House of Commons
Oral Answers to Questions
(1 day, 4 hours ago)
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Pam Cox (Colchester) (Lab)
The Lord Chancellor and Secretary of State for Justice (Mr David Lammy)
Listing decisions are rightly a matter for the judiciary. We know that listing practices can vary between courts, creating what many victims see as a postcode lottery, so I am pleased that the Lady Chief Justice, with the support of this Government, will publish a new national listing framework to clarify the listing process, set consistent principles and help deliver swifter justice for victims.
Pam Cox
How will the new listing framework help to fast-track prosecutions for rape and serious sexual offences? What other measures is the Secretary of State introducing or supporting to that end, so that we can honour our manifesto commitments to bring perpetrators to swift justice?
Mr Lammy
My hon. Friend will have heard that we are also piloting new digital and AI-enabled tools to support listing, helping the judiciary to make better use of data. I hope she will have seen that the reforms we are introducing under the Courts and Tribunals Bill include introducing independent legal advisers and expanding the principles of Operation Soteria into the courtroom, making sure that victims have the protection and support they deserve throughout the justice system. The Bill also introduces crucial reforms to ensure that rape victims are no longer unfairly undermined by evidence at court that relies on myths and misconceptions.
Jim Shannon (Strangford) (DUP)
I thank the Secretary of State for his positive answer. When I think of the great United Kingdom of Great Britain and Northern Ireland, I am always keen that we share improvements, whether that is from Northern Ireland for here or from England for Northern Ireland. Could the things that the hon. Member for Colchester (Pam Cox) has asked for be put to the Policing and Justice Minister in Northern Ireland, so that we can improve our system in the same way as the Secretary of State intends here?
Mr Lammy
These issues are devolved to Northern Ireland, but we are in touch and communicate best practice, as the hon. Member would expect.
Charlie Maynard (Witney) (LD)
The Parliamentary Under-Secretary of State for Justice (Alex Davies-Jones)
Our violence against women and girls strategy, which the Government published before Christmas, sets out exactly how we will achieve our mission to halve the number of these terrible crimes. The Ministry of Justice is investing more than half a billion pounds in victim support services over the next three years, alongside rolling out free independent legal advisers for all adult victims of rape.
Charlie Maynard
I welcome the new legal adviser service as a first step towards levelling the horribly unequal access to legal services available to victims as compared with suspects. However, only £3 million has been provided a year for the next two years to fund that service. Given the record highs of more than 12,500 sexual offence cases awaiting trial in the Crown courts, including Oxfordshire’s Crown court that serves my Witney constituency, does the Minister believe that funding to be anywhere near enough?
Alex Davies-Jones
The funding of £6 million over two years will enable us to introduce independent legal advisers for all adult rape victims, and that is alongside the support package we are introducing in our courts system. We are expanding on Operation Soteria to ensure that rape victims get the support they need. The investment in support services is only one part of a much bigger package to ensure that victims are put back at the heart of the justice system.
Andy Slaughter (Hammersmith and Chiswick) (Lab)
I know that Members from all parts of the House support the Government’s aim to halve violence against women and girls. The metric on which that is based, the crime survey for England, deals with those aged 16 and over, but girls under 16 are also substantially at risk. How will they be included in the recording and monitoring process to ensure that their needs are also addressed?
Alex Davies-Jones
I welcome the scrutiny from my hon. Friend the Chair of the Select Committee. We have been resolutely clear that the violence against women and girls strategy covers everyone, including children, those under the age of 16 and men and boys. We will be ensuring that the data captures a broad spectrum so that we are able to account for things. I recently met stakeholders who are concerned about the rise in domestic crimes committed against children and pre-teens, including in relationships they are getting into, and how we can best support them. I am working with colleagues across Government on that to ensure that we capture these things correctly, so that young people are not excluded from the data.
Sir Roger Gale (Herne Bay and Sandwich) (Con)
Violence against women and girls comes in many forms. I have discovered that, incredibly, while current legislation provides some protection for women and girls against revenge porn, it offers no such protection where images are clothed but accompanied by offensive material. Will the Minister take a long, hard look at that to see how the law can be strengthened so that those protections are afforded?
Alex Davies-Jones
I welcome that question. Just last week I was in the United States discussing the fact that the UK is a world leader in tackling non-consensual online intimate image abuse, and the proliferation of such abuse on social media platforms. We have been tackling it when individuals are clothed but there is offensive material on top of those images—for example, semen imagery. That is a vile, degrading crime that affects many people, and we are determined to tackle this degrading form of abuse wherever it occurs, including when individuals are clothed. If they are being degraded, and if it is non-consensual, this Government will come for those responsible.
Matt Bishop (Forest of Dean) (Lab)
Given the recent high-profile case involving the hotel chain Travelodge, which I know the Minister has been involved in, does she agree that tackling violence against women and girls must include clearer legal duties for companies to co-operate fully with the safeguarding expectations of customers?
Alex Davies-Jones
I thank my hon. Friend, and my hon. Friend the Member for Dagenham and Rainham (Margaret Mullane), for all their work in shining a light on this horrific issue. I was proud to meet the chief executive of Travelodge yesterday to discuss it in detail, and the Government are looking into what more we can do. We are convening a roundtable with the relevant Ministers in the Departments for Business and Trade and for Culture, Media and Sport to discuss the tourism aspect, and what better regulation and support we can provide to keep people safe wherever they are—in hotels, in the street or online. We will ensure that women and girls are kept safe.
Dr Kieran Mullan (Bexhill and Battle) (Con)
Right now there are potentially thousands of rapists, paedophiles and perverts, who are responsible for some of the worst offences against women and girls, who this Government are going to let out of prison earlier. That is a disgrace, and at the very least the Government should be transparent about it. When I asked them to tell us what their estimates and modelling were on the number of people who were due to be let out, at first they denied they had any of that information; then they admitted that they did, but refused to publish it. Does the Minister not think that they should be transparent about the consequences of their own policies?
Alex Davies-Jones
I will take no lectures from the hon. Member about transparency when it comes to early release schemes. It was this Government who had to pick up the mess left by the last Government when we came to office, because our prisons were full. Instead of dealing with the issue, they ran away and called a general election. It was this Government who introduced risk assessments to prevent violent perpetrators of crimes against women and girls from being released early in our early release scheme, whereas the Conservatives’ early release scheme included no such protections. I will take no lectures from the hon. Member about how we protect women and girls.
Dr Mullan
I wish that the Minister got as angry about the fact that her Government are releasing thousands of rapists, paedophiles and perverts from prison early. If the Government will not tell us about the reality of the consequences, surely they should at least tell the victims. One of the worst aspects of this policy is the fact that many of those victims will have been given an estimated date for when the perpetrators would be released. That date will now be brought forward, and the perpetrators will get out of prison earlier than the victims were led to believe. Does the Minister think that, at the very least, the Government should write to the victims in advance to let them know that they are letting the perpetrators of those horrendous crimes out of prison earlier?
Alex Davies-Jones
I will tell you what makes me angry, Mr Speaker: it is the fact that the last Government presided over an increase in the number of crimes of violence against women and girls of 37% in just five years. That was not a Government who tackled violence against women and girls. That was not a Government who took it seriously. As for communication and notification, it is this Government who are introducing the victim contact scheme in our Victims and Courts Bill to ensure that victims are notified, which the last Government refused to do. It is this Government who are writing to victims to ensure that they are given information. I will take no lectures about how the last Government tackled these crimes; it is this Government who are getting on with the job.
Tessa Munt (Wells and Mendip Hills) (LD)
The Parliamentary Under-Secretary of State for Justice (Jake Richards)
This Government are focused on removing foreign national offenders so that they are no longer a burden on the taxpayer. Strengthening prisoner transfer arrangements is a priority, and we are actively engaging with a number of countries to do that, so that more offenders can be removed and serve their sentences in their home countries.
Tessa Munt
I am not sure that that really answers my question. Let me set out the details of what I am asking about.
One of my constituents was murdered by a foreign national, which robbed her mother of her daughter and her mother’s grandsons of their much-loved mother. Her mother is very distressed to discover that the murderer is being repatriated a short while into his sentence, which was over 14 years, at which juncture she will lose what remaining input the family has into his parole arrangements, which was promised to her when the man was sentenced. What can the Minister say to reassure my constituents that, as victims, they will not see him released early in the country where he was born? What voice will victims have in situations like that in future?
Jake Richards
The hon. Member raises an important point. This Government are committed to ensuring that, where possible, foreign national offenders serve their sentence outside this country. To do so, we have to engage in bilateral negotiations with countries to achieve proper and rigorous prisoner transfer arrangements. That is why I have had discussions with colleagues in Ghana, Nigeria, Albania and Poland in the last few weeks; indeed, last month we signed a new arrangement with Italy. We are working at pace to ensure that those agreements are as rigorous as possible. On the individual case that she mentions, I am very happy to meet her, and indeed her constituents, to discuss the details.
Ben Obese-Jecty (Huntingdon) (Con)
I want to look at the flip side of this issue—specifically, what happens to those detained overseas who return to the UK? The Government are preparing to resume deportations of Syrian foreign national offenders, while the Syrian Democratic Forces have called on countries to repatriate their own citizens. In recent months, several ISIS-linked individuals have been returned to this country from the al-Roj camp. Will the Minister confirm whether these ISIS-linked individuals will return to custody in the UK, given their direct links to a proscribed terrorist organisation, or are those individuals now free in the UK, having faced no consequences for their terrorist affiliations?
Jake Richards
When foreign national offenders are deported from this country and are able to return, they should be detained and dealt with appropriately by law enforcement agencies. I would expect that to happen in every single case.
Liz Jarvis (Eastleigh) (LD)
The Minister for Courts and Legal Services (Sarah Sackman)
The Courts and Tribunals Bill puts victims at its heart and aims to deliver faster, fairer justice for all victims. In addition, we are increasing transparency and support for victims in the criminal justice system, funding victim support to the tune of over half a billion pounds, consulting on a new victims code, and enhancing special measures.
Liz Jarvis
My constituent was appalled that character references were read out during the sentencing of a man found guilty of attempting to engage in sexual communication with a child. The Minister will be aware that Queensland, in Australia, introduced reforms last year to restrict the use of character references in the sentencing of sex offenders. Does the Minister agree that all victims should be at the heart of sentencing, and will she review the admissibility and weight of character references in sexual offence cases?
Sarah Sackman
I thank the hon. Lady for raising an important point. The starting point is that judges decide what evidence is admissible and what weight to give to that, but we are interested in how evidence is being used in criminal trials. The Courts and Tribunals Bill will make changes—for example, to defendants’ bad character evidence. This will clarify that if a defendant has a previous domestic abuse conviction, the judge can say that this shows that they have a propensity to commit further domestic abuse offences, but I am happy to work with the hon. Lady on what further changes might be beneficial.
Steve Witherden (Montgomeryshire and Glyndŵr) (Lab)
The Parliamentary Under-Secretary of State for Justice (Jake Richards)
My hon. Friend will no doubt be aware that this important matter falls under the remit of the Home Secretary, with whom I am in full agreement that the right to peaceful protest is a vital part of our democracy. However, peaceful protest does not extend to unlawful behaviour. Should a protest contravene the law, the police have the powers to respond, and such behaviour will be met with appropriate consequences.
Steve Witherden
Proposals to restrict the right to protest based on “cumulative disruption” are causing great concern. It is absurd that a march by an anti-racist group one week could be blocked because an anti-abortion march occurred the week before, and that this power could be extended across large parts of a city. Such a significant change demands proper scrutiny. This House must have adequate time to debate and vote on this issue. Can my hon. Friend the Minister guarantee that?
Jake Richards
As my hon. Friend knows, this is a matter for the Home Secretary. If my hon. Friend seeks parliamentary time for a debate, he should come to business questions on Thursday morning.
Bob Blackman (Harrow East) (Con)
Clearly, the Home Secretary has the power to ban marches but no power to deal with static protests. This weekend we had the annual al-Quds hate demonstration, at which individuals regularly chanted antisemitic slogans, but the police could take no action. Will the Minister have discussions with the Home Secretary on what can be done to police and ban static demonstrations that will clearly lead to a contravention of the law? The big problem in London is that police are being sucked into the centre of the city and taken away from the boroughs where they should be doing their policing work.
Jake Richards
The hon. Member raises an important point, as I know he has repeatedly in the past, and I will raise the issue with the Home Office. I put on record that the incidents of antisemitism we saw over the weekend were wholly disgraceful, and this Government will do everything we can to stamp them out.
Kim Johnson (Liverpool Riverside) (Lab)
The Government’s relentless clampdown on the right to protest has been disgraceful. However, the High Court’s ruling that the proscription of Palestine Action was unlawful is a victory for the National Council for Civil Liberties, which is now challenging policies that suppress and criminalise peaceful protesters. Does the Minister agree with me that our so-called justice system is being weaponised to intimidate and shut down legitimate protests, and that this Government’s assault on our fundamental right to protest has failed?
Jake Richards
No, I do not agree with my hon. Friend on that point. The Home Secretary has been very clear that that judgment will be appealed in the courts. We have been absolutely clear as a Government that the right to peaceful protest is a vital part of our democracy, but those rights are balanced, and it is crucial that, where peaceful protest contravenes the law, the law stands firm.
Mr Peter Bedford (Mid Leicestershire) (Con)
People should have the right to protest, but that needs to be coupled with responsibilities. As my hon. Friend the Member for Harrow East (Bob Blackman) mentioned, it is outrageous that fringe groups feel emboldened to protest in support of terrorist ideology, contrary to basic British values. What steps is the Department taking to ensure that these people are under no illusion about how they will end up being prosecuted if they openly support fundamentalist Islamist ideology, and that if they have no right to be here, they will be deported?
Jake Richards
As I have said, this is a matter for the Home Secretary. She has made it abundantly clear that, although there is a right to protest in this country—an important right that should be protected—where incidents such as those the hon. Gentleman has identified occur, those individuals should face the full force of the law.
Jerome Mayhew (Broadland and Fakenham) (Con)
Rebecca Smith (South West Devon) (Con)
Dr Neil Shastri-Hurst (Solihull West and Shirley) (Con)
Lincoln Jopp (Spelthorne) (Con)
The Lord Chancellor and Secretary of State for Justice (Mr David Lammy)
The Conservatives left our criminal justice system on the brink of collapse, and we are taking action to clean up the mess they left behind. Our detailed impact assessment, published alongside the Courts and Tribunals Bill, shows that our package of measures will save about 27,000 sitting days per year, a saving of almost 20%. Only through reform, together with record investment and action to modernise our courts, can we finally turn the tide on the backlog and deliver swifter justice for victims.
Jerome Mayhew
The Justice Secretary has just told us that the reason he is cutting jury trials is to get the backlog down. If that is the case, why is there not a sunset clause, so that once the backlog is reduced, those jury trials can resume?
Mr Lammy
If the hon. Gentleman had listened during the Second Reading debate, he would have heard me say that demand in the system is up. Police arrests are 10% up. For all those reasons, alongside the backlog that we inherited from the Conservative Government, it is important that we put in place reform that is sustainable for the long term, and that is why there is not a sunset clause.
Rebecca Smith
About 6,200 cases are awaiting justice in the south-west. Sexual offences cases take about 320 days, but local victims and defendants deserve justice. The excellent example of Liverpool Crown court highlights how it is possible to tackle the case backlog and secure justice without impacting defendants’ right to a jury trial. Given that tackling the backlog using efficiency, not removing the right to a jury trial, has the backing of the public and the Opposition—and, indeed, Labour MPs—when will the Secretary of State back down from his entirely un-British decision to minimise the use of jury trials?
Mr Lammy
It was not un-British when the Callaghan Government made reforms at the end of the 1970s, and it was not un-British when Margaret Thatcher made changes in 1989. It is precisely because we are lifting the system, which was on its knees under the last Government, that it is absolutely the opposite of un-British to support victims, especially women, who find themselves in the criminal justice system.
Dr Shastri-Hurst
The Government’s case for curtailing trial by jury is based on an impact assessment that rests on assumptions, rather than hard evidence. Is it not the truth that the Government are asking Parliament to give up and weaken a fundamental safeguard on the basis of hearsay alone?
Mr Lammy
Sir Brian Leveson spent months delivering part 1 and part 2 of his reforms. We are building on that. I have set out that this is a 20% saving. If the hon. Gentleman was Health Secretary—I am not sure he ever will be, but if he were—and he was told that a 20% saving could get the waiting list down, he would take it in an instant; so am I.
Lincoln Jopp
I think what the Health Secretary is actually doing at the moment is paying people to fudge the waiting lists. I want to be very clear, because there are slightly mixed messages from the Justice Secretary: are there any circumstances in which he would consider the reintroduction of jury trials for those cases that are going to have them removed?
Mr Lammy
I know the hon. Gentleman has studied this closely, but there are two problems we have to fix. Demand is going up—I said that the police are arresting more. But he will know that because of the use of smartphones, social media, DNA evidence and forensics—for all those reasons—trials are taking longer. That is what we are seeking to fix in the Courts and Tribunals Bill and that is why we have to put the system on a sustainable footing for the next generation. That is what the Bill will deliver.
Natalie Fleet (Bolsover) (Lab)
Since coming into this role, I have heard from more victims than I ever thought I would in a lifetime. They tell me their stories, and I believe them and listen. What I do not ask them to do is report, because nobody wants to put anybody in a system that is so unsustainable, and re-traumatise them. Does the Secretary of State agree that the changes being presented and driven through by our Government will mean that a victim is more able to report, more likely to feel like they can get an outcome in a reasonable amount of time and less likely to feel that they are the ones on trial?
Mr Lammy
I am hugely grateful for my hon. Friend’s continual advocacy in the Chamber on behalf of victims. She is absolutely right. If we do nothing, we head to a backlog of 200,000, and many, many victims sitting behind that backlog. If we do as Opposition Members suggest, we head to a backlog of 133,000. That is why we have to do these reforms and why I am very pleased to put forward a Bill that also does more, in particular for victims of sexual crime and rape.
Alex McIntyre (Gloucester) (Lab)
Under the previous Conservative Government, criminal justice funding was cut by 23%, we lost 42% of our magistrates, half of our magistrates courts were closed and the number of sitting days in our Crown courts went down. That is the record of the Conservative Government. The only thing that went up was the number of victims waiting for justice. Does my right hon. Friend agree that the crocodile tears from the Conservative party today just show why the public should never put trust in arsonists to put out the fire?
Mr Lammy
One hundred per cent. That is why the shadow Justice Secretary, when he stands up, should apologise. He was sat in the Home Office while that was happening.
Nick Timothy (West Suffolk) (Con)
Thank you, Mr Speaker—[Interruption.]
Mr Speaker
Order. The Opposition Benches were disorderly yesterday; I do not want the Government Benches to be disorderly today. Have the courtesy to hear the question, please. I am inundated with constituents complaining about the behaviour of MPs in this Chamber. I expect Ministers to set the best example, not the worst.
Nick Timothy
The Prime Minister, we learned this weekend, once said that trials without juries mean evidence is not properly tested and can lead to wrongful convictions. Was he wrong?
Mr Lammy
Is that the best the hon. Gentleman can do? Of course the Prime Minister was not wrong—that is why jury trials will remain the cornerstone of our system. What a waste of a question!
Nick Timothy
I think the public will be disappointed by this behaviour. The Justice Secretary cannot get his story straight. Like the Prime Minister, he once said:
“Criminal trials without juries are a bad idea”.
Now he says they are a good idea, with his justification for this change changing by the minute. Last week, 10 Labour MPs voted against the courts Bill and 90 abstained. They are looking for a compromise—not in the House of Lords, but while the Bill is in this House. The Justice Secretary just refused to agree a sunset clause in answer to my hon. Friend the Member for Broadland and Fakenham (Jerome Mayhew), so, for the sake of the 100 Labour MPs who do not trust him or his intentions, I will ask again: will he consider a sunset clause, or will he tell his own MPs no?
Mr Lammy
I have to say, the hon. Gentleman has not apologised for the state that the Conservatives left the criminal justice system in, closing 40% of court buildings in England—[Interruption.]
Mr Speaker
Order. I will say this to both sides: there has been quite enough chipping in. The public do not like it, and I am not going to tolerate it.
Mr Lammy
There was also a reduction in funding of 23%. The hon. Gentleman knows that 90% of criminal justice cases are dealt with by the magistrates courts and 10% go to the Crown court, with 7% of those people pleading guilty—that leaves 3%. Our Bill is to deal with a small proportion of cases in a new division so that we can do that swiftly. I have previously explained the reasons—demand in the system and length of trial—why it is my judgment that these have to be sustained changes, as were made by the Thatcher Government at the end of the ’80s and the Labour Government at the end of the ’70s. That is what I proposed. The Bill will now go to Committee and then on to Report, and will be debated and discussed in the usual way.
Andrew Cooper (Mid Cheshire) (Lab)
The Minister for Courts and Legal Services (Sarah Sackman)
This Government are dedicated to increasing transparency in our courts. We are expanding free Crown court sentencing transcripts to all victims who request them and rolling out recording to all magistrates courts, so that all criminal cases heard in open court will now be recorded. We are also working with our judiciary to see where we can go even further on transparency.
Andrew Cooper
The Courts and Tribunals Bill seeks to increase the transparency of court proceedings in several important respects, but conducting empirical research into how real juries make decisions will remain illegal in England and Wales. Researchers have had to rely on mock juries in their research, which has shown a link between the attitudes of jurors and verdict decisions, in particular in rape trials. Does my hon. and learned Friend agree that we must break down barriers to jury research so that we can develop appropriate reforms to address this problem?
Sarah Sackman
Of course, there are good reasons for the protection of jury deliberations, which ensures that they can happen in private. The Government in Scotland have recently legislated for a tightly controlled exception to support research into jury deliberations, and my officials are working with the Scotland Office to see what lessons we can learn from that vital work.
Katie Lam (Weald of Kent) (Con)
In February, the Government ordered Courtsdesk to delete the largest archive of court records in the country—an essential tool for transparency in the justice system. The Government changed their minds about that, which was incredibly welcome, but we do not yet have a clear sense of what they intend to do with that archive or how they intend to move forward. Could the Minister assure us today that Courtsdesk will not be compelled to delete its archive in the future and confirm whether it will be allowed to continue operating its services?
Sarah Sackman
I will start by reminding the House why we suspended the operations of Courtsdesk. It was because of its handling of sensitive data in breach of the agreement it had with Government. Of course, we recognise the importance of transparency and the service provided by Courtsdesk, which I recently met. The hon. Lady will know, as I have updated the House, that we intend to bring forward new licensing arrangements to make court listings and registers available to more people—for journalists in particular—and we will bring forward plans as to how Courtsdesk and others can bid for those new licences.
Munira Wilson (Twickenham) (LD)
The Parliamentary Under-Secretary of State for Justice (Alex Davies-Jones)
The victims code sets out exactly the rights that victims can expect to receive. We have now launched a consultation on a new victims code to ensure that it is fit for purpose for 2026 and that we get the foundations right for victims. We are also raising awareness of the victims code through an “Understand Your Rights” campaign, as we want everyone to be aware of their rights.
Munira Wilson
The Minister will recall that last month I raised with her the case of Roksana Lecka, who was convicted of child cruelty at a nursery in Twickenham. Her victims’ parents were given only six days’ notice that she was being deported just a few months into her eight-year sentence, so although the victims code currently says that “all reasonable steps” should be taken to inform victims of an offender’s immigration status and likelihood of deportation, it does not say when. Does the Minister agree that an updated victims code should say that information about an offender’s immigration and likely deportation status should be shared as early as possible in the process?
Alex Davies-Jones
I want all victims to have as much information as possible in a timely and appropriate fashion. That is exactly the type of information that we need to include in a new victims code. This is why we are consulting. I would be happy to meet the hon. Lady and her constituents to hear about their experiences and how we can best shape this new code. All victims are entitled to information about their offender. We are expanding the victim contact scheme to include that and to ensure that victims know their rights. As I have said, I would be happy to work with the hon. Lady and any other hon. Member to ensure that victims know their rights and that they are up to date.
Jess Brown-Fuller (Chichester) (LD)
The family courts urgently need reforming so that victims, especially those of domestic violence, are not experiencing a system that is being used by perpetrators to continue to control and abuse. The Domestic Abuse Commissioner reported that 73% of hearings in the family courts involved evidence of domestic abuse, but it is frequently not recognised in determinations. In the Courts and Tribunals Bill, the Government have included a clause to remove the presumption of parental responsibility, so will the Secretary of State take the opportunity to increase the scope of the Bill by including the family courts as a whole within it, and restore some faith for victims in our family court system?
Alex Davies-Jones
I welcome that question. The Liberal Democrat spokesperson will know of my commitment to ensuring that the family court is safe for all involved, including children and domestic abuse victims. That is why we are repealing in the Courts and Tribunals Bill the presumption of parental involvement in contact in these cases. Just today, the Justice Secretary has announced a national roll-out of our child-focused model, formerly known as pathfinder, over the next three years. We are doing all we can to ensure that our family courts are safe and effective for all involved.
Peter Lamb (Crawley) (Lab)
The Minister for Courts and Legal Services (Sarah Sackman)
It is the prosecution and the defence who decide what evidence to put forward in a criminal trial, including deciding whether to put forward evidence from automated enforcement technology. Once that evidence has been put forward, the magistrates and the judge have a duty to ensure that only admissible evidence is presented to a jury.
Peter Lamb
The Government are to be commended for the largest ever investment in police technology, including facial recognition to catch serious offenders, and a drone squad to crack down on waste crime. However, the rules around admissibility of some high-tech evidence, such as the six-month crime rule, are holding back enforcement, which could enable us to stamp out low-level crime and antisocial behaviour. Can the Minister commit to reviewing these rules to ensure that the latest technology can be used to protect our communities?
Sarah Sackman
We will keep the rules relating to the admissibility of evidence under review. When considering whether evidence is admissible, the magistrates and judge will consider its relevance, competence, materiality and probative value.
Sir Edward Leigh (Gainsborough) (Con)
The Minister will have heard, as I did, the very moving speech of the hon. Member for Warrington North (Charlotte Nichols) last week. She really moved the House with her testimony of the terrible experience that she had had as a rape victim, and her experience of delays. She will also have heard her say that, according to the Government, abolishing jury trials will save perhaps only a week. So my positive question to the Government is this: why do we not proceed on the basis of the Labour manifesto? It has its merits and it promised specialist rape trials. Why do we not set up courtrooms in every single courthouse with specialist lawyers and really deal with the backlog now?
Mr Speaker
I am not quite sure whether the right hon. Member’s supplementary is relevant to the main question. [Interruption.] No, I think it is not.
Jas Athwal (Ilford South) (Lab)
The Parliamentary Under-Secretary of State for Justice (Alex Davies-Jones)
We are putting victims first with a record £550 million investment in victim support services over the next three years. Our measures in the Courts and Tribunals Bill aim to deliver faster, fairer justice to improve victim confidence across the whole system. We are also consulting, as I have previously said, on a new victims code, so that victims know exactly what they can expect from the justice system.
Jas Athwal
I welcome the Government’s recent efforts to improve victims’ experiences in the courtroom, including the expansion of the Operation Soteria principles and the introduction of a national independent legal adviser service to provide dedicated legal support throughout the criminal justice process. However, many victims still lack confidence in the prosecution system, and some withdraw from proceedings after experiencing further trauma during the process. What further steps are the Government taking to ensure that victims are treated with dignity and respect so that they feel supported to see their cases through to conclusion and that justice is fully delivered?
Alex Davies-Jones
I thank my hon. Friend for that important question. I hope that I can also respond to the comments made by the Father of the House in the previous question; I, too, want to pay tribute to my hon. Friend the Member for Warrington North (Charlotte Nichols) for her brave testimony in the debate last week. It is exactly those experiences that this Government are improving by introducing Operation Soteria in our courtrooms, expanding the use of specialist measures, introducing independent legal advisers and consulting on a new victims code. When we came into office we said that we would reform the criminal justice system to put victims back at the heart of it, and that is exactly what this Government are doing.
Mr Gregory Campbell (East Londonderry) (DUP)
Can I wish you a happy St Patrick’s day, Mr Speaker? St Patrick is sometimes somewhat disparagingly referred to as a “west Brit”, which is very unfortunate given where he was born.
Will the Minister have discussions with the Department of Justice and the Justice Minister in Northern Ireland to ensure that victims are not experiencing delays and prevarications in the court system, which lead to justice being denied as well as delayed?
Alex Davies-Jones
May I take the opportunity to wish the hon. Member a happy St Patrick’s day today? I recently had the pleasure of visiting the island of Ireland and met the Irish Justice Minister, but we have regular conversations with our Northern Ireland counterparts as well to discuss how we can improve the system for victims as a whole. Violence against women and girls has no borders and does not discriminate in the targeting of victims. That is why we need to do all we can to keep victims safe, wherever they are.
Adam Thompson (Erewash) (Lab)
The Parliamentary Under-Secretary of State for Justice (Jake Richards)
This Labour Government are committed to halving knife violence. We have introduced reforms to ensure that every child caught with a knife receives a mandatory plan to prevent reoffending. There is still much more to do, and we will set out a cross-Government plan to reform the youth justice system over the coming weeks.
Adam Thompson
In December 2024, 18-year-old Noah Smedley from Ilkeston in my constituency was killed when he was stabbed by a 17-year-old armed with a Rambo knife. For a young man to lose his life this way, murdered by another teenager, was absolutely devastating to our community. There was a very deep public outcry of grief in this tight-knit town with a strong local identity. Noah’s death hit the town profoundly. Could the Minister outline the work that the Government are doing to protect young people, especially teenage boys, from the horrors of knife crime?
Jake Richards
Each case is an absolutely tragedy, and Noah’s is no different. On behalf of the Government, I send our commiserations and thoughts to his family and, indeed, the whole community, which suffers when these events occur.
In the past 18 months of this Labour Government, we have seen an 8% reduction in knife crime, which is a start. Very recently, we invested a further £15 million in the turnaround programme—a specialist programme aimed at early intervention, working particularly with young people and teenagers. We have set out a three-year funding settlement for youth justice services, offering for the first time in a generation that stability and certainty. We have taken tens of thousands of dangerous knives off the streets, and have invested in violence reduction units, young futures hubs and young futures panels. There is a lot more to do, but this Labour Government are getting on with the job of tackling knife crime.
Anna Dixon (Shipley) (Lab)
The Lord Chancellor and Secretary of State for Justice (Mr David Lammy)
The Government have agreed a landmark £2.78 billion settlement for courts and tribunals over this next period. That includes £2.5 billion in resource funding—the highest level ever provided to His Majesty’s Courts Service—and £287 million in capital investment. Sitting days in the Crown court will also be uncapped for the next year, enabling courts to sit to maximum capacity.
Anna Dixon
For victims of child sexual exploitation, rape and serious sexual offences, the option of having pre-recorded evidence has been a really positive step forward. However, when I visited Leeds Crown court recently, I heard that too often the equipment does not work, leading to significant delays and even postponement of hearings, which is obviously terrible for victims. Will the Secretary of State outline how that investment will help victims get the justice that they deserve and ensure that the technology is available in every courtroom?
Mr Lammy
My hon. Friend is right that too often there are problems in the use of that technology for defendants in court, and sometimes there are problems between the prison and the court as well. That is why capital funding is increasing by 46%, enabling essential maintenance, estate improvements and digital modernisation. I am grateful to her for continuing to champion the issue.
Tim Farron (Westmorland and Lonsdale) (LD)
Last year, Carlisle Crown court saw a reduction of 71 sitting days. Add to that the fact that Westmorland, our neck of the woods, lost our magistrates court in Kendal 10 years ago. Does that not remind us that backlogs are not because Britain has juries, but because we lack capacity in our judicial system? Will the Secretary of State restore those sitting days to Carlisle, and extend the number of sitting days in Lancaster, too? Will he also look at restoring magistrates courts to places like Westmorland?
Mr Lammy
As I said, the number is now uncapped, so the hon. Member will be pleased to hear that Carlisle will have the maximum number of sitting days that it can possibly have. He will note that there were substantial magistrates courts closures under the last Government, and a massive reduction in the number of magistrates. He will also have noted the extra funding that we have found, along with our ambition to increase the number of magistrates across the country.
Gill Furniss (Sheffield Brightside and Hillsborough) (Lab)
The Minister for Courts and Legal Services (Sarah Sackman)
Before answering the question, I extend my condolences to the family and friends of Jeff Blair, a county court bailiff who was killed last week doing his job. It was a shocking incident, and violence against our hard-working staff is completely unacceptable.
Turning to the question, the Government support the work of the Enforcement Conduct Board to raise standards in the enforcement industry and to ensure, in particular, that vulnerable people are treated fairly. We have consulted on establishing an independent regulatory framework to build on the ECB’s excellent work, and we will announce next steps in due course.
Gill Furniss
I welcome the Government’s commitment to legislating for a statutory bailiff regulator. Research by StepChange and others has uncovered shocking cases that show why that is urgently needed, including a bailiff pushing someone through their front door and then laughing when they said that they had mental health issues. Will the Minister tell the House when we can expect that legislation to reach the statute books?
Sarah Sackman
I join my hon. Friend in endorsing the work of StepChange, in particular, in this campaign. The indignity that she describes, which many suffer as a result of the abusive actions of some, and only some, unregulated bailiffs, reinforces why we need legislation in this area. We have consulted on how we will legislate, and as I have said, we will announce our next steps in due course.
Sir Gavin Williamson (Stone, Great Wyrley and Penkridge) (Con)
I very much associate myself with the Minister’s words on the sad loss. She touched on the important issue of the vital role that court bailiffs play. Many small businesses are struggling to recover money because of a lack of court bailiffs. What actions are the Government looking to take to increase the number of court bailiffs, in order to help small businesses recover the money that they are owed?
Sarah Sackman
As much as we want to protect debtors, we also have to ensure that creditors who are owed money are able to recover those funds, whether they are small businesses or, indeed, the public purse. That is why we plan to uplift fixed fees for enforcement agents, so that we have a sustainable and effective enforcement sector. Ultimately, better regulation helps everyone, creditor or debtor.
Melanie Onn (Great Grimsby and Cleethorpes) (Lab)
The Lord Chancellor and Secretary of State for Justice (Mr David Lammy)
I want to start by expressing my deepest condolences to the family, friends and colleagues of Jeff Blair, one of our country’s court bailiffs, who was tragically killed last week. That was a horrendous incident, and violence against hard-working staff is completely unacceptable.
Since the last Justice oral questions, this Government have introduced a landmark Courts and Tribunals Bill to deliver swift and fair justice for victims. I also announced a £2.78 billion fund for our courts in the largest ever funding settlement, as well as uncapped sitting days. The Government have strengthened action on antisocial behaviour through neighbourhood policing, dedicated ASB leads and plans to expand visible, accessible community policing; there will be 13,000 additional neighbourhood personnel by the end of the Parliament.
Melanie Onn
Grimsby town centre is experiencing repeated attacks through antisocial behaviour, particularly by young people, and this is causing a huge amount of concern for shop workers and shoppers in the town. I welcome the Government’s additional funding for police officers, but what is the Department doing to improve the punishments and create an even stronger deterrent to these appalling acts?
Mr Lammy
My hon. Friend has been a great champion of Grimsby over many years and takes these issues very seriously. In my Department, our early intervention programme, Turnaround, has funded more than 15 million ASB referrals, which is up 14%. I am happy to look closely at what is happening in Grimsby particularly.
Nick Timothy (West Suffolk) (Con)
I join the Justice Secretary in sending condolences to the family of Jeff Blair. I also pay tribute to the shadow Solicitor General, my hon. Friend the Member for Maidstone and Malling (Helen Grant), for her successful campaign for a child cruelty register, and I look forward to meeting the Hudgell family this afternoon.
The Government have published their Islamophobia definition, rebranded as a definition of anti-Muslim hostility. We are told that the definition is non-statutory, but it is designed to influence official decision making, so will the Justice Secretary make it clear right now that the definition will not be adopted by the police, prosecutors or the judiciary?
Mr Lammy
The hon. Gentleman will recognise that those are independent bodies, but it is not a statutory definition. It seeks to allow us to intervene to bear down on the rising Islamic/Muslim hate that we are seeing across the country, just as we have had to do to deal with antisemitism and racism more generally.
Dan Carden (Liverpool Walton) (Lab)
The Minister for Courts and Legal Services (Sarah Sackman)
The Renters Rights Act 2025 represents the biggest expansion of renters’ rights in a generation, but of course, rights are not worth the paper they are written on unless they are enforceable. That is why the role of appeals, including to our property tribunal, is so important. My hon. Friend will know that court fees are a feature right across our system, but we will ensure that fees do not represent a barrier to access to justice.
Jess Brown-Fuller (Chichester) (LD)
I associate the Liberal Democrats with the Secretary of State’s condolences to the family of Jeff Blair. Strategic lawsuits against public participation, known as SLAPPs, have been used by the rich and powerful to silence victims and undermine the free press in this country. Anyone engaging in public-interest activities can be a target of SLAPPs. Powerful individuals who are exploiting the justice system in this country should not be shielded from scrutiny, so when can we expect legislation from this Government to address this?
Sarah Sackman
I entirely agree that the profound financial and psychological impact of SLAPPs, and the chilling effect that they have on public-interest journalism, pose a threat to our democracy. The Government commenced the SLAPPs provisions in the Economic Crime and Corporate Transparency Act 2023 in June 2025, and we recently saw the first case that engaged those provisions. While this is a positive first step, I am keen to consider all options for how we might take this further, and I look forward to working with Members right across the House on how we do that.
Harpreet Uppal (Huddersfield) (Lab)
The Parliamentary Under-Secretary of State for Justice (Jake Richards)
My hon. Friend raises the important issue of knife crime, as did my hon. Friend the Member for Erewash (Adam Thompson). Every incident of knife crime is taken seriously and has a devastating effect on the victim, their family and the community. As I said, knife crime is down 8% under this Labour Government. That is a good start, but we have also just announced record investment in early intervention services, whether that is the Turnaround programme or youth justice services more generally. In the coming weeks, we will publish a cross-Government strategy for tackling knife crime, which will involve work by colleagues at the Department for Education, the Home Office and the Ministry of Justice. That is the best way of ensuring that we tackle the causes of knife crime.
Mr Will Forster (Woking) (LD)
Sarah Sackman
I thank the hon. Member for his question and his tireless advocacy, which is a way of honouring Sara, who was brutally murdered at the hands of the very people who should have been protecting her. Of course, it is essential for justice that all court users understand what is happening in hearings. We believe that Sara Sharif’s birth mother was entitled to an interpreter, but she did not request one. However, we need to look into what should have been done to guarantee that she had an interpreter. We make over 200,000 interpreter bookings every year to ensure that people can understand proceedings, but I look forward to working with him to see what more we can do to implement that review.
Dame Meg Hillier (Hackney South and Shoreditch) (Lab/Co-op)
Sarah Sackman
We are maximising the number of judicial sitting days in the immigration and asylum chamber. We are recruiting more judges in this area, as well as working with the Home Office to develop proposals for a new independent appeals body that would handle appeal types currently heard in the immigration tribunal, all of which I hope will benefit my hon. Friend’s constituents.
Alison Bennett (Mid Sussex) (LD)
Sarah Sackman
I am sorry to hear about that case. These sorts of delays mount trauma on trauma for many of those going through sensitive family court proceedings. We have to get this right. Because of the sensitive nature of family proceedings, there has to be judge approval of transcripts, and they have to meet the rigorous requirements of the secure transcription unit. We cannot compromise on accuracy and quality, but we do need to get the delays down.
Brian Leishman (Alloa and Grangemouth) (Lab)
Mr Lammy
I sat down with the POA just a few weeks ago to discuss this and other matters. Of course, it is right that I prioritise investment in our prisons as I seek to support prison officers, who do an incredible job against the backdrop of a system that was horrendously underfunded for 14 years.
Lisa Smart (Hazel Grove) (LD)
The Parliamentary Under-Secretary of State for Justice (Alex Davies-Jones)
I am so sorry to hear of the experience that Simon has endured. Sadly, so many others like him, fathers in particular, have similar experiences while going through the family court. That is why the Deputy Prime Minister has announced today the national roll-out of a child-focused model—formerly known as pathfinder courts—for the next three years. It will provide early risk assessments, specialist domestic abuse support for all involved, and non-adversarial problem-solving processes, and it will reduce stress and anxiety for all families, better supporting their mental health. This will not come as a comfort to Simon, but we hope that it will help many other fathers and families going through this process.
Tonia Antoniazzi (Gower) (Lab)
Mr Lammy
This is a sensitive matter. My hon. Friend will recognise that our judiciary is independent, but I continue dialogue with the Lady Chief Justice on these and other matters.
John Milne (Horsham) (LD)
Jake Richards
The practicalities of that case are for colleagues in the Department of Health and Social Care, but the hon. Gentleman is absolutely right to say that human rights in a health setting are incredibly important. Specific tribunals deal with that issue, and I would be very happy to deal with that case in writing if he writes to me.
Lloyd Hatton (South Dorset) (Lab)
Unlike in category A prisons, prison officers at HMP The Verne and HMP Portland are not routinely issued with protective body armour—namely, stab vests. Protecting our prison officers from harm is essential in all prisons, as has been made abundantly clear to me by local branches of the Prison Officers’ Association. With that in mind, will the Minister work constructively with me and Lord Timpson to introduce appropriate body armour for all prison officers, regardless of the category of prison in which they serve?
Jake Richards
My hon. Friend is absolutely right to raise that issue. The Government have invested £50 million to ensure that our brilliant prison officers, who do incredible work, are fully protected. I believe that I am meeting my hon. Friend tomorrow to talk about an issue in his constituency, and we can put this matter on the agenda, too.
John Lamont (Berwickshire, Roxburgh and Selkirk) (Con)
Grooming gang survivors have told us that they were trafficked between England and Scotland. Police were aware of those allegations of abuse but failed to do anything about them. Will the Minister explain how the grooming gang inquiries on either side of the border will work together to ensure that the perpetrators, and those responsible for the cover-up, are held to account?
Mr Lammy
The sexual exploitation and rape of children by grooming gangs is one of the darkest moments in this country’s recent history. We accepted all of Baroness Casey’s recommendations. We are changing the criminal law to ensure that adults who penetrate children under 16 are charged with rape or equally serious offences for other penetrative sexual activity. I want to assure the hon. Gentleman of that.
Mr Jonathan Brash (Hartlepool) (Lab)
Ministers will be aware of the campaign to make all court and tribunal transcripts available for free. Fees can run into the thousands, effectively acting as a paywall to justice. Do Ministers agree that access to the law cannot be based on wealth alone, and what will they do about it?
Sarah Sackman
My hon. Friend is right: we are seeking to increase transparency and reduce barriers to justice. That is why we are legislating to make sentencing remarks available to all victims upon request, free of charge. We want to go further by creating more opportunities for broadcasting court proceedings and by working towards the greater availability of proceeding transcripts.
Calum Miller (Bicester and Woodstock) (LD)
One of my constituents has been waiting since September for a three-day fact-finding hearing in the family court. A hearing scheduled for February was cancelled at only a few days’ notice because no judge was available. My constituent had to pay nearly £2,000 in legal fees for preparation and representation, even after their barrister reduced their costs. Will the Minister reform the system so that families facing delays caused by the courts are not left bearing the financial cost of failures in the system itself?
Sarah Sackman
The impact of delays, as the hon. Gentleman rightly points out, is a feature of not just our criminal courts, but our civil and family courts. The financial impact, and, if an individual has been waiting, the build-up to the nerve-racking prospect of a trial in court, can be absolutely devastating. We are working to maximise capacity in every jurisdiction and hiring more judges to improve timeliness. I will continue to work with colleagues across the Department to deal with delays in the family court.
Rachael Maskell (York Central) (Lab/Co-op)
I refer to my entry in the Register of Members’ Financial Interests. I have met the academics behind the University and College Union reports on the prison education service, which highlighted the real challenges around the wellbeing and mental health of educators, as well as their safety, especially with the racism they have been experiencing. Will my hon. Friend look at carrying out a complete review of the prison education service to ensure it is fit for purpose and able to do the job it was designed for?
Jake Richards
Lord Timpson and I are looking at this issue in the round. We are ensuring that where prisons have education contracts, they are being given full effect, which often is not the case. My hon. Friend raises an important point. We are working on it, and we will keep her informed.
Carla Lockhart (Upper Bann) (DUP)
While it would be inappropriate to speak of a live case, I am mindful of the McNally family from my constituency, who are currently sitting through the trial of a man accused of murdering their daughter—truly heartbreaking. There was another murder in County Fermanagh recently. This demonstrates how unsafe society is for women, particularly with social media and online abuse. Will the Minister outline what efforts she is making with online platforms to do more?
Alex Davies-Jones
I thank the hon. Lady for bringing that horrific case to the attention of the House. She is right to draw attention to the impact of social media and online abuse on violence against women and girls. It is why we are working across jurisdictions to try to tackle some of these crimes. We are bringing in the strongest protections against non-consensual intimate imagery, and we are working through the Online Safety Act 2023 and with our regulator, Ofcom, to hold social media accounts accountable. The Secretary of State for Science, Innovation and Technology recently held a roundtable with the platforms to discuss what more we can do to tackle this heinous abuse. The Government have been clear: where the platforms refuse to act, the Government will.
Andy Slaughter (Hammersmith and Chiswick) (Lab)
I have noticed there is a lot of debate on the role of juries at the moment—nothing gets past me. It might be a better informed debate if the researchers and jurors could talk about what happens in the jury room. The Law Commission recommends decriminalising that so it cannot be a criminal offence. Will the Government do that in the Courts and Tribunals Bill?
Mr Lammy
My hon. Friend makes a good point. It is something that I will reflect on in the coming days.
Blake Stephenson (Mid Bedfordshire) (Con)
First, I thank Ministers for inviting me to a meeting yesterday on unduly lenient sentences. My constituent, Tracey Hanson, and other campaigners like her continue to raise powerful points on the need for victims to have parity with offenders on rights and support. Will the Minister assure the House that the Government intend to achieve that parity during this Parliament?
Jake Richards
I thank the hon. Gentleman for his question and for his attendance at yesterday’s meeting. The testimonies given by his constituent, Tracey, and other victims there were truly powerful. I said this at the meeting in private and I am happy to say it again at the Dispatch Box: we are working at pace to look at all the solutions. We will contact his constituent, and indeed him, as and when we have our position.
Gideon Amos (Taunton and Wellington) (LD)
Given the massive immigration tribunal backlog left by the previous Government, would it not make more sense to lift the cap on non-salaried tribunal judges who are already recruited, and invest in court venues such as Taunton, instead of abolishing their role and doing massive damage to morale?
Sarah Sackman
Plainly, we have to address the backlogs in our immigration and asylum chamber. It is why we are maximising capacity in terms of sitting days and traditional recruitment. I had the pleasure of visiting the immigration and asylum chamber on Rosebury Avenue recently, and I saw the commendable work being done by the resident judge. We are focusing on a new appeals body, working with the Home Office. We think that is the better plan, and we will make sure it is properly resourced.
Jim Allister (North Antrim) (TUV)
Last week, Flora Page KC resigned as a board member of the Legal Services Board. In her letter to the Lord Chancellor, she said that she could not stand idly by while he halved the number of jury trials and ripped the heart out of our constitution. She also rebutted the suggestion that backlogs are because of jury trials, saying that was being used as a “cover”. Faced with such a devastating critique, is it not time that the Department thought again?
Mr Lammy
I am sorry that Flora Page felt that she was no longer able to serve. We took very seriously Sir Brian’s recommendations that we would need to make more investment, that we would need to modernise —we are doing both of those—and that reform was essential. We put out the modelling because we are serious about bringing down the backlog to levels that are acceptable to the population at large.
Meningitis Outbreak
(1 day, 4 hours ago)
Commons ChamberRead Full debate Read Hansard Text Watch Debate Read Debate Ministerial Extracts
The Secretary of State for Health and Social Care (Wes Streeting)
With your permission, Mr Speaker, I will make a statement on the outbreak of meningococcal disease in Canterbury and east Kent.
My thoughts, and I am sure the thoughts of the entire House, are with the families and friends of the two young people who have sadly died. I cannot begin to understand what they must be going through. This is an unprecedented outbreak. It is also a rapidly developing situation. With these considerations in mind, it is absolutely paramount that we stick to the facts, which is what I intend to do.
This is the current situation: as of 9.30 am today, the UK Health Security Agency has confirmed four cases of group B meningococcal disease, with another 11 cases under investigation. The two deaths are associated with this cluster. The majority of cases link back to the Club Chemistry nightclub over the dates of 5, 6 and 7 March, and their associated networks. Club Chemistry is currently closed voluntarily. Going forward, these figures will be updated publicly by UKHSA each day at 9.30 am.
Let me now turn to the timeline of this outbreak. UKHSA was notified about the first case on Friday 13 March. In line with established protocol, health officials began identifying and tracing the patient’s immediate close contacts, who were offered prophylactic antibiotics as a matter of urgency.
On Saturday, UKHSA was in touch with the University of Kent to ensure it had the necessary support, advice and guidance and to establish where the patient was living. Also on Saturday, the French authorities alerted UKHSA to a second confirmed case in France, from an individual who had attended the University of Kent. Both cases lived in private accommodation and at that stage there was no apparent link between the two.
At 7 pm on Saturday evening, hospitals reported that a number of severely unwell young adults were presenting with symptoms consistent with meningococcal disease. Contact tracing of these individuals began immediately and continued into Sunday morning, 15 March. All those traced were offered precautionary antibiotics. So far, 700 doses have been administered.
Recognising the scale of the potential outbreak, at 10 am on Sunday, UKHSA stood up a full-scale response, including preparations for more widespread distribution of antibiotics on campus. By 5 pm on Sunday those antibiotics were in place and distribution began to students in the two halls of residence where we were aware of cases, and by 6 pm, a public health alert was issued.
It is important that the House, and the wider public, understands that even before the public health alert was issued, students and young people who had been in close contact with suspected cases were being offered antibiotics. This is precisely what one would expect as a rapid response, and I am confident UKHSA acted as quickly and as comprehensively as possible.
In addition to cases involving students at the University of Kent, two cases were identified involving sixth-formers in year 13, one of whom has sadly died. The UKHSA made contact with the headteachers at both schools first thing on Monday morning and has worked closely with the schools to provide information, advice and support, including a letter to parents that was issued the same day. We are working closely with the Department for Education on wider communications to schools across the Kent area, and a briefing with schools has taken place this morning.
The strain associated with this outbreak is meningitis B, known as menB. It is an uncommon but, as we have seen, serious and potentially lethal strain of meningococcal disease. The onset of illness is often sudden, and early diagnosis and treatment with antibiotics are vital. It does not spread very easily. The bacteria are passed to others after a long period of close contact—for example, through living with someone in shared accommodation, through prolonged kissing, or through sharing vapes and drinks. However, the symptoms are easily mistaken for other common conditions, and even for something like a hangover.
Let me set out the current advice from the UKHSA. Anyone who attended Club Chemistry on 5, 6 or 7 March, and anyone who believes that they were in close contact with someone who is confirmed or suspected to have meningitis, should attend a treatment centre and receive antibiotics. There are four centres open in Canterbury today, with 11,000 doses available on site. Details about the location of those centres are available on the UKHSA website and are being promoted by the UKHSA, the NHS, my Department, schools and the university, as well as the BBC, and I encourage all media outlets to do the same. There is no need to book an appointment.
A single course of antibiotics is highly effective in preventing the contraction and spread of this disease in 90% of cases. If you become worried about yourself, your child or a friend, particularly if symptoms are getting worse, please seek medical help urgently. Anyone with symptoms should call NHS 111 or, in an emergency, dial 999 to seek medical attention.
People are understandably asking about a vaccine. From 2015, the menB vaccine has been available on the NHS as part of routine childhood immunisations, but clearly most students will not be vaccinated. Given the severity of the situation, I can confirm to the House that we will begin a targeted vaccination programme for students living in halls of residence at the University of Kent in Canterbury, which will begin in the coming days. The UKHSA will provide further advice on other cohorts in the coming days.
On the question of wider eligibility, we obviously follow the expert independent advice of the Joint Committee on Vaccination and Immunisation. In the light of this latest outbreak, I will ask it to re-examine eligibility for meningitis vaccines. I will do so without prejudicing its decision, because we have to follow the clinical advice on this. I will keep the House updated as the situation unfolds, and I commend this statement to the House.
Stuart Andrew (Daventry) (Con)
I am grateful to the Secretary of State for advance sight of his statement and for the clarity that he has provided to the House this afternoon. Our thoughts are also with the families of the two young people who have so tragically lost their lives—I cannot imagine the pain that they must be going through at this difficult time. This will also be an extremely distressing time for parents, students, staff and the wider community across the south-east, especially as I understand that two more cases have just been announced. Yesterday, friends of mine were very anxious about their own son, who was in the vicinity over the weekend. I pay tribute to the NHS staff, public health teams, school and university leaders, and all those working at pace to respond.
I welcome what the Secretary of State has set out on the daily publication of figures, the scale-up of antibiotic provision and the decision to introduce a targeted vaccination programme for students in halls of residence, alongside seeking further advice from the JCVI. However, a number of important questions remain. First, concerns have been raised out there on the timeline. The Secretary of State has set out the sequence of events in detail, but can he be clear about the threshold used for wider public communication? Is that threshold being reviewed in the light of this outbreak? He also set out that headteachers were contacted on Monday morning. Can he clarify when those schools were first identified, and whether there is a need to review how quickly educational settings are brought into the response, given that cases were identified several days beforehand?
Secondly, turning to the nature of the outbreak, while many cases are linked to a single venue, can the Secretary of State confirm whether all cases are believed to be part of one cluster, or whether there remains a risk of multiple sources of infection? Thirdly, on escalation, given the involvement of both a university and schools, can he set out what criteria are being used to determine when more extensive interventions are required across educational settings? This situation will undoubtedly cause concern among families, particularly with the end of term approaching.
Can the Secretary of State therefore set out what steps are being taken to manage the risk of onward spread as students return home, and what advice is being provided to families and local health services in other parts of the country? Can he also confirm that public health messaging is fully consistent across schools, GPs, local authorities and NHS services, so that families receive clear advice wherever they turn? What steps are being taken to counter misinformation online, where false claims may undermine confidence in public health advice? Can he also confirm that local laboratories, intensive care capacity and public health teams are fully resourced to manage any increase in cases, and that supply chains for antibiotics and vaccines are resilient, should further clusters emerge?
Finally, although I welcome the targeted vaccination programme and the decision to seek further advice from the JCVI, the Secretary of State has acknowledged that most students will not have been routinely vaccinated against meningitis B, and protection among older teenagers is clearly not as strong as it is in infancy. Does he accept that this creates a particular vulnerability among older teenagers and young adults, and will he ensure that any further advice on eligibility or wider catch-up measures is brought forward as quickly as possible?
This is a serious public health situation. It is right, though, that the response remains calm, evidence-led, and focused on protecting patients and supporting those families affected.
Wes Streeting
I thank the shadow Secretary of State for his constructive response and support as we respond to this incident, and I welcome the way in which he has rightly brought scrutiny to the response. I should say from the outset that once we are through this, we will obviously look at the handling of the UKHSA’s response at every point, because there are always things that we can learn from and seek to do better.
The balance that needed to be struck in the public communication was to ensure that people were informed in a timely way, but also that, first, we did not spread unnecessary anxiety and concern, and secondly, having been made aware of the risk, there was a channel through which people could receive support. As I set out in the timeline, in response to individual cases, thorough contact tracing was undertaken and antibiotics were offered in cases of direct contact. By 5 pm on Sunday, the antibiotics were more widely available, and public communication went out at 6 pm. The schools were identified over the course of Sunday—that was not a straightforward experience.
The two schools identified, Simon Langton grammar school and Queen Elizabeth’s grammar school in Faversham, were both contacted first thing on Monday. We are also looking at Norton Knatchbull school in Ashford, where there may potentially be another case. We are working closely with those schools and have stood up wider school briefing. We will look carefully at whether we could have done more, and more quickly, to identify those schools and make contact ahead of Monday morning.
The shadow Secretary of State asked about the criteria for educational settings and the wider availability of vaccinations. We are looking at this issue actively with the UKHSA and will make announcements about further cohorts in the coming days. Turning to local NHS capacity, the NHS in the south-east region is supporting the UKHSA, which is the lead agency, in the response to the bacterial meningitis outbreak. Kent and Medway integrated care board has stood up, and is currently operating, a hub at the University of Kent site to deliver prophylaxis to students, and a second site has also been opened. We have obviously made sure that appropriate support is in place for hospitals responding to patients presenting at those hospitals.
The shadow Secretary of State asked about the supply of antibiotics and vaccinations. We are confident that we have the right levels in place to respond, and as we think about potentially widening cohorts, we will obviously make sure that supplies are available in a timely and effective way.
Naushabah Khan (Gillingham and Rainham) (Lab)
I thank the Secretary of State for his statement, and I particularly welcome his announcement that he is reviewing the ongoing use of the vaccine and considering expanding it to a wider cohort. Given that the University of Kent also has campuses in Medway, could he inform me what work he is doing with the university to ensure that the spread across other campuses is monitored on a regular basis, and that if there is any potential for this outbreak to spread further, it is being reviewed regularly?
Wes Streeting
I am grateful to my hon. Friend for her question, which raises an important point—the shadow Secretary of State also raised it—about public health information. There are exams taking place at the University of Kent this week, but many students may have returned home, and indeed there will be some students at the University of Kent in Canterbury who commute in from the surrounding area. We have four sites available on and around the campus: the senate building at the University of Kent, the Gate clinic at Kent and Canterbury hospital on Ethelbert Road in Canterbury, Westgate Hall in Canterbury, and the Carey building at the Thanet community health hub in Broadstairs, which is planned to be open from Tuesday 17 March. We are also making sure that students who have gone home and who may wish to access antibiotics because of risk factors or concern about symptoms are able to contact their GPs and receive support locally.
Alison Bennett (Mid Sussex) (LD)
I thank the Secretary of State for advance sight of the statement. Like other hon. Members who have spoken, first and foremost my thoughts are with the family and friends of the two young people who have lost their lives, and everyone who has been touched by this devastating outbreak. It is understandable that many young people and their families will be feeling anxious. With that in mind, is the Secretary of State confident that this outbreak is contained and has not yet spread beyond those present at the initial event?
It is not unreasonable for young people and their families elsewhere in the country to be wondering whether they should be seeking catch-up vaccines. Young people will not have been protected by the menB vaccine that is available to those born after 2015. Is the Secretary of State confident that there is sufficient stock to deliver protection to all those who need it? As well as talking to the JCVI, will he involve Meningitis Now, which has called for teenagers and young people born prior to 2015 to be vaccinated against meningitis B on the NHS?
Vaccination rates are falling in the UK, including for meningitis. For that reason, all politicians and political parties have a moral duty to support science over conspiracy theories. It is deeply regrettable that certain parties have not been responsible in this respect in recent months, and I and my Liberal Democrat colleagues are worried that these avoidable deaths will become more common should a conspiracy theory narrative persist. We must encourage those communities and healthcare workers who are not currently taking up vaccines to do so. We must build trust, tackle disinformation and encourage people—regardless of where they live—to take up lifesaving vaccines.
Wes Streeting
I thank the Liberal Democrat spokesperson for her response, and I strongly endorse what she said about the importance of vaccination. When it comes to determining which vaccines are available and to which cohort, we follow the advice of the JCVI, but if one good thing can come out of this awful situation, I hope it is general public awareness of the importance of taking up vaccinations where they are available. They remain one of the best public health tools available to us.
On the one hand, it is a very good thing that few people alive in this country today remember the dark days when this country did not have a national health service and did not have vaccination available for common treatments. It is wonderful that we now live in a country where the memories of some of those everyday conditions being widespread killers are distant, but there is also a real risk of a return to those Victorian conditions, because of the misinformation and irresponsible anti-science political positioning that we see in certain corners of even this House. I hope that politicians in particular will think carefully and responsibly about our shared duty to the public in helping people be protected.
On the specific concerns that the Liberal Democrat spokesperson raised, the public health risk to the wider population remains low, but we are actively contact tracing and offering antibiotic prophylaxis to those in close contact with cases. The antibiotics are one course, and they are effective in 90% of cases. I once again emphasise to those watching that if you or someone you know develops symptoms of meningitis or septicaemia, you should seek medical help urgently by calling 111 or 999, particularly if symptoms deteriorate. If you are one of those students at the University of Kent who may have left campus and would otherwise have been visiting one of those four sites, we are making arrangements for you to be able to see your GP and receive the antibiotics there.
Sojan Joseph (Ashford) (Lab)
I thank the Secretary of State for his statement. I pay tribute to all the health leaders in Kent and the school leaders for their calm and quick actions yesterday and over the weekend. I was able to get a briefing from UKHSA yesterday morning and also was able to visit my local hospital, the William Harvey, which has made immediate changes to accident and emergency to take care of those patients who are turning up. There is much speculation on social media and in local newspapers that vape sharing might be the reason behind this outbreak. I am not asking the Secretary of State to comment on that speculation, but can he reinforce the public health message? Can he offer advice to young people and parents in the Kent area on precautions they should be following at this time?
Wes Streeting
I thank my hon. Friend for his support for the local health system and for engaging so actively with my Department and the UKHSA team in response to this incident. He is absolutely right to press on public advice. It might be helpful to be clear that transmission requires close and prolonged contact, such as someone living in the same household or intimate contact such as kissing or the sharing of vapes or drinks. It is those sorts of things where the risk of spread exists. This disease is not like some of the other respiratory conditions that we have seen recently. It is important that people understand how it is spread, because they may find that reassuring. A range of symptoms can present, including a rash that does not fade when pressed with a glass, the sudden onset of high fever, a severe and worsening headache, stiff neck, vomiting and diarrhoea, joint and muscle pain, dislike of bright lights, very cold hands and feet, seizures, confusion or delirium, and extreme sleepiness or difficulty waking. Those symptoms can also apply to a wide range of other conditions. As ever, if in doubt, the best thing to do is to seek medical advice, whether that is calling 111, or in an emergency dialling 999, or seeing your GP. I urge everyone to share the public health information that is disseminating online, so that we can spread facts rather than misinformation.
Layla Moran (Oxford West and Abingdon) (LD)
I share my condolences with those families and communities affected by this outbreak. I cannot begin, as the Secretary of State said, to imagine what they must be thinking and feeling during this time. I also thank those staff who have been involved in the response. I echo the Secretary of State’s hope that from this tragedy will come greater public awareness, but may I add that there should be an increased laser-like focus on vaccination and immunisation from the highest levels of Government? He may be aware that the Select Committee did a one-off inquiry into vaccination and immunisation. I have to be honest with him: our letter to the Department is one of the strongest we have ever sent. We have deep concerns. We use words such as “complacent”, although I do not think that applies to this specific case. I believe that UKHSA has taken this matter incredibly seriously and the mobilisation has happened, although that is despite, not because of, the level of underlying resilience in the system. Will the Secretary of State undertake to look at what we have sent him and his Department? Will he undertake to lead the response himself, not just on this incident but on all vaccination trends in this country from now on?
Wes Streeting
May I first welcome what the Chair of the Select Committee has said about the response to this incident? She is right to press more broadly on vaccination. The winter campaign that we have just run was more successful than last winter’s, but on her point about complacency, I would be the first to say that even with that improvement, we are still not doing well enough as a country on vaccination rates. I am particularly concerned about childhood vaccination. I can give her the assurance that I and our new public health Minister, my hon. Friend the Member for Washington and Gateshead South (Mrs Hodgson)—I welcome her to the Front Bench—will look at that issue carefully. We take it seriously, and we will reply directly to the Committee with actions and with the seriousness that the letter warrants. To reassure the Chair of the Select Committee, I am already talking to my right hon. Friend the Secretary of State for Education about what more the Department for Education, the NHS and the Department of Health and Social Care can do together to ensure that we improve childhood immunisation as well as wider vaccine uptake across the population.
Kevin McKenna (Sittingbourne and Sheppey) (Lab)
My heart also goes out to everyone affected by this terrible and unfolding tragedy. I think particularly of my constituents in Sittingbourne and Sheppey, many of whom are students who attend the universities in Canterbury or who go to school in Faversham. Many are staff there, too. It will be particularly hard on my constituent, Sue, whose son died of meningitis a few years ago. She has been tirelessly campaigning for a change in the law on the duty of care for people in those situations. Matthew would be alive today if action had been taken swiftly enough by the people who were with him. What more can we do to ensure that everyone on the ground across Kent and more widely knows what to do if they see the signs and symptoms of meningitis?
Wes Streeting
My hon. Friend raises such an important point. Let me, through him, convey my thoughts and condolences to Matthew’s family and, via them, to so many families across the country for whom the news headlines will be particularly painful, because they have lived through and are still living with grief and loss as a result of this devastating disease and the loss it can bring about. My hon. Friend is absolutely right that we need to ensure not only that there is wider public understanding of the signs and the symptoms, but that we are not complacent about that within the health system. Sometimes, in busy A&E departments, GP practices or pharmacies, things can get missed. It is important that we that we pick those concerns up and act quickly. I know that there are views on vaccination and the need for more widespread vaccination. I have asked the JCVI to look at that, but we will follow the scientific evidence.
Helen Whately (Faversham and Mid Kent) (Con)
I thank the Secretary of State for his statement, and for his communications with me.
Juliette was a schoolgirl in year 13 at Queen Elizabeth grammar school in my constituency. She died of meningitis this weekend. Her headteacher said of her:
“She was incredibly kind, thoughtful and intelligent”,
and that she had been “treasured”. I too am a parent of a year 13 student and my heart goes out to Juliette’s family, and also to the family of the university student who has died.
Sixth-formers and university students mix in the same crowded venues in Canterbury, so the Government must fully consider the risk to schoolkids as well as the students in the universities. I am grateful to the NHS and the UKHSA for the action that they have already been taking locally, but many parents feel that they are not receiving enough information, and schools have also found themselves struggling to obtain guidance. May I ask the Secretary of State why there was no contact with schools until Monday, whether all school pupils who went to Club Chemistry have been identified and invited for treatment, and whether he will roll out the vaccination programme to local schools, including residential schools in the area?
Wes Streeting
I thank the hon. Member for repeating that wonderful and moving tribute to Juliette from her headteacher, which brings into sharp relief the devastating impact that this has had and the anxiety that many other parents will be feeling, in common with her. I also thank her for the proactive way in which she has been in contact with me and with the UKHSA over the weekend. She is asking the right questions. We will obviously review this and return to her and to the House with more detail, but I understand that on Sunday identifying the schools concerned posed some challenges and that contact was made on Monday morning. We need to look hard at whether more could and should have been done to be in touch with those particular schools on Sunday, but also with schools more generally.
The hon. Member was right to point out that there will have been other sixth-formers over the age of 18 in the nightclub, including, perhaps, some who should not have been there. It is important for us to have a grip on who those young people are, to ensure that they have access to high-quality health information and advice and know where to go if they are concerned. I am confident that the four hubs that I mentioned will reach those young people and that the flow of information is improving, but the hon. Member is right to press and probe on whether we could and should have been more effective in communicating with schools, as we certainly were in communicating with the university.
Jim Dickson (Dartford) (Lab)
I thank the Secretary of State for his statement, and I echo his words and those of other Members about the tragic loss of two young lives to meningitis as a result of this outbreak. Many Dartford residents remain understandably concerned, and I therefore welcome his assurance and those of the UKHSA that the outbreak is linked to a very specific venue and event. It has of course been encouraging to see the swift action from health authorities, as well as local public health teams, to trace those who attended Club Chemistry, and to offer preventive antibiotics to tackle the outbreak. Can the Secretary of State confirm for my constituents that those who attended the club should go immediately to designated sites for antibiotics, and that anyone else experiencing symptoms should contact their GP or dial 111 as soon as they can?
Wes Streeting
My hon. Friend is entirely right. I did not respond to a linked question from the shadow Secretary of State earlier, so let me let me respond to both questions now.
All cases are currently being treated as being connected with the Club Chemistry incident and cluster, but we are not taking that for granted: we remain open-minded and assess it continually as information comes in from patients and their families, which can take time because they are often very sick. Via the UKHSA, we are providing the opening times and locations of the four hubs. If people fear that they have been in close contact and are worried about the risk to themselves, they can come forward for antibiotics, which will be made available to them.
Rosie Duffield (Canterbury) (Ind)
I thank the Secretary of State and his team for their engagement with this awful situation in Canterbury. As he can imagine, all in my constituency have been devastated by the tragic death of Juliette Kenny and another student from this cruel disease, and I thank my constituency neighbour, the hon. Member for Faversham and Mid Kent (Helen Whately), for her lovely tribute to my constituent.
We have been inundated by questions from extremely worried constituents, and the Secretary of State has answered some of them in his statement. The main question has been about the roll-out of the vaccine, and I was really pleased to hear that that will happen soon. Worried parents and vulnerable students are telling me that communications from their education settings are not consistently clear, and one school has been closed to those in year 13. What is the Secretary of State’s message about attendance in person?
There are reports from medics on the frontline in the hubs that the service has been overwhelmed by requests for antibiotics, with people presenting with mild colds and coughs. Will the Secretary of State make very clear once again exactly why and when people should turn up? The time for addressing the concerns about the roll-out of information is not now, but hopefully we can drill down on that when this horrible event is over.
Wes Streeting
I thank the hon. Member for her proactive approach over the weekend and in recent days, given the impact that this is having on her constituency and the devastating impact on her constituents. Let me reassure her about two things.
First, we are not advising that there should be school closures. I think it important once again to underscore the nature of the transmission of this disease, which is close personal contact, such as kissing, sharing vapes—which I am concerned about in the context of young people—and sharing drinks. Obviously, if people live together in a household, some of those things are even more likely to occur, but the general risk is low. I want people to think carefully about their own situation, but they should not be unnecessarily worried or anxious.
Secondly, on antibiotics access, students at schools who have had close contact with those who were at Club Chemistry can attend the sites that provide antibiotics. That message went out to all Kent schools this morning, so hopefully there will be an improvement in the flow and accuracy of information going to schools.
The hon. Member was absolutely right to say that once this incident has passed we will need to look back and reflect on what was done and when, and what we can learn from that. At the same time, I am keen to ensure that we are listening, getting active feedback from Members across the House, and improving in real time as well. We will keep these channels open, not just through questions today but through briefings with Members, so that we can get feedback from local elected representatives, which in the hon. Member’s case and others has been extremely valuable.
Dr Lauren Sullivan (Gravesham) (Lab)
I send my condolences to the families affected, and to all those who have lost young lives to meningitis in the past. I welcome the Secretary of State’s targeted vaccine programme, as well as the roll-out to deliver antibiotics at pace. Vaccines are the most effective and powerful way in which to protect individuals and the community at large, but we know that infectious diseases mutate, and we must be ready. Will the Secretary of State commit to future work to examine the menB vaccine to ensure that it provides wider protection? Would it be considered as part of the package including the MMR vaccine that is offered to students and young people before they embark on life?
Wes Streeting
We can be proud in the United Kingdom that this was the first country in the world to roll out the menB vaccine. As for who might be eligible in the future and on what basis, we always rely on the advice of the JCVI, which is independent and is based on the data and on scientific research. However, owing to the nature of this outbreak and the speed at which we have seen the disease spread, I am asking the JCVI to look again at the advice that it has provided, without prejudice to any decision that it might make. Given our most recent experience and what we have seen in recent days, I think it prudent for the JCVI to take those factors into consideration and issue fresh advice to the Government.
Tom Tugendhat (Tonbridge) (Con)
I thank the Secretary of State and the medical teams who have responded incredibly quickly, particularly UKHSA, which has done a phenomenal job in tracing and in making sure that we have preparations in place. There are lessons to be learned, but we will park that for a moment.
May I ask about the antibiotics? People from not just east Kent but Tonbridge were at Club Chem on the relevant days and, for very understandable reasons, they do not particularly want to go all the way back to Canterbury; many of them are feeling rather nervous about it. Is there a reason why the antibiotics are not available in Tonbridge, as I have been told by one of the medical groups in the town? Is there a possibility that the antibiotics will be spread, so that people can receive them in other locations?
Wes Streeting
Following the right hon. Member’s question, I will ask whether expansion to Tonbridge would be a sensible thing to do, given the number of people who may have been in Club Chemistry on the relevant dates. I take his point about some people not being willing or able to travel to the four sites that have been made available in Broadstairs and Canterbury. None the less, and not least because some students have left university for the Easter break, we are making sure that GPs are able to prescribe antibiotics through the NHS. I know he is talking about different cases—they will not be students—but we will make sure that people can get access to antibiotics via their GP. If I have not fully answered his question—he is shaking his head—I will catch him after this session to make sure that I do.
Daniel Francis (Bexleyheath and Crayford) (Lab)
May I share my condolences with the friends and families of the two young people who have very sadly lost their lives? Nine years ago, I saw my own daughter have a 42-minute seizure. Thanks to the work of the NHS and the drugs, she recovered from meningitis B, but I know exactly how terrifying that situation can be. For lots of families around the country, their children are currently at university and are hundreds of miles away. What advice can the Secretary of State give families about the conversations they should have with their young people in Canterbury about the health advice that they should seek and the symptoms that they should look for?
Wes Streeting
I thank my hon. Friend for sharing his awful experience, and for once again emphasising the importance of good public health information and advice, including for parents whose students will still be in Canterbury and who may therefore be particularly worried. UKHSA is now advising anyone who visited Club Chemistry on 5, 6 or 7 March to come forward for preventive antibiotic treatment as a precautionary measure; it can be collected from four sites. If they or people they know develop symptoms of meningitis or septicaemia, they should urgently seek medical help by going to the nearest accident and emergency department or dialling 999. If it is not an emergency but people are concerned, they can contact their GP or NHS 111.
Symptoms of meningitis and septicaemia can include a rash that does not fade when pressed with a glass; a sudden onset of high fever; a severe and worsening headache; a stiff neck; vomiting and diarrhoea; joint and muscle pain; a dislike of bright lights; very cold hands and feet; seizures; confusion or delirium; and extreme sleepiness or difficulty waking. I want to underscore that the general risk of transmission is low and that it takes place through close, direct and prolonged personal contact through things like kissing or sharing vapes and drinks. We need to get the balance right between promoting awareness—people thinking about their own situation and whether any of these factors apply to them—and not spreading unnecessary anxiety, because most people, including the overwhelming majority of students at the universities and people in Canterbury, will not be at risk.
Kirsty Blackman (Aberdeen North) (SNP)
Our thoughts are with everyone involved in this matter, particularly all those who are dealing with it, including medical professionals, university staff and UKHSA. I understand that the Secretary of State’s immediate priority today will be this specific outbreak. Dr Amirthalingam from UKHSA was on BBC Radio 4 this morning and suggested that the progression of the outbreak is atypical. Will the Secretary of State give a reassurance that the devolved health authorities will be given updates if there is another atypical progression anywhere else in these islands?
Wes Streeting
The hon. Member is absolutely right about the atypical nature of this outbreak. I can reassure her and the House that UKHSA is in regular contact with the devolved Administrations.
Clive Efford (Eltham and Chislehurst) (Lab)
My heart goes out to the bereaved families affected by this terrible tragedy. Their pain must be unimaginable, and I wish those who are being treated in hospital a swift recovery. I commend UKHSA for its swift response; notwithstanding any lessons that need to be learned, it seems to have reacted very quickly and effectively. How confident can we be that the outbreak is contained within the identified area, and is there a contingency plan for any outbreaks in other areas? As a south-east London MP, I have concerned constituents.
Wes Streeting
I am very grateful to my hon. Friend for his question, and I am mindful of the concerns of neighbouring communities across his part of London and the wider south-east. I can provide reassurance on two points. The general risk is low because of the nature of the transmission of this disease and because of the active contact tracing that is under way, on which UKHSA has done a particularly impressive job, given the unusual nature of this outbreak. We can be reasonably confident that we are tracing people and managing risk in that way. Even as students return home from university, we are managing the risk, proactively contacting people and making antibiotics available. We are preparing for a targeted vaccination campaign in the coming days, but we are also considering the wider cohorts that UKHSA may deem necessary to vaccinate.
Dr Neil Shastri-Hurst (Solihull West and Shirley) (Con)
I know from my time in medicine that all those involved in combating this outbreak will be working at pace, and they have our utmost respect. However, there will be concern about the report in The Independent in the last hour or so that certain pharmacies in the region are running out of or running low on the menB vaccine. Will the Secretary of State commit to looking into that personally and ensure that we get a robust supply chain?
Wes Streeting
I can understand that some people may choose to buy the vaccine, but I will reassure the hon. Gentleman on two points. First, we have a significant stockpile of vaccines. Secondly, we are taking an evidence-based approach to vaccination, starting with the targeted vaccination programme that UKHSA is preparing. We are thinking about additional cohorts, and we always keep an eye on our medicine supply more generally.
Jas Athwal (Ilford South) (Lab)
I thank my right hon. Friend the Secretary of State for his statement. Parents of teenagers and students across the country will be looking on with increasing anxiety. What is the Secretary of State’s advice to parents in other parts of the country, particularly those in the Kent area? What exactly are the symptoms that they should be looking for?
Wes Streeting
I am very grateful to my hon. Friend for his question, and I know that lots of parents will be concerned about this issue. As I have said, the first thing that individuals should do is think about their risk of exposure. We have already made available the four hubs for people to come forward and get antibiotics, and we will continue to contact people actively and trace the outbreak.
As I have previously said, there is a range of symptoms: a rash that does not fade when pressed with a glass; a sudden onset of high fever; a severe and worsening headache; a stiff neck; vomiting and diarrhoea; joint and muscle pain; a dislike of bright lights; very cold hands and feet; seizures; confusion or delirium; and extreme sleepiness or difficulty waking. Those symptoms can apply to a range of conditions, but it is good to be cautious. Students who may have been at Club Chemistry on the dates concerned should not write off some of the symptoms as a hangover. It is better to be reassured than to be ignorant, so seeking medical attention and advice is the right thing to do, rather than simply writing off the symptoms as something else. I urge parents to give that advice to young people, and students to follow the advice.
Vikki Slade (Mid Dorset and North Poole) (LD)
Meningitis is one of the worst nightmares that parents worry about, particularly when their teenagers leave home and are living away. My constituent Vicki Purdey from Corfe Mullen had her life changed by meningitis two years ago, and she is still unable to walk unaided. She is calling for meningitis awareness in schools, particularly via PSHE lessons, and at university through freshers’ packs. Will the Secretary of State talk to his colleagues in the Department for Education to progress this, given the high-risk nature of those in this age group and the fact that they will not have been vaccinated as they were born before 2015?
Wes Streeting
I think that is a really constructive suggestion, and we will absolutely look at it.
In reply to the right hon. Member for Tonbridge (Tom Tugendhat), who had left us but has just returned fleetingly to his place—it is an amazing skill he has—I think his question was about the availability of antibiotics in Tonbridge, not necessarily at a distribution centre. I would just reassure him that there are sufficient antibiotic stocks at the university, hospitals and the ambulance service, and we are working with local resilience partners to ensure effective distribution. However, I will pick up his point about Tonbridge, given the proximity and the likelihood that many residents will have been at the club in question.
James Asser (West Ham and Beckton) (Lab)
I join other hon. Members in sending my condolences to the families of the students who have died. As my right hon. Friend will be aware, I was once upon a time the National Union of Students officer responsible for national health campaigning, and a meningitis outbreak on campus was always one of our great anxieties. We used to run awareness campaigns that, as we know from feedback at the time, enabled students to be aware of the symptoms and get urgent medical treatment.
Although this is a localised outbreak, there will obviously be anxiety among parents and students across the country. Would the Department work with the national meningitis charities, the National Union of Students and university authorities to run a national awareness campaign, so that the symptoms he has outlined are fully understood, and students are aware of them and can understand what to do if they spot them?
Wes Streeting
Like my hon. Friend, I am a member of the NUS mafia in this place, and I well understand the enormous value that students’ unions bring to promoting student welfare and raising awareness. I think he is absolutely right about the risks of meningitis and other infectious diseases on university campuses, and to suggest that we should work with the meningitis charities, the NUS, student unions and others to see what more we can do not just in response to this outbreak in Kent, but more generally to raise awareness among groups of students, who, because of the nature of their studying and living conditions, can be more prone to the spread of infectious diseases.
Edward Argar (Melton and Syston) (Con)
I associate myself with the Secretary of State’s remarks: the thoughts of all of us in this House are with the families of those, tragically, who have died and all those who have been affected.
While there are understandably questions about vaccination and antibiotic eligibility, it is important that decisions continue to be guided by clinical experts, and in this country we have some of the best in the world. I welcome the Secretary of State asking the JCVI to review the eligibility criteria, but will he please be unequivocal—I think he has alluded to this—in saying that he will continue to be guided by its expert clinical advice in any decisions he subsequently makes?
Wes Streeting
I am extremely grateful to the right hon. Gentleman for raising that question and making that point. It sometimes feels that barely a month, if not a week, goes by in this job when I am not regularly exhorted to make a political decision overriding clinical advice. I think that is the wrong thing to do and it sets a dangerous precedent, particularly when others in this House might be minded to make ideological judgments about science and medicine that are neither good science nor good medicine. There is an important principle to defend here, which is that where we are making clinical decisions, they should be based on good, high-quality clinical advice on the basis of robust evidence and data. I give him the assurance that I will continue to follow clinical advice, and he is absolutely right to raise this particular point of principle.
Danny Beales (Uxbridge and South Ruislip) (Lab)
I, too, welcome the Secretary of State’s statement and join him in expressing our sympathies with and condolences to the families who have lost young people in recent days.
Obviously, parents and students are very concerned at the moment, and there are reports online that private pharmacies are selling vaccinations for several hundreds of pounds. Can the Secretary of State assure this House that NHS England and the Department of Health are monitoring any possible price gouging on vaccinations and that there is no profiteering following these tragic events?
I echo the comments of the Chair of the Health Committee. We recently looked at vaccinations, and there have recently been a number of outbreaks of different diseases across the country, some of which are associated with declining vaccination rates—although that is not directly related to this incident. Will the Secretary of State update us on his thoughts about whether the last Government’s 2023 vaccination strategy needs a fresh look in order to deal with both uptake and responses to outbreaks?
Wes Streeting
I thank my hon. Friend for the excellent work he does as a member of the Select Committee, and reassure him that we are taking the Committee’s letter and advice very seriously. I think he is right to ask us to look again at the 2023 strategy.
I also reassure my hon. Friend that to price gouge or profiteer in this situation would be a totally immoral and irresponsible thing to do. More generally, we are not advising the public to pay for a vaccine. If it is decided that any vaccination is required, that will be offered on the NHS. The menB vaccine is already offered to infants, and the menACWY vaccine, for adolescents and young adults, is free on the NHS. That is the advice. I understand that people may wish to make individual choices, but the advice stands, and I would urge people not to allow themselves to be ripped off by those trying to exploit understandable public anxiety.
Sir Julian Lewis (New Forest East) (Con)
I have heard a suggestion that this type of meningitis is more widespread in some countries than in others. Is there any truth in that, and if there is, would there be wisdom in suggesting to young people travelling to the countries concerned that they ought to add the vaccination as a prophylactic against that possibility?
Wes Streeting
I am not sure about the point of prevalence, but we will look carefully at the genesis of this outbreak. Of course, in common with the point raised by my hon. Friend the Member for West Ham and Beckton (James Asser), we will think about what advice ought to be offered. As ever when it comes to travel advice, we rely on the evidence available, and with our partners at the Foreign, Commonwealth and Development Office, we regularly offer good travel advice to British citizens travelling abroad where there may be exposure to greater health risks.
Carla Lockhart (Upper Bann) (DUP)
Given that we are nearing the Easter holidays, what discussions has the Secretary of State had with the Minister of Health in Northern Ireland about ensuring that students travelling home are aware of the situation and the need to take precautions?
Wes Streeting
I reassure the hon. Member that UKHSA is in close contact with all the devolved Administrations to make sure they understand the nature of this outbreak, what we are seeing and how we are responding, and we are also helping the devolved Administrations to manage risk through contact tracing. We will continue that regular contact.
Sir Gavin Williamson (Stone, Great Wyrley and Penkridge) (Con)
I thank the Secretary of State for his statement. Obviously, we are rapidly approaching the time when, right across the country, university students will be dispersing and heading away from halls of residence and their campuses. What actions is the Secretary of State taking—working not just with universities, but with health authorities and other bodies right around the country—to make sure that any cases that may be dispersed around the country are quickly acted on?
Wes Streeting
I thank the right hon. Gentleman for his question. I can reassure him that, through partners in the NHS, we are ensuring that antibiotics are available to GPs to prevent students from necessarily having to return to Canterbury, especially if they have travelled a long distance to get home. There is obviously a widespread public awareness of the outbreak, so in all our NHS settings there will be a particular vigilance for these types of cases, which are rapidly reported. I am also reassured by the extent to which contact tracing with UKHSA is effective, and people are responding accordingly.
Shockat Adam (Leicester South) (Ind)
I thank the Secretary of State for his statement. I, too, would like to express my condolences to the families and loved ones of the two young people who have passed away, and send my best wishes to those who are in hospital. As the father of a daughter at university, I cannot imagine what they must be going through.
Many students have expressed to newspapers such as The Guardian their concerns about returning home where they have vulnerable loved ones, citing a mother coming back from hospital or those who live with their grandparents. Does the Health Secretary have any advice for students returning home to loved ones on not spreading the disease to them?
Wes Streeting
I am grateful to the hon. Member for his question. It is worth bearing in mind that the transmission of this particular disease is through close and prolonged personal contact. Therefore, the risk of transmission is much lower than other outbreaks of disease we have seen in this country in recent years, in particular respiratory diseases and some of the concerns people had around flu over the winter. We are actively contact tracing and making antibiotics available. It is for individuals to make their own judgments about their own risk of exposure, and what that means in terms of close personal contact. More generally, if students returning home from university are sat next to someone on a train, for example, that is not close prolonged personal contact. I hope that reassures people that, through contact tracing, the availability of antibiotics and the standing up of the targeted vaccination campaign, we are actively managing the risk of transmission, and that the risk to the general public is very low.
Middle East
(1 day, 4 hours ago)
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The Secretary of State for Foreign, Commonwealth and Development Affairs (Yvette Cooper)
I would like to update the House on the conflict in the middle east. Since the start of the conflict, we have seen Iran fire over 900 missiles and over 3,000 drones across 13 countries in the region—countries that are UK partners, and that hundreds of thousands of British citizens visit, work in or live in. Regional air defences have intercepted the vast majority of Iranian strikes, but in recent days we have seen damage to oil export infrastructure, gas facilities, ports and airports, and restrictions on the strait of Hormuz, with major consequences for the global economy; there are impacts on the UK economy, too. US and Israeli strikes across Iran are continuing. We have also seen attacks from Iranian proxy groups, and troubling escalation in Lebanon. The UK is continuing our support for British nationals in the region, our defensive military support for partners against Iranian strikes, and our intensive diplomatic activity on both security and economic issues in the UK national interest.
In Riyadh a few days ago, I saw the work to get British nationals home from across the region, and how we are protecting our people and our partners. I stressed the UK’s support and solidarity as I met counterparts from across the Gulf. Over the last week alone, I have held discussions with my counterparts from all six nations in the Gulf Co-operation Council, and with the US, Israel, key European allies and other regional partners. We want the swiftest possible resolution to the crisis to bring security and stability back to the region, and to stop Iran’s threats to its neighbours and its efforts to hijack the global economy.
The events in the middle east have consequences around the world and affect our security and our prosperity here in the UK. Our response is based on clear principles and calm leadership: we will support UK households under pressure; we will protect our people in the region; and we will defend our allies under attack. As the Prime Minister said yesterday, we will not be drawn into a wider war; nor will we outsource our foreign policy. Our decisions will be based on UK values and the UK national interest.
Let me update the House on support for British nationals in the region. At the outset of the crisis, more than 300,000 British citizens were in the region. When the air strikes started and airspace closed, many were stuck. Since then, we have been working relentlessly to help them get home. That has been a complex task. Our 24/7 crisis response centre has been working with our embassies, partner Governments and the rapid deployment teams we sent to operate on the ground. We have worked closely with airlines and laid on additional Government charter flights from Muscat and Dubai. We estimate that the number of British nationals who will have flown back from the region since the start of the war will today reach 100,000. We continue to monitor the situation to provide the latest advice, but I want to put on record my sincere thanks to all those involved in the tireless efforts to support British nationals abroad and to bring British citizens home.
Turning to the conflict, as the Prime Minister set out to Parliament, we took the decision not to be involved in the initial US strikes, or to join any offensive operations. We have taken a different position on that from the US and Israel, based on what is in the UK national interest. When Iran began to target other countries across the region, putting our partners and citizens in danger, we took the further decision to support defensive action. In Saudi Arabia, I have seen the air defences that the British Army is helping to operate to counter drones. We discussed additional defence assets, which were pre-deployed by my right hon. Friend the Defence Secretary to the region before the conflict began, and we have increased support since. We have jets operating from sovereign base areas in Cyprus, and eight in Qatar, including in the joint UK-Qatari squadron. As I speak, British Typhoons and F-35s are flying in defence of the eastern Mediterranean and across Jordan, Bahrain, Qatar, the United Arab Emirates and Iraq. The UK’s defensive military action is supporting the wider region, with four extra Typhoons, three Wildcat helicopters and a Merlin helicopter already deployed. We are increasing our naval presence in the eastern Mediterranean, as HMS Dragon and RFA Lyme Bay approach. As the House is aware, we have given permission for US forces to use long-standing basing at RAF Fairford and Diego Garcia to support defensive strikes against the ballistic missiles that are targeting the Gulf, but let me confirm again the point that the Prime Minister made last week: our Cyprus base is not being used in those US operations.
We want to see an end to this war as quickly as possible. The longer it goes on, the more dangerous the situation becomes, and the more pressure on the cost of living here at home. Iran’s capabilities have been massively degraded, but the conflict has confirmed the threat that the regime poses through its weapons and its proxies, and why for so long there has been an international determination that Iran should never be able to develop nuclear weapons. As the conflict eases or ends, we will need some form of negotiated agreement to contain and constrain the future threats from ballistic missiles, drones, proxies and Iran’s nuclear programme, and to safeguard international shipping.
In the past seven days, we have seen Iran particularly focus its strikes on economic infrastructure in the Gulf: oilfields in Saudi; ports in Oman; strikes against commercial ships from Thailand and Malta; and threatened mines in the strait of Hormuz. Iran is seeking to hijack the global economy. It is holding hostage supplies of oil, gas and fertiliser, affecting prices and supply chains across the globe, threatening the cost of living here at home, and causing real worry for our constituents across the country. That is why the Prime Minister laid out yesterday how the Government will stand up for working people here in Britain, including by providing support for households with heating oil costs, and by maintaining the energy price cut and cap. Last week, we joined 31 other countries in the biggest co-ordinated release of oil in the International Energy Agency’s history, while maintaining our economic pressure and sanctions on Russia. As we welcome President Zelensky to London today, we are determined that war in the Gulf must not become a windfall for Putin. We continue to stand with Ukraine.
Reopening the strait of Hormuz is vital for market stability, and for the cost of living for British households. However, as the Prime Minister has said, this is a serious and complex issue, and there is no easy fix. We are discussing this with international partners in Europe and Asia, Gulf partners and the US. These discussions are separate from the conflict itself, as the US has said; countries around the world have been clear that they do not want to see escalation, or be drawn into a wider conflict, but they do want to see the strait open and functioning, and they do not want to see the fundamental principle of freedom of navigation undermined. Because it is an international shipping lane, multiple nations need to be involved in planning the way forward. Our discussions will continue to reflect serious, expert military and commercial assessments of what is credible and feasible, so that commercial shipping can return as soon as possible, as the conflict subsides.
I turn to Lebanon, which I am extremely concerned is on the precipice of a widening conflict that risks disastrous humanitarian consequences. In recent days, I have spoken to the Lebanese Prime Minister and the Israeli Foreign Minister, as well as holding discussions with the US, France and other European and Gulf partners. We need urgent diplomatic action to avert further escalation, but amid that danger, it is possible that there is also a moment of diplomatic opportunity, and we must bring all support and pressure to bear so that it is seized and not squandered.
Let me set out the UK position. First, we condemn the appalling attacks by Lebanese Hezbollah, which has fired hundreds of rockets at northern Israel. This must cease immediately. The actions of this proscribed terrorist group, at the instigation of the Iranian regime, are once again drawing the people of Lebanon into a conflict that they do not want and that is not in their interests.
Secondly, we support the sovereignty of Lebanon. We welcome the commitments made by the Lebanese Government, including the significant decision to ban Hezbollah’s military activities, and we will continue to support the Lebanese armed forces—they, not Hezbollah, are the sole legitimate defender of Lebanon.
Thirdly, we are extremely worried about the civilian consequences of current Israeli operations. An estimated 1,000 people have been killed, and one in seven Lebanese civilians have reportedly been displaced from their homes. This scale of humanitarian displacement is unacceptable and risks devastating consequences. This weekend, I announced that the UK would provide an additional £5 million in essential humanitarian aid, and today I can announce a further £10 million of humanitarian support to provide emergency medical care, shelter and other lifesaving assistance in Lebanon and the region. This will help prevent further displacement and instability that would risk escalating regional problems and have a wider impact on other countries beyond the region.
Fourthly, we believe that diplomatic progress can be made, as there is a shared interest across Lebanon and Israel in seeing an end to the Hezbollah threats and seeing peace and stability return. Both the Lebanese and Israeli Governments have expressed an interest in joint talks. We strongly support this path, the framework for which is in Security Council resolution 1701, as it presents the best route to lasting peace, security and stability beyond the region. The UK stands ready to provide diplomatic support to this process.
This conflict in the middle east is affecting countries across the region and the world. These global events are impacting our security and economy here at home. This Government are resolute in our determination to protect the safety, security and prosperity of British people and our partners. We are pursuing the swiftest possible resolution to the conflict, and security and stability, in the national interest of the United Kingdom. I commend this statement to the House.
Madam Deputy Speaker (Ms Nusrat Ghani)
I call the shadow Foreign Secretary.
Priti Patel (Witham) (Con)
I want to put on the record the thanks of the Opposition to our brave armed forces in the region and to those en route, as well as our thanks to the diplomatic and consular staff for all their efforts to support the quarter of a million British nationals in the region. We also thank our GCC allies for their care in hosting the thousands of British nationals who have returned home via their commercial carriers—Emirates and Etihad Airways—through the air corridor that they secured.
British nationals in the region, our assets and interests, and our allies continue to be on the receiving end of indiscriminate targeting by Iran’s despotic regime. As our friends in the GCC have said, the regime has pursued a nuclear weapon and ballistic missile programme, and sponsors terrorist proxies, whose destabilising activities across the region and interference in domestic affairs of state have threatened us all. The world would be a safer place free from the tyrants of Tehran.
While Iran attacks our military bases, targets British nationals, holds Lindsay and Craig Foreman captive and indiscriminately fires missiles and drones on its neighbours, we cannot stay silent or inactive. The UAE’s Minister of International Co-operation, Her Excellency Reem Al Hashimy, has called Iran’s actions “unhinged”. Our friends in the Kingdom of Saudi Arabia have rightly stated that Iran must stop the attacks on economic infrastructure. We have consistently called on the Government to work closely with our friends in the Gulf. We must back our allies in their attempts to safeguard their regional airspace, freedom of navigation and economic and national security. Given the concerns that they have raised in recent weeks, what assurances and confidence did the Foreign Secretary give our friends in the Gulf about the depth and reliability of our support to them? What specific commitments did she make to them about better protecting our bases and allies in the region? The way that our friends and close security partners who host British armed forces have been subjected to outrageous, unprovoked aggression has been painful to watch. Britain cannot stand by while our allies do the heavy lifting to protect us all.
Take Bahrain, for example, with whom we signed the C-SIPA—comprehensive security integration and prosperity agreement—in 2024. I am yet to receive a substantive answer from the Government on how we are mobilising the agreement to better protect our ally and our naval base near Manama. What commitments has the Foreign Secretary given to ensure that British assets would be made available to bolster our allies’ defences? Will minehunter vessels be returning to our base in Bahrain, and will a destroyer, which can take down projectiles, be in the region?
What discussions has the Foreign Secretary had with Israeli Ministers on the Iranian-backed terrorist organisation Hezbollah, whose actions are undermining regional stability and the Lebanese Government and causing terrible hardship for both the Lebanese and Israeli people? Can she advise the House on any actions that the British Government are taking to support practical efforts to see Hezbollah disarmed? What is her assessment of the capacity of the Lebanese armed forces to deal with this threat?
Earlier this month, the Minister for the Middle East summoned Iran’s terrorist representative in London. What was discussed? Will the Foreign Secretary summon him again? Has she held any direct discussions with her Iranian counterpart?
As well as threatening regional security, the Islamic Revolutionary Guard Corps threatens our homeland. It has been designated a terrorist organisation by every corner of the world, including the United States, the European Union, many members of the GCC and our Commonwealth partner, Canada. At this time of war, why does the UK diverge from the rest of the world? What leverage over Iran are the Government exacting for taking the position of not acting? If the Government bring forward legislation to proscribe the IRGC, the Opposition will stand ready to work with them. That also applies to the source of funding of the Iranian regime—what steps is the Foreign Secretary taking with our partners to cut off the financial flows that fund the Iranian regime through the international financial system?
The Foreign Secretary referred to her conversation with Secretary Rubio. Can she confirm that Britain is being kept informed of US actions, both militarily and diplomatically? What kind of agreement on Iran’s nuclear programme would she find acceptable, given the Government’s preference for a negotiated settlement? What is her assessment of the international efforts to reopen the strait of Hormuz? I say that following the Prime Minister’s statement yesterday about a new viable collective plan. What are the details of that plan?
Finally, Iran’s close friend Putin must not profit from this conflict in the middle east. What is the coalition of the willing doing to collapse Putin’s financial flows, make the shadow fleet unviable and stop refineries in India, China and Turkey buying Russian crude oil and funding Putin’s assault on Ukraine? Will the Foreign Secretary also join me in commending our Ukrainian friends for their support of our Gulf allies, when they themselves are under constant attack? This is a consequential moment for the world, and strong and consistent British leadership is required.
Yvette Cooper
I thank the shadow Foreign Secretary for her questions; I will take each in turn. Not only are we working immensely closely with our Gulf colleagues and partners, but we are providing them with direct military defensive support, including with our F-35s and Typhoons, which are in operation over the region. We are taking action, including against drones, and providing basing support against the ballistic launchers and missiles that are targeted at the Gulf. We will continue to work closely with those partners, including looking to the future to see how we can support them with the latest anti-drone technology, learning from the experiences of Ukraine.
I have had discussions with the Israeli and Lebanese Governments on Lebanon and the threat from the terrorist group, Lebanese Hezbollah, and the threat from that Iranian-backed organisation is clear. Once again, it has been exposed in recent weeks as doing the bidding of the Iranian regime. Hezbollah does nothing to stand up for the Lebanese people.
On the IRGC, I gently point out to the right hon. Lady that she was Home Secretary for some time and did not introduce the legislation necessary to address some of the wider security issues. However, we continue to fully sanction not just the IRGC, but much more widely across the Iranian system, to keep up the pressure. We do so alongside our allies and alongside the defensive military operations that are in place. Iran cannot be allowed to develop nuclear weapons. That would be a threat not just to the region, but to the world. That is why I, alongside my French and German counterparts, led the work to ensure that we could trigger the snapback response to reintroduce sanctions on the Iranian regime back in October, before this conflict started. We will need to keep our focus on preventing not just the nuclear threat, but the ballistic threat, the proxy threat and the threat to the strait of Hormuz.
The issues around the strait are complex; that is the reality. That is why we need to ensure not only that we are guided by military and commercial expertise, but that planning is in place, drawing together countries across the world because there is international interest in the strait, and that is what we will continue to do.
Finally, I could not agree more with the shadow Foreign Secretary on her point about Russia and Ukraine. Russia and Putin cannot be allowed to benefit from this crisis. We see the long-standing links between Russia and Iran and the threat that both countries pose. Today, as we welcome President Zelensky to London, we continue our steadfast and, I believe, cross-party support for Ukraine. That support must continue, because we know that Ukraine’s security is our security.
Dan Carden (Liverpool Walton) (Lab)
I thank the Foreign Secretary for her statement and for her focus on the impact on our constituents from the fallout of this conflict. Specifically, what are our allies and partners in the region, who now find themselves under fire from Iran, asking of the UK Government, and are we able to deliver?
Yvette Cooper
When I met the Gulf Co-operation Council, our partners welcomed our support and our long-standing commitment to their security, stability and territorial integrity. At the moment, they face challenges from the ballistic missiles threat, so we are providing basing in support of the US defensive operations. They also face threats from drones and cruise missiles, so we are providing jets to help strike them down and some of the long-standing air defences that I saw in Saudi. They also face significant economic threats, because Iran is now deliberately targeting their economic infrastructure to escalate the situation more widely. That is why we are working closely with them on a way forward for the strait of Hormuz.
Madam Deputy Speaker (Caroline Nokes)
I call the Liberal Democrat Spokesperson.
Calum Miller (Bicester and Woodstock) (LD)
I thank the Secretary of State for advance sight of her statement.
The war of Trump and Netanyahu—cheered on uncritically by Reform Members and the Conservatives—has put our citizens and troops in the region under immediate threat from Iran’s reckless retaliation, and worsened the cost of living crisis for households here in the UK. The Government’s first priority must be to protect our citizens, our troops and our allies facing unprovoked attacks. They must also take action on the huge cost increases here at home. I wish to put on record my party’s thanks to our brave service personnel for their work to keep our citizens safe.
We also now face the possibility of another major escalation. Reports suggest that a ground invasion of Lebanon by Israeli defence forces is imminent. Hezbollah is a brutal terror organisation and must be disarmed, but that must be achieved by working with leaders in Beirut and through international organisations. Will the Foreign Secretary tell me what further steps she will take to pressure the Netanyahu Government to cease their devastating strikes on Lebanon, and pull back from plans for a ground offensive? Will she also set out what new steps the Government are taking to halt and reverse the expansion of illegal Israeli settlements in the west bank?
The IRGC is also a terrorist organisation and should be proscribed here in the UK. Can the Foreign Secretary explain to the House why she has still not done that? We know that UK bases have now been used by the US to conduct strikes in Iran. The Prime Minister told this House that those strikes would be only defensive. To assure the House of that, it is crucial that the UK monitors the outcomes of US actions. Will the Foreign Secretary confirm whether the Government have been supplied with that information by US forces or, if not, will she confirm whether the Government have asked for it?
It was wholly predictable that Iran would retaliate by closing the strait of Hormuz. Donald Trump has now made a shameless plea that NATO allies should clean up the mess that he initiated. Liberal Democrats are clear that we cannot afford to be dragged by Trump into this costly foreign adventure. Can the Foreign Secretary confirm that the Government will seek to secure an emergency resolution from the UN Security Council, calling for a multilateral approach to reopening the strait of Hormuz? Will she commit to bringing a vote to this House before any UK forces are sent to operate in the strait?
Yvette Cooper
On Lebanon, as I made it clear in my statement, the threat from Lebanese Hezbollah is serious. This is a terrorist organisation that is doing the bidding of the Iranian regime, not standing up for the Lebanese people. The Israeli and Lebanese Governments have a shared interest in tackling Hezbollah, and there is an opportunity for both of them to engage in diplomatic talks and discussions, which we want to support. We urge Israel to support those talks and that process, and not to pursue the huge displacement of civilians, with all its humanitarian consequences. We want to see a shared set of operations against Hezbollah, including support for the Lebanese armed forces on that as well.
More widely, the hon. Member is right to recognise the support for our armed forces and the work that they are doing to secure the safety not just of British citizens in the region, but of our partners and the wider energy and economic infrastructure as well.
On the strait of Hormuz, the focus at the moment is on the practical measures that will help to restore shipping once the conflict subsides, and to ensure that Iran cannot continue with a long-term ability to hold the global economy hostage, which is affecting us here at home.
Yasmin Qureshi (Bolton South and Walkden) (Lab)
I commend the Prime Minister for his decision not to get involved in this war of choice. While we are all distracted by Israel’s illegal bombing of Iran and Lebanon, Israel has also occupied the west bank and, in the month of Ramadan, closed Masjid al-Aqsa, which is the third holiest Muslim site. It is in East Jerusalem, which, under international law, has been declared as being illegally occupied by Israel. This is a particularly pernicious and vindictive action. Can the Secretary of State please tell us what discussion she and the Foreign Office have had with their Israeli counterparts, and will she ask them to please reopen the Masjid al-Aqsa and allow the worshippers in, especially as Eid al-Fitr will be celebrated by the end of this week?
Yvette Cooper
My hon. Friend is right to raise real concerns about the escalation in the west bank. This is a critical issue—both for the west bank and the rights of Palestinian people in the west bank, and when it comes to addressing concerns around illegal settlements and settler violence—and it is fundamentally part of the wider issues around the peace process for Gaza and the future of a two-state solution. As we deal with the ongoing conflict in the middle east involving Iran, it is really important that we do not lose focus on the 20-point plan and wider issues around the west bank. We are continuing to raise these issues with the Israeli Government and more widely in the region and beyond.
Sir Julian Lewis (New Forest East) (Con)
If an Iranian rocket attack—hopefully this will never happen—successfully penetrated our defences and caused severe damage and casualties on a British base, is the Foreign Secretary ruling out any response by the RAF against the source, such as a battery, from which those missiles had been fired?
Yvette Cooper
The right hon. Member will know that we are already taking defensive military action in support of our partners, against threats to them, and we take immensely seriously any threats to UK bases or military assets. He would not expect me to comment on operational issues, but he knows how seriously we take the UK’s military and defensive capabilities.
Debbie Abrahams (Oldham East and Saddleworth) (Lab)
I commend my right hon. Friend on her statement, and I thank her and her offices for the safe return of two of my constituents who were caught up in the original bombings.
I support what my right hon. Friend says about the Government’s position not to get embroiled in this war of choice, but I note her equivocation around potential involvement in relation to the strait of Hormuz. If we are able to have further details about that, as appropriate, it would be really helpful. To what extent does she think that the international community’s lack of action—that includes from the UK—in holding Israel to account for its illegal actions in the west bank and Gaza has potentially made its action in Iran more likely?
Yvette Cooper
On the strait of Hormuz, I should be clear that the discussions that are under way are separate from the conflict, as the US itself has made clear. One thing that is being looked at is what is possible as the conflict ends or subsides. On the wider issue of Israeli operations in the west bank, I have myself raised these issues in the UN Security Council, and we will continue to do so. We take these issues immensely seriously. We also have to recognise the ongoing threats and challenges from the Iranian regime.
Dr Andrew Murrison (South West Wiltshire) (Con)
The Foreign Secretary said that the situation in the strait is complex, and so it is, but it is not that complex. Her Government or military must have war gamed this in the past, because it was foreseeable. Can she say when a plan will emerge and who she is discussing it with? Will she please reassure the House that she is not simply talking to the United Nations, because if we expect the United Nations to keep the strait open, we will be here talking about this at Christmas?
Yvette Cooper
I said in my statement that we were having discussions about the strait with our European partners, our Gulf partners, the United States and other countries who also have a strong interest in supporting freedom of navigation. This is complex. The nature of technology, including new drones—sea drones and air drones—the different kind of threats and the issues around commercial confidence make all of this complex. That is why we need to do this based on expert advice and multilateral discussions. All these issues can only be addressed through international partnerships.
Paul Waugh (Rochdale) (Lab/Co-op)
I thank the Foreign Secretary for confirming today that British foreign policy is being decided by the British Government and not outsourced either to Washington or to Tel Aviv.
At the weekend, Israeli police killed two young Palestinian brothers and their parents in the occupied west bank, shooting all four in the head and face as the family returned from a Ramadan shopping trip. Mohammed was five, and Othman, who was blind and had special needs, was seven. Their mother and father were driving them through their home town of Tamoun late on Saturday when Israeli forces opened fire. Eleven-year-old Khaled, who survived the shooting, told Reuters that Israeli police who dragged him out of the car said, “We killed dogs.” Does this not show the need for the UK to take tough action against Israel for the expansion of illegal settlements in the west bank and the wider crimes being committed by settlers in the west bank?
Yvette Cooper
The case that my hon. Friend describes is deeply disturbing. It is essential that all Governments follow international law and maintain international standards around human rights and civilian protection. The case is extremely distressing and obviously needs full investigation.
Stephen Gethins (Arbroath and Broughty Ferry) (SNP)
When there is no long-term plan for military intervention, it is civilian populations who pay the price. We know that from Iraq, Libya and elsewhere. Given the importance of international law, which I hope the Foreign Secretary supports, will she tell me what the consequences are for Israel for its actions in Lebanon? Just as importantly, when it comes to RAF Fairford and Diego Garcia, what assurances has she been given that there will be no targeting of civilians from those bases?
Yvette Cooper
The UK Government continue to follow and to be guided by international law—that is an important part of our principles and values. On RAF Fairford and Diego Garcia, there are operational arrangements in place for our military, and an agreement was reached to use them for defensive purposes.
Kim Johnson (Liverpool Riverside) (Lab)
The illegal war started by Israel and the US is shifting focus away from the atrocities that we are seeing happen daily in Gaza and the west bank. This morning I listened to the mother of Hind Rajab. In the week when the film about her was nominated for an award, her name has become a symbol of strength for the children of Gaza. Investigations have shown that 355 bullet holes were found on the car in which Hind hid with dead members of her family—overwhelming evidence of the terror that she faced while trapped and frightened. Does the Foreign Secretary agree that the horrendous actions of the Israel Defence Forces in this case, and so many others, as we have heard today, can only be described as barbaric and inhumane? Can she say what this Government are doing to challenge these atrocities and barbaric actions, and does she have more to say than just warm words?
Yvette Cooper
I heard part of that deeply distressing interview this morning. Not only does there have to be compliance with international standards, humanitarian law, international law and full investigations of any violations, but we have to ensure that there is a peace process, which is desperately needed, for Gaza and the west bank as part of a two-state solution. Only that will deliver peace and respect for human rights across the region.
Kit Malthouse (North West Hampshire) (Con)
One of the most depressing things about the Foreign Secretary’s statement is that she seems to have failed to learn from the failure of her predecessors of both Governments, who were repeatedly warned that if the violence and cruelty in Gaza were left unchecked, it would spread out across the entire region and possibly consume it in flames. We find ourselves in exactly that position. I was struck by the passage of her statement concerning Lebanon, because it is almost completely the same as passages that were said about Gaza at the start of that conflict—“We are very concerned, we are protesting to the Israelis, and we are sending some aid, but there is really nothing we can do”.
I have three questions. First, we have been supporting the Lebanese armed forces for many years now, so do we believe that the Lebanese have a right to self-defence, and if they do, how will we support them in the defence of their civilian population? Secondly, what will the Foreign Secretary do to prevent Lebanon from becoming a new Gaza—a phrase that has been used by Israeli officials about this conflict? Thirdly, if she is not willing to do either of those things, how many Lebanese is an acceptable number for us to see killed over the next few weeks?
Yvette Cooper
Because of the immense scale of risks and the already horrendous humanitarian consequences in Lebanon, I have spoken directly to both the Lebanese Prime Minister and the Israeli Foreign Minister in recent days about exactly that. That is also why we have identified the interest shown, and the steps that the Lebanese Government have taken to propose direct talks are really important. It is essential that the Israeli Government support those and take steps forward for those, instead of taking ground offensive action, and that countries across the world support that process. This should become a diplomatic opportunity in a way that we have not seen before. It would be devastating if that were instead thrown away by extended conflict and by the Israeli operations that we have seen.
Chris Bloore (Redditch) (Lab)
I reiterate the thanks to the Foreign Secretary for reconfirming that Britain will make independent foreign policy decisions in the interests of our own people. Many of my constituents are still stuck in countries in the middle east and the surrounding areas because of the closure of airspace, and some are still struggling to gain visa extensions to stay in those countries where they are on holiday. What work is the Foreign Secretary doing with airlines to ensure that those people can get flights back? For many of them, it has been several weeks.
Yvette Cooper
I am happy to pursue further the cases that my hon. Friend raises. The work being done by the 24/7 crisis centre that the Foreign Office set up, by our rapid deployment teams and by our consular teams in the region has enabled an estimated 100,000 British citizens to return home since the conflict started. Some of that is through additional charter flights that we put on, particularly from Dubai and Muscat, and some through working closely with the airlines to ensure that there are flights to the UK and routes that British citizens can take. There have been some areas where airspace has been restricted again and there have been additional problems, but we continue to work with anyone who is finding it difficult to return home.
Tom Tugendhat (Tonbridge) (Con)
I wonder whether the Foreign Secretary, in all her travels, has been considering the effects on the United Kingdom, and not just on energy prices but on fertilisers. Has she, by any chance, engaged in any conversations with countries that are some of the world’s biggest suppliers of fertilisers, such as Canada, whose Prime Minister was here, or indeed with the United States? While events continue in the middle east and there is absolutely no indication that her words are having any effect at all in opening up the strait of Hormuz, there may be something she can do to open up markets that British people can benefit from.
Yvette Cooper
I can confirm that I am seeing the Canadian Foreign Minister later this week. There are many international discussions under way. One of the things that I discussed with the Saudi Energy and Transport Ministers, whom I met while in the Gulf, was some of the work that they are doing, for example, to look at re-routing on different commercial routes and so on to ensure that different supply chains can keep moving.
The right hon. Gentleman is right that fertiliser is one of the important issues here. Most people have been focusing on oil, but fertiliser is hugely significant for a lot of different areas, and we continue to work across Government and internationally on what routes there might be. Also, bluntly, we want this conflict to reach an end as swiftly as possible, so that these global arteries for trade and transport get moving again.
Melanie Ward (Cowdenbeath and Kirkcaldy) (Lab)
The Government are right not to be drawn into this war and that it needs to end, including with a negotiated agreement. I welcome the Foreign Secretary’s comments about the situation in Lebanon, where I used to live and work as an aid worker. Does she share my serious concern at the conduct of the Israeli military, with at least 28 attacks on hospitals and health facilities in Lebanon so far and threats of forced displacement? The tactics used in Gaza were criminal and must not be exported with impunity.
Yvette Cooper
My hon. Friend is right that the humanitarian consequences of the Israeli operations are extremely serious already. It is estimated that over 800,000 Lebanese civilians have been displaced from their homes, which is already causing emergency problems with shelter. I have discussed this with the UN High Commissioner for Refugees, as well as directly with the Lebanese Government, and it is why we are providing £15 million in humanitarian assistance, both to Lebanon and to other neighbouring areas, to support people facing displacement.
Liz Saville Roberts (Dwyfor Meirionnydd) (PC)
It is reported that the UK’s national security adviser was in the room at Iran-US nuclear talks last month, just before the war began, and it appears that diplomatic options were still viable and there was no solid evidence of an imminent missile threat to Europe, or of Iran obtaining a nuclear weapon. Does the Foreign Secretary therefore believe that a negotiated path between Iran and the US was still possible at that time? If so, surely that means that the initial US-Israeli strikes were premature and therefore illegal.
Yvette Cooper
The UK did provide support for negotiations and diplomatic processes around the nuclear discussions; we thought that was an important track and wanted it to continue—that was one of the reasons for our position on the initial US strikes. Also, as we look forward, we need to ensure that the approach covers not just the nuclear threats but the ballistic and drone threats to the region, as well as the proxy threats and the threats to the strait of Hormuz. It is also of central importance that we prevent Iran from getting a nuclear weapon.
Mike Kane (Wythenshawe and Sale East) (Lab)
Thomas More, a former occupant of your chair, Madam Deputy Speaker, once famously said that when we cut down laws to defeat the devil, we are defenceless when the winds turn against us. In conflict the enemy always has a vote, and Iran has chosen to restrict the strait of Hormuz. Does the Secretary of State agree that we need to get back to a rules-based order and that the UN convention on the law of the sea should make it clear to Iran that firing upon defenceless maritime vessels and restricting passage in international waters is wrong, and that that provides us with an opportunity for a way forward?
Yvette Cooper
I agree about the importance of maritime law, freedom of navigation and the law of the sea. Those are fundamental international principles and that is why the UK, as an international trading nation, has long supported them. It is also one reason why we have supported Bahrain’s UN Security Council resolution—we were a co-sponsor—because we also see the UN charter as part of the underpinnings of international law.
Lincoln Jopp (Spelthorne) (Con)
I thank the Foreign Secretary for her statement. I am slightly struggling to see what it adds to the answer to the urgent question we had yesterday, but it is always nice to see the Foreign Secretary. When she asks the US Government to de-escalate, what do they say in response?
Yvette Cooper
We have long been clear that, ultimately, we need a swift resolution to this conflict. We are providing the basing support for the US to be able to take defensive action against the military launches and the weapons that are being pointed at the Gulf, and we are also providing broader defensive support, but as the Prime Minister said yesterday, we need a swift resolution. We also know that, as the conflict ends, we will need a negotiated settlement that will prevent Iran from being able to rearm and pose an ongoing threat to the region and beyond. That is the best way to get stability and security in the UK’s national interest.
Sarah Smith (Hyndburn) (Lab)
While this war of choice is raging, Netanyahu’s forces have been murdering innocent Palestinians—men, women and disabled children —in the west bank, so what further action will the Foreign Secretary take to stop Israel repeating what happened in Gaza in the west bank and in Lebanon?
Yvette Cooper
As I set out in our concerns on Lebanon, we are urging the Israeli Government not to pursue further ground operations but instead to pursue the opportunity of talks and a shared interest with the Lebanese Government, who we continue to support. We have raised our deep concerns and condemned some of the decisions made by the Israeli Security Cabinet in the west bank, because they risk setting back the potential for peace and for the two-state solution that the Gaza peace process should have been an opportunity to move towards. We cannot let that process fall off track.
Dr Ellie Chowns (North Herefordshire) (Green)
In the Foreign Secretary’s statement—all six pages of it—there was not a single word of criticism of the illegal, reckless action of Trump and Netanyahu in launching the strikes that have set off this conflagration in the middle east. If the Foreign Secretary is not prepared even to criticise that, what hope can the British people have that the UK Government are standing up to the aggression of Trump and Netanyahu behind closed doors? Can she assure us that she and her Government are showing more backbone behind those closed doors? And can she assure us that she is investing in building a special relationship with allies we can really rely on, who believe in human rights, diplomacy and peace?
Yvette Cooper
This Government take decisions according to UK values and the UK’s interests. I know that there are different perspectives on foreign policy. There are some who believe that we should agree to and join in with everything that the US does. There are some who believe that we should always criticise and oppose everything that the US does. We believe that it is in the interests of the UK and the people across the UK to pursue UK values and UK interests in a hard-headed, serious and calm-headed way.
John Grady (Glasgow East) (Lab)
I pay tribute to the staff of the British embassies in Doha and across the middle east for their professional work in incredibly challenging circumstances. On a separate note, the economic crisis flowing from this war will have a disastrous effect on the poorest countries in the world, plunging people into deeper poverty and leading to an increased risk of conflict. Will my right hon. Friend explain what her Department is doing with international allies to mitigate those risks?
Yvette Cooper
We have been monitoring and assessing the impacts, particularly of the restrictions on the strait of Hormuz and the restrictions around oil and fertiliser. We have been looking at the impacts that that can have, not just on the UK but on some of the most fragile and vulnerable countries across the world. We are monitoring that and looking at how we work with other countries to address that, and I would be happy to provide my hon. Friend with more information, because we have been considering this.
Simon Hoare (North Dorset) (Con)
In June last year, Mr Trump told the world that the Iranian nuclear sites had been “completely destroyed”, but the last few weeks prove that he did not believe that to be true. Last week, the President told the world that the war was nearly completely won and that he needed no help. He has said in recent months that NATO is useless. He now appears to need both help and NATO. Does the Foreign Secretary agree with me—and, I believe, with many in the House—that the President himself is becoming an increasingly unreliable and erratic ally and partner, and that the UK is therefore right to be strategically questioning and sceptical about his pronouncements and his motives? I also echo the view of many people across the House that our remaining sceptical and questioning should not be an excuse for sitting idly by, wringing our hands and offering earnest words but no action in support of humanitarian aid to safeguard the lives of ordinary Lebanese and Palestinians and those in the west bank, because to sit and do nothing would make us as culpable as the guilty.
Yvette Cooper
Our relationship with the US on security and the economy is deep and long-standing. I was first briefed on our security co-operation as a member of the Intelligence and Security Committee more than 25 years ago, and it has strengthened and deepened since then. Our focus needs to be on the substance of that relationship and the real issues, not on rhetoric or statements. That is immensely important, and it is because we take seriously the humanitarian issues that we are now providing £15 million of humanitarian support for Lebanon and talking to the Lebanese Prime Minister. We are raising the issue of Lebanon not just with the Israeli Government but with the US, with European partners and with other Gulf partners.
Laura Kyrke-Smith (Aylesbury) (Lab)
I thank the Foreign Secretary for her statement and in particular for her commitment to Lebanon, which does not want this war any more than we do. Others have also noted that while the world is focused elsewhere in the middle east, Israeli forces have stepped up their deadly attacks on Palestinians in the west bank. The accounts of the killing of the Bani Odeh family in the village of Tammun are utterly harrowing. One witness described to the BBC the little kids crying before they were killed in their car on the way back from their family shopping trip. Can the Foreign Secretary reassure me that she will keep calling out these crimes and make it clear to the Government of Israel that this cannot continue?
Yvette Cooper
I agree with my hon. Friend; we have seen these deeply disturbing reports. This comes against a backdrop not just of increased settler violence but of settlement expansion and the decision of the Israeli Security Cabinet to extend control over the west bank in a way that we strongly condemn. That is deeply damaging. It goes against all the long-standing international agreements and arrangements, it is counterproductive and it sets back the process of peace and the two-state solution.
Jeremy Corbyn (Islington North) (Ind)
In this overarching statement on the middle east by the Foreign Secretary, it is surprising that she did not take the opportunity to condemn the continuing genocide in Gaza, the brutality of the occupation of the west bank, the destruction of Palestinian villages there, the invasion of Lebanon by Israel and the continued supply of British weapons. Trump has declared war on Iran without any war objective or war plan, and we are involved in that. Can she end this nonsense about whether we are sending defensive or offensive strikes from this country? The reality is that if a bomber takes off from RAF Fairford and bombs civilian targets in Iran, we are involved in that act of aggression against the people of Iran. Should we not join Spain and say no to the USA?
Yvette Cooper
We have taken a different approach to the US and to Israel over this conflict, and that has been guided by our principles and our assessment of the UK’s national interest. But I would also say to the right hon. Gentleman that there have been Iranian airstrikes against our partner countries—countries that were not involved in those initial strikes and countries where 300,000 British citizens were either visiting or resident—and strikes on hotels as well as on energy and civilian infrastructure in places across the Gulf. If the UK had done nothing, when we had the ability to take out the missiles and the drones while they were in the air, I think people would have found that extremely difficult to understand.
Jonathan Davies (Mid Derbyshire) (Lab)
I thank the Foreign Secretary for her wide-ranging statement, including the support she outlined to protect British nationals in the region and to ensure that humanitarian aid gets into Lebanon, and the efforts to ensure that British consumers with heating oil are protected from price rises. Over 1,500 properties in my constituency depend on that.
May I ask specifically about Iran? Iran has been a threat to the UK, around the world and to many of our partners. It has been a destabilising force directly and through its proxies for many decades. Is it her assessment now that whatever the circumstances of how this war came about, we have an opportunity to permanently de-escalate and neutralise the threat from Iran so that the whole world can benefit from more peaceful circumstances without it?
Yvette Cooper
Iran continues to be a long-standing threat to international security through its attempts to develop a nuclear programme and to regional security through its proxies and its ballistic missiles programme, but also to its own people in some of the brutal repression that we have seen. It will be important as this conflict subsides and as we come out of it that there is a medium and long-term containment plan to prevent the threats in all these different areas from Iran to its neighbours, so that we cannot see this kind of threat again.
Greg Smith (Mid Buckinghamshire) (Con)
In answer to an earlier question, the Foreign Secretary rightly said that Ukraine’s security is our security. But in answer to the last question, she equally set out why the current regime in Iran is a threat to our security, both through proliferation—a level of enriched uranium to make a nuclear weapon—and the IRGC, which not only slaughters thousands in Iran but has been responsible for plots, which have been foiled, on our own soil. It is all very well the Foreign Secretary saying that she wants to see a swift resolution, but when diplomacy so far has failed and the Government will not join our allies in the attacks, how does she think this will end?
Yvette Cooper
When there are important decisions to be made about UK forces and operations they might be a part of, it is immensely important to look at whether there is a purpose—a clear structure—to the operations and a lawful basis for them, and whether they are in the UK’s interest. We will continue to work with our Gulf partners, European partners and allies and partners across the world on how we maintain the pressure together for a swift resolution that not only restores security to the region, but ensures that we have economic prosperity as well as national security protected.
Patricia Ferguson (Glasgow West) (Lab)
I thank the Foreign Secretary for her statement. It was reassuring to hear her say that we will not be outsourcing our foreign policy—something I think we should all agree with. Is she confident that the United States properly understands that its actions in the middle east have not only made peace in Palestine much more difficult to achieve, but have provided cover to Israel for its ongoing offensive in Palestine and its aggression against Lebanon?
Yvette Cooper
Because the regional stability and security issues around the middle east have so many wider ramifications, some of the Gulf countries, for example, that I have spoken to are not only immensely seized by the issues around the Iranian threat and the direct threat to their airspace and communities, but are raising with me issues around Palestine, Gaza and Lebanon. This ought to be a moment for intense international diplomacy in support of regional security and not for allowing wider escalation and regional threat that would pose long-term instability for the region.
Ayoub Khan (Birmingham Perry Barr) (Ind)
The one thing Trump and Benjamin Netanyahu knew full well when they entered this illegal war unilaterally was that the strait of Hormuz would be a place of strategic weaponry, if you want to call it that, for Iran to use against all other nations. Some European countries have unilaterally now decided to open negotiations with Iran, such as France and Italy. They have done that because they are not participating in any direct military action. My question for the Foreign Secretary is: if the Iranians said, “We would allow UK ships to pass through the strait of Hormuz, but you must prevent America from using your base,” would we comply?
Yvette Cooper
I can say to the hon. Member that we are working closely with our European allies, including France, Germany and Italy, on a range of these issues. I do not think that his characterisation of the situation is right.
John Slinger (Rugby) (Lab)
I want to express my sorrow at the death and suffering of civilians, wherever that is happening in the region. I commend the Foreign Secretary and the Prime Minister for their calm and principled approach to this crisis, which is rooted in respect for international law. Could she expand on efforts that she, the Prime Minister and our allies are taking to de-escalate this conflict and to seek a diplomatic solution that will put the interests of those civilians front and foremost in our minds? We hear far too much about regimes and actors in this region; we need to hear more about the rights of civilians.
Yvette Cooper
My hon. Friend is right that at every stage we have been urging the protection of civilians. That is immensely important as part of this and is also why we need to work so immensely hard to prevent further escalation. It is one of the issues we have been raising particularly around Lebanon, where I am concerned that we are on the brink of what could be much greater devastating humanitarian consequences. It is also why we have been looking forward to what diplomatic process and settlement process could prevent Iran from posing a threat in future.
Ben Obese-Jecty (Huntingdon) (Con)
The morning after the drone attack on RAF Akrotiri, the Foreign Secretary said in the media round that the drone had struck the runway at RAF Akrotiri. I clarified that with the Ministry of Defence, which went on to confirm that it in fact struck the hangar. The hangar in question was widely reported in the media as containing the U-2 spy planes of detachment one of the US air force’s 9th operations group, which is tasked with flying intelligence, surveillance and reconnaissance missions over the middle east. To that extent, given that the Foreign Secretary stated that Cyprus is not being used in those US operations, could she clarify unequivocally whether Operation Olive Harvest is being used by the US to fly reconnaissance over the middle east in defensive support of these US operations? If she is sure that it is not, could she confirm what conversations she has had with the US that made her come to that assessment?
Yvette Cooper
The hon. Member is right about the strike around the hangar. The request from the US to provide basing support for the operations against the ballistic missiles was a request for RAF Fairford and Diego Garcia. The agreement that we have reached to provide that basing support is confined to RAF Fairford and Diego Garcia.
Dr Al Pinkerton (Surrey Heath) (LD)
It is abundantly clear to any fair-minded geopolitical observer that the US-Israeli actions in Iran were commenced without the cover of law and without a plan to follow the initial impulse of kinetic violence. But it is equally clear that the United Kingdom was caught short in our responsiveness and preparedness, particularly in relation to the island of Cyprus. Following the drone attack on that particular hangar, the Cypriot Government expressed disappointment in the UK, and the Cypriot Foreign Secretary has openly speculated about the future of our sovereign base areas. What work has the Foreign Secretary or her ministerial colleagues done to repair the damage with Cyprus, which is, after all, an incredibly valuable diplomatic and defence ally?
Yvette Cooper
It is because regional instability increased in the early part of this year that, since January, we have been pre-deploying additional jets to Cyprus—to the sovereign base—exactly to provide additional protection for Cyprus, including additional air defence and radar capabilities. We took that issue very seriously and continue to do so. I have spoken with the Cypriot Foreign Minister on a series of occasions, and, as the hon. Gentleman will know, the Defence Secretary has not only visited the sovereign base in Cyprus but met the Cypriot Government. We take our partnership with the Cypriot Government, and the defence of operations around Cyprus and the eastern Mediterranean, immensely seriously.
Shockat Adam (Leicester South) (Ind)
I think, and hope, that everybody in this Chamber, including the official Opposition, now agrees that Donald Trump had absolutely no plan when he agreed, along with Israel, to this illegal invasion of Iran. Their first action was to bomb a school, killing more than 160 schoolchildren—mainly girls—and over 1,500 people have been killed and more than 20,000 injured. The whole region is in flames, and the obstruction of the strait of Hormuz is affecting the global economy. Does the Foreign Secretary agree that no UK warships should join this illegal war, and that there should be no boots on the ground to deflect from what is essentially Trump’s “Operation Epstein Fury”?
Yvette Cooper
We took a different view from the US on this conflict. We also think it right to provide defensive support to partners in the region who were never involved in the initial strikes but are being targeted by the Iranian regime. We want to see a swift resolution of the conflict because that is in the interests of the region and of the UK.
Jim Allister (North Antrim) (TUV)
I wholly appreciate that none of this is of our making or choice, but when the Foreign Secretary says that Iran’s action in the strait of Hormuz is an attempt to hijack the world economy, does that not put a direct focus on what is in the United Kingdom’s interest? If we take no action, we assist Iran’s attempt to hijack the global economy, but if we take action, are we not inescapably in this war?
Yvette Cooper
It is exactly because the strait of Hormuz is an important global artery for the global economy that we are working internationally with partners on a way forward. We recognise the complexity of the situation, and are taking a serious approach to the detail to ensure that partnership work is viable, effective and in the UK’s national interest, because we cannot afford to get it wrong.
Youth Unemployment
(1 day, 4 hours ago)
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The Secretary of State for Work and Pensions (Pat McFadden)
I would like to make a statement on our new package of support to tackle the long-term problem of youth unemployment. Let me begin by wishing you, Madam Deputy Speaker, and the whole House a very happy St Patrick’s day. This year, due to Lenten abstinence, I will toast it with Guinness zero—one of the world’s great inventions.
The UK has historically high levels of employment overall. In its most recent report, the Office for Budget Responsibility said that employment would rise in every year of the forecast from 2026, and that unemployment would peak this year and fall in every year of the forecast after that. In fact, in only two of the last 150 peacetime years was the employment rate higher than it was in 2025. However, a particular and long-term issue faces the young, and it is time that young people were offered more hope and opportunity. That is what the package that we are bringing forward will do.
At almost 1 million, the number of young people not in education, employment or training is much too high. The Conservatives try to claim that that is all a result of decisions taken over the past two years—
Pat McFadden
In fact, we can hear them claiming it right now. But the truth is that the number of young people not in education, employment or training rose by 250,000 in the three years running up to the last election, and the Conservatives did precisely nothing about it. Youth unemployment has been rising since 2022, and youth employment never reached pre financial crash levels in any single year of the Conservatives’ 14 years in power. On top of that, the Conservatives kicked away the ladder of opportunity from young people when they presided over a shocking 40% fall in youth apprenticeship starts over the past decade.
The problem is long term and deep rooted. We will back young people with more youth apprenticeships, more chance of getting a job, and more help in overcoming the challenges they face. We have already announced a youth guarantee to help the young unemployed. It involves intensive work coaching, 300,000 work experience and training places, and subsidised work for long-term unemployed people aged 18 to 21. However, we will now go much further, with an explicitly pro young people package, aimed at helping them to learn and earn. From this summer, we will introduce hiring bonuses for businesses that hire a young person who has been out of work for six months. The bonus will be worth £3,000 per young person. There will also be bonuses of £2,000 for small and medium-sized businesses that hire young apprentices. Both bonuses can be combined if the young person hired has been out of work for six months or more. What a contrast with the Conservatives’ record on apprenticeships, which was to take opportunity away from young people—[Interruption.] They don’t like to hear it, but I am going to continue!
We are introducing new foundation apprenticeships in retail and hospitality, and new short courses in AI, electric vehicle charging point installation, electrical fitting and assembly, mechanical fitting and assembly, modular building, solar photovoltaic installation, and welding—the skills that young people need for the future. On top of that, the jobs guarantee, which we previously announced for the long-term unemployed, will be extended to those aged 22 to 24. Those young people will get six months of paid work, at 25 hours per week paid on minimum wage rates. Altogether, this will create 200,000 job and apprenticeship opportunities over the next three years.
This is our new deal for new times, offering new hope to the young people who are so often disparaged by the Conservatives as shirkers and scroungers. Our message is different: “We back you, we believe in you and we want you to succeed.” The package that I have announced is new investment of about £1 billion, and it comes on top of the funding that we announced at the Budget. Taken together, it is a package of support for young people worth about £2.5 billion. The existing exemption from employer national insurance contributions for workers under 21 will stay in place. This package is not just pro young people; it is pro business. I welcome the comments by the Federation of Small Businesses, which said that the provision is a “game-changer” and “a decisive step forward”, and rightly describes the package as “pro-jobs, pro-opportunities”. The package has also been welcomed by large employers such as Amazon, Kier Group and PwC, and the welcome goes beyond business. We know that a lot of young people face challenges in the labour market, and the chief executive of Mental Health UK, Brian Dow, said that the package
“will support young people to be ready for work and help organisations large and small to capitalise on the skills, talents and enthusiasm that young people have to offer.”
As well as the package, there is an urgent need to offer help to young people, given technological and demographic change. They need our help, and we cannot afford to lose their talent and energy. This is about not just young people, but their parents and grandparents. This is a generational challenge, because who does not want their child or grandchild to have a better chance in life? That is why investment in the young is a bond between the generations. It is an act of solidarity that is in the interests of the whole country, because if a young person has prolonged periods out of work, the scarring effects can stay with them for the rest of their life. A young person under the age of 25 on the health element of universal credit is now less likely to get a job than someone over 55 on the same benefit. We have to act to change that.
I am often asked, “So when will you do welfare reform?” Well, I tell the House that this is welfare reform. Putting work and opportunity at the heart of our system is the best reform we can make. Asking not just, “What are you entitled to?” but “How can we help you change your life?” is the change that the system needs. That view lies behind the changes that I am announcing in this package. I commend the statement to the House.
Madam Deputy Speaker (Caroline Nokes)
I call the shadow Secretary of State.
Helen Whately (Faversham and Mid Kent) (Con)
The Government have lost control of welfare. The benefits bill is ballooning. Sickness benefits alone will cost us £109 billion by the end of the decade. Working-age benefits are costing £161 billion right now and rising. But instead of bringing forward welfare savings, Labour MPs have chosen to spend ever more on benefits. Just the other day, they backed an extra £3 billion spending on scrapping the two-child benefit cap. It is all paid for in the same way—by taxpayers, by hard-working people, and by the businesses that employ them.
First the Government tax jobs, and then they wonder why there are fewer of them. Let me tell them: if you tax it, you get less of it. Under Labour, unemployment has gone up month after month. Our youth unemployment now rivals that of Greece, at over 16%. That is one in six young people out of work, wanting employment but denied the chance—and a university degree will not save them, either. Some 700,000 graduates are out of work, and nearly 1 million young people are not in education, employment or training. So many young people have done everything asked of them. They have studied hard, done their exams and got their grades, but now they are getting rejection after rejection to their job applications.
The Government are letting down a whole generation, and the Secretary of State knows it. He said so himself this week on the radio. He talked about the “scarring effects” of youth unemployment: worse mental health, worse outcomes and even lower life expectancy. He is right, so why are his Government making things so much worse? Let us be clear about what this new policy is. It is not a jobs plan or a serious new deal for young people; it is a sticking-plaster, and an expensive one costing over £1 billion. These are state-subsidised jobs to replace the real ones that Labour has killed.
The Secretary of State has laid into our record on apprenticeships, but he knows perfectly well that the drop he refers to happened because we raised the standard of apprenticeships to make them a qualification that would actually count, and to make them a meaningful alternative to university, not just a way for businesses to get cheaper workers. I warn him not to just chase higher numbers in his reforms; quality matters. And why are the Government doing nothing about dead-end degrees and mounting student debt? Why not adopt the policy we have announced of cutting back on low-value degrees, and using the saving to increase apprenticeships? This Government’s answer is to just go back, cap in hand, to the taxpayer.
At the end of his statement, the Secretary of State talked about welfare reform, but why do we never hear the important word “savings”? I think we know why. The Government tried and failed to make welfare savings last summer. What has changed since then? The Prime Minister is only weaker and more indecisive, though the problem becomes ever more urgent. Today’s personal independence payment figures show that claims are up again. There are over 300,000 more people on PIP since Labour took over—a rise of 9%—and the number of young people claiming PIP has risen by 14%. There are nearly 150,000 more people claiming benefits for mental ill health and neurodiversity. I have been clear: this cannot go on. Benefits are not the right answer. Work is better for us. People who can work should work.
The Secretary of State needs to answer some questions. Where exactly has the extra £1 billion that he has just announced for state-funded jobs come from? Will this latest plan actually bring down youth unemployment? Will it even touch the sides? How will he stop fraudulent claims for the cash? How will he make sure that no one loses their job because of his cash handouts? How will he make sure that all this spending makes a difference, and that he is not subsidising employment that would have happened anyway? Does he accept that taxing jobs on the one hand and subsidising them on the other is not an economic strategy, but the economics of the madhouse? Finally, can the Secretary of State at least agree that the benefits bill needs to come down? Perhaps he could take this chance to use the word “savings”. Does he see the irony? Does he understand my feeling of déjà vu? This is another plan from his party for welfare reform that spends more money, rather than saving it. When will he bring forward a plan to actually bring down the benefits bill? He talks about welfare reform; is this it?
Pat McFadden
I fear that the hon. Lady’s response was written without her listening to a word in the statement. She has confirmed that the Conservative party not only bequeathed us the problem, but has learned nothing about how to tackle it. There was no statement of responsibility, no statement of regret and no apology for the record on youth apprenticeships—in fact, she defended cutting youth apprenticeship starts. It is a continued pretence that somehow all of this started just two years ago.
The hon. Lady asks where the funding to help young people comes from. It comes from stable management of the economy—something that the Conservatives know nothing about and that we have practised for the past two years. Young people, at whom all of this is aimed, will have heard her disparage efforts to get them into work and to give them more opportunity. They will have heard her dismiss our changes, which will boost youth apprenticeships. They will have heard her pretend that we can somehow wish all this away with tax changes. That proves that the Conservatives have learned nothing from their disastrous management of the economy. They will have heard her say that the package does not offer young people anything, when we have announced a plan to give them a new deal with more jobs and more apprenticeships. That is the difference between our approach and theirs.
I want to give young people in this country opportunities to get skills, to get a job, to get off benefits and to build a better life for themselves. That is much better than kicking the ladder away and leaving the system unchanged, which is what the Conservatives did. How does the hon. Lady explain the number of NEETs rising by a quarter of a million in the last three years in which they were in power? How does she explain their lack of action to deal with it? When it comes to welfare, what I have said today is very clear and simple: the best means of welfare reform is to put work and opportunity at the heart of the system, and that is what we are doing with this plan.
David Baines (St Helens North) (Lab)
Young people are often unfairly criticised, but it is worth remembering that the vast majority of them are in employment, education or training. Those who are not deserve our support, and to be provided with opportunity, not the condemnation and ignorance that was all they got from the Conservatives in government, and all we have heard from them today. Does the Secretary of State agree with me that the number of young people not in employment, education or training is a scandal, and that it demands action? Will he set out how this new investment will support young people in St Helens North and across the country?
Pat McFadden
My hon. Friend says that young people deserve support; I believe that with the right support, young people want to work and to make the most of their life. He asked how people in his constituency would be helped. They could be helped through the hiring incentives that I have announced, and through the hiring bonuses that will allow small and medium-sized businesses to hire a young apprentice. The young unemployed in his constituency will be helped, because we are offering hope, ensuring that they get a chance, and offering the sense of pride, purpose and dignity that comes with having a job.
Madam Deputy Speaker (Caroline Nokes)
I call the Liberal Democrat spokesperson.
Steve Darling (Torbay) (LD)
The Secretary of State is correct to suggest that the Government inherited a crisis around youth unemployment. However, by introducing the hikes in national insurance contributions, the Government made that crisis into a catastrophe for young people, and supercharged the pressure on our youth across the United Kingdom. Rather than tackling what is now the root of the problem—the NIC hikes—these proposals are just papering over the cracks.
Young people’s childhoods are massively different from those that many of us experienced, especially hon. Members who grew up some years ago, so I pay tribute to the organisations that get young people to the right place, including Eat That Frog, Doorstep Arts, Sound Communities and South Devon college, who do incredible work. They help young people who have come through the pandemic, those who feel as though they are in a pressure cooker because of social media, which is gnawing away at their life, and who face a cost of living crisis.
The Liberal Democrats are concerned about an element of the Government’s policy: we do not understand why the Government are removing funding for apprenticeships for management. Surely managers are the people who support young people in their hour of need, as they go into work. Young people aspire to move into those positions eventually, so will the Secretary of State think again about the impact of the national insurance contributions hike on hospitality, retail and tourism industries in areas like Torbay?
I was interested to hear the Secretary of State speaking on the “Today” programme on Monday. The presenter challenged him by suggesting that the NIC hike had jacked up youth unemployment, and the Secretary of State appeared to agree with that. Finally, an article in The Times suggested that the Government are thinking about making young people second-class citizens through their changes to disability benefits; I would welcome comments from the Secretary of State about that.
Pat McFadden
The hon. Gentleman opposes the changes that we made to national insurance, but he neglects to mention that employer national insurance contributions are not required for employees under the age of 21, unless they are earning more than £50,000 a year. He opposes those changes while supporting extra expenditure on the NHS. As I have said to him a few times, if his party supports extra expenditure, it really has to support revenue-raising measures to fund it.
Young people will have heard the hon. Gentleman dismiss the changes that I have set out today; in fact, they will have heard him say that if he was asked to choose between management courses and young people, he would choose management courses—that is now the established position of the Liberal Democrats. I think that many people would be surprised to hear that in some years, most apprenticeship expenditure has gone on those over the age of 25 who are already in work. We have made a choice; we have chosen young people, and for good reasons. We have chosen them because of the scarring effects of youth unemployment, which I mentioned in my statement, and we now have on record that both the Conservative party and the Liberal Democrats are opposed to our prioritisation of young people.
Rushanara Ali (Bethnal Green and Stepney) (Lab)
I welcome this excellent initiative, with the backing of £2.5 billion of investment, and I commend the Secretary of State on trying to get a grip on the scourge of youth unemployment. We saw a generation lost during the previous Government because of the failure to support young people. What will the Secretary of State do to support disabled young people? The backlog and delays in the Access to Work programme are a real issue. Will he say more about what charities and social enterprises can do, and how they will be supported, in addition to the public sector, to get more young people who are NEET into work?
Pat McFadden
My hon. Friend asks about disabled young people. It is really important that we get more help and support to disabled people who, in the past, were too often signed off, written off and forgotten about. That is not good enough for them or for the country as a whole. The Connect to Work programme, which is devolved to elected mayors and local authorities, is helping disabled people, and the WorkWell programme seeks to get over the divide between health advice and employment advice. She is right that there are issues with the Access to Work programme. It is a really good programme, but there is a backlog that I want to see reduced because it is an important programme that helps disabled people to get into work and stay in work.
Joy Morrissey (Beaconsfield) (Con)
The national insurance tax rise and the upcoming implementation of the Employment Rights Act 2025 are just two of the reasons why businesses are on their knees. I welcome the Government’s youth guarantee, but how can the Government guarantee jobs when there will not be any businesses to offer those jobs?
Pat McFadden
I welcome the hon. Lady’s welcome of the youth guarantee. Perhaps she might have a word with her hon. Friend the shadow Minister, who did not welcome it. She asks about national insurance, but the problem is not new—what is new is the package of help for young people that I have announced today.
Catherine McKinnell (Newcastle upon Tyne North) (Lab)
I refer the House to my entry in the Register of Members’ Financial Interests. As co-chair of the all-party parliamentary group for youth employment, I welcome the Secretary of State’s statement on these new measures. Members will know that Newcastle is home to the country’s best retail and hospitality offer, and I know many businesses will welcome the support for employing young people. Will the Secretary of State set out how his Department is working to ensure the balance between fairness in the administrative processes do not create any burden for small and medium-sized businesses to access the support?
Pat McFadden
I welcome my hon. Friend’s question and her praise for the great city of Newcastle, which I am sure we would all echo. On small and medium-sized businesses, she is right that we need to ensure that the systems are as easy to use as possible. There is a real direction of help in the package to small and medium-sized businesses, particularly with the hiring bonus for young apprentices. That is perhaps why the Federation of Small Businesses has described this programme as a “game changer” and a “decisive step forward.”
Mr Peter Bedford (Mid Leicestershire) (Con)
This is a socialist economic statement. If it moves, the Government tax it; if it keeps moving, they regulate it; and if it stops moving, they subsidise it. Will the Secretary of State accept that his national insurance rises, the changes to business rates and the “unemployment” rights Act have contributed to the hostile environment to employing young people?
Pat McFadden
I am not sure whether the hon. Gentleman’s description of this statement will do me good or harm among my right hon. and hon. Friends, but once again he makes the mistake of assuming that this problem is something that happened only in the last 18 months, which is where the Conservative party is going wrong. It is a long-term and deep-rooted problem. We need a different approach to tackle it, and that is why we need to offer hiring bonuses to businesses and to redirect the apprenticeship system to help young people, precisely because of the long-term scarring effects of young people being out of a job for any length of time. That can mean worse mental and physical health and, in some cases, even lower life expectancy than their peers in work. We have brought forward this package of measures today because of our concerns about that.
Oliver Ryan (Burnley) (Lab/Co-op)
I am glad to hear that the employer NI exemption for staff under the age of 21 is staying in place. The new £3,000 hiring bonus for businesses taking on young people will make a real difference. How will the Secretary of State ensure that it is taken up by businesses and young people in Burnley, Padiham and Brierfield? Does he agree that the 40% drop in youth apprenticeships that we saw under the 14 years of the Tories left 1 million young people as NEETs and many without the opportunities and life expectations that they deserved?
Pat McFadden
We heard the Conservatives defend the 40% figure on the drop in youth apprenticeship starts—that is on the record. If they want to defend and own that record, so be it, but we want to prioritise opportunities for young people, and that is what we are doing with this package. There is a lot in it for employers in Burnley and for small and medium-sized businesses, which now have a new financial incentive to give a young person the vital start in life that can set them on a path of pride, purpose and dignity. That is what having a job gives you.
John Milne (Horsham) (LD)
The Government want to cut funding for level 7 apprenticeships and redirect resources to younger groups, but bodies such as the Royal Institute of British Architects tell me that young people are unlikely to enter professional training in the construction sector, because funding will be withdrawn at the later, more expensive stages of their training pipeline. Does the Secretary of State accept that a one-size-fits-all, generalised cut-off point for 22-year-olds just does not work for industries that have a longer training period?
Pat McFadden
Once again, the Liberal Democrats speak against the prioritisation of youth. We are for training throughout the system and throughout the age range, but we have to make a decision about where to prioritise it with a public budget. I have unashamedly made the decision to prioritise young people, and I think that is the right thing to do.
Jim McMahon (Oldham West, Chadderton and Royton) (Lab/Co-op)
Happy St Patrick’s day to the House and to all across the country.
The Secretary of State is absolutely to committed to this agenda, and that comes across in not just his words, but the action that has been announced today. May I highlight the vacancy period for apprenticeships? Only 16% of vacancies in England are advertised in the two months when young people are leaving school and going into the summer break. That means that many are waiting for months and months to even get the opportunity to apply for an apprenticeship, and that is contributing to the NEET figures that he cares about so passionately. Can we at least address that issue in the public sector so that most apprenticeships are advertised when young people are finishing their exams and leaving school?
Pat McFadden
Let me return the greeting of a happy St Patrick’s day to my hon. Friend.
My hon. Friend makes an absolutely vital point about information. When I talk to young people, they tell me that when they are at school, there is a lot of information about how to apply for a university course. That is great, and it is a great route for young people, but the information on how to apply for an apprenticeship is not as clear; it is not readily available to them or as much a part of the preparation process that many schools put young people through. There is a job of work to be done on information, because we want the clearest, most user-friendly information possible to be available to young people and their parents when making such a vital decision about their future.
Sir Iain Duncan Smith (Chingford and Woodford Green) (Con)
I have known the Secretary of State for a long time, and I have a lot of respect for him and for the position that he is in. The key thing here, as I observe it, is that one of the big problems is the competition between younger people with no experience and older people. He is focusing on younger people. One of the things that we learned the hard way on this matter is that we also have to do something that moves older people through the system faster. We put up the Work programme at the time, which did not cost the Government any money, because it was based on payment by results. May I suggest that when the Secretary of State goes back to the Department and has a look at that, he is focused on the longer-term older people and moving them through jobs?
The second point is on the criticism of national insurance. I recognise that this is not the Secretary of State’s decision; it comes from the Treasury—he will have endless disputes with the Treasury. The threshold does not apply to those under the age of 21, but lowering that threshold puts a block in the system, because the risks to those who want to hire younger people are at the same time blocking older people from coming into work for the same reason. May I suggest that he says, “Let’s do a proper set-up so that we understand this issue”? We have to get older people and younger people into work, not just the younger people.
Pat McFadden
I have a lot of respect for the right hon. Gentleman; I walk past his picture every morning. He was responsible for a major reform to the welfare system with the introduction of universal credit, but after that his party stopped reforming the system. We are seeing the costs of that, particularly with what has happened in the last few years.
On the Work programme, I am happy to look at any successful programme to help people into work. We have more than one of these programmes in the Department, and they should all be evaluated. The right hon. Gentleman makes an important point; we need to get support to people to overcome the barriers to get into work. With regard to national insurance, as I have said, all these things are costs for business, but this is not a new problem. This is a deep-rooted, long-term problem, and we need new answers to it. That is why I have brought forward this package today.
Rosie Wrighting (Kettering) (Lab)
My generation has faced deep generational inequalities over the last decade. That did not happen by accident; it was the result of years of decision making in which the Conservatives chose austerity over investment into future generations. Nowhere is that clearer than in the fact that one in eight young people are not in education, employment or work—a generation lost. What steps is the Secretary of State taking to ensure that his Department and the Government are hearing directly from young people so that we can fully understand the barriers they face when entering work?
Pat McFadden
My hon. Friend is right. That ratio of 1:8 is too high, and it grew a lot in the last few years. She asks about discussions with young people, and she makes a really important point. When I talk to young people, they tell me that they want to work and make the most of themselves; they just need a platform that will help them. In every part of the programme that we have brought forward today, whether it is the apprenticeship changes, the help for the long-term unemployed, the short apprenticeship courses or the hiring bonus, the motivation that I have had is to give young people a platform on which to stand and take the next step in their lives.
Adam Dance (Yeovil) (LD)
People with special educational needs and disabilities are more likely not to be in employment or training. It is great that the new apprenticeship incentives will include recruitment for 19 to 24-year-olds with education, health and care plans, but a majority of people with SEND leave school without one. Will the Secretary of State set out what specialised support will be on offer to young people with SEND without EHCPs who are looking for work or apprenticeships, as well as what new guidance employers will get?
Pat McFadden
The hon. Member raises an important point. The issue of youth inactivity does not start at the age of 16; it often starts well before that. The reforms to the SEND system announced by my right hon. Friend the Secretary of State for Education very recently are really important in that regard, and we want the maximum opportunity for people. The last thing that we want is for people with special educational needs to be written off from the labour market; there has been too much of that in the past. Part of the package that I have outlined today is not about helping people into work then forgetting about them, but about supporting them once they are in a job so that we can get job retention and give young people the maximum chance of success.
Dan Carden (Liverpool Walton) (Lab)
The number of young people not in education, employment or training hitting 1 million follows a trajectory that has been ongoing for a long time and is a global phenomenon. I am delighted that the Secretary of State has today said that a Labour Government are determined to intervene and do something about it. How does he plan to measure the success of this scheme, and how does he think the Government and our education and work systems need to be more agile, given the onset of artificial intelligence technology?
Pat McFadden
I thank my hon. Friend for his question—I know that he takes a deep interest in this issue. There is an urgent need to help young people with the technological change that is taking place in the labour market. That is not just a British phenomenon; graduate unemployment in the United States went up from 5.3% to 5.7% in the final quarter of last year, and youth unemployment in the United States reached a four-year high last summer. We have to be less insular in our debate and understand that young people face particular challenges. That is why, for example, the different apprenticeship courses that I outlined in my statement are really important. They will train young people to cope with a different technological environment and ensure that we give them the maximum chance of success.
Simon Hoare (North Dorset) (Con)
It frankly beggars belief that the Secretary of State does not understand the impact that the Government’s policies on business, tax and regulation have had on the confidence of businesses up and down the country to invest and employ. There is a direct causal link, and nobody will understand why the Secretary of State does not make that link and persuade the Treasury to do something about it. However, my direct question to him is this: why does he think that unemployment is always higher at the end of a Labour Government?
Pat McFadden
The OBR predicts that unemployment will peak this year and then fall in every year of the forecast—[Interruption.] Conservative Members disparage the forecast, but I gently remind them that disparaging the OBR did not work out too well for them a few years ago. In fact—to make a more serious point—the country is still paying the price for the fact that they did so, so I suggest that they learn that lesson.
Andrew Pakes (Peterborough) (Lab/Co-op)
I thank my right hon. Friend for the care and consideration he has shown in putting this package together. I am delighted today to be joined in the House by some inspiring apprentices from Caterpillar in my constituency, who have been talking about their experiences of moving into work. This matters in Peterborough, because we have one of the highest levels of youth unemployment for a generation, and it needs tackling. Can my right hon. Friend assure me that the work we are doing will not just benefit large employers such as Caterpillar, but put in place opportunities in the supply chain for small and medium-sized enterprises, so the brilliance of the apprenticeships we have at Caterpillar is extended to more and more young people in Peterborough?
Pat McFadden
I thank my hon. Friend for his deep interest in this issue. I have visited his constituency, and I give a warm welcome to the apprentices from Peterborough who are in the Chamber today. He asked about supply chains and small and medium-sized businesses. Those businesses will benefit from the hiring bonus for a young apprentice, which is why the Federation of Small Businesses has welcomed this package, describing it as a “game changer” and a “decisive step forward”.
Wendy Morton (Aldridge-Brownhills) (Con)
For this scheme to work, we need vacancies for young people, yet we have a Government who are squeezing the very businesses that are needed to create opportunities and jobs for young people through business rates, energy costs and national insurance increases. The result, sadly, is that businesses up and down the country are going bust and unemployment is going up. I urge the Secretary of State, rather than apply an expensive sticking-plaster to this problem, to speak with the Chancellor and ask her to reverse the jobs tax.
Pat McFadden
I warmly welcome the Chancellor’s support for this package and the help that she has given me in putting it together. The right hon. Lady mentioned vacancies—there are about 700,000 vacancies in the economy, including 50,000 in manufacturing. I attended a jobs fair in Blackpool a couple of weeks ago, where almost 1,000 jobs were allocated on the day. There are vacancies in the economy, but we have to help young people to be in a position to be trained and have the confidence, skills and support they need to take them up.
Catherine Atkinson (Derby North) (Lab)
Having seen the 40% fall in youth apprenticeships over the past decade and the long-term trend of increasing numbers of young people not in education, employment or training, I welcome the fact that this Labour Government are enabling more apprenticeships and opportunities for young people. Derby is a city of makers with a highly skilled workforce, but we need to train up the next generation, so can the Secretary of State tell us more about how this Government will work in partnership with businesses, including SMEs, to provide opportunities to young people, so that we can benefit from their talents?
Pat McFadden
Let me praise the magnificent industries in the Derby area, many of them manufacturing companies. As I said, there are 50,000 vacancies in manufacturing right now. What the trade bodies tell me is that they need help with skilling young people to take up those vacancies. That is precisely what will be made easier by the package that we have brought forward today.
Kirsty Blackman (Aberdeen North) (SNP)
I am not interested in discussing how we got to this point; we all need to work together to ensure that young people can get the opportunities they deserve and that those opportunities are available to them. I have read the Secretary of State’s statement from Monday, I have read the press release, and I have read and listened to today’s statement. There are some gaps about exactly how the timelines will work and what the legislative process for putting the package in place will be. Will he give us an assurance that the House will get this information at the earliest opportunity, so that we can work together to ensure that young people will have the opportunities that he is hoping they will get?
Pat McFadden
The rate of young people not in education, employment or training is, I believe, even higher in Scotland than it is in the UK as a whole. The hon. Member asks for more information on timescales. The hiring bonuses, for example, will be introduced from this summer, and the apprenticeship changes will be introduced from later this year.
Chris Webb (Blackpool South) (Lab)
I start by thanking my right hon. Friend for joining me at my jobs fair a few weeks ago, where more than 1,100 people secured work on the day. Some 900 are already in those jobs, working in our economy. That is Labour in action. I have spoken many times in this House about the need to support the hospitality and tourism industries, especially in coastal communities such as Blackpool, so that they can hire more young people and give them that opportunity. I got my first job at age 14, on Blackpool seafront. It was a great job that helped me get countless more jobs in hospitality. We need more young people to have access to those jobs. Does my right hon. Friend agree with me, Blackpool businesses and the Federation of Small Businesses that this plan is a game changer in tackling youth unemployment in Blackpool and other coastal communities across the country?
Pat McFadden
I thank my hon. Friend for the enormous amount of work that he put into organising the successful Blackpool jobs fair, which I attended a few weeks ago. He is right that the evidence from that jobs fair is that the vacancies are there, with more than 1,000 jobs allocated on the day of the jobs fair itself. Hospitality is a great entry route for young people. We have announced a foundation apprenticeship in hospitality as part of this process, and I hope that extends opportunity to other young people, similar to the opportunities that he had when he was a young man.
John Glen (Salisbury) (Con)
I refer the House to my entry in the Register of Members’ Financial Interests. I share the concern of many on the Opposition Benches about the national insurance increase, but I am particularly concerned by what is happening with graduate unemployment, which we have seen increase by 46% over the past six years. I draw the Secretary of State’s attention to the work of upReach, a charity that I have been involved in over the past few years. It is a social mobility charity that offers workshops, work experience and career coaching to young people. Will he engage with organisations such as upReach and Nick Bent, the excellent CEO who runs it, to see what lessons can be learned? In a world where AI is already taking many graduate jobs, it is concerning that the trend will only accelerate further.
Pat McFadden
As the right hon. Member knows, I have great respect for him. I am happy to reach out to upReach to speak about the work to which he refers. As I said a moment ago in response to another question, graduate unemployment is an international issue, not just one for the UK. There has also been an uplift in the United States, which we think of as possibly among the most dynamic economies in the world. Precisely because there is technological change, we need to help young people and support them through it. Policy has to catch up with the discussion taking place among young people themselves, because they are very alive to this issue, and they are evaluating their employment choices in terms of what they think will happen in the labour market and which jobs will be sustainable through this period of significant technological change.
Sarah Smith (Hyndburn) (Lab)
Before being elected to this place, I spent many years working for charities seeking to tackle the challenge of youth unemployment. I remember fondly the future jobs fund, which, under the last Labour Government, delivered real change for people across the country. I have established the Get Hyndburn Working group to help tackle the challenge of economic inactivity in my constituency. It would be helpful if the Secretary of State could outline how what he has announced today will support that group in its endeavour to see young and, of course, older people secure good employment. Will he also—as he develops further strategies in this regard—pay particular attention to the importance of place and locally-led decision making, in order to tackle the specific challenges experienced in different parts of the country as we seek to get everyone into a good job?
Pat McFadden
I thank my hon. Friend for drawing attention to the record of the last Labour Government. I have described this as a new deal for new times, and it does adapt some of the lessons that we have learnt in the past to today’s very changed labour market. She mentioned the importance of locally-led work. It is true that local labour markets differ, and I want to work closely with local authorities and elected mayors on this agenda, because I think that they all want the best for the young people in their area. The Connect to Work budget, for example, is devolved for the next few years, with considerable flexibility for local leaders in relation to how they use the funding.
Ann Davies (Caerfyrddin) (PC)
Measures to support about 17% of our young people in Wales who are not in education, employment or training to gain employment are welcome, although I prefer to use the term “LEET”—looking for education, employment or training—which I think is a much more positive way of viewing our young people. However, apprenticeships and skills are devolved in Wales, so will the Secretary of State tell me which aspects of his announcement apply to the young people of Wales and the other devolved nations?
Pat McFadden
I agree that “NEET” is not the best and most user-friendly term, but it has been used for some time. As for the hon. Lady’s question about what is devolved and what is UK-wide, the hiring bonus will apply throughout the UK, but the apprenticeship aspects are devolved to Wales.
Gill German (Clwyd North) (Lab)
One of my main priorities as an MP is to ensure that we see more of our young people in good, fulfilling work, because I know that far too many young people in Clwyd North are unable to fulfil their potential. I am excited about the £3,000 youth jobs grant and the expansion of the youth guarantee in Wales, but can the Secretary of State tell me more about the difference this will make to young people in Clwyd North?
Pat McFadden
I think that the statement offers hope to young people throughout the United Kingdom. I look forward to a positive and close working relationship between the UK and Welsh Governments on this issue, because I believe that both Governments share a desire for young people, in Clwyd North and everywhere else in the country, to have the best start in life. I think that, for example, the £3,000 hiring bonus and the jobs guarantee for the long-term youth unemployed, which are UK-wide initiatives, can help people in my hon. Friend’s constituency and offer hope that there is a solution to the scarring effect of leaving young people to fester in long-term unemployment, which is not good for them and not good for the country either.
Rebecca Paul (Reigate) (Con)
I think we can all agree that tackling the rise in youth employment is very important, but I am concerned about the approach that is being adopted for that purpose. We are essentially taking money away from employers and then giving some of them some of it back. Has the Secretary of State considered, for instance, the use of existing levers in relation to employer national insurance? That would be an obvious way to address the issue and ensure that some of our young people are employed.
Pat McFadden
The hon. Lady refers to national insurance. As I have said, there is an existing tax break for employers of people under the age of 21 in the system, and they will continue to have that, but in addition they will have the hiring bonuses that I outlined in the statement. When we bring those things together, it sends a message that we want to help employers to employ young people and give them a good chance in life.
Patrick Hurley (Southport) (Lab)
Under the previous Government, as the Secretary of State mentioned in his statement, youth employment never reached pre-financial crash levels in any single year, so the country had suffered a long period of stagnation. Crucially, some young people, unlike a bloke my age, have never known what an active Government can do to get them into good work. Will the Secretary of State confirm that this targeted package of support is precisely what the young people of this country need in 2026, and that it can finally turn the tables on years of Tory decline?
Pat McFadden
My hon. Friend is right. Let me repeat what he said, so that the whole House hears it: when the Conservative party was in power, there was not a single year in which youth employment reached the levels that there had been before the financial crash. Perhaps no other figure shows what a long-term problem this is. It is right that we have targeted support to enable young people not just to earn a wage, but to get the sense of pride and dignity that comes with having a job. I do not want to bombard the House with too many statistics, but another shocking one is that more than half the young people who are not in education, employment or training have never had a job in their life. They have never experienced the sense of discipline, obligation and pride that comes with getting up and going to work in the morning. That is what we have to change.
Charlie Dewhirst (Bridlington and The Wolds) (Con)
The Chancellor has spent the last 18 months pricing young people out of jobs, and now the Secretary of State has been asked to ride to the rescue by paying companies to get the same young people back into work. The Government are effectively robbing Peter to pay Paul. Why does he think that youth unemployment in my constituency is up by 15% since the general election?
Pat McFadden
Youth unemployment has been going up since 2022—it has been going up for around four years. What we have not had is a specific package to tackle it, but that changes with the package that I have announced today, which will offer real hope and opportunity to young people in the hon. Gentleman’s constituency. My gentle advice to him is to go and make the most of this package. That is what he should do for the young people in his constituency.
Anna Dixon (Shipley) (Lab)
I welcome the support for small and medium-sized enterprises in my Shipley constituency, which will be able to take on young people who have been long-term unemployed and to offer apprenticeships, but the Secretary of State will know that young carers face additional challenges with getting into education, training or work. Shipley college provides excellent training opportunities, but often struggles to find work placements. Will he commit to working with DFE to ensure that all young people, including young carers, can benefit from today’s announcement?
Pat McFadden
My hon. Friend is right: there is a particular challenge for young carers. A significant proportion of the 1 million young people who are not in education, employment or training have caring responsibilities. I commend the work of Shipley college, and I am very happy to keep talking to her about this issue to see what help we can give to young carers.
Shockat Adam (Leicester South) (Ind)
Like the rest of the nation, my constituency of Leicester South struggles with youth unemployment, and many young people are not in education or training. The statement is welcome to a certain degree, but I have a technical question for the Secretary of State. Which age range will bonuses cover? Is it 18 to 21? Also, when will the bonuses be paid? Will it be on hiring, or after a certain period of work?
Pat McFadden
It will apply to young people between the ages of 18 and 24. The hiring bonus will be available from this summer, and we will look at having a retention mechanism so that people are not hired one day and let go the next.
Mr Luke Charters (York Outer) (Lab)
Apprenticeship starts fell under the last Government, largely driven by the reduced uptake from SMEs, so today’s SME incentive is a game-changer. Can the Minister confirm that that incentive can be stacked with other incentives—for example, when hiring a care leaver—and will he send a message from the Dispatch Box to York employers that they should take on apprentices and provide the opportunity of a lifetime?
Pat McFadden
I think employers want to do the right thing—they want to give young people a chance. My hon. Friend asks whether the incentives can be stacked, and the answer is yes. For example, if a small or medium-sized enterprise wants to take on a young apprentice who has been unemployed and on universal credit for six months or more, it can claim both the £2,000 apprenticeship incentive and the £3,000 hiring bonus. That sends a strong signal to business, and it is why the Federation of Small Businesses has called this a game-changer, just as my hon. Friend did. It sends a strong signal about giving young people a chance, which is exactly what I think small and medium-sized businesses want to do.
Ben Obese-Jecty (Huntingdon) (Con)
I was lucky enough to get my first job when I was 16—washing up in a kitchen as well as working in a warehouse—which taught me some really good life skills about what it is like to be employed and the responsibilities that come with that. From speaking to businesses in my constituency, I know that those opportunities simply do not exist for young people at the moment. Being paid a bung to hire young people will not help, because the problem is the huge impact of business rates, national insurance contributions and the minimum wage on their ability to retain the staff they have. They are having to lay off those staff because they simply cannot afford to keep them on. Knowing full well that I will clip this and put it on social media, what will the Secretary of State say to businesses in my constituency to show them that he is listening to those concerns and will address them, rather than putting on a sticking plaster, as this package surely does?
Pat McFadden
The hon. Member mentioned his career in washing up, and let me tell him that we have that in common, because one of my first jobs was as a dishwasher in what I believe was Scotland’s first Mexican restaurant, Viva Mexico. I inherited that job from the current First Minister of Scotland, John Swinney, the previous dishwasher in that restaurant, so we can be the three founding members of a national union of dishwashers.
The hon. Member asked for my message to employers in his constituency. It is to look at this package and avail themselves of the support in it—hiring bonuses for young unemployed people, specific help for small and medium-sized enterprises when hiring a young apprentice, and foundation apprentices for retail and hospitality industries. All those things should be good for the small businesses, particularly those in the hospitality sector, in his constituency.
Josh Dean (Hertford and Stortford) (Lab)
I really welcome this Government’s investment in our young people’s futures, but almost half of NEET young people are disconnected from the benefit system and traditional support. I know from my experience of leaving school at 16 just how much of a difference youth workers and trusted adults can make in giving those hidden young people a bridge into support. Can the Secretary of State say a little more about the role that he sees trusted adults playing in supporting young people into work, and reflect on the work of the pilots and the youth trailblazer areas in looking at the co-location of youth services and employment support?
Pat McFadden
My hon. Friend makes the very important point that a significant proportion of the 1 million young people not in education, employment or training are not claiming benefits at all, and not signing on for standard universal credit or the health element.
One way in which we want to reach those young people is through the expansion of our youth hub programme, which gives them a chance to come into a place—often a sports or community institution—and get a range of help on the health front, the housing front and the work-finding front, because young people do not live their lives according to Whitehall departmental boundaries, and why should they? It is up to us to tailor the help to the way they live their lives, and get it to them in the places where they want to be.
Lincoln Jopp (Spelthorne) (Con)
A couple of weeks ago, I hosted a student roundtable, with two pupils from my eight secondary schools and two from my further education college. I agree with the Secretary of State in that I was left incredibly excited for them and by their hopes and aspirations for the future. However, we also had a discussion about how AI-proof those plans were. His statement mentioned short AI courses, and he also talked about the urgency. Can he tell us how short these short courses will be, who is going to deliver them and how the young people of Spelthorne will sign up to them?
Pat McFadden
These short courses or apprenticeship units are something that employers have called for. Until now the minimum length of time for an apprenticeship has usually been eight or 12 months, or something like that, but these can be for a matter of weeks. We will publish more information about them as soon as we can. The sectors, including AI, in which the first wave have been announced are all sectors in which we will need the skills of young people. We are trying to adapt the training offer that we fund to the needs of employers, and one way to do that is with more short courses.
Richard Baker (Glenrothes and Mid Fife) (Lab)
I warmly welcome the Secretary of State’s announcement. This is exactly the kind of initiative to tackle youth unemployment that employers in Glenrothes in my constituency asked me for just a couple of weeks ago. Can he assure me that he will work with Scottish agencies and the Scotland Office to ensure that the scheme has the maximum possible impact in Scotland, where youth unemployment is also far too high?
Pat McFadden
Yes, of course. I want to work with the Scotland Office, the Scottish Government and anyone who can make an impact. I visited the Bellshill jobcentre in central Scotland just before Christmas. I was told by the area manager that over 40% of the young people on her caseload were on what was called the “health journey”. That should bring us up short. It should tell us and warn us about the stickiness and the long-term effects of a young person being off long-term on sickness benefits. We have to do more to get opportunity to those young people and help them into work. I hope the package I have brought forward today can help us to do that.
Ayoub Khan (Birmingham Perry Barr) (Ind)
Across the west midlands, around 29,000 young people are unemployed, with unemployment rates in parts of Birmingham, Wolverhampton and Walsall running at double the national average. I welcome the measures announced today, but how will the Government ensure they reach young people in high unemployment areas such as Birmingham Perry Barr, where approximately 2,000 young people are unemployed, rather than resources being spread thinly across the counties and the country?
Pat McFadden
Obviously, I know the west midlands well and I know the passion that our Mayor, Richard Parker, has for expanding opportunity, offering more skills and more opportunities to young people. I work closely with him on that agenda. I do not believe we should set area against area. Of course I am concerned about youth unemployment in the west midlands. I can assure the hon. Gentleman that his constituents and mine, and those in every other constituency in the west midlands, can benefit from the proposals I have brought forward today.
John Grady (Glasgow East) (Lab)
Glasgow has many brilliant young people who just want to work. They have been let down by the Tories and the SNP, with school standards plummeting and the refusal to fund the Rolls-Royce welding centre. In many meetings I have with employers, they emphasise to me how little they see of the apprenticeship levy they pay in. Will my right hon. Friend outline how the package provides opportunities to young people in Glasgow?
Pat McFadden
I do not need any convincing about how great a city Glasgow is, and I will be going there very soon. My hon. Friend asks what this announcement will mean to young people in his constituency and the city of Glasgow. The hiring bonuses I have announced today will be available all over the country, as will the subsidised job—25 hours a week at minimum wage rates for six months for young people who have been unemployed for 18 months or more—precisely to give young people not just a wage but the sense of pride and purpose that comes with having a job. I hope that that gives hope to the young people in Glasgow. It is hope that we need to give to young people all around the United Kingdom.
Liz Jarvis (Eastleigh) (LD)
The managing director of G. W. Martin, a manufacturing firm based in my constituency, welcomes the hiring bonus included in the announcement, but he says that it will barely cover the cost of one month’s pay. More important to him are the candidates’ attributes and commitment, rather than any bonus on offer. I absolutely welcome any measure to support young people in my constituency into work, but will the Minister tell me what more is being done to ensure young people remain and succeed in the workplace?
Pat McFadden
I welcome the hon. Lady’s—somewhat limited—support for the announcement, but she is right that we need to support young people in the workplace. There is perhaps a touch of nostalgia about some of the comments about young people not being work-ready, because that was the traditional role of youth apprenticeships. When the ladder is kicked away from them, it is no wonder that more young people are not work-ready. We are changing that with this announcement, because we are re-emphasising the importance of youth apprenticeships. I hope she welcomes that part, too.
Antonia Bance (Tipton and Wednesbury) (Lab)
I thank the Secretary of State for this announcement, which will make a big difference to so many young people in our area of the Black Country who are looking for work or training but unable to find the opportunities they need. I recently visited Asda in Great Bridge, where I saw the supported internship scheme that is being run in partnership by Asda, Project SEARCH and Sandwell college. The scheme’s employment rate for learning-disabled young people is 60%, compared with 4% nationally. Would the Minister join me in congratulating Asda, Project SEARCH, Sandwell college, Rose, Manvir, Oliver, Trish and Romeo on the work that they are doing together to ensure that learning-disabled people can get into good jobs?
Pat McFadden
I thank my hon. Friend and parliamentary neighbour for her question. I know Asda in Great Bridge. What a wonderful employment rate that is, after the programme. It gives hope to young people with learning disabilities, who should never be written off; there has been too much of that in the past. Part of our work is to get more help and support to young people with disabilities, in order to give them the confidence and the opportunity that a job can bring.
Lauren Edwards (Rochester and Strood) (Lab)
I thank the Secretary of State for his statement. As someone who represents an area where more than 90% of businesses are SMEs, I particularly welcome the financial incentives for SMEs to take on young apprentices in the key industries of hospitality and retail. Demand for apprenticeships has been high for some time, so I welcome the Government’s recognition that supply-side incentives were needed to provide opportunities for young people in areas like mine. However, SMEs lack HR departments, and when I speak to business owners, they talk a lot about the complexity of engaging with the system. How will the Secretary of State make the system simpler for SMEs to engage with, so that we can give young people the opportunities that they desperately need?
Pat McFadden
My hon. Friend is right that we have tried to put extra incentives in this package for small and medium-sized businesses. In particular, there is the hiring bonus for young apprentices, which is aimed at both young people and small businesses. I hope that will be of help to the small businesses in her constituency. She is also right that clarity of information is important. Schemes like this can be complex, so I want to work with officials to make the information about this one, and the administration of it, as clear and simple as possible—consistent, of course, with the need to properly use and protect public money.
Frank McNally (Coatbridge and Bellshill) (Lab)
It was a pleasure to join my right hon. Friend at Bellshill jobcentre last year to hear about the need to support young people who are not in education, training or work. I greatly welcome this announcement, which will help transform life opportunities. Businesses in my constituency across a range of sectors highlight that despite their willingness to train the next generation of workers, intentions are often undermined by the failing apprenticeship system in Scotland. Can my right hon. Friend expand on how the positive actions of this Government will support young people in Scotland who have sadly and tragically been left behind by the SNP?
Pat McFadden
My hon. Friend and I had a great day in Bellshill just before Christmas; I am grateful to him for the visit, and to the staff at the local jobcentre for explaining to us both the work that they were doing. The programme I am announcing today offers hope to young people in his constituency; the £3,000 hiring bonus will be available throughout Scotland. Of course, apprenticeship funding is devolved, but I hope that the Scottish Government will provide the maximum opportunity for young people to combine an apprenticeship role with the hiring bonus, which is available to businesses across the country.
Alex McIntyre (Gloucester) (Lab)
I must admit that I am a little disappointed by those on the shadow Front Bench, who are sneering and suggesting that plunging 3,000 Gloucester children back into poverty will somehow solve long-standing issues with youth unemployment. That is not backed up by the facts, and, quite frankly, it comes across as quite nasty. The Conservatives promised to level up places like Gloucester, but they left the most deprived parts of my city, and the young people living there, without the opportunity to get on.
I am really pleased to see Gloucester boy Tom Kerridge, who grew up in Matson in my constituency, backing the proposals that my right hon. Friend is putting forward. Can he explain to the House how more young people will be able to benefit from the Government’s reforms?
Pat McFadden
Tom Kerridge has achieved a great amount and done fantastic things. I was very pleased to meet him and talk to him about this package a few days ago, and I welcome his warm support for it. I agree with my hon. Friend on the response from those on the Opposition Front Bench. Young people throughout the country will have heard them dismiss the help that we are putting in place. If that is what the Opposition want to do, that is up to them, but we take a very different view. We want to give hope and opportunity to young people; we want to stop dismissing them; and we want to give them belief in their future. That is what this package is about.
Lola McEvoy (Darlington) (Lab)
The message from this Dispatch Box is clear: apprenticeships, apprenticeships, apprenticeships. This Government will meet the challenges that we face today with fantastic careers for the next generation, so thank you. SMEs in Darlington are huge engines of growth across the country. Many of the business owners came up through apprenticeship routes, and desperately want to pass on that opportunity to the next generation. We will bite the Secretary of State’s hand off for the £2,000 hiring bonus. Can the Secretary of State outline any sector-specific restrictions on the types of SMEs that can take advantage of the bonus?
Pat McFadden
We do not propose restricting the hiring bonus by sector, though my hon. Friend will have heard me list in my statement the areas covered by the new apprenticeship units—areas such as artificial intelligence, electric vehicle charging, infrastructure, solar panel installation, welding and so on. As regards the new short apprenticeship units, there are some specific areas that we are putting forward first.
Josh Fenton-Glynn (Calder Valley) (Lab)
I welcome this announcement. It will make young people’s lives and futures better. Calder Valley is famous for its world-class specialist manufacturing, but in the UK, one third of manufacturers are over 60. Can my right hon. Friend please confirm that this policy announcement will help us bring in the new generation of skills that we need for our economy?
Pat McFadden
This package can make a big contribution towards that. As I have said, there are 50,000 vacancies in manufacturing in the UK today. That is partly because of the difficulty that people have in finding skilled workers. With today’s extra help for apprenticeships for young people, we can begin to change that. That is why it is such an important part of this package.
Madam Deputy Speaker (Judith Cummins)
I call Chris Bloore for the final question.
Chris Bloore (Redditch) (Lab)
I am always happy to be last on an announcement such as this. The businesses and young people in my constituency strongly welcome what the Secretary of State has announced today. As I listened to those on the Opposition Front Bench, I was reminded of the statement by Senator Moynihan of New York:
“you are entitled to your own opinions, but you are not entitled to your own facts”.
Sadly, the Opposition have failed to mention that for over a decade, the UK has fallen behind other OECD countries when it comes to reducing the number of young people not in education, employment or training. That is because of structural failings in both education and public health, which the previous Government did nothing to solve. How can young people and businesses in my constituency of Redditch take part in this scheme, which will finally start addressing the tragedy of NEETs in our constituencies?
Pat McFadden
On the final question, I agree with my hon. Friend that this problem of young people not in education, employment or training is a long-term one that grew under the tutelage of the Conservative party, and about which it did precisely nothing. This statement and package is a different approach, with a very clear message behind it. Let us go out and sell it. That message is: we believe in Britain’s young people; we want to give them a better future; and we have a package of help to enable them to achieve that.
Points of Order
(1 day, 4 hours ago)
Commons ChamberRead Full debate Read Hansard Text Watch Debate
John McDonnell (Hayes and Harlington) (Lab)
On a point of order, Madam Deputy Speaker. Members of Parliament on both sides of the House have raised concerns in the House about the activities of the organisation called Labour Together. Labour Together was exposed by a group of journalists for wrongdoings, including the non-declaration of political donations to the Electoral Commission. Members were concerned that Labour Together had commissioned a US agency, APCO, to collect information and investigate the journalists. APCO produced a report, which was then used in attempts to smear those two journalists, affecting their careers.
After that matter was raised in the House, I was contacted by a journalist, and it was indicated that Labour Together might have been collecting information on not just journalists but possibly Members of Parliament. I submitted a subject access request to Labour Together, which replied that because this is a complex case, the deadline for responding will be three months, not one month. I also submitted a subject access request to the US agency APCO, and I received a reply last night that confirmed that, yes, it has been collecting information on me. It does not say why, or who commissioned the work that it is undertaking. APCO then gave me 11 redacted pages that are nonsensical. Literally whole pages are redacted, except for three or four words on each page, usually just names.
I am concerned that an organisation or agency could be collecting information on Members of Parliament. It does not know who for, or for what purpose, but if we look at what happened to those two journalists, the purpose was to smear them and affect their careers. I have called on a number of occasions for an independent inquiry on the activities of Labour Together and APCO. Through you, Madam Deputy Speaker, I would like to place on the record again my request for the Government to consider the establishment of an independent inquiry into the activities of both these organisations.
Madam Deputy Speaker (Judith Cummins)
I thank the right hon. Member for notice of his point of order. It is not a matter for the Chair, but he has put his point on the record. If he has concerns about compliance with the law, he may wish to consult the Information Commissioner.
Mr Adnan Hussain (Blackburn) (Ind)
On a point of order, Madam Deputy Speaker. I seek guidance on a matter that goes to the heart of the standards of this House, and the safety and cohesion of the country that we serve. Earlier today, the shadow Justice Secretary made remarks about a peaceful and entirely lawful iftar gathering in Trafalgar Square, organised with the prior approval of the Greater London Authority. He described that gathering as an “act of domination”, and implied that such expressions of Muslim faith are unwelcome in our shared public spaces.
Public spaces in this country, including Trafalgar Square, have long been places where people of all faiths and none come together—where Muslims break their fast, yes, but it is also a place where Sikhs, Hindus, Jews and many others have marked their traditions openly and proudly. That is not extremism. That is not domination. It is the expression of the plural democratic society that we claim to defend. To single out one minority community in this way is not only inconsistent with that tradition, but deeply dangerous and inflammatory.
Words from Members of this House, who are public officials, do not exist in a vacuum. They can legitimise prejudice and embolden those who seek to divide our country and society. This House has a duty to uphold respect, equality and the dignity of all communities. Madam Deputy Speaker, what recourse is available when such rhetoric threatens not only the reputation of this House, but the safety and cohesion of our communities in our country?
Madam Deputy Speaker
I thank the hon. Gentleman for his point of order. It is not a matter for the Chair, but the hon. Member has put his point on the record.
Richard Burgon (Leeds East) (Lab)
On a point of order, Madam Deputy Speaker. Thank you for allowing me to make this point of order and apologies for not making you aware of it in advance. I have just seen an email response from the private investigation organisation APCO in response to my subject access request, which says that
“this has produced a large volume of data”
and that they
“therefore require additional time in which to supply our response to you”.
It adds:
“This has made the response to your DSAR complex in accordance with the statutory framework.”
Labour Together responded:
“we will need some further time to complete this work”,
saying that they may need up to 18 May.
Madam Deputy Speaker, will you provide guidance on how the democratic and political rights of elected Members can be protected when a private investigation firm states that it has gathered a large volume of data in relation to us? By arguing that it is some way complex, it clearly holds a large volume of data. What guidance can you give as to how our democratic duties and political freedoms can be protected when a private investigation firm is operating in this way?
Madam Deputy Speaker
I thank the hon. Member for his point of order. You may not be aware of a previous point of order from your right hon. Friend the Member for Hayes and Harlington (John McDonnell), but you have put your point on the record. If you have any concerns about compliance with the law, you may wish to consult the Information Commissioner.
Bill Presented
Clinical Negligence
(1 day, 4 hours ago)
Commons ChamberRead Full debate Read Hansard Text Watch Debate
Catherine McKinnell (Newcastle upon Tyne North) (Lab)
I beg to move,
That leave be given to bring in a Bill to make provision for a fixed recoverable costs scheme to limit the costs that may be recovered in respect of certain cases of clinical negligence; to provide for regular review of the limits set by such a scheme; to amend the Law Reform (Personal Injuries) Act 1948; to require the Secretary to State to report on options for reform of clinical negligence compensation relating to obstetrics; and for connected purposes.
Horrified by the money spent on paying out for failure rather than on improving care, I was already set on bringing forward a Bill to implement some of the findings of our recent Public Accounts Committee “Costs of clinical negligence” report when Amie Evans from Forest Hall walked into my constituency surgery. Her story confirmed the urgency of the issue and the desperate need for change.
Amie, a teaching assistant, is a truly inspirational young woman. With unimaginable grace, she told me about the heartbreaking loss of her daughter Seren, stillborn last year, and its ongoing impact. She told me how the concerns she raised about reduced movements in the days leading up to her due date were simply not listened to. The fourth time she raised it, after her due date had passed, it was already too late.
On top of being utterly devastated, Amie feels completely failed by the medical professionals who were supposed to be taking care of her and Seren. Yet despite their grief, Amie and her partner Lewis have shown remarkable courage in campaigning to raise awareness and encouraging pregnant mothers to trust their instincts. She has succeeded in getting the hospital to review and change procedures in the hope that no other mother will ever have to experience such heartbreak.
Yet sadly, Amie is far from alone. Failures at maternity units across the country have sadly returned to the spotlight in recent years. The Secretary of State was right to commission a national review, led by Baroness Amos. Her interim report, published last month, sets out a horrifying catalogue of failings: culture issues, weak leadership, discrimination, and a lack of transparency and accountability when things go wrong. That lack of accountability is at the heart of the problem. Review after review have found families who feel ignored by hospitals, left desperately seeking answers and concerned that the same errors will happen again.
Rhiannon Davies and her husband Richard spent years calling for a review at Shrewsbury and Telford hospital following the death of their daughter, Kate, at just six hours old. Their steadfast commitment to ensuring that could never happen again led to the Ockenden review, which concluded that failures had led to the death of over 200 babies at the trust. Rhiannon said:
“All we wanted was the truth about why our daughter died. Instead, we faced years of denial.”
This theme of denial was front and centre of the Kirkup review into the Morecambe Bay NHS trust. One member of staff who was interviewed said as she left the room:
“Sometimes bad things happen in maternity—people just have to accept it.”
How can any parent have faith that lessons will be learned with attitudes like that? In Dr Kirkup’s next review into failings at East Kent, one parent said:
“Every time at the hospital, it always seems like one person is covering up for the next; they are a team and they work together, but they shouldn’t cover up when children are dying.”
As Chair of the Petitions Committee in 2021, I led a debate on black maternal healthcare, backed by 170,000 people calling for better care for black women, who continue to receive disproportionately poor outcomes in maternity care. I recounted the story of a woman who had said:
“As soon as the second midwife was on shift, she just seemed to have one goal in mind and that was delivering my baby as soon as possible. She didn’t seem to care about easing any part of my pain or reassuring me for the many worries I had at the time—she rushed my labour along and as a result almost cost me my son’s life.”
This is also personal for me. I had my own experience of poor care when in labour with my first child. Despite being in significant pain, nauseous and vomiting, and waters broken, I was sent away from the hospital numerous times. I was finally admitted as a full emergency, my unborn baby with a falling heart rate and in clear distress, both of us having endured 24 hours of unproductive, painful and dangerous back-to-back labour. I recalled afterwards that the midwives behaved more like nightclub bouncers than carers.
One even said to me, I think on the third time of being sent away:
“I know it’s exciting having your first baby”.
She clearly had never given birth. Fortunately both my daughter and I came through the experience without lasting damage, but when I read the stories of parents who have experienced the worst, I can see how close we came.
It is no surprise, then, faced with issues around accountability, denial and a lack of trust, that so many parents have to pursue legal avenues to get their answers. When mothers feel they haven’t been listened to and they hit the brick wall of NHS defensive culture, they have nowhere else to turn. Maternity claims are the highest-value negligence claims and can often involve babies born with catastrophic, lifelong injuries, yet the average birth injury claim in England takes six and a half years to conclude, during which time parents are trapped, having to fight for the support their child needs.
As the Public Accounts Committee’s extensive inquiry found, other countries have shown that a better, safer and more compassionate system is possible. New Zealand’s automatic no-fault scheme costs roughly half what England spends per capita. Japan’s cerebral palsy scheme combines compensation with a robust investigation and prevention programme, improving care while reducing claims. Sweden has a long-standing no-blame compensation scheme, where cases are assessed on whether it was avoidable, rather than proving negligence. This encourages transparency from clinicians and has contributed to a reduction in avoidable birth injuries. In Sweden, one baby fewer dies each day than in the UK. In Japan, that figure is two.
At the heart of this must be a willingness and openness to seek answers and learn lessons, so that healing can begin and care can improve. That is why this Bill calls for the incorporation of the lessons of existing maternity reviews and asks the Government to draw on international best practice, so that we can build a fairer, safer and more effective system in our NHS. The Bill also reflects the further findings in the Public Accounts Committee report. The Government’s liability for clinical negligence claims has quadrupled over the last two decades and now stands at £60 billion. When it comes to maternity, it is truly shocking that we spend more on failure than we do on the care itself.
NHS Resolution is working to resolve more claims without litigation, and that is welcome but it is far from enough. In 2024-25, claims under £25,000 in value cost the NHS £183 million, yet only £39 million—just £1 in every £5—went to patients in damages. The rest was absorbed by legal and defence costs. It is staggering that so much public money goes to lawyers, not to those patients who have been harmed or to improve care. The previous Government consulted on introducing a fixed recoverable costs scheme, mirroring the approach already used in many personal injury cases, and while it was agreed to three years ago, it remains under review. The Bill will put in place a system that will improve this, and I am grateful to the former Chancellor and Health Secretary, the right hon. Member for Godalming and Ash (Sir Jeremy Hunt), for supporting the Bill.
There is also a long-standing anomaly in how compensation is calculated, dictated by a law predating the NHS that prevents consideration that the NHS may be the best place for claimants to access ongoing care. As it stands, it can lead to the state effectively being double-charged. To ensure that every pound is focused on improving care and preventing harm, we must finally amend and update this law—this 1948 relic—to reflect modern-day reality.
Fundamentally, the Bill is not about numbers on a balance sheet, nor about restricting compensation for those who have experienced harms. It is about the mothers, patients and families who live every day with the consequences of failure, and who are crying out for a system that listens, learns and acts to reduce harm. We have to restore trust and have an NHS built on compassion, not defensiveness, when things go wrong. We must ensure that lessons are learned quickly and openly, so patients get the answers they need and a reassurance that the same mistakes will not happen again. The vast sums of money we currently spend on legal costs must instead go to improving the system, rather than forcing families into years of litigation just to get the answers they deserve.
For Amie, Lewis and baby Seren, and for all parents and babies who have suffered the most unimaginable harm, I commend this Bill to the House.
Question put and agreed to.
Ordered,
That Catherine McKinnell, Sir Jeremy Hunt, Marsha De Cordova, Mr Tanmanjeet Singh Dhesi, David Smith, Peter Prinsley, Rachel Gilmour, Mary Glindon, Jen Craft, Paulette Hamilton, Anna Dixon and Josh Fenton-Glynn present the Bill.
Catherine McKinnell accordingly presented the Bill.
Bill read the First time; to be read a Second time on Friday 17 April, and to be printed (Bill 407).
Ministerial Salaries (Amendment) Bill (Allocation of Time)
Ministerial Salaries (Amendment) Bill
(1 day, 4 hours ago)
Commons ChamberRead Full debate Read Hansard Text Watch Debate Read Debate Ministerial Extracts
The Paymaster General and Minister for the Cabinet Office (Nick Thomas-Symonds)
I beg to move, That the Bill be now read a Second time.
I am pleased to open the debate on this short Bill that has a straightforward, singular aim. It seeks to amend the statutory limits on the number of ministerial salaries available, currently capped at 109, to 120. That reflects the average size of Government since 2010 and largely ends the practice of unpaid Ministers. It will ensure that the Prime Minister of the day has the flexibility needed to appoint enough paid Ministers to meet the demands of modern government.
It may be helpful to explain the context of the Bill before us. Under the constitution, the monarch appoints the Prime Minister as the person most able to command the confidence of the House of Commons. All ministerial appointments thereafter are made by the monarch on the sole advice of the Prime Minister. There is a statutory limit on how many ministerial salaries are available, as set out in the Ministerial and other Salaries Act 1975. The current limit of 109 salaries has not been changed since then. There is a separate statutory limit on the number of Ministers who can sit and vote in the House of Commons, whether paid or unpaid, under the House of Commons Disqualification Act 1975. This limit is 95, and the Bill before us does not change that. There is no equivalent limit on the number of peers able to serve as Ministers.
The Ministerial and other Salaries Act also sets out the salaries that should be paid to eight other officeholders: the Speakers of both Houses, the Leaders of the Opposition in both Houses, the Chief Opposition Whips in both Houses and two assistant Opposition Whips in the House of Commons. The Bill does not seek to amend the number of salaries allocated to those roles. Within that limit of 109, 83 salaries can be allocated at Secretary of State, Minister of State and Parliamentary Under-Secretary ranks; a further four salaries are allocated to the Lord Chancellor, the Attorney General, the Solicitor General and the Advocate General for Scotland; and 22 salaries are allocated to Government Whips.
Dr Andrew Murrison (South West Wiltshire) (Con)
Given the economic situation, the public expect restraint at the moment. They also expect leadership—and that means ministerial leadership. Does the Paymaster General seriously believe that the public will welcome this? The explanatory notes tell us that it will involve a payroll hike of between 13% and 19% for that group of people, plus superannuation and severance payments, which is not an insignificant sum. Has he considered perhaps reducing, rather than increasing, the number of Ministers?
Nick Thomas-Symonds
I am genuinely surprised by that intervention, because when I was taking the House of Lords (Hereditary Peers) Bill through the House, the fact that Ministers in the Lords are unpaid was raised not only by Conservative Front Benchers in this House, but by the Conservative leader in the Lords. The right hon. Gentleman is very much out of step with his own Front Benchers. On the substance of his point, I give the reassurance that the freeze on ministerial salaries absolutely remains. This is not about the level of salary for individuals; it is about the number of salaries available for the Prime Minister to allocate.
Sir Oliver Dowden (Hertsmere) (Con)
I may be at risk of making myself fantastically unpopular, but I think I can do so having no prospect whatsoever of reaching ministerial office again. Although I am perfectly willing to admit that the previous Government did not do this, does the Paymaster General agree that a Government will at some point have to reconsider the constant freezing of the ministerial salary? It has to increase, or we will get to the point of there being no meaningful reward for ministerial office, which I think could have a detrimental impact on the calibre of people we can attract over the long term. He is being very bold on this, so why not be bold with ministerial salaries?
Madam Deputy Speaker (Judith Cummins)
Order. I remind the House that what we are discussing—and what is in scope—is the number of ministerial appointments, not the salaries of Ministers.
Nick Thomas-Symonds
If ever Ministers were looking for a trade union leader, we have found one in the right hon. Member for Hertsmere (Sir Oliver Dowden). Having already held very high office and been Deputy Prime Minister, he should perhaps worry less about future ambitions.
Nick Thomas-Symonds
The freeze remains in place.
The 1975 Act sets cumulative limits on the salaries allocated to Secretaries of State, Ministers of State and Parliamentary Under-Secretaries. Within the overall limit of 83, the cumulative limits are 21 Secretary of State rank salaries; 50 Secretary of State and Minister of State rank salaries; and 83 Secretary of State, Minister of State and Parliamentary Under-Secretary rank salaries. The salary limits were set in 1975, which is over half a century ago. As a result of the demands of modern government, all Governments since 2010 have consistently featured larger ministerial teams than the existing Act’s provisions permit to be paid. Team numbers ranged from an average of 118 in the Cameron and May Governments to 123 in the Sunak Government. There are 122 personnel in the current Government.
That has led to an unsatisfactory position in which Governments of all parties have become dependent on Ministers being willing and able to work unpaid. To be fair, historically that has predominantly fallen on Ministers in the other place. I do not think that is right. Lords Ministers work incredibly hard, and they often manage some of the broadest and most demanding portfolios across Government. I am sure that the whole House can support the notion that Ministers should be paid for what they do. This is a Government of service. We have more state-educated Cabinet Ministers than ever before, and it is right for Ministers to be paid for the job they do, and to focus on that job rather than relying on external funding.
Sir Julian Lewis (New Forest East) (Con)
I am grateful to the Minister for his typical courtesy. I am sure that there will be wide agreement with his proposition that someone who is doing a ministerial job ought to be paid for it, and such jobs should not be reserved for the people who can afford not to be paid. However, on the principle that a bigger Government is not necessarily a better Government, can he guarantee that if there is an increase in the number of paid ministerial posts, there will not be a commensurate increase in the number of unpaid ministerial posts?
Nick Thomas-Symonds
I have every sympathy with the right hon. Gentleman’s point, but the number 120 is not an objective for the Government to become bigger; it is the average size of the Governments we have had since 2010 in any event. We are not trying to expand the number of unpaid Ministers—far from it. We are trying to ensure that all Ministers in the Government are paid rather than expanding the number, which he quite rightly draws attention to.
To summarise, the Bill increases the cap on ministerial salaries from 109 to 120. All additional salaries will be allocated at either Secretary of State, Minister of State or Parliamentary Secretary rank, at the discretion of the Prime Minister. The salaries operate cumulatively, which means that salaries not allocated at a senior rank can be used to pay a Minister at a more junior rank within the limits. The Bill will therefore make provision for: one additional salary at Secretary of State rank, increasing the limit to 22; four additional salaries at either Secretary of State or Minister of State rank, increasing the overall limit from 50 to 54; and 11 additional salaries at either Secretary of State, Minister of State or Parliamentary Secretary rank, increasing the overall limit from 83 to 94.
Given that cumulative structure, if the Prime Minister of the day chose to allocate the salaries to the most senior Minister possible, that would result in one extra salary for a Secretary of State, three for Ministers of State and seven for Parliamentary Secretaries. The limits on the Lord Chancellor, Attorney General, Solicitor General, Advocate General for Scotland and Government Whips salaries will remain unchanged. The limits on the other office-holder salaries will also remain unchanged.
Sir Julian Lewis
I am sorry to come in again. One of the things that I have never quite understood, given that the workload is broadly the same, is why there is a differential in salary between the different levels of Minister—particularly in the Lords, where their jobs are effectively the same. Why are some Ministers of State or Under-Secretaries paid a different amount? After all, whatever our seniority, we are all paid exactly the same as Members of this House. Why would they not all be paid the same?
Nick Thomas-Symonds
The right hon. Gentleman raises an interesting point. If we go back to the debates from 1975, we will see some of the reasons why that is the case. We have always differentiated not just in the ranks but in salaries. That is also how we have done it historically for Law Officers. It does not necessarily mean that there is a logic behind it, but it is the historical system we have inherited. The Bill is meant to correct just one of the anomalies. That is not to say that there are not others, as the right hon. Gentleman sets out.
The increase to 120 salaries reflects the average number of Ministers since 2010, as set out in clause 1. Set against the existing limit of 95 Ministers who can be Members of this place under the House of Commons Disqualification Act 1975, 25 salaries will effectively be reserved for Lords Ministers. As I indicated when responding to the former Deputy Prime Minister, the right hon. Member for Hertsmere, the Bill does not increase the pay of individual Ministers—I take a different view from him on that. With the exception of Lords pay in 2019, the salaries of Ministers have not increased since 2008 and the Prime Minister maintained the salary freeze upon entering office. The Bill does not change that position.
Sir Oliver Dowden
The Minister has made frequent reference to the figure of 120 Ministers. Further to the intervention by my right hon. Friend the Member for New Forest East (Sir Julian Lewis), why not legislate to make that a fixed cap on the number of Ministers? In my experience of advising many Ministers and being involved in many reshuffles, there is always an enormous temptation just to squeeze one more in, and then another. So although there may be a cap of 120 Ministers, there could be some new brief and, before we know it, we will have 125 Ministers in total, with 120 salaried and five unpaid, and we will be back where we started. If the Minister wishes to gain the consent of the House of Commons for increasing the number of salaried posts—and he makes a convincing argument for doing so—why not guard against that risk by introducing an absolute cap on the number of Ministers?
Nick Thomas-Symonds
I can reassure the former Deputy Prime Minister that that is absolutely not the objective of the Bill. He will have been involved in more reshuffles than me over the many years that he was either in No. 10 or subsequently as a Minister, but the objective is that we do not have the situation where there are unpaid Minister. That is the very clear objective of the Bill. The purpose of the legislation is that the Prime Minister has the flexibility to appoint enough paid Ministers to meet the demands of modern Government.
There is general acceptance, which I agree with, that anyone in the country should aspire to be a Minister, no matter their background, without having to rely on personal wealth in lieu of a salary. On that basis, I hope that this short piece of legislation will command the support of Members across the House. I commend the Bill to the House.
Alex Burghart (Brentwood and Ongar) (Con)
Hon. Members will be delighted to hear that I will speak only briefly, because the Opposition do not intend to oppose the legislation. My contribution is already substantially longer than that made by my predecessor, Teddy Taylor, in 1975, when the legislation originally came to the House, who said only 14 words before sitting down.
Although the Conservatives do not oppose the measure, I have a few questions based on issues raised by my hon. Friends. The next Conservative Government intend to reduce the size of Government and, in due course, reduce the number of Ministers that the Government require. On principle, we think that Ministers ought to be paid. However, referring back to the point raised by my right hon. Friend the Member for Hertsmere (Sir Oliver Dowden), the former Deputy Prime Minister, it would be good to have a Dispatch Box commitment that there will be no more unpaid Ministers under this Government. I understand that the Bill has not been drafted in that way and that the Government intend to bring forward amendments only in Committee, but such a commitment would reassure the House that this is not just going to be an ever-increasing problem, and that unpaid Ministers will be added to paid Ministers, and so on.
It would be helpful if the Minister set out for the House the Government’s intention for the additional Secretary of State salary. That will command some interest, both inside and outside this place. It is pretty obvious that the Government have something in mind and it would be useful to air that at this stage.
As I have said, we believe that those who serve as Ministers ought to be paid. It is not really right that Prime Ministers should ask people to be a Minister of the Crown without offering them a salary, and I think our constituents would feel the same way. While our approach would be slightly different, we will not oppose the legislation today.
Lisa Smart (Hazel Grove) (LD)
The Liberal Democrats believe that people should be paid fairly to do a job, and that it should not be only the wealthy who can afford to be a Minister.
Ministers will face enormous demands on their time, for there is much to be done, and the Government should prioritise finding talent across both Houses to fill these positions. We recognise the importance of having a well-rounded and efficient Government, but expanding the ministerial payroll is only justifiable if it comes with transparency, accountability and a genuine commitment to public service.
When the previous Conservative Government—or maybe it was the one before that, or the one before that —were in power, we witnessed a merry-go-round of Ministers. We had the shortest serving Prime Minister ever, endless Cabinet reshuffles and a revolving door of Secretaries of State that left Departments directionless and policy in a constant state of flux.
Instead of everyone being famous for five minutes, almost every Conservative MP in the last Parliament was a Minister for 15 minutes. We on the Liberal Democrat Benches believe that Ministers who hold office for only a few days or weeks should not be entitled to handsome severance payouts. Under the chaos of the last Government, we witnessed severance payments to Ministers who had been in post for under a week. That is an insult to the taxpayer, and this Government must ensure that such practices are consigned to history.
In recent months, we have seen that those we should be able to trust in positions of government do not always have our best interests at heart, from Mandelson’s dismissal and the sharing of confidential information to a former Cabinet Office Minister being implicated in efforts to discredit journalists. Those scandals have led to further corrosion in public trust, which we should be doing everything in our power to rebuild. Last year, YouGov found that only 4% of people feel that politicians are doing what is best for the country, while 67% feel that politicians act out of self-interest. Our political system is under enormous strain, and public outrage at the numerous instances of corruption, lawbreaking or just poor judgment is a gift to those at the political extremes. Meek promises to tweak some processes are not enough.
With this legislation, the Government are adding an estimated £600,000 to £850,000 a year to the cost to the taxpayer. If the Government are demanding that amount of taxpayers’ money each year to pay for these additional salaries, they should be able to provide a guarantee that the public are getting full value for that money. The Government should commit that none of the newly salaried Ministers or any Minister drawing a taxpayer-funded salary will be permitted to hold a second or third job. If the Government are expanding the payroll to fit the size of the Government that they need, there is no excuse for those Ministers to be dividing their time with outside employment.
That being said, the work that Ministers do should be recognised. The Government have 120 Ministers, of which two in the House of Commons and nine in the other place are unpaid. Expanding the ministerial payroll must come with greater accountability, not less. The Liberal Democrats call on the Government to enshrine the ministerial code in law so that the standards we expect of those in office are not merely guidelines to be ignored at will, but legal obligations with real consequences.
We also call for the ethics adviser to be made truly independent. They should be empowered to initiate their own investigations, determine breaches and publish findings without interference from the very Prime Minister they are supposed to hold to account.
This Bill does not tell us very much new about what responsibilities the additional Ministers will take on. Before we nod through this additional taxpayer expenditure, I would welcome an assurance and a clear explanation from the Minister on what the roles will be and why they are needed. Transparency when signing over this amount of money should be an expectation, not a request.
This Government and their predecessors talk of devolution—something that we Liberal Democrats strongly support. We believe that the best decisions are those made closest to the people they impact, and this Government have taken some steps to devolve power and funding closer to the communities we all represent. They have not necessarily done it in the way that we Lib Dems would have done it, but we acknowledge that they have made some progress.
In his closing remarks, will the Minister comment on how he sees the number of Ministers changing over time? If the number of decisions taken locally or in the regions and the amount of power in those regions increases, does that mean that he expects the number of Ministers needed at a national level to decrease? Liberal Democrats will support measures that make Government work better, but we feel that this Bill expanding the ministerial payroll is a missed opportunity to strengthen ministerial accountability or do anything truly meaningful to rebuild the public trust that has been so badly damaged.
Sir Gavin Williamson (Stone, Great Wyrley and Penkridge) (Con)
What a pleasure it is to speak in this debate. Speaking in a debate where there is no time limit attached to the speeches made is a rarity and an opportunity that we should all relish and take advantage of.
I must confess that when I saw the title of this Bill, the radical in me was excited. I thought that the Government were going to do something bold, visionary and different, but sadly that opportunity to do something different seems to have passed them by. Instead of listening to what the Chancellor has said about some of the great challenges that this country faces in balancing the books and ensuring that we have the ability to pay our way and make savings in government all the way from the top to the bottom, the Cabinet Office seems to have gone on a little jolly of its own. It has decided to do something completely different and expand the cost of doing government. That is not quite what the British public are asking for.
Before this debate, I thought I had best check my emails, because I was wondering when I last had a deluge of emails—or even one email—calling for more Cabinet Ministers, more Ministers of State or more Parliamentary Under-Secretaries of State. I searched my emails over the past month, and I could not find one. I searched over the past year, and I could not find one. I went all the way back over 16 years, desperately searching for an email calling for more Cabinet Ministers, more Ministers of State and more Parliamentary Under-Secretaries of State, and I found none whatsoever.
I am concerned for the health of this Government, who are having a few difficulties. Are they doing things that the public do not want? I do not think there is a great demand for more Ministers. I urge the Minister to look again at this legislation. I agree with one element of the Bill—that if a person is being asked to do a job, they should get a wage for it—but why not bring down the number of people who can be Ministers? Why not turn this Bill into a saving for the Government and the Treasury? That will earn the Minister great plaudits from No. 11. He will probably be hailed; he will probably be earmarked for promotion, so that he can get one of the reduced number of Secretary of State positions.
I question why, at this time, the Government are bringing forward legislation enabling them to expand the Government payroll. I remember that when I was Chief Whip, I would often be confronted with Members of Parliament who were quite willing to do a job without any pay as long as they were going to be called “Minister”. Admittedly, that was many years ago—maybe things have changed—but I worry about sending the message that we have found the time to pass legislation to pay more people to be Ministers. What the public want to hear is that the Government and this House are tackling the issues that impact their lives. They want to hear that this House is tackling the issues that will make a difference to their living standards, not those of Members of Parliament and Ministers.
Jim Shannon (Strangford) (DUP)
The right hon. Gentleman is waxing lyrical about the Bill, but the fact of the matter is that my constituents are facing an oil cost of over $100 a barrel, are paying more tax and having less money to spend, and are wondering how having more Ministers will make an ineffective Government more effective. Does the right hon. Gentleman agree that this only adds to the disconnect felt by people in the street—the ones telling me what is happening, what is going on and how we can make it better?
Sir Gavin Williamson
I completely agree with the hon. Gentleman. There is a disconnect between all the priorities and all the issues around the world and our wanting to pass legislation to create more ministerial offices.
I also understand and appreciate the challenges that the Prime Minister will face. I am sympathetic to his position, because he will be constantly badgered to make more Ministers, with more people wanting patronage and elevation. As my right hon. Friend the Member for New Forest East (Sir Julian Lewis) has pointed out, there is no upper limit to the number of Ministers, so if we are in this House in 10 years’ time, we will be having a debate about how there are another 15 Ministers who are unpaid. The Government Minister will be at the Dispatch Box, possibly trying to defend the idea of paying even more Ministers. We will have a creep, creep, creep of patronage, with ever more people going on to the Government payroll. I feel, and I fear, that that may weaken this House.
Charlie Dewhirst (Bridlington and The Wolds) (Con)
First, I thank my right hon. Friend the Member for Stone, Great Wyrley and Penkridge (Sir Gavin Williamson) for his powerful remarks. I hope he did not spend too many hours trawling through 16 years of emails, but it is yet another example of his hard work and diligence in this place. I sympathise with his points, but I hope he is comforted by the opening remarks of my hon. Friend the Member for Brentwood and Ongar (Alex Burghart) that a future Conservative Government will reduce the number of ministerial posts and reduce the size of Government.
As I am sure all Members would agree, it is only right that those who choose to serve the public as Ministers of the Crown should be able to receive a salary if they wish. Although the Government of the day must always be drawn from and ultimately accountable to the elected House of Commons, previous Governments of all stripes have benefited from the knowledge and wisdom provided by noble Lords who have served as Ministers or held one of the great offices of state. I am sure many Members will have had the privilege of working alongside them and know personally of their dedication and public service.
All those who serve as Ministers of the Crown, whether they be Members of this House or the other place, give up their time and energy and take on an extra burden of responsibilities in doing so, both relating to their departmental work and in representing the Government in the Chamber. It is only right, therefore, that Ministers should receive equal payment regardless of the House in which they sit. It should also be noted that the impetus for ensuring that all those who serve as Ministers of the Crown can receive a salary came from the other place, which debated this issue at length during the passage of the House of Lords (Hereditary Peers) Bill. Although it remains a great disappointment that the Government chose to proceed with that misguided piece of legislation, at least some comfort can be taken from the fact that this debate emerged from that Bill.
In particular, I pay tribute to my noble Friend Lord True, who so eloquently made the case for ensuring all Lords Ministers can receive a salary in the other place, and who laid amendments to the hereditary peers Bill to that end. While it remains disappointing that the Government did not support the Opposition’s amendments when they had the opportunity to do so, those Lords who have been calling for this change can take comfort in knowing that their efforts were not in vain. It is also further proof of the quality of debate in the other place, and the importance of its constitutional role in strengthening our laws through scrutiny, that we should be debating this Bill because of their efforts.
To conclude, peers with the experience and expertise to serve as Ministers should not be prevented from doing so due to a lack of private means. I therefore join my hon. Friends in not opposing this Bill.
The Parliamentary Secretary, Cabinet Office (Chris Ward)
I thank the limited numbers who took part in this debate, taking advantage of the lack of a time limit. This is a simple Bill with just two clauses, and it has a simple purpose: to increase the number of Ministers who can be paid to 120, which is the average number of Ministers since 2010. It is also rooted in the simple principle that holding ministerial office should not be dependent on individual wealth.
The Bill, as my right hon. Friend the Paymaster General set out, amends the Ministerial and other Salaries Act 1975. It does so to better reflect the nature of modern government, including the number of Ministers any modern Government tend to require. It allows, but does not require, a maximum of 120 salaried members across both Houses. That number is based on the average number of Ministers since 2010 under successive Governments. Since 2010, an approximate average of 11 Ministers have been unpaid in each Government. I know that is not among the great injustices of our age—hence this is a short Bill—but the Bill addresses a clear inequity that limits those in the other place who are able or willing to take on a ministerial role. This Bill rectifies that, broadening the bench of those able to serve as Ministers. It recognises that private income should never be a requirement to serve as a Government Minister.
Sir Gavin Williamson
Was any consideration given to reducing the ministerial total, as against increasing it, in preparing this Bill?
Chris Ward
The number of Ministers in the current Government is virtually the same as it was in the previous Government. I think actually it is one lower than the previous Government. The intention of this Bill—this speaks to a point raised by a couple of Members—is not at all to increase the number of Ministers or the size of Government; it is simply to rectify the anomaly of unpaid Ministers in the other place. The right hon. Gentleman served in several Governments of this size over the past 10 years, and he asked why this Bill should come forward at this time. One answer to “Why now?” is that the leader of the Conservative party in the House of Lords proposed it in an amendment. It was put forward by the Conservative side. [Interruption.] The right hon. Gentleman says from a sedentary position that that was wrong. That is one of the reasons this has come forward, and it is one of the reasons for addressing the inequality with which we are dealing.
Let me refer to a point that was raised by the hon. Member for Brentwood and Ongar (Alex Burghart). The Bill will allow, but will not require, one additional salary at Secretary of State rank. It is for the Prime Minister to decide whether or not it goes to a Secretary of State; Parliamentary Under-Secretaries can be rewarded as well, as can Ministers of State. The Bill also allows four additional salaries at Minister of State or Secretary of State level, and 11 additional salaries overall. As I have said, those limits are cumulative, which means that the Prime Minister has discretion to make the awards. There is no prior intention; it is about discretion.
Let me turn briefly to what the Bill does not do. As the Paymaster General said, it does not alter the salaries of Ministers, much to the disappointment of the former Deputy Prime Minister. They will remain frozen, as they have been since 2008. The Bill does not necessarily create additional ministerial roles; this is a point that was raised. Indeed, it simply reflects the average number of roles since 2010. It does not alter the maximum number of paid Commons Ministers, which remains at 95—it effectively reserves 25 places for Lords Ministers—and, of course, it does not affect MPs’ pay, which is rightly entirely independent of this House. All that the Bill will do is increase the maximum number of salaried Ministers, so that it is in line with the average number of Ministers over the last few Parliaments. As I have said, the size of the Government remains unchanged, and the Government have no intention of increasing it. The purpose is merely to allow higher numbers to be paid, and to remove that inequity.
The hon. Member for Hazel Grove (Lisa Smart) raised the issue of the amount of minimum service for severance pay. The Government have already addressed that by introducing a power requiring a Minister to serve for six months before any severance payment can be made, thus removing some of the absurdities under the last Government, which she rightly pointed to. People were being paid for a day, or in some cases a few hours, in the job. She also raised the matter of second jobs. I remind her that the Labour party has a manifesto commitment to address that, and to ensure that second jobs are permitted only in particular circumstances—for doctors, for instance. The Modernisation Committee is dealing with that issue. I am keen for it to be addressed as quickly as possible, but it will come back to the House.
The hon. Lady mentioned the ethics adviser. Let me emphasise again that at the beginning of this Government, the Prime Minister made changes; there was an increase in the role and the independence of the independent advisers, so that they are truly independent—we have seen that they are, on several occasions—and the ethics adviser can now initiate his own inquiries. That is an important point. The hon. Lady also asked what roles the new salaried Ministers would fulfil. As I have said, that is a matter for the Prime Minister, and we have no intention of changing that.
Lisa Smart
The Minister of course will know that the Prime Minister is responsible for the contents of the ministerial code. While the ethics adviser can launch an investigation, the Prime Minister reserves the right to raise concerns about any such investigation, so that the independent adviser does not proceed. Have I understood that correctly?
Chris Ward
As I have said, the Prime Minister polices the ministerial code and has responsibility for it. The independent adviser was given the power to initiate his own investigations of Ministers, which is, I think, an important step forward. It comes, in part, because of some of the problems we saw under the last Government. I think that the role of the independent adviser has been significantly strengthened under the present Government.
Lincoln Jopp (Spelthorne) (Con)
I am reminded of that great fictional character Sir Humphrey Appleby, who once observed that a party with 300 members gets to form a Government, but 100 are too young and too callow, and 100 are too old and too silly, so the Government pretty much select themselves. I congratulate the Minister on making it into the middle group.
On the subject of second jobs, being a Minister is essentially a second job, for which the Minister is remunerated. Does he not feel that it is a bit mean-spirited to pull up the drawbridge on other MPs who might desire to have a second job, just as he does?
Chris Ward
I thank the hon. Gentleman for flattering me by not putting me in the first or third group. As I say, the Labour party has a manifesto commitment to limit second jobs significantly. It is not about pulling up the drawbridge in all circumstances; there will be exemptions, particularly for people who serve in the NHS and so forth. However, I do think that we should consider the hon. Gentleman’s point. There is a basic expectation from the public that being a Member of this House is an MP’s one and only job, except in exceptional circumstances, but this matter is being dealt with by the Modernisation Committee, and we will look at its findings.
The right hon. Member for Stone, Great Wyrley and Penkridge (Sir Gavin Williamson) said that nothing bold or radical is being put forward, but I point out that this Bill comes alongside a number of other reforms that this Government are delivering to modernise our democracy. Last week, following the Herculean efforts of the Paymaster General and others, legislation was finally passed to remove hereditary peers from this legislature—and not a moment too soon.
Chris Ward
I will not, because I know the right hon. Gentleman is not a great fan of that legislation. In a few months’ time, this Government will also introduce legislation to widen the franchise to people aged 16 and 17, delivering on our manifesto commitment. What better sign of bold and radical constitutional reform than removing hereditaries and broadening the franchise? I will give way to the right hon. Gentleman, because I am feeling generous.
Sir Gavin Williamson
I thank the Minister for his generosity. He is right to say that the Government have moved to remove hereditaries, which is an important step forward, but they have failed to do a number of other things that were in their manifesto, including introducing an age limit and making rules about attendance. Can he give some clarity about when that legislation will come forward, and about whether he can also get rid of the bishops?
Chris Ward
I thought that the right hon. Gentleman might raise the bishops. He is quite right to say that the removal of hereditary peers is a step forward in modernising the other place, but it is not the conclusion of the process. Our manifesto commits to a number of things that will be included in the second phase of Lords reform. A Committee is being set up to advise on how we go forward. I look forward to debating that second phase with him, and issues including a retirement age and other steps for modernising the second Chamber. However, those steps are quite far removed from this Bill.
As I said at the beginning of my speech, this is a simple Bill. It has a very narrow purpose, and it is designed to address a very simple inequity. I commend the Bill to the House.
Question put and agreed to.
Bill accordingly read a Second time; to stand committed to a Committee of the whole House (Order, this day).
Ministerial Salaries (Amendment) Bill (Money)
King’s recommendation signified.
Motion made, and Question put forthwith (Standing Order No. 52(1)(a)),
That, for the purposes of any Act resulting from the Ministerial Salaries (Amendment) Bill, it is expedient to authorise the payment out of money provided by Parliament of any increase attributable to the Act in the sums payable under any other Act out of money so provided.—(Stephen Morgan.)
Question agreed to.
Ministerial Salaries (Amendment) Bill
(1 day, 4 hours ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The First Deputy Chairman
With this it will be convenient to consider clause 2 stand part.
The Paymaster General and Minister for the Cabinet Office (Nick Thomas-Symonds)
It is a pleasure to serve under your chairmanship, Mrs Cummins, as I open the proceedings in the Committee of the whole House. I set out the core arguments for this Bill in my Second Reading speech, so I will not rehearse them again, although I have not matched the Teddy Taylor standard from 1975. However, for the benefit of the Committee, I will outline the two clauses and why they should stand part of the Bill.
Clause 1 amends paragraph 2 of part V of schedule 1 to the Ministerial and other Salaries Act 1975, which determines the maximum number of salaries that may be paid to certain ministerial office holders. Sub-paragraph (a) replaces the previous provision for 21 salaries at Secretary of State rank with a new provision for 22 salaries, sub-paragraph (b) replaces the previous provision for 50 salaries at Secretary of State rank and Minister of State rank with a new provision for 54 salaries, and sub-paragraph (c) replaces the previous provision for 83 salaries at Secretary of State rank, Minister of State rank and Parliamentary Secretary rank with a new provision of 94 salaries. This increases the total number of ministerial salaries available by 11. As I have said, the new limits are cumulative, meaning that the Prime Minister has the discretion to allocate salaries to a large number of Ministers at more junior ranks within those limits, if so desired.
Clause 2 sets out the extent, commencement and short title of the Bill. The Bill extends to England and Wales, Scotland and Northern Ireland. Of course, the Bill comes into force on Royal Assent. I very much look forward to the rest of the debate and seeing the Bill on the statute book soon.
Alex Burghart (Brentwood and Ongar) (Con)
I have just a few short remarks. First, it would be helpful if the Minister set out how the Government have come to the totals that they have come to: why one, four and nine in total? Why not fewer, and why not more? Secondly, I did not quite get the Dispatch Box commitment I was looking for that this would mark an end to unpaid ministerial posts in this Government. [Interruption.] There is a little bit of a debate on the Government Front Bench about whether that commitment was made, but if the Paymaster General would be crystal clear, we can all go home happy.
Nick Thomas-Symonds
I will try to be brief on those two questions. It was the usual precise contribution, as ever, from the shadow Chancellor of the Duchy of Lancaster. First, why those totals? Because they reflect the average practice since 2010. Perhaps to reassure the hon. Gentleman, we are trying to look at the existing practice rather than looking at additional totals in the future. Secondly, on whether we are ending the practice of having unpaid Ministers, which has largely been ended, that is exactly the intention of the Bill.
Question put and agreed to.
Clause 1 accordingly ordered to stand part of the Bill.
Clause 2 ordered to stand part of the Bill.
The Deputy Speaker resumed the Chair.
Bill reported, without amendment.
Third Reading
Nick Thomas-Symonds
I beg to move, That the Bill be now read the Third time.
I will keep my remarks brief. I just want to thank Members across the House for their contributions to the debate. I am sure there are issues of House of Lords reform that are far wider than this Bill, and that we will continue the debate on that in due course. If I may say a word to the officials and the team who put the Bill together, Members across the House are grateful for their work. I commend this Bill to the House.
Question put and agreed to.
Bill accordingly read the Third time and passed.
Business without Debate
Corpusty Primary School
Steff Aquarone (North Norfolk) (LD)
As a serving county councillor, I refer Members to my entry in the Register of Members’ Financial Interests.
Corpusty primary school is a valued small rural school in my constituency threatened with closure at the end of this academic year. It has educated generations of children in North Norfolk, and is a vital asset to the rural communities of Corpusty, Saxthorpe and the surrounding villages. The Conservatives on Norfolk county council could take action to try to prevent this closure, but they are refusing. Catchments could be widened, new housing will bring new families, and proper placemaking strategies could be employed—but the council will not do it.
The petition states:
“The petitioners therefore request that the House of Commons urge the Government to work with Synergy Multi-Academy Trust and Norfolk County Council to pause the proposed closure of Corpusty Primary School until alternative arrangements to secure the future of the school have been fully explored and the forthcoming local elections have taken place.
And the petitioners remain, etc.”
Following is the full text of the petition:
[The petition of residents of Corpusty, Saxthorpe and the surrounding communities of North Norfolk,
Declares that Corpusty Primary School is a vital part of the community and provides essential education for local children and families.
The petitioners therefore request that the House of Commons urge the Government to work with Synergy Multi-Academy Trust and Norfolk County Council to pause the proposed closure of Corpusty Primary School until alternative arrangements to secure the future of the school have been fully explored and the forthcoming local elections have taken place.
And the petitioners remain, etc.]
[P003171]
Adam Jogee (Newcastle-under-Lyme) (Lab)
On a point of order, Madam Deputy Speaker. Today is 17 March, St Patrick’s day. People will be celebrating across the world, something that has been made easier for us this evening because Opposition Members voted for the Government business today. Madam Deputy Speaker, as chair of the Ireland and the Irish in Britain all-party parliamentary group, I seek your guidance on the best way for this House to send its best wishes to all the Irish staff working in this place, and to all those who are Irish and who wish they were Irish, in Newcastle-under-Lyme and across the kingdom. And may I say, through you Madam Deputy Speaker, happy St Patrick’s day?
Madam Deputy Speaker (Judith Cummins)
While that is not a matter for the Chair, the hon. Member has put his comments on the record.
Isles of Scilly: Transport
(1 day, 4 hours ago)
Commons ChamberRead Full debate Read Hansard Text Watch Debate Read Debate Ministerial Extracts
Andrew George (St Ives) (LD)
I am pleased to have secured this debate, and I am sure the Minister is delighted that we have reached the Adjournment at a point when we have ample time to explore the important issues of transport to and between the Isles of Scilly.
There is, frankly, a shocking injustice. Scillonian residents have been treated as second-class citizens when it comes to affordable transport, especially when compared to everywhere else in the United Kingdom. I hope the Minister will acknowledge that point, take it on board and consider working with me, the council of the Isles of Scilly and the residents to ensure islanders receive parity on public transport, which other parts of the country take for granted. Some places struggle with transport, particularly in rural areas, but the circumstances are very different in the Isles of Scilly.
This is not the first time I have secured a debate of this kind. For example, I raised these issues in Westminster Hall on 8 January 2002—column 158, to help the Hansard Reporters—and on 15 January 2003, and on many other occasions since. I raised these issues outside the House even during my nine sabbatical years away because of the injustice. Some improvements have been made, but services have also gone backwards. One example comes from one of my constituents on one of the four off-islands. There are four inhabited off-islands in the Isles of Scilly—St Agnes, Bryher, Tresco and St Martin’s—and one main island, St Mary’s. To get over to the main island of St Mary’s, where all the services operate—the hospital, other medical services and the council—residents from the off-islands need to get across waters that are sometimes very tempestuous. This constituent says:
“I broke my wrist…recently, and because there was no bone showing through my arm I had to wait 5 days to see medical personnel, have it x-rayed and put in plaster. I have had a medical procedure which involved 2 daily visits”
from this off-island
“to St Marys Health Centre but fortunately it was summer. If this was in the winter, I would had to have paid £240.00 just for the boating”
to and fro each time—it is a £120 return trip—as residents have no alternative but to book what are known as “specials” to attend an X-ray appointment or medical appointment or to visit an elderly resident, friend or family member in St Mary’s hospital.
“This again is £120.00 return. There has also been a cut back of transport funding for the under-five nursery services and clubs like the Brownies and so the list goes on and on, of all the problems that the residents of St Martins”—
where this constituent lives—
“are facing due to the lack of affordable boating.”
Mike Martin (Tunbridge Wells) (LD)
My hon. Friend is making a powerful case for his constituents. Does he agree that this is a problem not just for the Isles of Scilly, but for the Isle of Wight and the Western Isles? We are an archipelago. Those who live on the outer islands suffer from this inequity; they are as British as us, but they do not enjoy the same connectivity.
Andrew George
I am grateful to my hon. Friend, who leads me on to my next point. Although he says that we are all in the same boat—if you will pardon the pun, Madam Deputy Speaker—the fact is that we are not. Services in Scotland are very heavily subsidised, as I will explain. When we look for parity and comparability, the services offered for the Isles of Scilly and for Scottish islands are significantly different.
Of course, the Isles of Scilly have the additional challenge of being some 40 miles off the coast. I do not know how many miles the Isle of Wight is off the coast—is it 1.5, 2 or 3 miles? It is certainly a very short journey. In addition, because of the numbers of passengers going in that direction, the costs are obviously significantly less than for those on the Isles of Scilly.
The costs and prices for passenger transport, freight and indeed air transport for the Scottish islands are, in most cases, very heavily subsidised. I know that the UK Government are not responsible for the practices of the Scottish Government, but it was their responsibility prior to devolution, and indeed that is when the policy was established. The Minister may attempt to distance himself from something that is not the responsibility of the UK Government and hide behind that, but it was their responsibility originally, and that left a legacy that has given Scotland significant advantages.
There is no equivalent of the £3 bus fare for the Isles of Scilly—it is a £120 return, as we have just heard. There is no subsidised air travel, either. The entire economy depends very much on tourism, and tourism depends on travel. In those circumstances, we hope that the Isles of Scilly will be treated fairly.
There are very high freight costs, and the costs of getting food and other essential services to the islands are therefore very significant. My ask of the Minister is that he works with me, the council, transport providers and others to alleviate these pressures by finding an agreeable way to provide support to reduce these costs of living.
David Reed (Exmouth and Exeter East) (Con)
I appreciate the hon. Gentleman bringing this important debate to the Chamber. Exeter airport, which is one of the key transport nodes for the Isles of Scilly, is based in my constituency. My grandparents and great-grandparents on my dad’s side really enjoyed going down there on holiday, adding to that tourism economy. I have seen the price of travel to the Scilly Isles increase in recent years, which means fewer people are able to enjoy that. I would like to offer my support to the hon. Gentleman; if there is any way I can add in Exeter airport and work with him on some of these problems, I would be very happy to do so.
Andrew George
I am pleased that the hon. Member and his family have strong connections with the islands, but I caution him against describing them as the Scilly Isles—he will not be well received on the islands if he uses that particular nomenclature—but, certainly, if he continues to call them the Isles of Scilly, I am sure that he will be very well received. His offer of working with me and the islanders—the Scillonians—will also be well received, and I am very grateful to him for it.
Transport Scotland, an agency of the Scottish Government, subsidises most routes to islands in the Hebrides through a contract with Caledonian MacBrayne —CalMac—which is owned by the Scottish Government. The islands are also served by several other routes, some of which are subsidised by local authorities, and a handful are served without subsidy by private operators. The Scottish Government have supported the sector since the 1960s. They have been obliged to tender for services since the late 1990s, to comply with state aid regulations. That has altered the ownership structures of what remains a state owned and operated set of services.
Approximately 70% of CalMac’s revenues come from the Scottish Government. It is often said that for every pound paid by a ferry user, another £2 of public subsidy is required. By contrast, passenger services between the mainland and the Isles of Scilly have always been operated on a commercial basis, with the exception of during the covid pandemic, when, like all companies around the country, it was subsidised. Certainly, this was seen as a lifeline service by the Government.
The Isles of Scilly Steamship Group, the primary operator of the transport services to the Isles of Scilly, operates Scillonian III, which is now in its 49th year and will be replaced next year by the Scillonian IV. Indeed, it was purchased in the 1960s with a Government loan of £1 million during the period when Harold Wilson, who was a resident of St Mary’s, was Prime Minister. That did help the company purchase that vessel at that time. As the Minister will know, Harold Wilson is buried on St Mary’s, and his love and affection for the islands are well known. The ISSG operates that important lifeline link to the Isles of Scilly, but only during the summer months; it cannot operate during the winter because of the inclement conditions.
The ISSG offers concessionary fares for islanders through its “travel club”, as it calls it, which is a way of building and rewarding loyalty. However, it is seen by others that somehow this service is being subsidised by visitors to the islands. We do not want to get into a situation where we discourage visitors to the islands. However, it is worth pointing out—I checked this online today—that if we were to book a return fare on the ferry from Penzance to the Isles of Scilly, which is a three-hour journey, more or less, on a 40 mile trip, that would cost around £220. If we were to catch a ferry from Mallaig to Canna, approximately 30 miles in Scotland, that journey would cost £14.20. If we were to go from Kennacraig to Port Askaig—Isla—the two-hour journey would cost £18. The comparison is something on which we need to reflect.
It is worth saying that most ferry services in England, such as the ferries to the Isle of Wight, are operated by private operators, just as they are on the Isles of Scilly, and receive no central Government grant or funding. There are other examples of publicly owned ferries in the UK, and between the UK and the Isle of Man. On Merseyside, Mersey Ferries is effectively owned by the local transport authority, Liverpool City Region combined authority. In 2018, the Government of the Isle of Man brought into public ownership the Isle of Man Steam Packet Company, which operates ferries between the Isle of Man, the UK and Ireland. The Isle of Man Government do not control the day-to-day running of the company’s ferries, but they do own a 100% stake in its parent company.
I have referred already to inter-island transport and the costs and made comparisons with the subsidies available to local authorities and passengers elsewhere. As I say, there is not an equivalent to the £3 bus fare, nor is there free transport for older people. This means that islanders have a significantly increased cost of living.
While the Isles of Scilly council is responsible for transport and the economic strategy as a member of the Isles of Scilly transport board, which also includes representatives of the transport providers and business groups, the council’s strategic economic plan—“Island Futures”—includes a core aim to
“improve transport connectivity across the islands and to the mainland”.
In relation to connectivity, the strategy aims to secure
“resilient, year-round transport services to Cornwall and further afield”.
It recognises that improving transport connectivity is a “major challenge”—that is an understatement—and aims to make the islands more self-sufficient and resilient to future changes, including in relation to transport connectivity and between the islands.
There are other matters that complicate and worsen the situation for the Isles of Scilly. Its council is responsible for running the airport. It is a very small council, with a budget of £8.8 million, but it has to run a fully regulated airport, which is a lifeline service. I understand that its landing fees are due to increase 18% this year simply to meet the pure costs of the regulatory challenges. The transport operators are complaining about this, and understandably so—it is a great expense.
When I was last in Parliament, the European geostationary navigation overlay service system—Europe’s satellite-based augmentation system that ensures safe use of the services—was in operation. One of the many so-called Brexit benefits is that we can no longer use the European safe satellite system. It has been withdrawn, so the services have become less resilient and more weather-dependent than they were just 10 years ago. So even where a system is in operation, it is struggling.
The Minister will also know that the Isles of Scilly Steamship Company has expressed concern about the expansion of the emissions trading scheme. While we want to have cleaner atmospheres, the question is about the proportionate impact this scheme is likely to have. Initially, it will apply to vessels with a gross tonnage of over 5,000 from 1 June this year, and then to vessels with a gross tonnage of over 400 from 2028, which will add cost to the service. It would be helpful if the Minister talked to the steamship company, but I know that he is addressing this issue, which is very helpful—I do appreciate that.
Help has been provided. As part of the previous Government’s levelling-up programme, £48.4 million was offered to create a new vessel. Indeed, when I was elected other subsidies were available, but unfortunately it was not always possible to get the operator of the service—the steamship company—to agree to use those funds in the way that they were offered.
I know that the Minister has responded, in correspondence and in meetings, about how the English national concessionary travel scheme is supposed to operate, but we do not have buses between the off-islands and the main island, so it is absurd to attempt to apply mainland, landlocked transport policies to a maritime environment such as the Isles of Scilly. I urge him to look at that again. He goes on to tell me that the local authority can provide concessions, but the council of the Isles of Scilly is struggling to survive, let alone being able to provide additional concessions for its transport services. I hope that the Minister will look again at these matters.
The recommended policies that we ask the Minister to consider are: extending the powers under the Concessionary Bus Travel Act 2007 to classify inter-island boating as eligible public passenger transport; beginning a pilot scheme with the Isles of Scilly, perhaps during next winter; and seeing how we get on and evaluate it after a 12-month period. We could create an islands transport mechanism, equivalent to the Scottish air discount scheme or ferry support services, and establish a statutory footing for island-appropriate subsidy powers. We could provide emissions trading scheme transitional relief for lifeline routes and describe the service to the Isles of Scilly as such a route to prevent fare spikes when the ETS comes into force. We could also support harbour electrification for Penzance and St Mary’s.
I am grateful to the Minister for responding to the issues that I have raised previously and I hope that he will take on board the issues that I have raised today. I am delighted to say that the chair of the council of the Isles of Scilly, Councillor Robert Francis, is in the Public Gallery watching this debate, and he will be as keen as I am to continue the conversation with the Minister after the debate, as it is desperately important that we address the very serious transport challenges that Scillonians face.
The Parliamentary Under-Secretary of State for Transport (Keir Mather)
It is a pleasure to respond to this Adjournment debate. May I begin by congratulating the hon. Member for St Ives (Andrew George) for securing it and for speaking so passionately about transport provision for the Isles of Scilly? He speaks with his characteristic good nature on what are really severe and challenging issues facing his constituents and, at the first instance, I acknowledge that and his tireless work across many decades in Parliament where he has advocated on their behalf. I also thank him for his kind offer for us to work more closely together on this issue, which is certainly a commitment I would be glad to accept.
The hon. Gentleman is right to point out that the Isles of Scilly are unique, both in their beauty and their appeal to both residents and visitors, as we have so ably heard, but also that they have clear and pressing challenges in their transportation needs. Their location, 30 miles to the west of Cornwall, brings a set of unique transport challenges that the hon. Member has set out.
If he will allow me, first, I will briefly highlight some of the work that this Government are doing across transport, and notably in Cornwall, that will benefit the hon. Member’s constituents, before turning to the specific concerns that he has raised. We are providing record levels of investment to road, bus and active travel projects across the country to boost connectivity through simplified multi-year settlements. Although I appreciate that the Isles of Scilly are treated separately for funding purposes, Cornwall council, the local authority for much of the hon. Member’s constituency, will receive over £30 million of local authority bus grants during the spending review period, in addition to the £10.6 million it is receiving this financial year. It will also receive over £4.5 million for active travel, up to £221 million for highways maintenance and £24 million in local transport grant funding over the next four years. However, I appreciate that the hon. Member has brought this debate today because he wants to speak about the specific concerns of islanders, and it is those matters that I will now turn to.
The Isles of Scilly are served by a ferry service for eight months of the year, provided by the Isles of Scilly Steamship Company and its vessel, the Scillonian III. I am pleased that the company has commissioned the building of a new passenger ferry, the Scillonian IV, which, as the hon. Member has outlined, is due to come into service next year. In addition, it has two new freight vessels coming into service this summer, and a further vessel is to be launched in 2027. These investments will help secure services between the isles and the mainland for the foreseeable future.
The hon. Member is right to point out the cost of living impact of the transport challenges that his constituents face. The cost of living is a key issue for this Government, and I recognise his and his constituents’ concerns regarding the unique challenges around the high cost of travel to, from and between the islands. I acknowledge the difficulties the island communities face, both in travelling to and from the mainland and in travelling between the islands, and my Department remains committed to delivering better, sustainable and more affordable transport provision. This will be reaffirmed in the integrated national transport strategy, which will soon be published.
Although the amount of transport funding that we are able to offer the Isles of Scilly through the legislative means that the hon. Member outlines is, in my view, limited, that does not mean that we do not wish to do all we can to improve the services there. I can confirm that we are providing the council with a total of £291,000 in highways maintenance incentive funding, up to and including 2029-30, to maintain and improve local roads. Alongside this, we have allocated £140,000 in active travel funding to support the development and construction of walking, wheeling and cycling facilities, and to support network planning and community engagement.
I would like to reassure the hon. Member that I am committed to continuing the engagement between the Government and the Isles of Scilly. It is of paramount importance to me and other Ministers that this continues. Officials from my Department and the Ministry of Housing, Communities and Local Government visited the Isles of Scilly last year and spoke to residents to gain a greater understanding of the challenges that people face. This was followed by a visit in July from Baroness Taylor. These visits were valuable for our Departments, which have worked collaboratively to understand the challenges for people on the islands, including economic difficulties and transport-related issues. Both Departments remain in regular contact with the Isles of Scilly council, which is proactive in driving forward change.
I also recognise the impact of the increasing cost of fares and of transport operations on the people of the Isles of Scilly. It remains the case that all air and sea services to and from the islands are commercially operated, without public subsidy. As I have explained in correspondence with the hon. Gentleman, the threshold for Government intervention in such markets is extremely high, and there are no current plans to intervene, given that commercial services remain viable. I take his point about the provision for the Scottish islands and the legislative hangover from previous Governments’ time in office, but I would note that the situation in question was distinct, in that the services could not operate on a commercial basis. I reassure him that, through the Department’s public service obligations, a policy is in place that if any air transport routes were at risk of being lost, we would assess whether intervention was needed to ensure that the vital links between the islands and the mainland were maintained.
I also recognise that inter-island boat services are vital for the Isles of Scilly community. As I have set out to the hon. Gentleman, however, if a service is to be covered by the £3 national bus fare cap, it has to meet the necessary criteria, including being an open bus service that allows all members of the public to board. The English national concessionary travel scheme is a statutory bus-specific scheme, and it does not extend to maritime transport, but I understand his concerns about the limitations of that framework.
Local authorities have the discretion to offer concessions on other modes, and I am aware that the Isles of Scilly council already provides a health pass, as well as a discretionary concession pass. On ferry services, it is for the Isles of Scilly Steamship Company to decide whether to offer concessions, but I take on board the hon. Gentleman’s very reasonable point about the fiscal pressures faced by the council, and the concessionary offers that it is able to provide. That is certainly something that I will take away and reflect on as a result of our debate.
Andrew George
To a certain extent, the Minister has implied the answer to this, but of course he is well aware that a bus cannot drive between the off-islands and St Mary’s—though there might be some inventive way in which someone could do such a thing. He must accept that if one is looking for parity between the Isles of Scilly and the mainland, one must recognise that we cannot have an open bus service. There are boats and launches that go between the islands—and yes, anyone can use them. Surely there must be a way of finding a parallel for the Isles of Scilly.
Keir Mather
I take the point the hon. Member makes, and the point that he made earlier about the basic issue of equity for British citizens, irrespective of which part of the United Kingdom they live in. That being said, it is incumbent on me in my ministerial capacity to work within the framework of the regulations that have been set. Unfortunately, if they are too narrow to facilitate the interpretation that he advises us to make. I am afraid that that is the reality of the situation, but that is why it is all the more important that we find ways to engage together to solve these challenges. That is certainly what I want to do, following this debate.
Since last year, Artemis Technologies and other stakeholders have taken forward activity as a result of their successful bid to the Department’s clean maritime demonstration competition fund round 6. The Department provided £750,000 to enable a feasibility study to ascertain whether Artemis’s technology could provide a viable solution for an island route passenger service, particularly in the winter months, when residents have no regularly scheduled water crossing. We expect to hear the results very soon.
The UK emissions trading scheme will be extended to cover UK domestic voyages and all UK in port emissions for vessels of 5,000 gross tonnage and above from July 2026. I can assure the hon. Member that we have assessed that these criteria are not met for the Scillonian IV or the Scillonian III. Both remain outside the scope of the UK ETS, and the exemptions and threshold will be reviewed in 2028.
Andrew George
I am grateful for that clarification; I am sure that it will be music to the ears of the steamship company. Going back to the point about Artemis, which is exciting—I congratulate the Government for investing in it—is there any indication of the timescale for any roll-out that might benefit the Isles of Scilly?
Keir Mather
The Department, of course, wants to pursue these projects at pace. If the hon. Gentleman does not mind, I will respond to him in writing with a more detailed timeline of when roll-out will begin.
To conclude, the Government are investing in roads, rail, buses and active travel projects across the country to connect people to jobs, education and opportunities. Our multi-year transport investments help local authorities to drive economic growth and deliver on our plan for change. There are still challenges that we need to overcome, and I commit to working with the hon. Gentleman to ensure that we tackle them for residents of the Isles of Scilly. I sincerely thank him for securing the debate, and for allowing me to address the House on these important issues, which I know are of paramount importance to both him and his constituents. I am sure that he will be able to cover this subject in more detail when he meets Lord Hendy, Lord Berkeley, Baroness Taylor and representatives from the Isles of Scilly council tomorrow morning. I look forward to working closely with him on delivering better transport provision and improved connectivity for everyone in his constituency and right across the United Kingdom.
Question put and agreed to.
Draft Armed Forces Commissioner (Family Definition, and Consequential and Transitional Provision etc.) Regulations 2026
(1 day, 4 hours ago)
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The Minister for Veterans and People (Louise Sandher-Jones)
I beg to move,
That the Committee has considered the draft Armed Forces Commissioner (Family Definition, and Consequential and Transitional Provision etc.) Regulations 2026.
It is a pleasure to serve under your chairmanship, Sir Desmond. These draft regulations were laid before the House on 15 January 2026. Their purpose is to give effect to the Armed Forces Commissioner Act 2025, a landmark reform for our armed forces and the families of those serving. The Act establishes an independent Armed Forces Commissioner, who will have the authority to visit Defence sites, request information and investigate welfare concerns, reporting directly to Parliament. By replacing the Service Complaints Ombudsman with a stronger, more proactive model, the Act strengthens transparency, accountability and trust. It also delivers a critical manifesto commitment of improving the day-to-day experience of those who serve and ensuring that their voices are heard at the highest level.
These Regulations formally establish the definition of “family member” for the Commissioner’s functions. This is central to ensuring that the Commissioner’s remit is clear and inclusive, and that it reflects the real-life experiences of armed forces families in today’s military. For the first time, families will have a direct route to raise welfare issues about how service life affects them, recognising that the welfare of serving personnel is inseparable from the wellbeing of their families.
The draft regulations introduce three main changes. First, they set out a broad and inclusive definition of family member: partners, including ex-partners and those in relationships akin to marriage; children; including adult children and those for whom the serviceperson or their partner has or had responsibility; siblings, including step-siblings; parents and guardians; and other relatives who are financially dependent, live with or are cared for by the serviceperson. Bereaved family members are also included, provided they fit into one of those categories at the time of the serviceperson’s death. We have deliberately adopted an inclusive approach, because modern service life does not just encompass the traditional nuclear family.
Secondly, the regulations make consequential amendments to existing legislation, transferring functions from the Service Complaints Ombudsman for the Armed Forces to the newly created Armed Forces Commissioner to ensure continuity and clarity in the service complaints system. Thirdly, transitional and savings provisions are included to ensure a smooth handover of responsibilities, so that ongoing cases and applications are managed seamlessly and without disruption.
These regulations are made under powers in the Armed Forces Act 2006 and the Employment Relations Act 1999. The policy intent is to promote the welfare of service personnel and their families most likely to be impacted by service life, reflecting the wide variety of modern family structures. Following feedback from Parliament and stakeholders, we have deliberately made the definition broader than those typically used by the MOD. It is designed to ensure that those most impacted by service life are supported, while remaining specific to the commissioner’s functions and not affecting other MOD definitions. It is important to stress, however, that this definition does not bring family members into the scope of the service complaints system; it is solely for the commissioner’s welfare remit.
The Government consulted extensively with stakeholders, including the Families Federations, MPs and peers. Feedback indicated strong support for the Bill’s objectives and for the proposed definition, with key asks, such as the inclusion of bereaved family members and adult children, addressed in the draft. As the Bill’s measures are rolled out, families will be given guidance and help so that they understand their rights and how to engage with the commissioner. The approach is proportionate, consistent and clear, without affecting other MOD definitions of family member.
In summary, these draft regulations provide clarity, inclusivity and coherence for the Armed Forces Commissioner’s remit, ensuring that both service personnel and their families are supported. I therefore commend them to the Committee.
Ben Obese-Jecty (Huntingdon) (Con)
The Opposition support these regulations. This is a straightforward piece of legislation, but we have some points that we would like the Minister to clarify.
When will the new Armed Forces Commissioner will be appointed? In January 2025 the hon. Member for Plymouth Sutton and Devonport (Luke Pollard), then Armed Forces Minister, stated:
“Our intention to have the operation up and running in 2026 remains in place.”—[Official Report, 21 January 2025; Vol. 760, c. 930.]
Could the Minister confirm that that position remains extant? If it does, could she indicate the timeframe within which the Government expect the Armed Forces Commissioner to be appointed?
In the interim, once this legislation comes into effect on 1 April, how will the responsibilities of the Service Complaints Ombudsman be discharged? Will the current ombudsman remain in place until the Armed Forces Commissioner is appointed or will this role, and those responsibilities due to be transferred to the Armed Forces Commissioner, be gapped?
The statutory instrument states in paragraph 3(3):
“For the purposes of this Regulation, references to A’s spouse or civil partner includes—
a person whose relationship with A is akin to a relationship between spouses or civil partners;
a former spouse or civil partner of A;
a person whose relationship with A was formerly akin to a relationship between spouses or civil partners.”
Could the Minister clarify that long-term relationships are covered in the same way? From the way she described it, it sounds as though they are, but I want to clarify that point. Could she also clarify the definition of
“akin to a relationship between spouses or civil partners”?
It would be helpful to know that there is a clear understanding of how this legislation defines a relationship and therefore who is or is not covered by the legislation.
I reiterate that we support this SI, but those are some minor points of clarification that we believe need to be addressed.
Louise Sandher-Jones
I thank the hon. Gentleman for his support of the regulations. To answer his questions, the new Armed Forces Commissioner and his office are expected to be operational from April; I hope that also addresses some of the hon. Gentleman’s concerns about a possible gap with the service complaints process. Long-term relationships are, as he says, covered, and guidance will be issued in due course with the exact clarification.
Question put and agreed to.
Draft Grants to the Churches Conservation Trust Order 2026
(1 day, 4 hours ago)
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The Minister for Creative Industries, Media and Arts (Ian Murray)
I beg to move,
That the Committee has considered the draft Grants to the Churches Conservation Trust Order 2026.
It is great, as always, to see you in the Chair, Sir Desmond. I am pleased to be speaking to this order, which was laid before the House in draft on 28 January 2026 and requires that the Government continue to provide funding for the Churches Conservation Trust, or CCT.
The CCT, which was established by legislation in 1969 as the Redundant Churches Fund, is a charity aimed at protecting an essential part of our national heritage. It demonstrates a successful partnership between Church, Government and communities. The CCT plays a crucial role in caring for some of the most architecturally impressive churches no longer required for regular worship. It currently cares for more than 350 churches in towns, villages and cities across England, all of which are listed, mostly at grades I and II, and some of which are scheduled ancient monuments. The CCT’s collection showcases how historical buildings can be brought back to life creatively to continue to serve the communities that they were built for, once they are no longer required for their original use.
Historical places of worship are a valued part of this nation’s heritage. Around 45% of all grade I listed buildings are Church of England churches or cathedrals, and they represent some of the finest examples of our historical buildings, heritage and exceptional craftsmanship. Those buildings are also often at the heart of communities, admired by visitors and beloved by residents. The CCT’s work is crucial to ensuring that they can be kept open and enjoyed as cultural, social, tourism and educational assets. Working in partnership with local communities is key to achieving that, as collaboration helps to secure the futures of historical places of worship as living, useful buildings that continue to contribute to the social fabric of their local places.
That approach was recently demonstrated at St Torney’s in North Hill, Cornwall, the newest addition to the CCT’s portfolio. The CCT took one of the last remaining community buildings in an isolated village on the edge of Bodmin moor and turned it into a hive of community activity, hosting art shows, music, talks, children’s activities and much more. Close consultation with local residents was paramount to the success of the project, which continues to be successful. Other recent notable successes include the CCT’s work to conserve the internationally important stained glass in St Mary’s in Shrewsbury, again in close consultation with the local community, which is critical.
The CCT recognises the importance of passing down traditional heritage skills to the next generation and building expertise in skills. Through its successful heritage skills summer programme, run jointly with Historic England, the CCT provides high-level repairs to the grade II listed St John’s church in Lancaster while helping to train a cohort of young people in the craft skills needed to take care of historical churches.
Closer to home, last year saw the CCT move into its new headquarters at the Old Black Lion in Northampton. Following an innovative regeneration project, that unique space combines the fantastic revitalised historical pub with St Peter’s church, in what is the crown jewel of the CCT’s estate and its new national office. Through the Old Black Lion project, the CCT is contributing to Northampton’s wider regeneration, investing more than £2 million in the town’s most deprived wards.
The CCT is supported by funding from both the Church of England and the Government—the Government are providing more than £3 million in the current financial year. It has also sought to diversify its income streams to multiply its core funding, so it can further support its activity at a time of public funding pressures. This debate takes place at a pivotal time for the funding of places of worship: to make a lasting difference to historical places of worship, this Government are shifting towards capital funding and will invest more than £90 million over the next four years, with the launch of the places of worship renewal fund.
That new fund, which was announced in January, will allow for longer term planning, enabling us to target resources at the areas that are most in need, particularly areas with double disadvantage. In 2025, the CCT launched its new strategy, which is designed to guide the charity’s work for the next five years. Under the strategy, the CCT will focus on three interdependent principles: conservation, community and creativity. It will work with local communities both to conserve the historical fabric of churches, and to find creative new ways to reimagine such places.
This order allows the Government to continue to provide funding to support the CCT and enable it to continue its work in giving future life to the historical places of worship in its care. The instrument covers three years, providing the CCT with certainty about Government funding support for this period and helping it plan its activities with confidence. The funding will allow the CCT to continue to conserve the fabric of one of the largest collections of highly listed buildings in the country, keeping them open, for free, to everyone of all faiths and none.
I hope that Committee members share my enthusiasm for the important work done by the CCT, and recognise the key role that it plays in preserving and promoting a vital aspect of our nation’s heritage. I hope that they will approve the draft order, which will provide for the CCT from 2026 to 2029, and I commend it to the Committee.
Nigel Huddleston (Droitwich and Evesham) (Con)
It is a pleasure to serve under your chairmanship, Sir Desmond. I am very pleased that I can start my speech by saying that I agree with the Minister: the Churches Conservation Trust does indeed play a vital role in the preservation of our heritage, and our religious heritage in particular.
The CCT cares for more than 350 listed churches across England that are no longer used for regular worship, including several in my constituency, and is the custodian of the third largest collection of heritage properties in the country, surpassed only by the National Trust and English Heritage. Together, CCT churches receive as many as 2 million visitors a year. They play a key role in our tourism economy, a point especially pertinent to today’s debate, which takes place during English Tourism Week.
The Churches Conservation Trust keeps these buildings open to the public for free, operating on a far smaller turnover than the National Trust or English Heritage. It not only performs vital restoration and preservation work but, working alongside the local community, often seeks new use opportunities for its churches, which helps to revitalise and rejuvenate those spaces for the benefit of all. Our churches contain some of the country’s best examples of historical art and architecture, from medieval wall paintings to stained glass and stunning monuments. By looking after them for future generations, the CCT also helps to sustain our country’s vital craft and heritage skills.
Government funding, in the form of an annual grant, is vital to the CCT’s work, and the Opposition therefore support the grant being awarded by this statutory instrument. Other funding comes from the Church of England, the National Lottery Heritage Fund, donations, legacies and commercial income, including the innovative idea of “champing”, or church camping—something I am sure you have partaken in, Sir Desmond. The CCT keeps its costs down thanks in no small part to the more than 2,500 volunteers in churches across the country who assist the trust in its work; I am sure the Minister will join me in thanking them all.
Funding from the Department for Culture, Media and Sport represents less than a third of the CCT’s funding, but provides a crucial foundation on which to build and raise other funds. A modest sum of state investment keeps nearly 360 of our most precious historical buildings safe and open for millions of visitors in each English county, and provides a network of valuable community facilities in urban and rural settings alike.
In recent years, the CCT has been given responsibility for looking after many more churches, and its costs have increased significantly due to inflation and the effects of a changing climate. Last month, the Church of England’s General Synod agreed to increase its annual contribution to the CCT in light of those growing challenges. Yet for many years the DCMS grant has been frozen, and this statutory instrument once again provides a flat cash settlement with the same ceiling for the two subsequent years, representing a real-terms cut. Along with the abolition of the listed places of worship VAT scheme, which will cost the CCT more than £300,000 next year, those funding cuts from the state cancel out the rise from the Church.
That situation reflects a broader anxiety among the custodians of our religious heritage. Many current and former places of worship are on Historic England’s heritage at risk register, meaning that without significant intervention they are at risk of being lost to the nation due to neglect, decay or inappropriate development. Yet the Government recently announced the end of the listed places of worship scheme, having halved its budget last year to a maximum of £23 million per year, compared to the £42 million budget when my party was in power.
To the surprise of no one but the Government, last month the fund ran out of money. The replacement scheme is due to start next month, but there is still little detail about how it will work in practice, particularly for historical churches, which now face large tax bills for carrying out essential works to look after these important parts of our shared heritage. The VAT grant scheme gave the custodians of our historical places of worship the certainty they needed to carry out vital works to these public buildings, and it sent a message that these were places that we all valued.
Scrapping the VAT scheme means that people caring for historical churches, including the Churches Conservation Trust—the Government’s own body that was set up to do just that—will now have to pay a 20% tax to repair or maintain a church, while someone demolishing one would pay 0%. That sends a terrible message about what we value as a nation. To give two examples of trust churches in my constituency, investigation work to locate and fix a leak on the roof of St Lawrence’s in Evesham will cost an estimated £12,000, of which £2,000 is VAT. At All Saints in Spetchley, re-roofing the nave and chancel to protect the 700-year-old church with its fabulous medieval paintings will incur a VAT bill in the region of £20,000.
Uncertainty about the Government’s changes has meant that important—indeed, vital—repair work has been delayed or cancelled. The Government announced other changes to heritage support, but again few details have been forthcoming and the high-level information that we have received so far has just given an indication that the VAT reclaim scheme will be replaced with capital grants instead, which has caused considerable anxiety to many stakeholders who fear they will lose out. Can the Minister confirm whether that means fewer sites will receive funding? Will there be winners and losers? If so, who?
We are still in the dark about the eligibility criteria, about timescales, the application process, the Barnett consequentials for Scotland, Wales and Northern Ireland, and whether any underspend may be carried forward from one year and so on. I hope the Minister will take the opportunity in his closing remarks to provide some reassurance to those entities, including the CCT, about when more details on the new scheme will be announced. In particular, can he confirm the eligibility criteria for the new places of worship renewal fund? Finally, will he lobby the Treasury to support the Conservatives’ commitment to fully restoring funding for the places of worship scheme up to the levels we had when we were in Government?
Dame Caroline Dinenage (Gosport) (Con)
It is a great pleasure to see you in the Chair, Sir Desmond. At the risk of dangerous levels of cross-party agreement breaking out, I echo what the Minister said about the important role that the Churches Conservation Trust plays in protecting some of our nation’s most significant historical churches. This debate is timely because the Culture, Media and Sport Committee, which I chair, is currently undertaking an inquiry into built heritage and how we protect it, examining the effectiveness of current heritage protections, funding structures and the current successes and challenges of organisations tasked with looking after our most important historical assets.
Evidence we received during our inquiry has shown clearly that the Churches Conservation Trust plays an invaluable role in preserving our heritage, but is increasingly struggling to meet the growing challenges placed upon it. Witnesses told us that funding from the Church of England has not kept pace with the rising costs of conservation. What was also particularly concerning was that around 50 to 60 churches, some unused and deteriorating for over two decades, remain in limbo. Additionally, DCMS funding, which forms less than a third of the trust’s income yet provides an essential foundation for its other fundraising events, has effectively been frozen, meaning the trust has continued to take on new churches without any corresponding uplift.
Although the Church of England has now agreed to increase its annual contribution, the combination of frozen DCMS funding and the loss of the listed places of worship grant scheme, which is worth more than £300,000 a year to the trust, means it is no better off in real terms.
The new places of worship renewal fund is welcome, but we still do not know how it will be distributed, and there is understandable concern about eligibility for it and about its overall adequacy, as we have already heard from my hon. Friend the Member for Droitwich and Evesham. It is not clear how much the Churches Conservation Trust will receive from the new fund, or whether the new fund will make up for the money that it loses as a result of the old scheme’s being axed. The order before us will help the Churches Conservation Trust to continue carrying out the critical work of conserving and maintaining our shared historical assets, but it is essential that it can access new funding schemes and wider cultural support.
Does the Minister accept that, as the amounts paid to the Churches Conservation Trust are frozen, the money being made available through this instrument amounts to a real-terms cut in funding? When will we get more updates about how the new places of worship renewal fund will operate? Above all, we need certainty and predictability, so will the Minister guarantee that the Churches Conservation Trust will be able to access the new fund and that it will not lose out as a result of the old grant scheme’s being axed? Finally, what assessment have the Government made of the number of churches that will close as a result of the listed places of worship scheme’s ending?
Ian Murray
I thank the Chair of the Culture, Media and Sport Committee and the shadow Minister for their contributions. First, I will deal with some of the questions about the listed places of worship scheme.
The replacement scheme will be a £92 million fund over the next four years, which is actually an increase in funding over what was available on the VAT reclaim scheme, because it is England only and not a UK-wide scheme, therefore only eligible in England. There are no Barnett consequentials to that for Scotland, Northern Ireland or Wales, because the scheme is the Department spending budget that has already been Barnettised through the spending review. In the case of Scotland, while I know there has been a lot of discussion from Scottish Members about this, it is up to the Scottish Government to determine how they spend the spending review Barnett consequential. There is no Barnett on this allocation of budget.
The CCT should be able to apply for the places of worship renewal fund, as it can already for the listed places of worship fund, as the shadow Minister laid out. In terms of when, I can confirm it will be soon—as hon. Members know, “soon” in Government terms is anything between 1 January and 31 December, but it actually will be soon, because we acknowledge that people are a little bit in limbo here.
The reason the scheme was closed—to answer one of the questions put to me—was because 80% of the projects that were brought forward said that the work would go ahead regardless, and another 15% on top of that said that the work would have gone ahead on time and on budget, so the public purse was funding stuff that was already happening. The fact that we have gone to the new grant system means that people will be able to apply for more funding in that sense. In the past there was a £25,000 cap, and the average spend was between £3,000 and £5,000—quite small amounts of money in terms of VAT reclaim.
We encourage the heritage sector—the CCT and otherwise—to come forward with projects as soon as the criteria are announced. The fund sits under the umbrella of the £1.5 billion that DCMS announced last month for arts, heritage, museums and places of worship, so there is a lot of money going into the sector, and the sector has welcomed that. I think that answers all the questions, unless anyone would like to come back to me on that.
There is eligibility for places of worship and former places of worship—CCT places—to apply for heritage at risk funding if they fall into that category. Recently, half a million was announced for repair work to St Catherine of Siena Church and more than £250,000 for emergency repairs at St Michael’s in Birmingham, because they are both sites classed as heritage at risk. There are other avenues of funding, so I encourage the custodians of churches to come forward if they need any advice on finding the best model for them.
Government funding for CCT, along with funding from the Church of England, is crucial to the heritage sector, enabling these remarkable buildings of cultural significance to remain open and in good repair, serving the communities for which they were originally built. I want to pass on my thanks to the trustees and staff at the CCT, and all the individual volunteers who keep these buildings going in a time of need. There is a positive outlook for historical places of worship under the Government’s new funding and with the CCT’s new strategy.
Question put and agreed to.
Draft Contracts for Difference (Sustainable Industry Rewards and Contract Budget Notice Amendments) Regulations 2026
(1 day, 4 hours ago)
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The Committee divided: - Ayes: 12 / Noes: 1 - Question accordingly agreed to.
The Minister for Energy (Michael Shanks)
I beg to move,
That the Committee has considered the draft Contracts for Difference (Sustainable Industry Rewards and Contract Budget Notice Amendments) Regulations 2026.
It is a pleasure to serve under your chairship, Ms Jardine, and it is wonderful to see so many Scots reunited for this debate. The draft regulations were laid before the House on 5 February; I should say from the outset that they still carry the legacy name of this policy, although it is now known as the clean industry bonus. I will briefly set out three things: first, the purpose and direction of the clean industry bonus; secondly, how the draft regulations help us to evolve the contracts for difference scheme; and thirdly, why funding under the scheme is now conditional on applicants adhering to the fair work charter, which I will come to in a moment.
First, the purpose of the statutory instrument is to amend regulations governing the clean industry bonus ahead of allocation round 8. As I am sure Members are aware, the contracts for difference scheme is our main renewable energy support mechanism. The clean industry bonus offers additional CfD revenue to offshore wind developers who invest in UK factories and ports needed to deliver offshore wind, driving investment in our industrial heartlands. Offshore wind developers have rightly prioritised reducing costs, but the CfD scheme was missing a mechanism to ensure that investments went back into the UK, and to cleaner factories, so that consumers got both clean power and local jobs. That goes to the heart of this Government’s mission to deliver not only clean power but our industrial strategy.
Funding under the clean industry bonus is allocated through a competitive process that is run ahead of the main CfD round, with awards given out for the best value investments in the UK or for cleaner supply chains. Payments are released only on delivery of those commitments.
In the most recent allocation round 7, £204 million was allocated through the clean industry bonus, which crowded in £3.4 billion of private investment—that is £204 million for £3.4 billion of private investment into supply chains and ports in the UK, delivering a strong return on public investment. The scale of private investment leveraged by the clean industry bonus represents an unprecedented vote of confidence in the UK’s supply chains, compared with previous allocation rounds.
Let me set out the direction of travel in the draft regulations. The aim is to make targeted, practical improvements to the operation of the scheme for allocation round 8, such as simplifying the application process and clarifying how budgets and delivery rules operate. The draft regulations also provide a legislative basis for making the subsidy conditional on fair work, ensuring that investments come with a commitment to good-quality jobs. The aim of the scheme’s operational improvements is to speed up the process and reduce the administrative burden by diminishing the volume of paperwork required, as well as clarifying budgets and rules, such as if events outside an applicant’s control derail their project. The draft regulations also set a sunset clause on the scheme, meaning that no CIB can run after 31 December 2028 without further parliamentary scrutiny.
In the coming allocation round, we are also thinking beyond just offshore wind; the scheme will be extended to onshore wind projects in allocation round 9, and the regulations have been amended to make that possible. The period before introduction will give industry a small amount of lead-in time to get ready. Taken together, these changes improve and widen the scheme, as we speed up the delivery of renewables.
Thirdly, on fair work and skills, the most significant change in allocation round 8 is that clean industry bonus applicants will need to sign up to the offshore wind fair work charter, which is a series of commitments to improve worker voice and representation and health and safety in the offshore wind industry. If an applicant wants to apply for the subsidy, they will have to sign the charter. This was designed by industry and trade union representatives, and it reflects their constructive engagement. I thank the representatives from both the industry and the trade unions, who engaged constructively in pulling this together.
The purpose is very simple: if we are going to give public money, it should help to improve the quality and security of jobs in the offshore wind industry. It will mean that workers and communities across the country reap the rewards of offshore wind and that the sector becomes an even more attractive place to work amid fierce competition for skills. The charter builds on forthcoming commitments in the Employment Rights Act 2025, in particular by asking that the offshore wind sector proactively implement voluntary access agreements for trade unions. It also includes a commitment to strive for best practice health and safety standards that go beyond the legal minimum.
Our commitment to good jobs through the clean industry bonus does not stop at the fair work charter. We are pressing ahead with a skills investment fund that will help develop the skills needed for the clean energy transition. The idea is that offshore wind developers pool together skills funding and initiatives, rather than relying on individual projects trying to address particular short-term needs. The Government and the offshore wind industry have agreed that they will work together to set that up by 2027; that will be funded by existing developer contributions to the supply chain, not by any new money. Once that skills and investment fund is up and running, developers may be asked to contribute to it as a condition for taking part in the CIB and CfD schemes. That way, the bonus can drive improvements in how the offshore wind sector addresses fair work and skills, while continuing to fund UK industrial heartlands.
As I have set out, the regulations build on the strong foundations achieved in allocation round 7. They ensure that the clean industry bonus continues to drive supply chain growth in support of clean home-grown power. They make targeted improvements to the operation of the scheme and, crucially, ask that public funding supports public goods such as fair work and investment in skills. Taken together, the measures support the Government’s mission to make Britain a clean energy superpower, to lead in producing affordable clean energy and to support the creation of good jobs right across the country. I commend the regulations to the Committee.
Andrew Bowie (West Aberdeenshire and Kincardine) (Con)
It is a pleasure to serve under your chairship, Ms Jardine. The primary purpose of the statutory instrument appears to be twofold: to extend the scheme to onshore wind and to put ringfenced spending on a statutory footing for nascent technologies such as floating offshore wind. We also see some technical adjustments in the extension of the sunset clause and the altering of timeframes, alongside amendments to the Electricity Market Reform (General) Regulations 2014 to uphold financial minimum standards as a prerequisite for the release of payment.
The clean industry bonus scheme was introduced by the current Government in 2024 to promote investment in domestic supply chains, although it of course follows the excellent work of the previous Government to reduce our reliance on foreign supply chains. However, there is irony here on multiple accounts. First, it was only following immense pressure from the Conservative party official Opposition—and from the other place—that the Government were persuaded to amend their flagship legislation introducing Great British Energy, in order to prevent investment in supply chains with proven links to slave labour. I am immensely pleased that the Government U-turned on that, as taxpayers’ money absolutely ought not to be spent on importing solar panels from China manufactured in horrendous conditions in regions where slave labour is proven to be commonplace.
We should be promoting domestic supply chains, building domestic capacity and seeing investment to benefit British workers and British communities. Nowhere is that more evident than in the north-east of Scotland, home to a world-leading energy industry and supply chain. The irony there is the Labour Government’s reckless disregard for our home-grown supply chains in the north-east of Scotland. They are the very same offshore logistics specialists, subsea cabling manufacturers and workforce that the Government claim to need more of, yet the Government have shown them nothing but disdain since getting into office. At a time of maximum geopolitical uncertainty, our domestic oil and gas sector deserves support. If the Government wish to support domestic energy supply chains, I suggest that the Minister starts there.
The statutory instrument broadens the scope for allocation to technologies other than offshore wind, facilitating the inclusion of onshore wind in allocation round 9. If the Government were as interested in securing domestic supply chains they would have been much better doubling down on nuclear, which has the most secure supply chain of any power generation technology. Yet the Government cancelled the third large-scale nuclear power plant that we signed off at Wylfa. After all the effort it took to get Hinkley and Sizewell’s development consent order across the line, we find ourselves with no pipeline for large-scale nuclear projects in this country. We should be under no illusion that this scheme represents yet another subsidy for wind developers, on top of the subsidies that the Secretary of State already handed to them through the renewables obligation scheme—which we have committed to scrapping in its entirety—and on top of the subsidies that they received through their CfDs.
This instrument also puts on a statutory footing the protected allocation of funding for certain technologies, such as floating offshore wind. The Department’s explanatory memorandum explains that that is
“to safeguard some investment in a newer technology with higher costs in its exploratory phase and to support investment in the supply chain”.
Although I do not wish to stand in the way of the statutory instrument today, I reiterate the fundamental irony in the Government’s attempt to invest in domestic supply chains while accelerating the decline of industry across the country, particularly in the North sea, and refusing to double down on large-scale nuclear, all while the Secretary of State signs secret deals with China.
Kit Malthouse (North West Hampshire) (Con)
Notwithstanding the comments from my hon. Friend the Member for West Aberdeenshire and Kincardine, I am a little alarmed by this statutory instrument and its implications for my residents in North West Hampshire. I have a number of questions for the Minister.
My understanding is that this scheme was originally established in the aftermath of the disruption to supply chains caused by the conflict in Ukraine. There was significant concern about the ability of the offshore industry to continue, so the subsidy was put in place on a supposedly temporary basis. That was to allow for the uninterrupted development of an industry that had hitherto been working quite well, but was suffering at that point.
This statutory instrument, however, turns that temporary subsidy into a permanent feature of the landscape. We are voting through, colleagues, a permanent subsidy to the wind industry. [Interruption.] Well, there is no sunset clause; that has been taken out. There is no review mechanism—there is nothing. If the Minister wants to intervene on me, I am quite happy to be corrected, but as far as I can see this is an open-ended subsidy scheme through the CfD system. My questions are configured around that assumption.
First, could the Minister confirm that there will be no annual parliamentary vote on this subsidy? Normally, a subsidy to an industry would expect to come through direct expenditure from the Department for Energy Security and Net Zero, the Department for Business and Trade or whatever it might be. This is being funded through the supplier obligation levy, which is a direct levy on consumer bills. There is no approval by the House of the budget. In fact, I think it is just approved administratively—it is what it is. The consumer will pay, whether we like it or not. If the Minister could confirm that, that would be great.
As I understand it, the budget for AR7 was about £544 million. Could the Minister confirm for us the projected budget that the Government expect for AR8, and therefore how much my residents in North West Hampshire can expect to be added to their electricity bill to pay for this statutory instrument?
Much of the Government’s case for extending what is—let us be clear—an industrial subsidy is that there is a very high leverage. I looked at the maths, and the leverage of private sector to public sector is about 16:1. How was that number reached? I could not see in the impact assessment what the maths was, what assumptions had been made or whether this had been independently verified. Is there some kind of National Audit Office examination of that number? I have been a Minister myself, and I was always very sceptical about these public-private leverage numbers. They are often promoted by the industry looking for the subsidy, and make their way into these sorts of impact assessments without any kind of checking. I would be grateful to understand what the assumptions were.
Could the Minister also confirm that this is now a permanent feature of the landscape—that there is no sunset, statutory timeline, let or control? People will effectively just bid through the CfD system, the subsidy will make up the difference, they get to build their onshore, floating offshore or whatever wind it might be, and my constituents and I have to pay no matter what.
Then I wanted to ask a bit about this fair work charter. I understand that the Government are very keen on employees’ rights. We should all make sure that people are treated with respect in employment, but using a statutory instrument effectively to extend employment regulations seems very odd. I wonder whether that will be an ongoing feature of the landscape for statutory instruments such as this and whether we can expect a kind of extension of regulation by stealth.
I am sure these regulations are perfectly amenable, but their being contemplated in a small Committee of Members, rather than on the Floor of the House, as the Employment Rights Act 2025 was, or indeed going through both Houses in all their pomp, seems to me a slightly sneaky way to get around proper Government scrutiny. I would be very interested if the Minister could point me, please, to the specific statutory authority that permits the use of CfD contracts to impose employment standards on developers and their supply chains. If he cannot point me to that, what is the legal authority, please, for that being included in this statutory instrument?
Finally, CfDs were designed originally to bring down the cost of alternatives. That was the original plan. Yet what we are voting on today will do precisely the reverse: raise the cost for me and my constituents. I wonder how the Minister can justify that at a time of difficulty for so many of our constituents with the cost of living. If this industry is as attractive to the private sector as he says it is, why does it need the subsidy in the first place?
Michael Shanks
I will address a few things. There were some contradictory comments from different Members of the same party: on the one hand, we should support the supply chains, but on the other, the Government should do nothing to actually build them up. I will come to that point, because—
Michael Shanks
That is how we end up with absolutely no industry left in the country. That is what we are trying to rebuild after 14 years of it falling apart.
I will turn to the specific points. First of all, the shadow Minister, the hon. Member for West Aberdeenshire and Kincardine, made a good point about the strength of supply chains in the north-east of Scotland; I will be in Aberdeen again on Thursday. One of the key things that the North Sea Future Board has taken as a real priority is how we map those supply chains, not just over oil and gas but over what could come in terms of offshore wind, decommissioning, hydrogen and carbon capture. For too long, the pipeline of future projects that that supply chain could be redeployed on has not been clear enough. As a result, we have been losing out on contracts that could be dealt with here in the UK. We are determined to try to fix that, because there are significant supply-chain opportunities, but we need to make it easier for companies to take those up.
The shadow Minister and I always agree on new nuclear, although we slightly disagree on how much he achieved when he was the Nuclear Minister—but I will not mention that, because I want us to work co-operatively on nuclear. New nuclear is incredibly important. As he is right to say, the supply-chain benefits in the UK from nuclear are substantial: thousands and thousands of jobs in communities right across the country, not just in proximity to Sizewell or Hinkley, are contributing in different ways to building what are phenomenal engineering projects here in the UK.
The small modular reactor fleet that the Government not only consulted on but have actually delivered—and are delivering—will result in even more supply-chain jobs across the country as well. The shadow Minister and I also agree that we would like to see some of those SMR projects being built in Scotland, with even closer supply chains in Scotland as well, but we first need to change the Scottish Government in May; I am glad that he will be supporting a vote for Scottish Labour on 7 May to do that.
The shadow Minister also raised a number of other points about the supply chain that I think are right. It is absolutely right to say that floating offshore wind is an expensive technology, but we are at the cutting edge of its development. We have a real opportunity to do something differently on deep-sea wind, which we were not able to do on fixed-bottom wind, to have the supply chain here in the UK. We have the biggest pipeline anywhere in the world; we have one of the biggest projects in the world. That is an opportunity for us to deliver on that innovative supply chain, but it takes investment for that to happen.
The right hon. Member for North West Hampshire asked a number of genuine questions, which I appreciated. First, the regulations themselves very clearly set out the sunset clause as 31 December 2028. This will be eligible for the allocation rounds before that date; if we wanted to continue the scheme beyond that, we would have to come and update these regulations again, but it is not an unlimited fund.
On the projected budget for AR8, I cannot get into projected budgets because they are driven by the initial allocation that is set, and then by the bids that come in. In AR7, we reformed the process so that we could see the bid stack in order to see what projects were in that option round, although they were anonymised. That resulted in the budget getting us the output of offshore wind that we did, at a price that was 40% cheaper than new-build gas. That is what we should hold on to: the AR7 option round was cheaper for consumers than the equivalent would be.
I remind right hon. and hon. Members that there is no option to not build new energy infrastructure in this country. We have two choices: we either double down on gas, and the world as it stands right now is a reminder of why that would be a mistake; or we build renewables. There is no option to build nothing. There is a cost for consumers, regardless of what we choose to do. There is also a huge cost for consumers of building the grid that the previous Government failed to build for 14 years, which we are now determined to do.
On the fair work charter, there is no compulsion on any developers to bid into the clean industry bonus. If they want to participate in the contracts for difference auction, they are very welcome to do that. If they want to participate in the clean industry bonus and have public support for supply chains here in the UK, then they should conform to the requirements of that scheme. We think it is absolutely fair to say that if the hard-working people of this country are putting money into building those factories, fair work should be at the heart of it. I am surprised, frankly, that in 2026 anyone would think that fair work is something that we should not support by any means necessary.
Kit Malthouse
As I think I said, I agree that people should be treated with respect; my question was more about why it is being done through this particular route. For the Government to legally have grounds to include what we are discussing as part of, effectively, a procurement process, there has to be a statutory basis on which they are doing that; it cannot just be shoved through on a non-universal basis. I was asking for the authority on which it is included.
I am sorry if I misread the time limits regulation. Could the Minister confirm that, if the Government give notice before 31 December 2028 for 12, 15, 19 or 120 more rounds to come, they will then be able to continue post that deadline? So they can in fact manufacture a deadline.
Finally—rather than my having to intervene again; I hope you will bear with me, Ms Jardine—could the Minister confirm to colleagues what he said: we are being asked to vote today for higher energy bills for our constituents in perpetuity, or certainly for the next few years, as a result of this instrument? Just so everyone is clear: you are voting for higher bills.
Michael Shanks
I thank the right hon. Member for his second speech in the debate.
Kit Malthouse
I was trying to save time; I can intervene more if the Minister wants.
Michael Shanks
I understand the point. First of all, I have been really clear. This regulation, as it clearly sets out, comes to an end on 31 December 2028. We will come back to the Committee to update the regulations should we wish to continue the scheme. We have run AR7—it was a successful scheme. Obviously, we want to monitor what happens in AR8 and AR9. We may be able to devise other schemes. It may be that by then that our industrial strategy has delivered the supply-chain benefits across the UK and that that is not necessary, but supply chains do not come out of nowhere.
The shadow Minister, the hon. Member for West Aberdeenshire and Kincardine, made one other point that I wanted to come back to. When we left Government, two supply chain companies were building solar in this country. When we took back Government in 2024, there were none. If we want to have supply chains in the UK, we have to support and invest in them. That is not just a cost. It also delivers good jobs across the country, and our energy security.
On the question about raising bills, the right hon. Member for North West Hampshire is quite wrong. The outcome of building the clean power system is that we will bring down bills, but we have to be able to build it and that means supply chains here in the UK as well, because the rest of the world is also in a race to build clean energy infrastructure.
Michael Shanks
It is a no, because the counterfactual, of relying on gas, as his party is so determined to do, would put up everyone’s bills significantly. We are the ones bringing down bills, and on 1 April all our constituents will see that the decisions this Government have made will reduce their bills by 7%.
There are a number of points in this statutory instrument that I could go over again; in the interests of everyone’s time, I will not. I reinforce the point that we believe that if we are building an energy system for the future here, we should deliver the good jobs and industrial benefits that come with that. That should not be a controversial argument, but it seems that it still is. If we want to have an industrial strategy, we cannot be agnostic, sit on the sidelines and hope that someone else will do it—we have to drive it forward. If we want our constituents to have good, well paid jobs across the country, helping build the energy system, we have to do something about it. This Government are doing that, and I commend the regulations to the Committee.
Kit Malthouse
On a point of order, Ms Jardine. I do not mean to be difficult, but the Minister has not answered all the questions I posed—not least about the assumptions of the 16:1 leverage, which is apparently the big bonus coming in. I also do not know whether it is appropriate for us to vote on what is effectively an open-ended budget. Fundamentally, the impact I am most worried about is the one on my constituents—that I am not going to be able to tell them how much this will cost them; that is quite a significant hole in the Government’s argument. I am not aware of other statutory instruments where we vote for an open-ended budgetary allocation that our constituents will have to pay for, whether they like it or not.
I have time this afternoon. If you, Ms Jardine, want to suspend the sitting while the Minister goes and finds the answers to those questions, I am quite happy for that to happen. It seems to me disrespectful for us to rattle through something that will have an impact quite soon on people’s electricity bills.
The Chair
Thank you. That is not a matter for the Chair but the right hon. Member’s comments are on the record, and I have taken note of them. It is appropriate now for us to move on.
Question put.
Draft Tertiary Education and Research (Wales) Act 2022 (Consequential Amendments) Order 2026
(1 day, 4 hours ago)
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The Parliamentary Under-Secretary of State for Wales (Anna McMorrin)
I beg to move,
That the Committee has considered the draft Tertiary Education and Research (Wales) Act 2022 (Consequential Amendments) Order 2026.
It is a pleasure to serve under your chairship, Mrs Harris. The draft order was laid before the House on 2 February. It will make changes to UK legislation that are necessary as a consequence of the Senedd’s Tertiary Education and Research (Wales) Act 2022. The order must be enforced by 1 April to coincide with the Welsh Government’s commencement plan for the Act.
The 2022 Act created a new statutory framework for publicly funded tertiary education and research in Wales. It established the Commission for Tertiary Education and Research—recently named Medr—which is responsible for funding and overseeing the tertiary education sector in Wales. The sector encompasses higher education, further education and training, apprenticeships, sixth forms and adult community learning. I will refer to that body as either the Commission or by its name, Medr.
The Act provides the Commission with new powers to fund tertiary education in Wales and repeals corresponding functions that were previously in place. The order ensures that several pieces of UK legislation are kept up to date by making amendments that account for the new system introduced by the Senedd’s 2022 Act. The order mainly removes references to the powers that are now being repealed and replaces them with references to the equivalent powers in the 2022 Act. That ensures that the legislation being amended will continue to operate in largely the same way as it does now, but with the Commission integrated into the legislative framework.
Article 2 of the order amends the Value Added Tax Act 1994 to ensure that education and vocational training provision funded through powers in the 2022 Act will be an exempt supply for the purpose of value added tax. The Income Tax (Earnings and Pensions) Act 2003 includes provision for the tax treatment of income derived from shares in research institution spin-out companies. Article 3 ensures that the definition of “research institution” in that Act includes any university or other educational institution receiving funding under powers in the 2022 Act.
Article 4 amends the Higher Education and Research Act 2017 to enable Welsh Ministers to exercise functions in the 2022 Act jointly with other public authorities, including the Office for Students and UK Research and Innovation. Article 5 amends the Charities Act 2011 (Principal Regulators of Exempt Charities) Regulations 2013 to designate the Commission for Tertiary Education and Research as the principal regulator for specific charities in Wales. That reflects the fact that the Commission—or Medr—will now be responsible for regulating further education and training in Wales under the 2022 Act, whereas previously Welsh Ministers were. The order also ensures that existing restrictions on principal charity regulators relating to the onward sharing of His Majesty’s Revenue and Customs information are applied to the Commission.
Article 6 amends the Seafarers’ Wages Regulations 2024 to ensure that the apprenticeship rate for seafarers can apply to those carrying out apprenticeships funded by the Commission under powers in the 2022 Act.
The amendments to UK legislation in the draft order fall outside the legislative competence of the Senedd as they relate to reserved matters such as tax, charities and employment. Taken together, those amendments ensure that existing legislation will continue to operate as intended by taking account of the changes made by the 2022 Act.
I welcome the implementation of the Senedd’s Tertiary Education and Research (Wales) Act and the positive impact that Medr is already having in Wales. The draft order will make the consequential amendments necessary to keep UK legislation up to date, and it will help ensure that the 2022 Act can take effect as intended.
Mims Davies (East Grinstead and Uckfield) (Con)
It is a pleasure to have the opportunity to respond to this timely and important discussion on behalf of His Majesty’s loyal Opposition. I welcome today’s discussion on tertiary education, which is long overdue. I thank the Minister for her helpful introduction to the order.
The 2022 Act abolished the Higher Education Funding Council for Wales, and, as the Minister spelled out, the new Commission for Tertiary Education and Research— Medr—became operational in August 2025, bringing responsibility for higher education, further education, apprenticeships, sixth forms and adult learning together in a single strategic body. I recognise that the draft order does not revisit policy decisions; it simply updates legislation so that it continues to function properly following the creation of Medr.
While the instrument is technical, as the Minister said, it sits within a wider set of reforms that will shape the future of tertiary education in Wales. Audit Wales has rightly emphasised the importance of ensuring that Medr’s strategic planning reflects the views of learners, employers and providers, and that its long-term planning aligns with statutory missions.
Education as a whole should be at the forefront of the Government’s focus for Wales. Many members of the Committee will be concerned that, while Welsh Labour has been in charge of education in Wales from as far back as 1999—when Tony Blair was still Prime Minister—it has been somewhat distracted by other priorities, with some youngsters leaving school unable to progress. The Opposition have concerns about politicians ploughing hundreds of millions of pounds into other focuses, such as Cardiff airport, or sending millions of pounds to plant trees in Uganda.
Those spending decisions reflect where the Labour Welsh Government’s focus has been, so I welcome this interest in tertiary education in Wales. There will be some who feel that Labour Ministers in Cardiff Bay have somewhat ignored this issue. Every Government’s first duty should be to create the right conditions for our young people to succeed, no matter where they live, because they are the future of our country.
Under both Governments either side of the M4, ideological decisions have impacted on education in Wales in some way. A lack of ambition and motivation is a concern, particularly in higher education. The educational evidence is clear that Welsh pupils continue to record the lowest scores in mathematics, science and reading across the United Kingdom in the PISA figures. Those inherent weaknesses in schools are having a profound effect on the broader tertiary system because they mean that pupils are poorly prepared for further and higher education.
It is important to recognise that the target of delivering 125,000 apprenticeships has currently fallen short in Wales by around 25,000 places—or 25,000 opportunities that young people in Wales simply do not have—so it is important that this measure works. There is a shortage of degree apprenticeships, which has been exacerbated by the previously somewhat narrow scope in Cardiff Bay, and flexibility is needed.
There is also a degree of worry about developments in universities in Wales. Given these concerns from parents, guardians and students, I would appreciate the Minister’s addressing some points on the proposals and changes. First, will she outline any specific detail on how today’s proposals will tangibly improve tertiary education across Wales? What is her understanding on that? Secondly, will she kindly explain how the proposals address the worrying decline in the number of people entering Welsh tertiary education? Thirdly, what feedback has been received from relevant authorities, particularly in relation to article 4, which requests them to carry out joint functions? Fourthly, has there been an impact assessment to evaluate the potential consequences or opportunities of the proposals? Fifthly, will the Minister outline how these changes will affect the private school sector, which is somewhat struggling in Wales? Sector leaders are approaching us as the official Opposition, because they are currently unable to obtain answers from the Wales Office or indeed from Education Ministers in Cardiff Bay. Sixthly, will there be an update to the House on how any change in these regulations will directly deliver for the people of Wales and support the college sector? Finally, can the Minister talk about the transition to the new Commission? Is it proceeding smoothly? It is, as I know the Minister will understand, a large institutional change. Any evaluations and safeguards are key so that it is properly regulated and all responsibilities and changes are understood. I look forward to her response.
Anna McMorrin
I thank the shadow Minister for her valuable contribution to the debate this afternoon and members of the Committee for being here. This order provides for several consequential amendments to UK legislation necessary before the next phase of the 2022 Act comes into force in April.
The shadow Minister made several points in her speech. I am very pleased that Wales managed to withstand 14 years of austerity from a Tory Government. More than that, the Welsh Government invested in building more 21st-century schools than anywhere else in the UK. Medr is shaping a tertiary education system in which everyone can acquire the skills and knowledge they need for a changing economy and society. The Welsh Government reflected and consulted on that—they consulted widely with tertiary education providers—and they are taking it forward. Medr was established last August and is looking at tangible improvements to raise standards across the board. That is why the 2022 Act is in place. Importantly, it will ensure that education, skills and apprenticeships are available for everyone, no matter what their background.
I offer my thanks for the constructive manner in which the UK and the Welsh Governments have worked in preparing this order, and in which the shadow Minister made her points. I commend the order to the Committee.
Question put and agreed to.
Westminster Hall
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Productivity and Economic Growth: East Midlands
(1 day, 4 hours ago)
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Westminster Hall is an alternative Chamber for MPs to hold debates, named after the adjoining Westminster Hall.
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James Naish (Rushcliffe) (Lab) [R]
I beg to move,
That this House has considered productivity and economic growth in the East Midlands.
It is a pleasure to serve under your chairship, Dr Huq. I want to start by telling you, as someone from London, about how great the east midlands is. Home to Derbyshire, Leicestershire, most of Lincolnshire, Northamptonshire, Nottinghamshire and Rutland, we are central to the country’s logistics network, with fantastic facilities such as Magna Park in Lutterworth, Daventry international rail freight terminal and, of course, the UK’s largest freight airport at East Midlands airport. We have deep industrial roots, with space engineering expertise in Leicester, biomedical sciences clusters in Nottingham, and nuclear and rail engineering proficiency in Derby.
We have a range of excellent universities, from Loughborough and Nottingham to Lincoln and Northampton, all of which have produced fantastic start-ups. We are home to major energy projects and developers, such as STEP Fusion, the world-leading fusion energy programme, and great British businesses such as Derby’s Rolls-Royce, which was selected as the preferred bidder to partner with Great British Energy to develop small modular reactors.
In short, our region’s potential is obvious to anybody who cares to look, yet despite our having 5.1 million people, 403,000 businesses and a fabulous location in the heart of the UK, today’s debate is likely to repeat messages that I know have been said many times in this place: that the east midlands is under-recognised, under-appreciated and still does not receive its fair share of UK Government investment.
That points to a national policy failure that the Labour Government must at long last address via a long-term commitment to four things: backing our region across all Whitehall Departments; sustained levels of public investment, to correct historical injustices; further devolution, to empower local communities across our region; and a coherent set of tailored policy interventions that will turn the page on a sustained sense of managed decline for many parts of our region for over 40 years. I hope we will hear those things from the Minister today.
Having led a local authority in Nottinghamshire before coming to this place, I know that the east midlands is often forgotten. Indeed, on three key criteria we remain on the wrong side of important UK averages: our median earnings are below the UK average, our unemployment is above the UK average, and our productivity is significantly below the UK average, at just 84.8% in 2023.
Jim Shannon (Strangford) (DUP)
I commend the hon. Gentleman for securing this debate; he is making a name for himself in the House for raising issues that affect his constituency, and I congratulate him on that. There are lessons here for all parts of the United Kingdom, so I thank him for raising this topic. Given that manufacturing alone supports almost one in 10 jobs in Northern Ireland, does the hon. Gentleman agree that strengthening regional productivity—whether in the east midlands, Northern Ireland or anywhere in the UK—depends on supporting advanced manufacturing, skills and supply chains across the whole of this great United Kingdom of Great Britain and Northern Ireland? Always better together—let that be our motto.
James Naish
The hon. Member is absolutely right: there are fantastic advanced manufacturing capabilities across the country, including in the east midlands, and the supply chain and the skills chain are key to making them thrive. I will come on to skills in the east midlands in a moment.
Ahead of the comprehensive spending review last year, the all-party parliamentary group for the east midlands launched an inquiry into regional priorities. We received 34 written submissions and held an oral evidence session here in Westminster, with contributions from local government, business, infrastructure, skills and other sectors. This work was about trying to distil, from the people who know our region the best, what the most serious barriers to boosting economic growth and productivity are, and about determining what practical steps the Government should take to address them.
Dr Jeevun Sandher (Loughborough) (Lab)
My hon. Friend is making a powerful speech about our region and the help it needs. Does he agree that for our region to do well, we need more devolution—including where I am in Leicestershire—as he has in his county? Is he pleased that the Government set out in the investment strategy that more money has to come to our region, which receives two and a half times less money for transport spending—or used to? Finally, does my hon. Friend agree that local leaders on the brilliant councils in my region, who are doing a great job, need even more powers to help to ensure that our region can grow, thrive and prosper?
James Naish
My hon. Friend is absolutely right, and I have already mentioned the need for greater devolution. Of course, in Nottinghamshire and Derbyshire we are seeing the dividends of that under Claire Ward, but I appreciate that Leicestershire still has some way to go to get the equivalent devolution. I absolutely support my hon. Friend’s call.
Before I share the recommendations of the APPG inquiry, I should say that I hope the Minister recognises that the inquiry’s very existence shows that we are serious about growth as a region. What is more, over the past 25 years we have delivered 35,000 more homes than our counterparts in the west midlands, even though the west midlands has a population that is about 20% larger. We are clearly taking our growth responsibilities seriously locally, yet despite that housing growth, transport spend per head in the region has fallen to just 54% of the UK average. That is not just slightly below, but 54% of the average—the lowest level of any UK region or nation. Rail funding per head is just over 40% of the UK average, and only around a third of the level seen in the west midlands.
The gaps have not emerged overnight: they are the product of choices over many years, under Governments of different colours, and they have had real consequences, shaping whether businesses grow, whether local labour markets function properly and whether people—my constituents—can access high-quality job opportunities. In short, inadequate investment has suppressed our region’s true potential. That is why the APPG inquiry was conducted. I place on the record my thanks to everyone who contributed to it. I believe its conclusions were fair and grounded, and we will make sure that the Minister receives a copy of the report.
The inquiry came to five primary conclusions. First, unsurprisingly, it suggested that the Government need actively to rebalance public investment, especially in transport, so that it better reflects housing and employment growth potential and delivery. I wholeheartedly welcome the Treasury’s Green Book being updated, but that in itself will not correct historical imbalances that must be addressed if we want places like the east midlands to maximise their potential. There is a genuine need for overcorrection.
Secondly, the APPG inquiry recommended that we pilot enhanced local employment hubs across the east midlands, devolving skills, careers and business support in a way that genuinely reflects local labour markets. One of the strongest themes in the evidence received by the inquiry was frustration with the fragmentation of the skills system. There are too many pots of money, too many separate agencies, too much inconsistency and too little flexibility, all of which hamper growth and productivity.
Thirdly, the inquiry recommended that we should expand women’s health hubs across the region, given the relatively poor life expectancy of women in too many parts of the east midlands. All genders and all age groups must contribute to closing the east midlands growth and productivity gaps, and targeted interventions will be required to realise that.
Fourthly, the inquiry recommended that the east midlands should play a central role in the country’s net zero transition, given its historical role powering millions of homes and businesses across the UK. Linked to that was the call made by more than 30 MPs to finally electrify the midland main line to Sheffield, which has sadly become a byword in our region for slow, uneven and stop-start infrastructure investment into a really important part of the country.
Fifthly, the inquiry suggested that the Government should reform how flood resilience funding is targeted so that it reflects social need and repeated risk, rather than underlying land values. Flooding can sometimes seem like a subject separate from growth and productivity, but in the east midlands, which has the greatest share of properties at risk of flooding from rivers or the sea of any English region, it is very much part of the same conversation. If we want growth, if we want to boost investor confidence, and if we want housing delivery and economic resilience, flood adaptation and mitigation are not optional extras. They must be seen as enablers for economic growth as well as for protecting food and energy security, which our region provides in abundance, especially in Nottinghamshire and Lincolnshire.
Together, the recommendations show that the east midlands is not looking for a silver bullet. Indeed, there is not one—although I will briefly put on the record the need for junction 24 of the M1 to be upgraded as a strategic priority for our road network.
Michael Payne (Gedling) (Lab)
I thank my hon. Friend for securing the debate. Does he agree that one way to redress the historical imbalance in transport spending is for a green light to be given to the fourth Trent crossing, which would link my constituency to his beautiful constituency of Rushcliffe? It would unlock economic growth and bring forward new jobs, crucially it would help with emergency planning in one of the biggest cities in the country, and it would be great for our region.
James Naish
On Friday, I was part of a conversation about the potential impact of the Trent sports quarter on Rushcliffe, and Nottingham Forest’s expanded City Ground proposal. The fact that we have only three crossings across the Trent came up several times, so I absolutely support my hon. Friend in that call for a fourth crossing.
Rather than a silver bullet, the east midlands needs a serious, joined-up approach to growth because infrastructure, skills, health, clean energy and climate resilience—the five points that I just raised—are not separate conversations. They all need serious consideration to determine whether our region can fulfil its potential in powering the national economy.
Let me be clear: the east midlands does not lack growth prospects. On the contrary, it is full of them—I know colleagues will make the case for their local areas. The question is whether our regional and national policy frameworks are agile enough and, more pertinently, fair enough to support those growth prospects. I do not believe they are. That is why we are here on our region’s behalf once again to call for a fairer settlement and a serious attempt to remove the structural blockers that are holding us back. We need the Government, who were overwhelmingly backed by voters across the region, to look at how poorly the east midlands is currently treated and to finally act to address that.
I hope the Minister will address a few points directly. First, does she accept that the east midlands has for too long received a persistently unfair share of transport and infrastructure investment? Secondly, does she accept that that acts as a material drag on our local economy? Thirdly, will she confirm what steps the Government are taking to ensure that investment decisions are better aligned with the scale of housing and employment growth that is already being delivered in our region? Fourthly, is she willing to take seriously, along with other Departments, the APPG’s recommendations on the need for tailored local employment hubs and women’s health hubs?
Finally, will the Minister give the House some reassurances that the east midlands will not be told once again that its time will come? Too many people in my constituency of Rushcliffe, and across our region, have heard that before, and have sadly formed the view that the east midlands is important, but not important enough—that it is valued in theory, but not in practice. I refuse to accept that, and I am sure that many colleagues present refuse to accept it as well.
The east midlands is a region of makers, exporters, innovators and workers. We are home to strategic industries, nationally significant infrastructure and major universities. We have delivered homes, created jobs, powered the country for generations and shown ambition. What we need now is for the Government to match our potential and ambition with commitment and action.
I will repeat the four things I mentioned earlier. The Government must commit, first, to back our region across all Whitehall Departments, working together; secondly, to sustained levels of public investment to address the historical inadequacies I have talked about; thirdly, to further devolving and empowering local communities across our region, giving them more powers; and fourthly, to creating a coherent set of tailored policy interventions, which will turn the page on 40 years of perceived managed decline. These four things cannot come a day too soon for the east midlands. I look forward to hearing colleagues’ contributions, followed by the Minister’s response.
Several hon. Members rose—
Dr Rupa Huq (in the Chair)
Order. Can everyone who wants to speak stand so that we can calculate the time limit? It is going to be three-minutes, I am afraid. I call Ed Argar to set an exemplary example.
Edward Argar (Melton and Syston) (Con)
It is a pleasure to serve under your chairmanship, Dr Huq. I am grateful to my constituency neighbour the hon. Member for Rushcliffe (James Naish) for securing this important debate, and I look forward to welcoming him to my constituency later this week. I agree with much of what he said, particularly about flooding.
This is one debate in which I can argue from the Back Bench, without fear of contradiction, that the east midlands is the best region in the entire country—[Hon. Members: “Hear, hear!”] This may be the only time I get such consensus on both sides of the House. As the hon. Member set out, we have all the core ingredients. We have a central location; we have good transport links, although they need to be better; we have great universities; we have great skills. Most importantly, we have great businesses and we have great people with ambition.
The potential is clear but, as the hon. Member said, our region all too often appears to lose out. Perhaps that is because we are not demonstrative and we do not always shout about things. When it comes to funding for infrastructure or for our local authorities, the facts are clear. My local authority in Leicestershire has the lowest per-head funding in the country. Previous council leaders and councillors such as Deborah Taylor and Nick Rushton have fought hard to address that. We need fairer funding for our county.
Network North was due to bring more money to Leicestershire. Among other things, that would potentially have helped to fund the completion of the Melton Mowbray distributor road. Sadly, when the Government announced the new funding, that was taken away. One challenge we face is that when the Government direct funding to our area, they all too often favour those areas with mayoral authorities, rather than counties without one, such as Leicestershire.
Melton and Syston has a limited number of big businesses, but a lot of small and rural businesses. They are the bedrock of our local economy, but they face barriers to growing, including issues with public transport, with attracting people to work and with the ability to travel. The impact of national insurance increases and business rates in town centres, particularly for rural businesses and shops, makes it challenging for them to expand as they would wish to. A key challenge, as the hon. Member set out clearly, is in working together not only to deliver on our ambitions, but to break down the barriers to securing the additional investment bid for the A52, the A46 or even local roads and transport. We also need to break down the regulatory and taxation barriers that stop so many fantastic businesses growing and expanding.
There is huge potential in our region, in my county of Leicestershire and in my Melton and Syston constituency. We need those barriers broken down and investment put in to ensure that that potential is unleashed.
Several hon. Members rose—
Dr Rupa Huq (in the Chair)
Order. One of the displays is defunct, so it may be difficult for Members to see when their three minutes have ended. I will signal 30 seconds before their time runs out.
Catherine Atkinson (Derby North) (Lab)
It is a pleasure to serve under your chairship, Dr Huq. I congratulate my hon. Friend the Member for Rushcliffe (James Naish) on securing this important debate. I welcome a debate on productivity and economic growth in the east midlands, because it is a region with extraordinary potential, but for far too long that potential has been under-realised. Nowhere is that more evident than in Derby.
Derby is a city that helped to power the industrial revolution. The River Derwent, which runs through our city, once powered the mills that transformed Britain’s economy. Today, Derby remains at the heart of Britain’s industrial strength. We are home to globally significant engineering and manufacturing industries, from aerospace to rail, with thousands of highly skilled workers who design, build and maintain some of the most advanced technology in the world—technology that is crucial to this Government’s industrial strategy.
For years, however, under Conservative mismanagement, deindustrialisation and chronic under-investment, regional disparities have meant that our region has not fulfilled its potential. Nowhere is that clearer than in transport. The east midlands received a lower level of spending per person than any other region. If our region had received just the UK average across the five years between 2019 and 2024, we would have had an additional £10 billion. That is billions’ worth of missing rail connections and bus services that would have connected people to work, training and opportunities.
We cannot talk about economic growth without discussing investment in the skills that drive productivity. Derby is a city of makers, and we are known for our skilled workforce, but even in Derby it is clear that additional investment in our skills is essential. At the Nuclear Skills Academy, Rolls-Royce and the University of Derby are already delivering 200 apprenticeships a year, but there is so much appetite for good skills to deliver good jobs. I believe that Great British Railways, which will have its headquarters in Derby, can and should be an important vehicle for the skills that we need. We can also see that appetite at Derby’s university technical college, which has specialisms in engineering and life sciences. There were 450 applicants for just 100 places. If we are to deliver what we need and deliver what Team Derby foresees—good jobs, regeneration and skills—we need to ensure that we are investing in our future.
Shockat Adam (Leicester South) (Ind)
It is a pleasure to serve under your chairship, Dr Huq. I thank the hon. Member for Rushcliffe (James Naish) for securing this debate. As my colleagues have mentioned, the east midlands is an absolutely fantastic region with great cities, towns and villages, a fantastic location and the most fundamental thing: wonderful people.
I will give a quick anecdote. Ten years ago, my team, Leicester City, stood at the top of the premiership. We were about to be crowned the champions of England. It was a fairytale. Ten years later, we sit at the bottom of the championship, about to go into league one. That is what happens when we take our eye off the ball: lack of investment, lack of strategy, and taking things for granted.
Much has already been said about the region, and others will say more, but in my short time today I will focus on two things. The first is the manufacturing industry. Leicester was once known for clothing the world, and even today it supports 11,000 jobs in garment manufacturing and retains the rare ability to produce garments end to end in a single city. The capability and skills are there, but unfortunately the investment is not. Businesses face growing skills shortages, particularly in the manufacturing and digital sectors, with vacancies rising by over 150% in recent years.
I ask the Minister three simple questions. First, when will the Government address the clear imbalance in infrastructure and transport funding in the east midlands? Considerably less is spent on transport there than in the west midlands; in fact, compared with Birmingham, it is less than half. Secondly, what more will be done to close the skills gap, particularly through vocational training and apprenticeships aligned to local industry? Thirdly, will the Government use public procurement more strategically, particularly in the defence and NHS supply chains, to support British manufacturing in regions such as Leicester?
The east midlands does not lack potential. What it lacks is parity and equity. With fair investment and targeted support, it can once again be a driving force for UK growth.
Amanda Hack (North West Leicestershire) (Lab)
It is a pleasure to serve under your chairship, Dr Huq. I thank my hon. Friend and neighbour the Member for Rushcliffe (James Naish) for securing this incredibly important debate.
My colleagues will all agree that the east midlands is a region with so much to offer. We have two local mayoral authorities, which are fantastic for their areas, but we do not have one for Leicestershire. We do not have the strategic single voice or the powers that devolution brings. The only way to ensure that our constituents thrive in the long term is to ensure that the east midlands thrives together.
Historically, the region had some formal structures such as the regional development agency and regional assemblies. Those have long gone, but we need to consider where we go from here to get a single organisation that focuses on growth for the east midlands. Today we have a much more fragmented approach, and I cannot help worrying that that is a barrier to long-term productivity and growth.
My North West Leicestershire constituency alone employs 20,000 people in the logistics sector, partly because we have the second-largest freight airport in the UK: East Midlands airport, which operates like a 24/7 logistics hub. I am proud to say that exports through the airport, predominantly in sectors such as advanced manufacturing and aerospace, are nearly double the UK airport average.
Alongside that hub, we have the only inland freeport, with a freeport site across Leicestershire, Derbyshire and Nottinghamshire. The plan for freeports was to have high-quality advanced manufacturing, which is key to building new jobs in the growth sectors identified in the industrial strategy, aligning with the demand for export growth. However, what has been proposed for the Leicestershire site has created considerable concern for my community. To maximise growth and opportunity, we have to take our communities with us.
One of the barriers to growth in the east midlands, as has been mentioned, is transport. Spending per head is 54% of the UK average. What does that mean for my constituency? It means that our bus provision is unreliable, and we do not have passenger rail anywhere. In January, I led a debate on the Ivanhoe line, a disused passenger rail line that is completely intact from Burton to Coalville, and would connect two of the largest towns in the country to the rail network of Coalville and Castle Gresley on the edge of Swadlincote. Just imagine what that could do.
It feels as though North West Leicestershire, in the centre of the east midlands, is sitting on a bundle of incredible possibility. My constituency is the heart of the national forest, which is today celebrating the planting of its 10-millionth tree. This year also marks the 30th year of the National Forest Company, which has been working with North West Leicestershire district council to transform the industrial landscape for nature, people and enterprise.
North West Leicestershire and the east midlands are not short of ambition or opportunity. We would greatly appreciate the opportunity to work with the Minister to ensure that the east midlands is talked about not simply as a place for opportunity, but as a powerhouse for growth.
Martin Vickers (Brigg and Immingham) (Con)
It is a pleasure to see you in the Chair, Dr Huq. I congratulate the hon. Member for Rushcliffe (James Naish) on securing this important debate. He referred to most of Lincolnshire in his opening remarks, but I represent the bit of Leicestershire that is not, in official government terms, part of the east midlands, even though we have the East Midlands ambulance service. We are in no man’s land. We have the Northern Lincolnshire and Goole hospital trust; we are under Humberside police; and the integrated care board—well, that wanders all over the place. My question to the Minister is “Should that continue?”
We now have the Greater Lincolnshire Mayor and a combined authority, which play an important part in developing economic strategies and so on. Equally, I recognise that the Humber estuary plays an important part, particularly in energy. I am sure that there are ways to combine that with playing our part in the east midlands.
Reference has already been made to the A46. I remind Members that that road continues to Cleethorpes and is important to access to the south Humber industrial sector. We have the Humber freeports; I remind Members that Immingham is the largest port in the country, measured by tonnage. I have 10 railway stations in my constituency, but I do not have a direct train service to London. I have been campaigning for one ever since I arrived in this place in 2010. We have an international airport at Humberside that could play a much more important part in developing the economy of the area. As for railways, mention has been made of Sheffield and the slow services down the midland main line and so on. The first railway to reach my constituency was the MSLR—the Manchester, Sheffield and Lincolnshire railway—which was referred to at the time as “mucky, slow and late”, so this is nothing new.
My plea to the Minister is that she give a commitment in her response to looking at our place in government terms. Should we be part of the east midlands? I think perhaps we should. Equally, I recognise the importance of the Humber estuary and the links to the north bank of the Humber.
Baggy Shanker (Derby South) (Lab/Co-op)
It is a pleasure to serve under your chairship, Dr Huq. I thank my hon. Friend the Member for Rushcliffe (James Naish) for securing this important debate. I refer the House to my entry in the Register of Members’ Financial Interests with respect to Rolls-Royce.
I have said it before, and I will say it again: in Derby we are a proud city of makers. We have more Elizabeth line trains on the production line at Alstom. We have Rolls-Royce aerospace and nuclear powering today, and our next generation, in the skies and at sea. We have a brilliant community of over 6,000 small and medium-sized enterprises such as Huub and Mercian Cycles, which I joined yesterday in supporting Greg James as he passed through Derby on Radio 1’s “Longest Ride”.
Our local economy is full steam ahead, powering our region, our nation and, indeed, the world. With Derbyshire having more than double the national average number of people employed in advanced manufacturing, the talent in our city and region keeps our country moving and safeguards our national security. In recent years, the Government have committed to backing the city’s capabilities. Last year, the Ministry of Defence confirmed £9 billion of funding for Rolls-Royce through the Unity contract to deliver the next generation of AUKUS nuclear submarines, creating up to 1,000 jobs and safeguarding 4,000 more.
Recently, I welcomed the Railways Bill, which will let us crack on with making Derby the home of Great British Railways and setting up its headquarters in the heart of our city centre. Whether it is trains, planes or reactors for advanced nuclear submarines, we are proud of what we make in Derby, but for far too long our residents have not felt that benefit in the home of UK manufacturing. Our city is powering advanced manufacturing, but at the same time the majority of kids in Arboretum—where I was born—are growing up in poverty.
We build the trains that keep our country moving, but our region has consistently had the lowest transport investment of any nation or region. When industry in our city grows, residents rightly expect to share the benefits of that growth. That is why, backed by this Government and our brilliant mayor, Claire Ward, we are cracking on with setting up Team Derby. That is also thanks to the enormous help of the Minister here today. Through Team Derby, we will ensure that every single pound of investment flowing into our city works as hard as possible to deliver for the people of our city.
Michelle Welsh (Sherwood Forest) (Lab)
It is a pleasure to serve under your chairmanship, Dr Huq. I congratulate my fellow Nottinghamshire MP, my hon. Friend the Member for Rushcliffe (James Naish), for securing the debate.
My Sherwood Forest constituency is proudly rural, consisting of market towns, villages, farms, small businesses, local pubs and visitor attractions. Those communities are full of talent, ambition and hard-working people, but for far too long they have been neglected. Fourteen years of Conservative Governments did little to support the productivity and economic growth of rural communities like mine.
Nowhere is the neglect clearer than in public transport. For many rural villages bus services are inconsistent at best, with some having just a single bus to serve their community. Others require residents to take multiple buses to simply travel across the constituency. In many other areas, it is a bus desert. At a coffee morning I held in Farnsfield at the weekend, I met Oliver Asher, a young man in my constituency who has mapped the bus provision in Nottinghamshire. There is a stark difference between 2014 and now. There is no clearer evidence of the under-investment in and neglect of such areas of the east midlands.
Public transport is not a luxury in rural communities, but a lifeline. A young person who cannot reliably reach a college place, an apprenticeship or a first job risks being lost. Weak connections limit the ambitions of our young people and the productivity of our communities, but when people can travel easily, affordably and reliably, we unlock opportunity.
Currently, there are more than 4,000 children living in poverty in Sherwood Forest. Parts of the constituency, a former coalfield community, are some of the most deprived areas of the country. Those people have never recovered from the decimation of their livelihoods, and that loss of potential continues a cycle of poverty and deprivation.
It is vital that we connect rural communities to towns and cities such as Mansfield, Newark and Nottingham city, where many educational institutions and employment opportunities are based. As Oliver, the young person from Farnsfield, told me, people in our villages need bus routes that actually work for them.
If we are serious about removing barriers to opportunity and unlocking the potential of the east midlands, we must invest in reliable public transport. Of course, that must go hand in hand with protecting our green belt and embracing our future in a way that respects biodiversity and ensures that every one of my constituents can access the outdoors and the natural spaces that define our communities. Where a person grows up should not determine how far they can go. We have a duty to build connections that make that real. No young person’s future and wellbeing should be limited by a failing transport network.
Linsey Farnsworth (Amber Valley) (Lab)
It is a pleasure to serve under your chairship, Dr Huq. I thank my hon. Friend the Member for Rushcliffe (James Naish) for securing the debate.
Many in Amber Valley—including me—are proud descendants of coalminers, textile makers and engineers. That heritage still shapes our economy: 20% of the workforce are in manufacturing, mining and utilities. Amber Valley’s industrial history, national significance and visitor offer are currently underdeveloped, but I am working hard to change that through my visitor economy strategy.
A thriving visitor economy will boost footfall, inject money into hospitality and support local businesses and high streets. I am therefore delighted that my three towns of Alfreton, Heanor and Ripley have come together to submit a joint bid to the UK town of culture competition in recognition of their remarkable shared story. My visitor economy work complements that of East Midlands Mayor Claire Ward, whose vision for growth projects an additional £960 million in direct gross value added for the region and £730 million indirectly through the visitor economy.
No discussion of Amber Valley’s heritage and economy is complete without mentioning the Denby Pottery Company. Founded in 1809, it has made stoneware in Derbyshire since the industrial revolution. It is the constituency’s largest employer: about 350 of its 500 staff are local, and many have worked there for decades. As a tourist attraction, Denby Pottery Village brings in more than 250,000 visitors a year.
However, as Members know, the company has filed a notice of intention to appoint administrators, which is devastating news for staff facing uncertainty about their livelihoods. I have spoken to the GMB union, and I encourage colleagues to support any affected constituents. I have also met Denby’s leadership and ensured engagement with the Department for Business and Trade, and I remain in contact with the Treasury and the Under-Secretary of State for Business and Trade, my hon. Friend the Member for Stockton North (Chris McDonald).
Although the news may feel sudden, the truth is that the UK ceramics industry has been hit by sharp and unpredictable swings in energy prices, and the impact of new trading arrangements and global tariff pressures have hampered competitiveness. We hope that an investor will come forward to secure a future for the business, as it is hugely important to save the company. I urge Ministers to expand the British industry supercharger scheme, as very few ceramics companies currently qualify.
Amber Valley contains some of the most deprived areas in Derbyshire. People know that they have been overlooked and left behind for years, and a much-loved employer going into administration, putting 500 jobs at risk, compounds that belief. Bringing pride in place back to communities such as mine is absolutely essential, so will the Minister outline what more can be done for Amber Valley and how she will work with colleagues across Government to support Denby Pottery?
Steve Yemm (Mansfield) (Lab)
It is a pleasure to serve under your chairmanship, Dr Huq.
We must confront honestly the challenge of productivity in the east midlands remaining well below the UK average, currently at around 85% of it. Our constituents’ wages reflect that gap entirely, and if we are serious about raising living standards in the region, we have to close it. Investment drives productivity, enabling businesses to purchase better equipment, adopt new technologies and expand production. Such investment is not an abstract concept for my constituents and their wages.
Transport is a clear example. For too long, the east midlands has been under-invested in compared with other regions. Transport spending per head is shockingly now only around 54% of the UK average, which is the lowest of any region in the nation. That matters. Transport is not a luxury, but the infrastructure that allows firms to move goods, people to reach jobs and businesses to operate efficiently. Investment in skills is also critical, and my constituency is fortunate to have great educational institutions. On a broader structural point, public investment in the UK follows behind private investment, in great contrast to other European countries, particularly Germany.
We must recognise that economic growth should be spread across the country. Our national conversation too often focuses on a small number of already prosperous areas, such as Oxford, London and Cambridge. Those places are important, but economic growth has to go further. If we get this right, by combining public sector ambition with strategic private investment in infrastructure, transport and skills, places like my constituency of Mansfield, as well as other communities in north Nottinghamshire and right across the region, can play a central role in driving our future economic growth.
Adam Thompson (Erewash) (Lab)
It is a pleasure to serve under your chairship, Dr Huq. I thank my hon. Friend the Member for Rushcliffe (James Naish) for securing the debate, and colleagues across the House for their contributions. For too long, the east midlands was left behind: abandoned by a post-1980s, neoliberal, globalisation-driven economic consensus and forgotten by a conservative, austere Treasury logic that struggled to bring itself to invest in London, let alone in medium-sized towns in the east midlands. I am glad that that paradigm is finally changing.
The first blast furnace at the former Stanton ironworks in my constituency was lit at the dawn of the industrial revolution, but in 2007 it went out for the final time. Hundreds of jobs were lost, and Ilkeston became a post-industrial town. However, New Stanton Park now grows every day, and Italian manufacturer Fassa Bortolo recently chose Ilkeston as the location for their first factory in Britain. Jobs are returning and investment is coming, which is welcome.
However, it is important to note that new developments spark anxiety. Derbyshire was recently ranked as having the worst roads in England: the local road network was not designed to handle so much pressure, and failures at junction 25 of the M1 bring traffic to a standstill for miles. The old ironworks was linked to the railway by a rail spur, and although that infrastructure still exists, it will take a lot more time and money to bring it back into use. Getting the freight from New Stanton Park on to the railway would be an enormous win for local people in my constituency, for our roads and for the environment.
Alongside work on that, I have been campaigning for a junction 25a on the M1, designed to service Stanton. I have met Ministers and Highways England, and even sat down and found complete common ground with my local council’s Conservative group leader, Councillor Wayne Major. Ultimately, it would take a minimum of several years and tens of millions of pounds for that project to happen, but it is really important to get it working for our local community. For that, we need the Government, and I am grateful for the changes to the Treasury Green Book to make infrastructure upgrades outside London more acceptable. I am also extremely excited about the £2 billion that the Chancellor committed to transport in the east midlands, and to see how Claire, our brilliant mayor, will spend that money.
I want to stress that in Erewash, we have not just a strong industrial history but a growing industrial present. People want jobs; they want investment; they want economic growth—but that needs to come with proper, long-term, serious infrastructure commitments. Growth leads to work for local people, not just around them. They need to know that it benefits them, not just the mega-rich chief executive officers. Part of that is making sure that we have proper investment in infrastructure to make people’s lives better and more productive.
Jonathan Davies (Mid Derbyshire) (Lab)
It is a pleasure to serve under your chairmanship, Dr Huq.
The east midlands has been a driver of Britain’s economic growth since at least the earliest days of the industrial revolution. Belper in my constituency was the world’s first factory town; it spun cotton for textiles at a previously unimaginable rate, and that model was exported around the world. Now, our region hosts advanced manufacturing, cutting-edge technology and world-class research. Colleagues have touched on that and, as time is short, I will not go into it any further.
However, our region faces significant challenges. Housing costs and low wages mean that many young people are stuck renting or living with their parents well beyond the time when they would have liked to move out. That is why I am very pleased to lend my support to the regeneration of the Belper mills, a significant series of historical buildings integral to the Derwent valley UNESCO world heritage site. Bringing heritage buildings like that back online—with 130 homes, in this case—and making them work for the community is essential. When such assets are also used to grow the visitor economy, as we are seeking to do in Belper, the economic returns are multiplied.
To deliver that, we must ensure that we have the craftspeople to bring the buildings back into use. The technical excellence colleges for construction that are being established, including in Derby, must ensure that there is training in heritage building techniques and planning so that we have the skills to revive these valuable assets. Doing so not only benefits the economy and the people that it serves, but helps people understand our shared national story. It brings people together in engaging with the past and celebrating beautiful architecture that truly builds pride in place at a time when society feels increasingly fractured.
A second challenge for the region is the under-investment it has suffered in its public transport. The east midlands has consistently been the least funded region, but helping people to get around, whether for work or leisure or to access public services or education, is key to economic growth. The Labour Government have made a good start on that through initiatives such as the £2 billion for public transport that they have allocated to Mayor Claire Ward. I want to see a good chunk of that money spent in rural and semi-rural communities, of which there are many in Derbyshire, where bus services are insufficient. The issue of public transport in rural and semi-rural areas is highlighted in the Labour rural research group’s latest report, “Rural Poverty in Britain”, and I strongly recommend that Ministers take the time to look at that publication.
I am also keen to see the Government bring forward plans to electrify the remaining section of the midland main line, which was first mooted in the 1970s but has been kicked into the long grass numerous times. That would reduce carbon emissions and costs over the long term while delivering improved reliability and shorter travel times. It might also enable more services to stop in Belper, Duffield and Spondon. Given that Derby is the home of the railways, it is not acceptable that no electric trains run through the city.
The east midlands is not just about Britain’s past; it is integral to its future, and when it succeeds, Britain succeeds. I hope the Minister has gathered plenty of insights to take forward with colleagues so that our region can truly achieve all that it has the potential to do.
John Whitby (Derbyshire Dales) (Lab)
It is a pleasure to serve under your chairship, Dr Huq. I thank my hon. Friend the Member for Rushcliffe (James Naish) for securing the debate.
In Derbyshire Dales, we quarry the stone used to build new homes, produce the cement that keeps our buildings standing and have the outstanding natural landscapes that support a vibrant visitor economy. Derbyshire produces 85% of the UK’s limestone, and that raw material is essential for construction, infrastructure and manufacturing industries across the UK. However, as my hon. Friends have said, the east midlands’ economic growth has been held back by decades of under-investment. I therefore strongly welcome the £2 billion of transport funding for the East Midlands combined county authority, which should, in Derbyshire and Nottinghamshire at least, start to redress the balance.
Two transport-related projects in particular highlight the need for additional investment. Today, there is no direct train line from Derby, Nottingham or Leicester to Manchester. The map of the rail network has a Matlock-to-Buxton-sized hole in it, meaning that people from the cities of the east midlands have to travel via Stoke or Sheffield to get to Manchester. Reinstating that line would act as a catalyst for economic growth and increase productivity across our region. It would deliver major economic gains, connect tourism hotspots such as Bakewell to the rail network, and connect places such as Matlock and Matlock Bath to Manchester. It would bring major benefits for young people looking for work or education, for the transportation of freight from our quarries, for the millions of tourists coming to the area for its hospitality offer, for regional connectivity, and for small businesses that would warmly welcome commuting employees. We wait in anticipation of the Manchester and East Midlands Rail Action Partnership’s feasibility study, which we expect by the end of this month.
Aside from transport, there are other projects that would deliver major economic benefits. Peak Cluster based in the Hope valley is the world’s largest cement decarbonisation project and has the potential to decarbonise 40% of the UK’s cement and lime production. The project would safeguard our cement industry for generations to come, support over 13,000 jobs and attract £5 billion of private investment. I urge the Government to provide a clear route to market for carbon capture and storage projects beyond track 1 and track 2 clusters.
If we do secure the future of our cement and lime industry through carbon capture, which in turn will help to build the 1.5 million homes, there will be even more freight, much of it coming through the town of Ashbourne. The lack of a relief road has been a problem for decades. Already, around 700 heavy goods vehicles a day pass through the town, which causes major road safety issues and results in levels of air pollution above the legal limit. The Government have set ambitious housing targets. To deliver them, we need to support our industries and provide them with the infrastructure they need to thrive, but we also need to protect our residents. All we ask is for the playing field to be levelled.
Samantha Niblett (South Derbyshire) (Lab)
It is a pleasure to serve under your chairship, Dr Huq. It is bitterly disappointing that Reform could not be bothered to field a single MP to come and stand up for the east midlands in this debate about productivity and economic growth in the region. People need to be careful what they vote for if they want people who will stand up for them.
The east midlands is my home, and I am proud to say that there are Members of Parliament present who represent places that my family and friends live, which is wonderful. We have always been a region of makers, builders and innovators. Our communities were forged in the industrial revolution, and in South Derbyshire they were built on coal and clay. In fact, it is still possible to buy the iconic TG Green blue-and-white-striped Cornishware. I think almost every grandparent had one of the famous mixing bowls, which are brown on the outside and white on the inside.
Across the constituency, we have businesses innovating, creating jobs and driving growth for the wider regional economy. At the heart of that is advanced manufacturing, and Toyota Motor Manufacturing UK in Burnaston remains one of the most significant automotive plants in the country, supporting more than 3,000 jobs and anchoring a wider supply chain across the region. South Derbyshire is also well placed to benefit from the opportunities created by the east midlands freeport, which aims to attract high-value industries and businesses that are focused on science, technology, engineering and maths.
A strong skills pipeline will be essential to that success. We need our two new schools—New House Farm and Spencer academy—and I hope that my letter to the Department for Education, which contains data and evidence demonstrating why it must ensure backing for the schools, is taken heed of. We await a decision. I was delighted to attend the opening of the green skills academy of Burton and South Derbyshire college, which is driving sustainability in construction and retrofit and teaching people how to install heat pumps and solar panels. That brings me to the fact that we have more than our fair share of planning applications for battery energy storage systems and solar farms, which helps us make the case for the importance of having a local area energy plan.
Our economy is driven not just by large global employers; small and medium-sized enterprises across South Derbyshire are also innovating and creating opportunity, and I am forever grateful to our farmers for feeding us. South Derbyshire contributes strongly to the region’s visitor economy too: National Trust’s Calke abbey attracts visitors from across the country and Mercia marina is the largest inland marina in Europe. Our district is one of the fastest growing in England, with significant house building and population growth but without the infrastructure to support it. I am supporting local councillor David Shepherd to try to secure a GP in Stenson Fields.
Transport remains a connectivity challenge for us. Our largest town, Swadlincote, has not been served by a railway station for quite some time. The reopening of the Ivanhoe line, as championed by my hon. Friend the Member for North West Leicestershire (Amanda Hack), would reconnect our communities, support local businesses and help people access jobs and education.
Leigh Ingham (Stafford) (Lab)
I want to out myself: I am a west midlands MP, not an east midlands MP. But what my hon. Friend is speaking about is a structural failure of transport across the east and west midlands. The east midlands receives 54% of the UK’s average transport spend per head, which is the lowest of any region or nation in the country, but for rail that figure is 40%. As I often say, I can get from Stafford to London in about an hour and 10 minutes, but if I want to get across to one of the other east midlands cities—Derby, Leicester or Nottingham—the picture is completely different. We have built excellent lines up and down the country, but the lack of lines across the country is really holding back the development of the wider region. Does she agree that to maximise growth in both our regions, we have to invest in rail from east to west?
Samantha Niblett
I could not agree more. Reopening the Ivanhoe line would not only give us access to Burton, Coalville and eventually Leicester, but enable onward journeys to bigger cities including Birmingham and London. I support the case that my hon. Friend the Member for Derbyshire Dales (John Whitby) made for a direct line to Manchester, too.
Through the work of Mayor Claire Ward, we have a real opportunity to unlock the potential of some of our region. South Derbyshire already has the ingredients for success: world-class manufacturers, innovative engineers, ambitious entrepreneurs and strong communities. What we now need is investment that matches that potential. Let this debate be a rallying cry that when we invest in South Derbyshire and the east midlands, we invest in one of the most dynamic and productive parts of the country, with communities ready to grow, ready to innovate and ready to help drive the region’s and the country’s future prosperity.
Steve Darling (Torbay) (LD)
It is a pleasure to serve under your chairmanship, Dr Huq. I congratulate the hon. Member for Rushcliffe (James Naish) on his incredibly powerful speech and other colleagues from across the east midlands and nearby on the love they have shown for this part of the United Kingdom. We could almost say that we are under the moon of love—in fact, that reminds me that nobody has mentioned a great cultural export from Leicester: Showaddywaddy. I have fond memories of them from my childhood in the 1970s.
It is important that we reflect on where we have come from economically and the challenges that we face. The Tories crashed the economy—colleagues have covered that well—and the fact that we are having to pay so much interest on debt holds back our economy. The Liz Truss crash put some of the challenges that we face on steroids. The lack of investment over many years has affected the whole country, including the east midlands. The challenges we face in the south-west of England, as a part of the country that feels left behind, are not dissimilar from those that the east midlands faces. I represent the most deprived constituency that has a Liberal Democrat MP.
I would like to reflect on some of the positives. In my patch, we have an outstanding fishing industry, alongside the hospitality, electronics and photonics industries. That chimes with what colleagues have said about the manufacturing tour de force in the east midlands: whether it is Siemens, Rolls-Royce or Toyota, there are large companies powering the east midlands economy, and there are SMEs doing the same.
With so many Labour MPs here, I am afraid to tread on toes, but I will anyway. The national insurance hike has, sadly, had an impact on our economic growth and has led to uncertainty, speculation and delays to budgets. We desperately needed a firm hand on the tiller after the Tories, and it has not been there. I hope for the sake of the economy that we will see one soon. The Employment Rights Act 2025 is not a massive issue for companies like Toyota or Rolls-Royce, which have the capacity, but for SMEs and microbusinesses it is more of a challenge. I implore the Minister to reflect on that.
Jonathan Davies
The hon. Member mentions the national insurance hike. I am disappointed about that, but would he be content to see public services—education, healthcare and public transport—continue to fail people? We needed that investment to get the country back on its feet.
Steve Darling
Sadly, the investment that I had hoped to see in my hospital in Torbay has been kicked into the long grass. We still have hundreds of sewage leaks across the hospital, 85% of which is not fit for purpose. However, let me go back to discussing the east midlands, which is what we are really here to do.
As I was saying, SMEs will be challenged the most. I implore the Minister to consider that, as the Employment Rights Act is rolled out. Even HR reps acknowledge that this is important. Introducing it at the same time as the national insurance hike has resulted, effectively, in a double hit to the economy.
Amanda Hack
One of the things that is problematic about the hon. Gentleman’s line of questioning is that one in 10 people in Leicestershire are on an NHS waiting list. In order to increase economic productivity, we need to make sure that people of working age are well enough to work. Does he agree that investment in health is also key to economic productivity?
Steve Darling
Yes. Let me reflect on the three areas that we need to be driving in particular. The first is our green energy approach, which the Government have made significant steps on. I am disappointed that the previous Government had a policy that did not prioritise the new schemes. A number of zombie schemes were sticking in the system. We need only look at the shock to our economy.
Jo White (Bassetlaw) (Lab)
The hon. Gentleman talks about green carbon-neutral schemes coming forward. I welcome yesterday’s announcement of a construction partner for the STEP Fusion plant at West Burton in Nottinghamshire: the consortium known as ILIOS, which is led by a joint venture between Kier and Nuvia, supported by AECOM, A_AL Architects, and Turner & Townsend. This will see the creation of thousands of jobs right across the region. We should welcome that initiative by our Government.
Steve Darling
I am delighted to welcome that, but we need to drive harder. We need only look at the massive impact on our economy of the incredibly foolish war that has been launched by Donald Trump. Uncoupling ourselves from the oil and gas industry will be a good way of protecting ourselves from such impacts in the future.
The second area I will reflect on is our young people. The fact that 16.1% of young people are unemployed is a real challenge. In my constituency of Torbay, there is a description of a “bay mentality”. A barrister came to speak at the school of one of my sons. He talked about using one’s connections ruthlessly. In a working-class setting, that is not so easy. People do not have such connections. My challenge to the Minister is, beyond the scheme announced by the Government yesterday, how are we looking at opportunities for working-class youngsters in particular to gain enrichment and experience, to get them to a better place?
Finally, given how many progressive Labour Members are present, I am shocked that so far we have not talked about rejoining the customs union. I look forward to the Minister sharing a date for when she is planning to complete the negotiations to rejoin the customs union, which will grow our economy significantly.
James Wild (North West Norfolk) (Con)
I congratulate the hon. Member for Rushcliffe (James Naish) on securing the debate, and welcome the opportunity to speak on behalf of His Majesty’s Opposition about what is not only an important region but a great one, as he put it.
As we have heard, the east midlands is home to world-leading manufacturers, a thriving logistics sector, pioneering aerospace firms and hundreds of thousands of small and medium-sized businesses. There is huge potential, as every Member who has spoken has attested to. These businesses, workers and entrepreneurs deserve a Government who are pursuing policies to help them to realise that potential and drive growth in the area. Concerningly, however, growth has been consistently downgraded; we need only look at the spring forecasts a couple of weeks ago to see that growth has been once again downgraded for the coming year, and that is before any impact is felt from the operations happening in the middle east.
Today we have heard lots of ideas from Members across the parties on how to realise growth in the east midlands. That can be achieved, but will require the Government to change course. The region has many internationally renowned businesses. Members have rightly spoken proudly about Rolls-Royce, Toyota, Alstom and other businesses. The East Midlands Hydrogen zone is positioning the region at the forefront of clean energy transitions, and of course there is a strong university sector. It is a region with key strengths, and the last Government recognised that. Several Members referred to the East Midlands freeport, which was given the green light in 2023. The only inland freeport in England was backed by Government seed funding at the time and underpinned a projected 28,000 jobs coming to the area.
If we look at the wider picture, the current Government have talked a lot about economic growth, but sadly growth has underperformed. As the Liberal Democrat spokesman—the hon. Member for Torbay (Steve Darling)—said, we cannot ignore the impact of the higher national insurance charges. We cannot ignore the higher business rates that many companies are about to be hit with, as well as higher wage and other costs. The Bank of England has pointed out the impact that these have had.
Michael Payne
Does the shadow Minister also regret the fact that between 2010-11 and 2019-20 local authority spending in the east midlands dropped by 22.6%, on the previous Government’s watch?
James Wild
We can trade statistics, but the context for that was the 2009 financial crash, which led to a deficit of 12% to 15%. [Interruption.] The Government who came in were the coalition Government, including our Liberal Democrat colleagues, and it was Danny Alexander, Chief Secretary to the Treasury, who drove those savings in spending, particularly in local government but also in other areas. We had to get the books to balance. That was the context that we had to deal with. People can deny the reality, but that was the situation at the time.
The number of people who are unemployed is forecast to hit 2 million by the end of the year. I expect other Members are particularly worried, as I am, about the impact on young people. Youth unemployment has already moved above 16%, which is higher than the EU average. We are now in the bizarre position in which the Government are having to pay companies to take on young people whom the Government’s own policies have priced out of having jobs. As my right hon. Friend the Member for Melton and Syston (Edward Argar) highlighted, SMEs across—[Interruption.]
Dr Rupa Huq (in the Chair)
Order. Let us not have chuntering from a sedentary position.
James Wild
If hon. Members want to intervene, they are welcome to do so. As my right hon. Friend said, small and medium-sized businesses across the east midlands and beyond are having to cope with those costs, making it harder for them to invest and grow. The Government should listen to them.
Fundamentally, the problems that the east midlands and the UK face in relation to growth are around productivity. Investment has been too low. The UK has trailed the G7 average over the last 30 years, not just the last 14 years. Our infrastructure ambitions are often buried under red tape and excessive costs. Colleagues have spoken about energy costs. The hon. Member for Amber Valley (Linsey Farnsworth) spoke about Denby and the ceramics sector, and we hope that a solution is found for that workforce. But by linking us to the EU emissions trading scheme, the Government will be driving up costs for our industry.
The sparks of business dynamism have dimmed. Office for National Statistics data shows that firm entry and exit rates have reduced, particularly compared with the United States. That leads to a less competitive, dynamic and innovative economy. The east midlands has consistently been ranked among the least productive regions in the UK, but that is not inevitable and nor should it be, because if it stays like that, living standards will not increase.
Steve Yemm
Does the hon. Member recognise the fact that, in 2010, productivity in the east midlands was at 92% of the national average, but by the time the previous Government left office it was at 85%? Actually, the region went steadily backwards under the Conservative Government. Does he recognise that?
James Wild
I am looking at the House of Commons Library brief on the average productivity level. I cannot quite see the hon. Member’s point reflected in the chart that I am looking at, but I will look at it again afterwards, when there is more time, and see whether that is the reality.
As I said, it is not inevitable that the productivity level is lower, and it cannot be accepted if we want living standards to rise. The Productivity Institute did a study looking particularly at the region, which identified some of the challenges around skills shortages, infrastructure and under-investment in research and development. Many Members have spoken about transport spending in particular. The briefing note for the debate from East Midlands Councils talks about a period of 20 years in which there has been a lack of investment. I understand the importance of improving investment; if I was speaking in an east of England debate, I and other colleagues would be pointing out that we also do not get our fair share.
The east midlands is a region of makers, and manufacturing makes up a greater part of the economy there than in any part of the UK other than Wales. In terms of productivity, the 2023 output was 14.7% below the recent UK average. Boston Consulting Group has just published a report on productivity, which I commend to Members, that looks at the underlying factors for this national challenge. The sectors that historically have driven productivity—manufacturing, information and communication technology, and financial services—accounted for 84% of the positive increase in the pre-crisis decade, but since then, that figure has fallen to just 34%. While those are still key sectors that are important for the economy, they are performing less well than previously.
What do we do to change that? We need to look at policies that boost productivity, including focusing on incentivising R&D spending in advanced manufacturing, reducing the barriers to commercialising innovation, and building on the full expensing introduced by the last Conservative Government to boost investment. Sadly, in the Finance (No. 2) Bill, which I have just gone through in Committee, some of the incentives on capital allowances have been reduced. We also need to promote a culture of enterprise, not one that is focused on regulatory compliance. We certainly need cheaper energy in order to compete. We need to scrap some of the bureaucracy around planning, and boost competition and skills.
The east midlands is a region with assets, and it is a strong driver of national growth. It has the companies, the geographic position, the people, and the small and medium-sized businesses to make a change. By pursuing reforms—the hon. Member for Rushcliffe outlined a number of recommendations in the APPG report that seemed sensible and well worth considering—the east midlands can be helped to maximise its potential.
The Parliamentary Under-Secretary of State for Housing, Communities and Local Government (Miatta Fahnbulleh)
I thank my hon. Friend the Member for Rushcliffe (James Naish) for securing the debate, and I thank Members who have spoken for their insight, passion for their area, and fantastic contributions. Let me start with my hon. Friend’s insightful analysis of both the challenges and opportunities in the area. I look forward to reading the APPG report, and to drawing insights on how we can continue to work with the area to advance its economic potential.
We all agree that economic growth is paramount, and it is one of the Government’s top priorities. Economic growth is central to raising living standards, which we absolutely must do, funding improvements in public services after a decade and a half of under-investment by the Conservatives, and rebuilding the country. That is why the Government are determined to not only drive growth from the centre but empower local leaders with the tools they need to drive growth in their area—local leaders such as Mayor Claire Ward, a fantastic Labour mayor whom I have had the privilege of working with, and who has been an important champion for the region before and since her election.
Productivity, as my hon. Friend the Member for Mansfield (Steve Yemm) pointed out so eloquently, is one of the key drivers of growth. While we can debate the causes, we all recognise that productivity has been weaker in the years following the 2008 financial crisis. Improved productivity will require relentless work and a focus at every level of government—from national Government, through to our regional government and our local authorities—in partnership with the business community and industry.
That work is essential to everything that my Department and others are doing to make progress—and we are making progress. Analysis by the Resolution Foundation last month showed that UK productivity grew more in the last year than in the previous seven combined. But we acknowledge that there is more that we need to do. My hon. Friend the Member for Rushcliffe was right to point out that productivity varies across the country. Indeed, the gap between our cities, where we would expect some of the highest productivity, and the UK average stands in contrast to the performance of many comparable cities across the OECD. Cities such as Lyon, Frankfurt, Turin and Bilbao have productivity higher than the UK average, while many of our own cities have productivity lower than our UK average. As my hon. Friends the Members for Rushcliffe and for Loughborough (Dr Sandher) pointed out, devolution is key to unpacking, unlocking and dealing with the challenge.
We know the impact that devolution can have on growth and in improvements for local people. The parts of the country with the longest and deepest devolution of powers and funding are the ones where growth is taking off. That is why we are giving more areas, including the East Midlands combined authority, the tools and funding that they need to address the challenges in their areas and to realise the opportunities for growth. Devolution is fundamental to achieving the change that the public expect and, frankly, deserve: growth, more joined-up delivery of public services, and politics being done with communities, not to them.
I am conscious, however, that the debate is not just about the East Midlands combined authority; it is about the whole of the east midlands. Local leaders have an important role to play in growing the economy. We want more collaboration, not less, and we are supporting places to access devolution so that they can work together to drive outcomes locally. We have therefore issued a call for areas without devolution, including parts of the east midlands not within the combined authority, to come together with their neighbours to form strategic authorities so that they can benefit from devolution.
Local leaders will have greater control over economic development levers, transport and skills, as well as having revenue-raising powers, to ensure that they invest in the economic prosperity of their area. In the meantime, we encourage local leaders to work together and to set a vision for their area. Many local authorities already have an economic strategy, and we encourage them to set out a vision for growth in their area and to work across administrative boundaries for the benefit of their region. Industrial strategy zones are a perfect example—industry, innovators and government coming together, and local leaders equipped with a powerful set of tools to drive growth in each of the sectors.
My hon. Friend the Member for Rushcliffe rightly pointed out under-investment in these areas, and Members across the House reiterated that point. I would say that that is, in fact, a double whammy, because we have had under-investment across the piece under previous Governments for 15 years, in every key part of the economy and in the infrastructure that we need to unlock economic development. In addition, investment was skewed to some areas, to the disadvantage of others, and we are absolutely determined to turn that around and put that right.
That is why we as a Labour Government are putting in record investment across all key sectors of the economy. On the key point of transport, where Members have pointed out a range of transport investment schemes and key pinch points to economic growth, the Department for Transport has unlocked a record £2 billion of support for transport in the east midlands. That is an important first step to deal with some of the critical transport connectivity issues, combined with investment in the green economy—which we see across the east midlands —in advanced manufacturing and in defence, with £180 million of local growth funding next year alone, to ensure that we put the money in to unlock the potential that we can see and that my hon. Friend the Member for Rushcliffe so eloquently pointed out.
My hon. Friend the Member for Derby South (Baggy Shanker) made the point that when we put investment in, it does not always touch our communities or lift the lives of people in those communities. We need to be intentional about it, which is why what my hon. Friend the Member for Derby North (Catherine Atkinson) and other Members said about skills is absolutely critical. We have to combine the investment with intentional work to ensure that we develop a workforce strategy for the area and the skills, and ensure that we have the employment support to get people into jobs. That is the approach that we will take with the combined authority and that we intend to take with Team Derby. Our absolute commitment is to do our bit to work alongside leaders to unlock potential.
My hon. Friend the Member for Amber Valley (Linsey Farnsworth) talked about the critical role of the visitor economy, which we absolutely recognise. One of the key requests of our mayors was for a visitor levy so that they can raise revenue that can then be invested in the enabling infrastructure and the support we need to boost the visitor economy. We are now consulting on that, and we will legislate on it.
My hon. Friend the Member for Erewash (Adam Thompson) talked about how this cannot be just a short-term blip; we need a long-term commitment and long-term plans. In the mayor, Claire Ward, we see a long-term plan for the area, but that long-term commitment from local leaders must be matched by a long-term commitment from this Government. That is why we are moving to multi-year funding that is looking at the long-term horizon in our places, and standing with our local leaders to invest and unlock that potential over the next decade.
As my hon. Friends the Members for Sherwood Forest (Michelle Welsh) and for Mid Derbyshire (Jonathan Davies) made clear, however, the plan cannot just be for our urban centres, as critical as they are as engines of growth in the region. It must also speak to our rural areas to make sure that we unlock opportunities, not just in our towns and cities, but across the agricultural sector and our rural economy. We must also ensure that we deal with those pockets of deprivation.
Pride in Place is targeted at that very question: how, alongside the big work that we are doing regionally or in a local area, do we get investment into some of our deprived communities so that they can invest in the things that will lift up their area and restore pride in place? That goes hand in hand with the work that we know needs to be done regionally.
Finally, the hon. Member for Torbay (Steve Darling) made the important point about SMEs, which make up 99% of businesses in the economy. Under the last Government, however, we saw a huge neglect of the SME economy. Our job is to make sure that we support the backbone of our economy, which is why we have an SME strategy that looks at everything from late payments to procurement and how we provide the support to ensure that SMEs continue to be the key engine for growth.
I will end by referring to the comments of the shadow Minister, the hon. Member for North West Norfolk (James Wild), who spent a long time bemoaning the Government’s growth record. I would gently point out, as has been acknowledged by Members across the House, that the legacy that we are trying to turn around is a function of the fact that we had a decade and a half of Governments who did not have an economic strategy, who chose to under-invest in key services, and who deliberately took money away from regions across the country, such as the east midlands, to make sure that they did not meet their economic potential. We are turning that around; that is the job and we are getting on with it.
The underlying fundamentals are there. We have been in power for 18 months; it will take time to repair the damage that was done over a decade and a half, but we are getting on with that job. Today, the Chancellor will set out our economic plan and the sectors that we will be boosting. Part of that will be a critical step around how we devolve to areas, such as the east midlands and across the country, to ensure that they work alongside us in partnership to unlock their potential.
To sum up, it is clear that we all agree on the need to boost productivity and support economic growth across the east midlands. I hope Members can see the Government’s commitment, passion and determination to work alongside leaders in the east midlands to ensure that we do that. Devolution is a critical part of that, and my job is to ensure that, whether through mayoral strategic authorities or foundation strategic authorities, we equip our local leaders with the skills, tools and capabilities they need to do their job.
But that is just one part of the answer: from day one, the Government have been clear that while local leadership in all its forms and at all levels is vital, it sits alongside the work that we are determined to do at the national level to boost the economic potential of the east midlands and every region across the country. I again thank my hon. Friend the Member for Rushcliffe for being such an amazing champion for the area. I look forward to working with him and Members across the House to make sure that we do right by the region.
James Naish
I thank you, Dr Huq, and all Members for their contributions. It came as no surprise to me that this was effectively a debate of two halves. On the one hand, we heard about the positives. The hon. Member for Brigg and Immingham (Martin Vickers) talked about the east midlands having the largest port in the country. The hon. Member for Leicester South (Shockat Adam) reminded us of that fantastic football result in 2015-16, which is probably still the east midlands’ greatest achievement. My hon. Friend the Member for Derby South (Baggy Shanker) talked about the Government’s commitment to nuclear and engineering capability. My hon. Friend the Member for Erewash (Adam Thompson) talked about an industrial presence, and it was good to hear about jobs returning to his area.
The truth is, however, that the east midlands is building back from years of under-investment. My constituency neighbour, the right hon. Member for Melton and Syston (Edward Argar), mentioned the need for flooding investment and better local government funding. My hon. Friend the Member for North West Leicestershire (Amanda Hack) talked about the fragmentation of strategic and industrial leadership.
Many Members mentioned the lack of rail connections, which are so important for boosting our economy, and my hon. Friend the Member for Sherwood Forest (Michelle Welsh) talked about the need for reliable public transport. I know she, and all of us here, will be seeking to work closely with our relevant local authorities and strategic leadership to make sure that is delivered for our constituents. My hon. Friend the Member for Mansfield (Steve Yemm) was absolutely right to talk about the importance of leading with public sector investment—not relying on the private sector, but moving forward with the public sector. That is what I hope our Government will be doing, and I believe they are seeking to do that, but we must put our foot on the accelerator when it comes to the east midlands because we are starting a long way behind other regions of the country.
I am sure we will continue to work across the House to promote the east midlands. With that in mind, I will invite all Members to room W2 at 11 o’clock so that we can quickly reconstitute the APPG for the east midlands and continue this work over the next 12 months.
Question put and agreed to.
Resolved,
That this House has considered productivity and economic growth in the East Midlands.
Croydon Area Remodelling Scheme
(1 day, 4 hours ago)
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Dr Rupa Huq (in the Chair)
Order. I will call Natasha Irons to move the motion and then I will call the Minister to respond. Other Members can make a speech with prior permission from the mover of the motion, which I think on this occasion has already been secured. As this is one of those 30-minute wonders, there is no time for a winding-up speech at the end.
Natasha Irons (Croydon East) (Lab)
I beg to move,
That this House has considered Government support for the Croydon Area Remodelling Scheme.
It is a pleasure to serve under your chairmanship, Dr Huq.
As the Minister will know, this is the second time that I have secured a debate on this topic; it is great to be reunited with him today. It is really important to return to the subject, because the Croydon area modelling scheme is not just about driving billions in economic growth across the east and south-east, or capitalising on key infrastructure projects such as the expansion of Gatwick and Luton airports, or the opening of the Universal Studios theme park, but about something far greater. It is about getting a lift at Norwood Junction station.
The Croydon area modelling scheme, or CARS, is a Network Rail plan to add capacity and resilience to the most complex part of Britain’s rail network, and improve services not just on the Brighton main line but on the wider Thameslink growth corridor, which runs from Peterborough to Brighton.
The lack of capacity at East Croydon station and the complex series of junctions north of Croydon—the Selhurst triangle—means that trains across the Brighton main line and the wider Thameslink corridor, including those that run between Gatwick and Luton airports, have been vulnerable to delays and cancellations for many years. Thameslink and the Brighton main line are integral to economic growth in the east and south-east, and the demand for services will only increase.
Around 18% of national passenger journeys take place on the Govia Thameslink Railway network, and south of London it is already the most congested part of the rail network in the country. The Brighton main line is 5% of the southern region network, but delivers about 25% of its revenue, which helps to sustain and subsidise the wider rail system. About 1.7 million people live in areas served by the Brighton main line outside of London and more than 30,000 passengers a day already depend on this corridor.
Across the local authorities served by the Brighton main line, around 34,000 homes are required to be delivered every year, and on the Thameslink line Luton airport wants to nearly double passenger numbers to 32 million by 2043, while Gatwick is seeking to grow from around 40 million passengers today to as many as 80 million in the late 2030s. The new Universal Studios theme park in Bedfordshire, which is due to open in 2031, is expected to attract 8.5 million visitors a year and support 28,000 jobs.
That is a genuine growth and opportunity corridor, and it all flows through the bottleneck at East Croydon. East Croydon station already handles more trains in a day than all the inter-city operators from Euston, St Pancras and King’s Cross. It is a critical pinch point, where limited platforms, constrained tracks and complex junctions restrict the number of trains that can flow through it.
It is because Thameslink is such an interconnected system that delays here do not stay here. A problem at the Croydon bottleneck quickly spreads across the Brighton main line, through the Thameslink core and across the wider network. Around 67% of trains passing through East Croydon are late or cancelled. For the people who rely on that vital route every day, that means missed connections, unreliable journeys and longer commutes.
The issue is made even more pressing because every rail service between London and Gatwick passes through East Croydon. Gatwick’s northern runway expansion is a £2.2 billion project that is expected to support around 14,000 jobs and deliver an estimated boost of £1 billion a year to the economy. However, that could all be held back by poor rail infrastructure.
Gatwick plans include a commitment to have 54% of journeys to the airport made by public transport, so rail is not an optional extra; it is a fundamental element of Gatwick’s success. Without remodelling at East Croydon and in the wider Selhurst triangle, the Brighton main line is expected to reach 100% capacity by 2030. Addressing the bottleneck could unlock around £5.1 billion in economic value over the next 20 years, and provide the resilience and growth that this corridor needs to succeed.
Jim Shannon (Strangford) (DUP)
I commend the hon. Lady for securing this debate. I spoke to her beforehand to give her my thoughts. I am here to support her and wish her well in the project. There is a good Minister here to help her and her constituents; I look forward to his response. Does the hon. Lady agree that although spending reviews are necessary, these infrastructure developments are essential for local areas? Much like in the case of the Ballynahinch bypass in my constituency, the perpetual long finger is detrimental to the local economy and business. There comes a time when the bottom line cannot be the only common denominator.
Natasha Irons
I completely agree. We have to look at economic investment and infrastructure in broad terms. The fact that local plans can unlock local growth corridors and be key to local areas should be included in the assessment of the validity of these projects.
Addressing the bottleneck could unlock around £5.1 billion in economic value over the next 20 years and provide resilience and growth for this vital corridor. The Croydon area remodelling scheme would expand East Croydon from six platforms to eight, redesign the track layout and remove the conflicting train movements that cause so many delays today. It could create capacity for an additional four to six trains an hour and, based on previous modelling, could deliver around 15% extra peak capacity.
The scheme would also support wider station improvements, drive economic growth and, most importantly, finally get us a lift at Norwood Junction station. Network Rail will not draw up plans for a lift just in case CARS happens at some point in the future, but the Department for Transport has not agreed to restart CARS, which leaves commuters at Norwood Junction stuck in an endless cycle of lift limbo. Further delays to getting CARS off the ground could hold back economic growth not only for the south-east, which is estimated to be the seventh largest regional economy in the country, but for some of this Government’s key infrastructure investments.
This Government have rightly stated their intention to grow every corner of this country, and that good public transport will no longer be confined to the boundaries of our city, so I urge the Minister to consider the wider impact that investment in CARS could have on our coastal communities and our towns and regions outside London. CARS is not just good for Croydon and south-east; it is good for the whole country.
Peter Lamb (Crawley) (Lab)
It is a pleasure to serve under your chairmanship, Dr Huq. This issue has been on my radar for a very long time. I used to be the leader of the local authority in Crawley, and we have been aware for many years that the capacity limitations that are coming on the line will be so severe that they will gum up the entire network—the whole north-south link through London—from the coast in Brighton all the way through to Peterborough and Cambridge. Ultimately, we can address that only by resolving the bottleneck in Croydon.
The Department for Transport has already commissioned scoping work and started the process of bringing CARS forward. A significant part of the land required to undertake the work has been purchased and is just sitting idle. Unfortunately, it was the victim of the great strategic vision of our previous Prime Minister, who cancelled HS2 and a number of other proposals. Since that point, it has been very hard for a Department to get things back on the agenda. The new Government have come in with a significant proposal for investing in infrastructure. People underestimate just how significant the Government’s proposals for infrastructure are. We are talking about £100 billion of additional infrastructure investment under this Government, which will transform a very large part of the country.
The risk we run into, however, is where that investment goes. There are different pressures acting on the DFT as a consequence. Some of it is about trying to regenerate regional economies in the north of England and other parts of the country. As someone who lives in south-east, it is to my benefit for other parts of the country to develop. The direction of travel of policy in this country for many decades has been, essentially, “We are going to move the entire population of the United Kingdom to the south-east, and that is where the only jobs will be.” That is not sustainable. The housing pressures are just not sustainable. We have to have regeneration elsewhere.
However, the risk with insufficient investment in the south-east is killing the goose that lays the golden egg. The south-east as a whole generates more economic activity than London. In combination with London, we are talking about a third of the UK’s economic activity. If we do not invest in the infrastructure that sustains that, we will run into very significant problems. The Gatwick airport expansion is supposed to come forward in my community. My community already has full employment, and it has a housing problem. With the capacity limitations expected on the line by 2030, my community will have a very significant transport problem—and I should add that those limitations will come into effect without Gatwick expansion.
Gatwick expansion will not necessarily bring any additional benefits to my community, but it brings benefits to the country. I can understand that, and I respect why the DFT is going in that direction, but if we are to see additional benefits to the country coming out of economic activity, that has to come with the necessary infrastructure not only to enable my community to avoid the negative consequences of the housing and transport pressure that will result if the scheme is not put into effect, but to enable the country to get the best possible rate of return on the investment. Ultimately, that is what those of us involved want.
A large number of business groups now support the scheme and are making the point that we are cutting off investment in the area. I was at a meeting last week with my hon. Friend the Member for Croydon East (Natasha Irons), the hon. Member for East Grinstead and Uckfield (Mims Davies) and a number of business and transport groups. One business group, which tries to bring inward investment to the United Kingdom, said that people refuse to move here when they have experience the railway capacity or the delays on the line getting to and from Gatwick. That is a real consequence of the UK’s inward investment strategy.
We need to ensure that we have the infrastructure to get the maximal benefits of the private investment that is coming in, and the south-east will deliver on that. This is the only profit-making line in the GTR network. The numbers coming through will quickly increase the rate of return for the Treasury, based on the investment. We are one of the very few areas where rail investment would do that, and subsidise other railway lines elsewhere. It will pay for itself in the long term, but we need the pump priming at the start. If we pump prime this part of the south-east with the relatively limited amount of capital we are talking about, it will deliver a much greater return to the Treasury and the UK, through the social and economic benefits of the resultant growth.
It is worth noting that passenger volumes are projected to increase by 50% by 2045, which is 15 years after we run out of capacity on the line. If CARS is not the solution to that, what is the DFT’s strategy for dealing with capacity limitations of that scale on the line? I am happy to lobby for something else if I am pointed in the right direction, but my understanding, from talking to transport people, is that this scheme is the only thing that is going to resolve that particular problem. There will be some temporary stops along the way, but they can be dealt with.
Despite the reduction in passenger volumes after covid, we are now essentially back to having the mid-week peak, so there is no time for delay. The works are urgently needed if we are going to move things forward. I appreciate that the Treasury needs to address a range of concerns, but this need is urgent now, and will ultimately deliver a much better offer for the United Kingdom in the long run. Please can we just get on with it?
The Parliamentary Under-Secretary of State for Transport (Simon Lightwood)
It is a pleasure as always to see you in the Chair, Dr Huq. I am grateful to my hon. Friend the Member for Croydon East (Natasha Irons) for securing this important debate, and I recognise her tireless advocacy on behalf of her constituents and rail passengers across the region. I also thank my hon. Friend the Member for Crawley (Peter Lamb) for his contribution. I commend the collaboration among local partners, councils, industry and residents in making the case for improvements on the Brighton main line.
The BML is a vital artery that connects the south-east with the heart of London, carrying millions of passengers every year. It is a lifeline for commuters, visitors and businesses, and provides a direct rail connection to Gatwick airport. East Croydon station, in the constituency of my hon. Friend the Member for Croydon East, serves as a major transport hub, linking services across Sussex, Surrey and the London Tramlink network. The line facilitates billions of pounds in economic activity every year, supporting the growth of businesses and helping communities to remain connected.
The line’s importance is reflected in the significant investment it has received in recent years. The £7 billion Thameslink programme transformed north-south travel through London, delivering faster, more frequent and more reliable journeys for passengers. It introduced a new fleet of class 700 trains on the Brighton main line, significantly increasing onboard capacity. Given the modern technology used in those trains, there have been improvements in service reliability right across the Brighton main line and the wider Thameslink network.
Major stations such as London Blackfriars and London Bridge were completely rebuilt as part of the programme, and a vital interchange with the Elizabeth line was created at Farringdon. Through the major hub of East Croydon station, the Thameslink programme established new direct connections to destinations such as Peterborough and Cambridge.
More than £250 million was recently invested in upgrading Gatwick Airport station, delivering a more accessible concourse, doubling the space for passengers and improving the reliability of trains calling at the station. For too many years, Gatwick Airport station had impacted services along the Brighton main line due to the extended time that passengers needed to board and alight trains. Following platform widening and track remodelling, passengers can now board more quickly, which reduces delays and cuts journey times between Brighton and London by up to five minutes, and improves performance and reliability overall. It has also reduced knock-on delays further up and down the line. I hope my hon. Friend and her constituents have started to see the direct benefits of those interventions at Gatwick, be it in the efficiency of the train service or the ease with which they can start their holiday journeys.
Before the pandemic, the Croydon area remodelling scheme was rightly identified as a way to address overcrowding, increase capacity and improve the reliability of the Brighton main line. As my hon. Friend outlined, the complex junction at Selhurst—often referred to as the Croydon bottleneck—alongside the challenging operation of East Croydon and Norwood Junction stations, places significant constraints on the capacity and smooth operation of the network.
CARS was developed to address those challenges through extensive remodelling of the tracks and rail junctions north of East Croydon station. The programme also included plans for the redevelopment of East Croydon and Norwood Junction stations. At the time, Network Rail estimated that the scheme would take more than 10 years to deliver and would cost about £2.9 billion. Delivery would also require substantial disruption for passengers travelling along the Brighton main line.
As we know, the covid-19 pandemic changed travel patterns, created uncertainty about future demand and placed considerable pressures on public finances. In response, the previous Government took the decision to cancel the scheme at the 2021 spending review, although regrettably that decision was never actually formally communicated to stakeholders. No further development work has taken place on CARS since then.
On 8 July 2025, the Secretary of State updated Parliament on rail infrastructure scheme progress following the 2025 spending review. As my hon. Friend is aware, CARS was not allocated funding. The Government are committed to delivering infrastructure that offers the greatest benefit to passengers and the wider economy as quickly as possible and within a fully funded, deliverable programme. Given limited funding for rail enhancement projects and the significant recent investment already made on the line, including through Thameslink and Gatwick, the difficult decision was taken not to prioritise CARS at this stage.
I recognise that, despite those investments, my hon. Friend and other Members who represent constituencies along the Brighton main line will continue to make the case for investment. The next spending review, due in 2027, will be an important opportunity to make the case for future investment. The Government look forward to working with my hon. Friend and other BML stakeholders in developing that case.
I again thank my hon. Friend for securing the debate and for her commitment to championing improvements for rail passengers across her constituency and the wider region. I understand the disappointment that she and other stakeholders expressed following the outcome of the spending review last year. Although difficult decisions have been necessary, the Government recognise the long-term benefits of the Croydon area remodelling scheme. We will continue to work constructively with industry partners, local authorities and stakeholders as we consider future opportunities to improve capacity and performance on this vital route.
The case that my hon. Friend has set out today and on many previous occasions will remain an important part of the discussions as we look to the future. I am sure the Rail Minister looks forward to continuing that engagement and ensuring that the Brighton main line remains a reliable, high-performing railway that supports passengers, communities and economic growth for years to come.
Question put and agreed to.
Immigration Reforms
(1 day, 4 hours ago)
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Pete Wishart (Perth and Kinross-shire) (SNP)
I beg to move,
That this House has considered immigration reforms.
It is a pleasure to serve under you in the Chair, Mr Stringer. What an extraordinary few weeks we have had in the area of home affairs and immigration. It has been quite breathtaking. It is difficult to grasp the scale and ferocity of the Home Secretary’s assault on immigrants, refugees and asylum seekers in the past few weeks. It is simply astonishing that in a few short weeks she has turned nearly all our assumptions about refugee status and asylum totally on their head. She has embarked on one of the biggest set of reforms on asylum and immigration that we have witnessed in the past few years, and all without one Government-sponsored debate on the Floor of the House and without one single vote for Members.
We had barely caught our breath from the outrageous changes to indefinite leave to remain and its associated earned settlement restrictions when there was an almost daily blitz of further cruel and restrictive measures. In case the House has forgotten, I will refresh Members on what has been announced, because it is totally extraordinary. First, at the beginning of March the Home Secretary arbitrarily announced that refugee status was to be completely redefined, from something that had always been akin to a permanent status to something that would be temporary. It was to be reduced from five years to 30 months, with the proviso that people may be returned to their countries of origin if the Home Secretary, exclusively and on her own, deemed those countries to be safe.
Let us think about what that will do to people and families. It will lock people into years of insecurity, denying them the opportunity to rebuild shattered lives. It will prolong uncertainty for refugee families, making it almost impossible to make decisions about education for children and for these poor souls to find positive employment. What employer is going to spend money hiring, training and investing in people if there is a chance they will be booted out of the country within the next two and a half years?
Apsana Begum (Poplar and Limehouse) (Lab)
I congratulate the hon. Member on securing this important debate. Is he concerned, like me, about what the reforms will mean for the survivors of abuse who have fled persecution abroad? Does he agree that perpetrators already weaponise immigration status against their victims, and that removing refugee protection will lead only to survivors having even less access to support and being too scared of deportation to leave?
Pete Wishart
The hon. Lady is spot on, and entirely right to raise those issues. The changes will effectively retraumatise so many asylum seekers and refugees who have already experienced of all sorts of abusive arrangements. I am glad the Minister is here to listen to the hon. Lady’s remarks.
Only a couple of days after the announcement on refugee status, the Home Secretary announced what she called an “emergency brake” on visa applications from nationals from Afghanistan, Cameroon, Myanmar and Sudan. Those are some of the most dangerous countries in the world, where conflict, oppression and human rights abuses are an everyday feature and continue to drive people from their homes. The Home Secretary says she wants to expand safe and legal routes, but at one stroke she took away meaningful safe and legal routes from some of the most dangerous countries in the world.
Not content with that, the Home Secretary then went on to announce a pilot scheme offering financial inducements for failed asylum seekers to return to their country of origin. It was a voluntary scheme, but only in the context of, “If you refuse that inducement, you may be forcibly removed.” The proposal is chillingly reminiscent of what we are seeing in the United States, where Trump’s paramilitary Immigration and Customs Enforcement force is forcibly evicting people who are on the wrong side of the refugee and asylum system there.
The Home Secretary actually said—I could not believe it when I heard it—that she is currently consulting on how removals can be carried out “humanely and effectively”, particularly where children are involved. Let us pause and think for a minute about the forcible removal of families in the United Kingdom where children might be involved.
Even after that—this was in only one week—it went on. Next, the Home Secretary announced changes to the law that will mean it is no longer a legal duty to provide financial support to asylum seekers. Payments will stop for anyone working illegally, anyone convicted of a crime or anyone with independent financial means. I am sure people listen to that and think, “That sounds fair enough and pretty reasonable. If people are in any of those categories, it’s quite right that they shouldn’t receive Government support.”
But that is only until we consider what is required for an asylum seeker to work in the United Kingdom. They can work only with the permission of the Home Office, and securing that permission is a complex, byzantine, bureaucratic task that some people in the asylum community say is barely possible. The only thing that will be achieved is more people being put into destitution. If we look at the Trussell Trust or any of the food banks, we see that the number of asylum seekers who are now seeking assistance and help is going through the roof—and it will only go further.
Ann Davies (Caerfyrddin) (PC)
Care workers such as Grace Reji work hard to provide an invaluable service to the most vulnerable people in my constituency. She has a family, but when faced with a possible five-year increase in the qualifying period for indefinite leave to remain, carers like her worry that they will be forced to leave. Coleg Elidyr, an education and care setting in my constituency, looks after young people with special needs and also relies on migrant staff. Does the hon. Member agree that we cannot underestimate the long-term damage of the Government’s ill-thought-out immigration policies on workforce stability and services for the most vulnerable in our society?
Pete Wishart
I absolutely agree. I am really pleased that the hon. Lady raised that issue, and she is right to do so. I have received countless briefings from a number of organisations, including the Royal College of Midwives, that are genuinely concerned about where this leads. Scotland is in the early stages of depopulation; just wait till they get it down here. If the Government think immigration is a bad thing, just wait till they get to the negative consequences of emigration. We are starting to get there, because it looks like immigration this year will be net zero. The rest of the UK is about to experience the end of population growth, which will put all sorts of strains on demographic issues throughout this country. The hon. Lady is right to raise that point.
It is not only that people are being forced out; I have high-value constituents from Sri Lanka who are just going home. They have had enough. They cannot be bothered dealing with a Government who treat them so shabbily and shoddily and do not see any value in what they do. That is what the Government are doing with the immigration changes.
All this essentially delivers prolonged uncertainty, fear and anxiety in the asylum system. It will undermine every and all positive efforts towards integration. It will leave a generation of people living permanently in limbo, constantly looking over their shoulder and fearing that, at any moment, they may be forcibly removed. Whole communities that have already been traumatised by having to leave their home, sometimes in the most extraordinary conditions, fleeing oppression, with their own lives sometimes at risk, feel they are being traumatised all over again.
But do not worry—the Home Secretary tells us this is the plan. She says we have to make the UK an unattractive country for people who want to come here, as if they could make hostile-environment UK even more unattractive. That is the Government’s mission, and by God are they making a good go of it! They are not just making the UK an unattractive place for asylum seekers; they are making it an unattractive place for all of us who have to live in this country—all of us who care deeply and passionately about community harmony, consensus, building communities and giving honourable people a break and an opportunity to get on with their lives. Well done, Minister: you have managed to make this place even more unattractive than the Conservatives did, and I did not believe that would be possible for a minute.
The Government do not have the courage to bring their proposal to the House. They do not have the guts to bring it forward and ask us to support them, because they know what will happen: all the Labour MPs who oppose this will be there to voice that opposition, call them out and join us in standing up for some of the most wretched souls who inhabit this country. That is why they will not bring anything to the House.
The Home Secretary did not even have the courtesy to come to the House and make a proper statement. She was forced to answer an urgent question from the Conservatives, who actually told her that she did not go far enough, but she did not have the courtesy to come to the House to announce the reforms. She was in Denmark, in the British embassy in Copenhagen. She is asking us to emulate what is happening in Denmark—a country that could not be more different from the United Kingdom in terms of our historical roles in the world.
Denmark’s approach has not produced anything resembling a humane, fair or effective asylum system. It has not defeated the rise of the far right. Denmark has what it calls “parallel societies”, a sinister development that seems like some sort of weird ghetto law. Denmark has seen growing calls from its far right for remigration—that is where the debate is going there—and it has some of the worst structural discrimination in any welfare system in Europe. “Let’s copy Denmark,” they say. Well done on that one!
I remind the Minister, because he is such a fan of Denmark, that the Social Democratic alliance that introduced those measures was facing political annihilation until Trump ensured political and national unity with all his Greenland ambitions. But even so, many social democrats and progressives have abandoned those parties and are looking to the Greens and other progressive parties in Denmark. Maybe that is the real lesson from Denmark: look at what is happening to core Social Democrat support.
The truth is that the Government will not bring the reforms to the House because they know what will happen if they do. More than 100 Labour MPs have written to the Home Secretary to say that they have deep concerns about what is proposed. I hope that if they are given the chance to vote, many of them will join us in beating the proposals.
The question that always gets me in this particular Parliament is: why are the Government doing this? What is motivating them to take such an approach to immigration and asylum, and why do it now? The conventional view from the Government, and what we continue to hear from various Ministers and the Home Secretary, is that if they are not seen to be hard on asylum seekers, refugees and immigrants, their votes will go to Reform—that Reform will continue to grow unless Labour is seen to be as hard as Reform when it comes to these issues. But there is absolutely no evidence that Labour supporters are moving towards Reform. There is loads of evidence that Labour voters are moving towards the Greens; we have seen that in a couple of—
Pete Wishart
Does the hon. Lady want to intervene? Sorry; I thought she was making weird gestures at me, but obviously she is just looking at her phone. That is what is actually happening.
As I have said to the Government at every opportunity —and I will say it again and again—they cannot beat Reform by emulating them. Reform can be beaten by challenging its agenda and dismantling its toxic ambitions. Reform cannot be beaten by marching on to its territory and fighting on its ground. All that does is legitimise its arguments and embolden its ambition.
You would think, Mr Stringer, that after their absolute hammering at the by-election a couple of weeks ago by my colleagues in the Green party, the Government might just think, “Is this working for us? Is there a problem with the way we are positioning ourselves on the spectrum of UK politics?” They might have taken a cursory glance at what happened in Caerphilly, where my colleagues from Plaid Cymru hammered the Government and stood strong against Reform, and were rewarded by a stunning by-election victory.
The Government’s strategy seems to be going on to Reform’s territory and trying to beat them. I say ever so gently to the Minister: regardless of how hard he tries—and he seems to be trying his utmost and damnedest—he will never out-Reform Reform, which is possibly to his credit. Reform are the absolute masters of sinister, poisonous right-wing ideology and, regardless of how hard the Government try, they will never beat Reform on that territory.
The Government are chasing Reform down that road but not noticing something profound that is happening in British politics. In Scotland, we have a particularly sharp divide in our politics, based around the constitution, and a divide seems to be opening up in English politics. Let us look at who came first and second in the by-elections. On one side, it is the parties of the progressive ideals of unity, consensus and wanting a compassionate immigration system. On the other side stand the parties of the right—the authoritarians and those who believe immigration is a bad thing that has to be controlled and defeated.
Labour is absolutely nowhere. It is fourth in the polls this morning. When is Labour going to have an opportunity to look at where it is? The dividing line is opening up, and Labour Members are all on the wrong side of it. Labour is seen to be part of a right-wing coalition; we hear that every time some right-wing Conservative or senior Member praises the Home Secretary to the rafters, and there is even praise from Reform. I am sure we will get more praise for the Home Secretary from the shadow Minister, the hon. Member for Ruislip, Northwood and Pinner (David Simmonds). I hope he will indulge the House and tell us how wonderful he thinks these things are, because I know that privately he thinks what the Home Secretary is doing is brilliant. That is where Labour is now.
We have a march and rally next Saturday, organised by the Together Alliance. We are all going to be there. We are going to stand up, proudly and defiantly, to the far right. We have a little group in Westminster—the parliamentary forum to take on the far right. Members should come and join us, because that is where the action is in this country now, and where it is increasingly going. Labour Members are going to have to get on the right side or they are going to be finished.
Afzal Khan (Manchester Rusholme) (Lab)
On the question of being on the right side, I say to the hon. Member that the Manchester Refugee Support Network, through its specialist services, helped almost 3,000 people last year to find stability, security and belonging in our community. It requires £60,000 per year to operate, but its funding runs out in August 2026. Does the hon. Member agree that such organisations must be provided with long-term, sustainable funding to support our most vulnerable constituents?
Pete Wishart
Absolutely. We cannot praise those organisations enough, because they are working in Labour’s hostile environment, where everything has been made harder for them to operate, so of course they should be supported. I am shocked to hear of the difficulties that organisation is having; I am sure that, with the hon. Member’s support, it will be able to address them and turn it around.
We are at an important juncture in UK politics, one that we have never seen or experienced before. A new dividing line is emerging. It looks like the conventional parties of the old times cannot meet and respond to this new agenda, and we are seeing something dramatic and profound happening in our politics.
I used to work with Labour Members when they were in opposition. They were the easiest and greatest people to work with—high values and high ideals. What has happened to them? They had better find their mojo. They had better regain their true intentions and find their values, or it could be a long, hard race to the bottom. I say to them, “It’s up to you now.” They can continue with the decline, or they can come and join us, and ensure that proposals like this are defeated.
Several hon. Members rose—
Graham Stringer (in the Chair)
Order. Members who wish to speak should bob. I have taken a rough count of those who have, and we will start with a four-minute limit, which I might have to reduce later.
Brian Leishman (Alloa and Grangemouth) (Lab)
It is a pleasure to have you in the Chair, Mr Stringer. My appreciation goes to the hon. Member for Perth and Kinross-shire (Pete Wishart) for securing this debate. He has been consistent in defending human rights in his decades of service to this place, and he has my respect for that.
When the country elects a Labour Government, it does so with certain ideas in mind: to lift people out of poverty, to improve public services, to offer genuine left-wing solutions for the problems the country is facing, and to show compassion to the most vulnerable people, both domestically and from across the world. That is why I vote Labour, and one of the main reasons why I joined the party.
No one ever votes Labour with the desire to be tough on the weak and weak on the tough. But with its immigration reforms, the Home Office is being tough on the very weakest—the most oppressed people. The reforms do not represent the values of the Labour party that I joined, and that I am still proud of. We should always stand up for oppressed people at home and all over the world. That really should be a given.
The feeling of perpetual review and assessment will cause no end of uncertainty. The change from five years to 30 months will negatively impact people’s ability to integrate and contribute to Britain. What a barrier to building a new life for people who have fled war, oppression and persecution—the sort of traumas that, personally, I cannot comprehend. This is most certainly not the route to making the country a more caring and more tolerant place.
I honestly do not know why the current leadership seems to think there is mileage in copying the far-right ideals of Reform. Thinking that that is the route to gaining electoral success is incredibly misguided and in no small measure wrong. No one voted Labour thinking that we would make social media videos bragging about deporting some of the most vulnerable people in the world. It is beyond distasteful and it is dangerous, because this is a huge political and moral moment, not just for this Labour party but for this country.
We all see that the far right is making headway across Europe. Fascists are already in power in Italy. France looks likely to elect as President a known extremist with a racist past. With the Government’s cruel reforms, we are trying to appease and pander to the far right’s lack of humanity. If it came to a vote, I certainly would not vote for the reforms, and anyone who would needs to have a look at themselves, and ask themselves the serious question of what happened to their humanity.
Sir John Hayes (South Holland and The Deepings) (Con)
There has been too much immigration into this country for too long, and that is certainly the view of the vast majority of the people I speak to in my constituency. I suspect it is a widespread view among law-abiding, patriotic Britons from all kinds of backgrounds.
Three myths have been perpetuated to sustain the level of immigration that we have endured. The first is that it is necessary for our economy—that we need labour. What migration has actually done is to displace investment in domestic skills, to perpetuate a labour-intensive economy at a time when we should have been automating and taking out labour demand, and to feed the greed of those employers who, rather than paying a decent wage for employees who understood their rights, were happy to take cheap labour. Those have been the effects of the arguments about the economy.
The second myth has been about multiculturalism: this curious notion that we can absorb all kinds of people into our country without a shared sense of belonging, a common sense of what being British is all about, and that these co-existing subcultures would somehow cohere. In fact, as Trevor Phillips, himself of course the child of migrants, argued long ago, we have ended up with the ghettoisation—his words, not mine—of large parts of our country, with co-existing subcultures, without the bonds that bind us together in the shared sense I have described.
The third myth is that migration would not have a detrimental effect on some of our public services. Just imagine the figures for a moment—I am speaking now of legal migration. Between April 2022 and March 2023, the number of people entering Britain was 944,000—944,000 people extra in a year—yet when we debate housing, transport infrastructure, the health service, the availability of dentists and GPs, we never consider the effect of population growth at that scale on the demand for all those services.
Iqbal Mohamed (Dewsbury and Batley) (Ind)
The right hon. Gentleman is making an extremely eloquent speech. Of course we understand that the more people come into our country, the more the pressures on our public services will be exacerbated. The numbers he cited are post Brexit, under his former Government. If I remember correctly—I apologise if I get this wrong—net migration before Brexit was around a quarter of million people, mostly skilled labour or for specific work. After Brexit, the Europeans had to return, and we ended up allowing thousands of people to work in our care sector, in our NHS and in service industries that had too many vacancies. How does he explain the policies of his Government, which led to net migration rising from a quarter of a million to 900,000-plus, and what would he do differently today?
Sir John Hayes
The hon. Gentleman is of course right. The blame for all this should not be laid exclusively in the hands of the Labour party or Labour Governments. Successive Governments have administered a regime that has been out of tune with the sentiments of the vast majority of the population, who know what I have said is true. For the hon. Gentleman is right to say, too, that those successive Governments have allowed unsustainable levels of net migration.
If we look at the history, however, we see it was once quite different. In 1967 net migration was minus 84,000, in 1987 it was just 2,000, and in 1997 it was 48,000. It is in my time in this House—although, I hasten to add, not at my behest—that migration has soared, and we have begun to accept that hundreds and hundreds of thousands of people can be added to our population without taking account of the fact that that brings additional pressure on public services. That is not to say that many of those people do not make a positive contribution to our country—of course they do, in all kinds of ways—but to ignore the facts in terms of, for example, the growth in demand for housing is a dereliction of duty of which politicians across the political spectrum are guilty.
Mr Gregory Campbell (East Londonderry) (DUP)
On the issue of population change, it would appear that in the past 25 years the population of the United Kingdom has increased by over 10 million, while our economy has been largely stagnant. Does the right hon. Gentleman agree that most people agree that there is a distinct difference between those who come from around the world to contribute to our society, pay their taxes, help the NHS and work, and those who come illegally? That distinction is often lost in this debate.
Sir John Hayes
Illegal migration, of course, is of a different order. Illegal immigration is about breaching borders. A nation means very little unless it has territorial integrity. What is the purpose of a nation that has porous borders? Indeed, it barely deserves to be described as such. The hon. Gentleman is right to draw attention to the way our borders have been breached, with impunity, over time.
Bear in mind that nine out of 10 of the people who arrive in dinghies are men, and 75% are under the age of 40. Let us be clear about who is coming, and for what purpose. Many are economic migrants and, frankly, given where they come from, if we came from those places, we might come, too, because we would see a better life here and want that life for our families. I do not criticise the individuals; I criticise a system that permits that level of illegal migration.
Legal migration matters because of its scale and its character. It has led to a change in our society at a pace that many people find it impossible to comprehend, still less to cope with, so it is time that the political establishment, populated as it is by the liberal bourgeoisie—
Sir John Hayes
Not the Minister, of course—I except him from that general description. It is time that the political establishment faced up to the fact that what they have perpetuated for too long is at odds with the intuition, experience and will of the British people. We need to cut migration of all kinds, and we need to cut it now, or they will dispense with us and elect people who will.
Graham Stringer (in the Chair)
Order. I remind Members of two things: first, interventions should be brief; and secondly, if you say “you”, you are referring to me.
Rachael Maskell (York Central) (Lab/Co-op)
It is a pleasure to serve with you in the Chair, Mr Stringer. I congratulate the hon. Member for Perth and Kinross-shire (Pete Wishart) on securing the debate.
I have to say to the right hon. Member for South Holland and The Deepings (Sir John Hayes): I do not know who he thinks is working in our NHS and in our care sector, providing the skills, or who he thinks the engineers are who are coming here and building our houses in order to support our economy, but we certainly need immigration to support our economy and public services, which have been so severely under-invested in over the past 14 years.
We know our world is challenged. It is stretched and stressed, as we have seen with climate change displacing communities and war springing from that. We are seeing floods and famine across our planet, and as a result people are moving so that they can experience some dignity in their life. Some people come to our shores because they want dignity, and I have to say to the Government that the dehumanisation of fellow citizens of our planet is a complete disgrace and it is not in my name, and it is not in the values of our party.
Our party was built on solidarity between communities. The responsibility of a Labour Government is to bring those communities together, as we always have in our tradition, through the trade unions and through our party, to ensure that we are investing in those communities and bringing fantastic integration, as we are seeing in York, where we recognise the dignity in one another and bring it to the fore. The Government seem to have lost their way, and as a result they are losing support. They have certainly lost their beating heart, which must be re-found.
The draconian policies that are coming out of the Home Office are deeply damaging to our party and our future, as well as to our country, and I plead with the Government to change course. We know that Reform is not interested in the agenda—Reform Members just want power and have not even turned up for this debate today, so why follow them? Why not put a different stake in the ground with a different tune, which talks of different values—the values that we hold deep, the values that we place in those people, including the care workers who are serving our parents’ generation to ensure that they have dignity in later life? I say to the Government: change course.
Change course, as well, on our universities. The policies that have been brought forward for our universities are forcing them into financial ruin. International students have choices, and they used to choose to come to British universities; they are now going overseas. I know from the two universities in my constituency the consequences of the policy. Remove the international student levy, which they should not be paying, and remove the NHS surcharge, which clinicians revile. Ensure that instead we give universities the opportunity to be more inclusive and to have more home students, which the policy clearly rails against.
We have heard about already in this debate the impact of leaving the EU on migration levels. We need to recognise the risk-sharing opportunities of working with our European colleagues in a much more cohesive and comprehensive way. We used to be under the Dublin agreement, and we knew the rules. Since leaving the EU, we have not been part of that expression and working together with other countries. We cannot do this on our own, and we have seen the consequences of that. As imperfect as the asylum and migration management regulations are, at least they put risk-sharing at the heart of the agenda. We should be part of that too.
Graham Leadbitter (Moray West, Nairn and Strathspey) (SNP)
It is a pleasure to serve under your chairship, Mr Stringer, and I congratulate my hon. Friend the Member for Perth and Kinross-shire (Pete Wishart) on securing this important debate.
Right across my constituency, through the highlands and islands, across Aberdeenshire and right across Scotland, successive Governments continue to fail our communities, our public services and our businesses with immigration policy that bears no scrutiny when it comes to labour requirements. Many Members have talked about the hardships faced by refugees and the impact on their lives, and the humanity or otherwise of our actions. I agree with those sentiments, but I am going to focus on the big impact on employment, and how that impacts the communities in my constituency.
Every day in Moray West, Nairn and Strathspey, there are people with care needs that cannot be fully met and businesses that cannot be staffed, not because of lack of budget, but because of lack of labour. “But,” say some, “there are people in the UK who can do these jobs,” but are there, really? In areas like my constituency, much of which is a two-and-a-half-hour drive north of Perth, which itself is an hour north of Edinburgh and five hours north of London—we are talking about somewhere that is 11-plus hours from here—are we really going to drag people away from their families and friends to do these jobs, when there has been and there could be a willing workforce to do them, contribute to our communities and be part of a constructive, progressive and successful whole? People do come by choice and love the places they move to, but their number does not come close to closing the gap between labour demand and labour availability.
The fact is that before Brexit there was far more labour available to care and hospitality. Sadly, that has disappeared in broken Brexit Britain. Care providers that do have foreign workers under excessively strict working visa rules are often left with the utterly invidious choice of not fulfilling care needs of vulnerable clients, or breaking visa rules on hours worked in order to do so. They are then punished severely simply for the act of caring, which is a disturbingly dystopian situation. Business leaders across Scotland, in Federation of Small Businesses branches and chambers of commerce, point to labour shortages and the stalling of economic growth as a result of current immigration policy.
Apsana Begum
Does the hon. Gentleman agree that the Government need urgently—today—to provide clarity on those constituents, perhaps of his and certainly of mine, who came through the European Community association agreement route and have had applications for renewals and other elements paused since November 2025? They are now in complete limbo, although they are eligible as of this month to apply for indefinite leave to remain.
Graham Leadbitter
Absolutely. That is just another example of delays in a system that does not work—a system that is not able to process applications or to deal with the legitimate issues that are raised by people within it in a timely and reasonable way. These are people who could be doing jobs, paying taxes and contributing to society, but have restrictions placed on what they can do and how they can live their lives.
Scottish Labour says it supports a more bespoke immigration system for Scotland, which would be great if its own Ministers paid any attention to it. The oppressive and stifling immigration rules that were imposed by the previous Conservative Government and are now being copper clad by, of all people, a Labour Government, are deeply damaging to the highlands, Moray and far beyond. Will the Government take responsibility for the harms that they are inflicting on vulnerable citizens whose care needs cannot be met from our current working population, and on those in the hard-pressed hospitality sector who cannot provide the service they wish or grow their businesses to meet demand due to an immigration policy that utterly fails them?
Steve Yemm (Mansfield) (Lab)
I am pleased to serve under your chairmanship, Mr Stringer.
People in my constituency and, I think, right across the country are clear: they want an immigration system that is fair, but one that is controlled and works in the national interest. That is exactly what this Labour Government, led by the Home Secretary, intend to deliver.
Baggy Shanker (Derby South) (Lab/Co-op)
On the point of fairness, constituents in Derby tell me that they are working hard to make a living and put their kids through school, but they are worried by retrospective changes to ILR. Does my hon. Friend agree that, to make the system completely fair, changes to ILR should not be retrospective?
Steve Yemm
I have met many people living in my constituency—workers from west Africa and from Asia—who make that case to me. I have written to the Home Secretary to support that case, and I hope the Government will look at the results of the consultation and think carefully about transitional arrangements for people who have been in the UK, working quite properly, for some time.
At the same time, as the Home Secretary has set out, it is important to recognise that the Government are restoring both control over the system and compassion. It is important not to choose one over the other, but to deliver both together. As a Government, we are taking decisive action to stop abuse of the system, and we will save taxpayers hundreds of millions of pounds as a result. It is important to recognise that we are introducing a system where refugee status is not automatically permanent, but—
Feryal Clark (Enfield North) (Lab)
Does my hon. Friend agree that the measures are so sweeping that it is not just asylum seekers who are caught by them, but, as my hon. Friend the Member for Poplar and Limehouse (Apsana Begum) mentioned, those who arrived under the ECAA route, also known as the Ankara agreement? They came to this country and set up businesses, they pay taxes, contribute to the country and have set up their lives here, and now, at just the time that they were about to apply for ILR, they are caught by these measures. Does he agree that transitional protections need to be announced as a matter of urgency?
Steve Yemm
It is important to recognise that position, and it is important that transitional arrangements are put in place for people who entered the country absolutely legally. Crucially, I hope my hon. Friend will also recognise that we are shifting the system away from dangerous and illegal routes, towards safe and legal pathways, because no one should be risking their lives in the hands of criminal gangs.
This is what good government looks like. It is about restoring trust in the system, it is about fairness, and it is about delivering for constituents like mine in Mansfield, who expect a system that is fair, controlled and in the national interest. This Labour Government are getting a grip, and I am proud to support them.
Blake Stephenson (Mid Bedfordshire) (Con)
I congratulate the hon. Member for Perth and Kinross-shire (Pete Wishart) on securing this important debate. Immigration is one of the defining issues of contemporary politics. Polls regularly show that it is one of the most important issues for the public. Much like my right hon. Friend the Member for South Holland and The Deepings (Sir John Hayes), I am told by my constituents that they are fed up with a system that seems to work for absolutely nobody. I send surveys to villages on a monthly basis, and regularly more than 80% of those who return the surveys tell me that this issue is important to them and we need to fix the immigration system.
The Government’s attempts to reform the system are welcome. I encourage them to be ambitious. This is not about chasing Reform, as has been suggested by Members today; it is about focusing on an issue that matters deeply, certainly to my constituents. Earlier this month, I published a short report, “Backdoors to Britain”, which sets out 30 recommendations for strengthening our legal migration system. It comes after months of work and hundreds of written questions to the Home Office—I must apologise for pestering Home Office Ministers with them—which uncovered some alarming truths.
Nearly 17,000 micro-companies with five or fewer employees are eligible to sponsor visas, but there seems to be no data on how many people they have sponsored. There is a clear commercial incentive for our universities to undercut our legal migration system in exercising their power to conduct their own English language testing at the start of study. Completion of a degree, regardless of what it is in or where the individual has come from, itself acts as proof of English language competency for future applications to the Home Office.
Thousands of visa holders come through hard-to-enforce routes with minimal financial requirements. Two examples that I focused on in the report are religious and charity visa routes. We are operating a system where it is easier for someone to bring their non-British spouse to the UK if they are an immigrant than if they are a British citizen. I do not think that is fair to hard-working British citizens who want to bring their non-British spouse to the UK.
Sir John Hayes
I should have congratulated the hon. Member for Perth and Kinross-shire (Pete Wishart) on securing the debate and said how pleased I am that you are in the Chair, Mr Stringer.
My hon. Friend will know that the care visa system established by the previous Government brought here more dependants than care workers. Everyone who arrives in a country brings an economic value and an economic cost; they all want houses, they all want health and they all want education for their children. That was a flagrant example of what my hon. Friend described: more dependants came, and the cost was much greater than the value.
Blake Stephenson
I could not agree more. That is clearly a back door to Britain, and we need to close it.
Our public sector is dependent on a huge number of worker visas, while we debate—even today, in the Chamber —record youth unemployment. As my right hon. Friend said earlier, we need to get those young people into work rather than relying on importing labour.
Perhaps more worrying are the huge gaps in fairly basic compliance data that I uncovered through my questions to the Home Office. Responses to many of my questions indicate that there is a lack of robust data in the Home Office, or that data might be available but producing an answer is simply too expensive. In either case, without robust and easily accessible data in the Home Office, I and my constituents are concerned that our legal migration system is effectively unenforceable.
Britain’s immigration system is not working for the British people. It is time that changed. As we continue to shape a new immigration system over the coming months and years, I hope the Minister will consider the recommendations in my report, which I have shared with Members and might well be in his inbox. I am more than happy to meet him to go through the recommendations if that would be of any use to the Government. My constituents want this Government—any Government, in fact—to end the loopholes, close the back doors to Britain and build an immigration system that works for British citizens.
Neil Duncan-Jordan (Poole) (Lab)
It is a pleasure to serve with you in the Chair, Mr Stringer.
I congratulate the hon. Member for Perth and Kinross-shire (Pete Wishart) on securing a very timely debate. In fact, it took only hours after the Home Secretary’s announcement on settlement rights for messages from worried constituents in Poole to start flooding in. One of them, my constituent Olebanjo, put it very powerfully. He said:
“Migrants are not just statistics; we are carers, professionals, volunteers, and parents raising children who already call this country home. We want to belong, to integrate fully, and to continue giving our best to the UK. This proposal would make that harder, not easier.”
I think he is right. The idea that making life harder for people who are already here, working, raising families and contributing somehow improves assimilation or cohesion simply does not make sense at all.
The Government have described settlement as a privilege to be earned, but that ignores the valuable contribution that those workers have already made to our country, the economy and their local communities. In Poole and across the country, our health service relies on thousands of workers from around the world. In social care, the changes risk turning a staffing crisis into a catastrophe. We cannot tackle that problem by punishing the migrant workers caring for our relatives and providing dignity and warmth to our elderly.
The problem, then, is that migrant workers are being made to pay for issues that they did not cause. The outcome will be, I fear, depressingly predictable. When care homes, particularly those outside big cities, struggle to fill vacancies and care worsens as a result, right-wing politicians and their media outriders will not admit that punishing migrant workers has failed; they will double down and the clamour for harsher measures will grow. Our Labour Government must challenge that approach.
Iqbal Mohamed
Care workers make an invaluable contribution to our country and the people that they care for. Does the hon. Member agree that illegal care companies that are charging to issue visas to people who then come to this country with no job are—along with those people arriving illegally—demonising the legitimate care workers without whom this country would not function?
Neil Duncan-Jordan
I led a debate in this Chamber some months ago on the need for a certificate of common sponsorship, which would make sure that individuals coming over to this country and working in the care sector were not tied to a single employer and could move between employers, giving them the power rather than the employer. I hope that the Government will look very seriously at that point.
It is wrong fundamentally to pull the rug out from people and change the rules halfway through the process. What message does it send about the kind of country we are if our laws and promises hold no meaning and if the British Government can make a deal with someone on a Monday, but by Wednesday, we could have changed our mind? That is part of why these policies have provoked such a reaction: they run against our values. British people believe—and Members across the Chamber have said today—that if a person works hard and plays by the rules, the Government should tread lightly on their life. What someone gets out should be what they put in.
Labour must be clear-eyed about where the real value in our economy lies. It is not with the billionaires and bankers, but with the workers—wherever they come from—who keep this country running every day.
Several hon. Members rose—
Graham Stringer (in the Chair)
Order. I am going to reduce the time for speeches to three minutes.
Iqbal Mohamed (Dewsbury and Batley) (Ind)
It is a pleasure to serve with you in the Chair, Mr Stringer.
Too often when immigration is spoken about in public discourse, whether in the media, online platforms, or indeed in this House, the tone becomes detached from reality and at times from a basic sense of humanity. I do not know anybody who supports or condones illegal entry into our country, or exploitation of our compassionate rules to take advantage and usurp other people’s rights. However, we must reject the false binary that elites seeking to divide us are all too willing to present: that we have to choose between compassion and prosperity. That is simply not true.
I want to present a real-world example of what a compassionate and beneficial immigration policy might look like: in January 2026, Spain’s left-wing Government issued a royal decree to create a pathway for around 500,000 undocumented migrants to obtain legal residency. To be eligible, migrants were required to have lived in Spain for at least five months—not 30 months, not five years, not 20 years—before application. Eligible individuals could apply for a one-year renewable residence permit, or a five-year permit for children. Permits allow people to work in any sector in any region of Spain.
Why is Spain doing this? To address labour shortages and support economic growth. Spain has argued that undocumented migrants are already contributing to the economy but cannot work legally. The Government say that migration has accounted for 80% of Spain’s economic growth in the past six years. Spain has an ageing population and labour shortages in key sectors, making additional legal workers essential. The reform aims to strengthen the formal labour market and increase tax and social security contributions. The Government also argue that the policy will promote social cohesion and rights integration. It is a model based on human rights, focusing on dignity, inclusion and co-existence. Spain needs an estimated 2.4 million additional workers in the next decade to maintain productivity.
Blake Stephenson
I thought I would intervene to give the hon. Gentleman a little more time. Is he arguing for an amnesty here in the UK? What does he think British citizens would think of such an amnesty? Does he believe that that would be fair or unfair?
Iqbal Mohamed
The reasons why Spain introduced the policy also apply to our country. Whether we address the challenges that both Spain and the UK have in the same way or differently is a question for the House. It is for the Government to make proposals and for the House to contribute to a fair, compassionate, productive and ethical policy. We do not want mass illegal or uncontrolled migration without benefits to our nation.
Spain requires 2.4 million workers in the next 10 years to maintain productivity and to support the pensions system. My question to the Government is, what estimate have they made of how many new workers will be needed in the UK over the next 10 years to maintain productivity and to deliver the Government’s mission for growth, and how will that requirement be fulfilled?
Graham Stringer (in the Chair)
Order. I am going to have to reduce the time limit to two minutes. That speech lasted longer than I expected.
Bell Ribeiro-Addy (Clapham and Brixton Hill) (Lab)
I thank the hon. Member for Perth and Kinross-shire (Pete Wishart) for leading this debate. My Government came to power promising a fairer Britain, so I have to ask plainly, who exactly are all these immigration proposals for? They are not designed for the people I represent, who help to keep this country running.
I want to start with the thousands of children and young people who have grown up in the UK and who are being pushed to the margins of the immigration system. They are being made to pay child citizenship fees of £1,214 to register as a British citizen. The Home Office’s own figures show that it makes a profit of £840 on each application. The fee is not an administrative cost; it is a revenue-raising exercise targeted at children, and it results in tens of thousands of children who have a legal right to British citizenship being priced out of it. They do not discover the consequences of that until later in life. Members may be wondering why I am still talking about this issue, given that the Government made a commitment in the House to reduce the financial burden on families and to address the issue specifically, but in all the proposals, I have not heard anything about it, and the fee remains the highest in Europe.
The Government are also proposing to double the qualifying period for indefinite leave to remain. The idea that we would apply it retrospectively undermines the foundation of trust on which people make decisions when they come to work in the UK. They put down roots based on the rules that they are given when they apply. Those families are attempting to live and work in this country based on the promises that were made. We will drag people into an endless cycle of visa applications and unpredictable fees, sitting alongside an asylum and accommodation system where private providers make millions from Government contracts despite repeated reports of mismanagement, abuse and dangerous conditions. In turn, we turn around and blame those who are the most vulnerable—those seeking asylum—and change their conditions.
Apsana Begum
On danger and protections, does my hon. Friend agree that the Government must maintain the existing protections for survivors of domestic violence who have fled persecution and violence abroad, including the migrant victims of domestic abuse concession and the domestic violence ILR protection?
Bell Ribeiro-Addy
My hon. Friend is absolutely right. How far have we fallen if we renege on those commitments that we have made, particularly those under the refugee convention? Removing such status or forcibly removing people who have lived here lawfully for a number of years would be in direct contravention of our values as a country.
The Government cannot claim to support integration while pricing children out of citizenship. They cannot talk about fairness while extending the ILR pathway. They cannot promise compassion while allowing profiteering in the immigration system, while reneging on commitments and demonising asylum seekers. We need to build an immigration system that reflects not just our economic priorities, but our values as a country. These reforms do neither.
Jim Shannon (Strangford) (DUP)
I congratulate the hon. Member for Perth and Kinross-shire (Pete Wishart) on securing this vital debate. I am well-known for believing in immigration for those who need it, those who have a desire to assimilate and those who wish to make a new life for their families and become part of the fabric of British life. I believe in asylum for the few who are persecuted for their faith. They should be given an opportunity to apply for immigration status and to work and raise their families.
I think of those who come to the Ulster hospital, the Royal Victoria hospital and the Belfast City hospital—those who have emigrated here, pay their national insurance and their tax here and keep the A&Es in all those hospitals going. That is really important. But I do not believe in an unrestricted flow of immigration for those who jump in a plastic or rubber boat in Calais and come across—economic migrants who are fit and well.
In the very short time I have, I want to make a point about the fishing fleet, which faces what I believe is unnecessary immigration reform. The new English language thresholds being introduced in 2026 create a huge barrier to bringing new crew into the industry from overseas. The phasing-out of the temporary shortage list for the end of 2026 means that we will no longer be able to bring in foreign crew to Northern Ireland to work on fishing vessels and will only be able to renew the visas of those who already work here. That means that in 12 months we stand to lose 70% of our workers, which will tie up close to 100% of our fleet.
I ask the Minister, who is a decent person and always replies very positively: can we have a meeting to discuss the bespoke visa system for fishing roles in the short and medium term? We need a mechanism to ensure that the industry does not fall during that period, while we do the necessary work to achieve more domestic recruitment. I ask the Minister to ensure that we have that meeting to prevent the implosion of the fishing industry due to the pressure on crews and vessels. Immigration is the lifeblood of our nation, but it must be controlled and in the national interest. We need to find that balance and find it soon—indeed, we need to find it before it is too late.
Graham Stringer (in the Chair)
Order. The flurry of interventions that we have had over the last three speeches has meant that we have gone two or three minutes over time. I will reduce the time available to the spokespeople for the three parties by a minute each, and ask each of them to take nine minutes.
Mr Will Forster (Woking) (LD)
It is a pleasure to serve under your chairship, Mr Stringer.
I thank the hon. Member for Perth and Kinross-shire (Pete Wishart) for securing the debate. He and I served together on the Committee that considered the Border Security, Asylum and Immigration Act 2025, where we proposed amendments to lift the ban on refugees working, and to provide for humanitarian visas to introduce safe and legal routes. I am pleased to work in partnership with him again to support our vulnerable refugees.
I want to start with what the Law Society says about the Government’s proposals:
“The Home Secretary’s proposals to increase the time for migrants to be eligible for settlement from five to ten years lack clarity, risks unfairness and may undermine rule-of-law principles.
The changes must not be applied retrospectively to those already in the UK in a way that would disadvantage them. To do so would run counter to the rule of law, undermine business planning and reduce flexibility and movement in the labour market.
The proposed changes are impacting businesses now, with our member law firms reporting that international hires are declining job offers. This is due to the uncertainty over their plans to build a life in the UK for them and their family. Our members who practice immigration law are left unable to advise clients with any certainty.
These changes risk the UK’s reputation as a centre for global talent and undermine business’s ability to recruit the best people for the job. In an increasingly competitive global services market, it is imperative that the UK can stay ahead and be an attractive destination for talent.”
I would welcome the Minister’s response to the Law Society’s damning assessment of the Government’s immigration reforms.
I will admit that this Government have inherited an absolute mess and a chaotic asylum and immigration system from the Conservatives, who deliberately did not process asylum applications in order to put people off coming to this country. That was a failure both for taxpayers and for putting immigrants off coming here. It means that we spend £6 million a day on asylum hotels.
However, another party is responsible for this mess: Reform. Last week, when we debated immigration, Reform MPs were not here; today, when we are debating immigration, they are not here. Brexit boats now cross the channel, resulting in deaths. Reform’s pursuit of Brexit has resulted in that, yet its MPs are absent from the debate. They need to be held to account for what they have done. The Dublin regulation has already been mentioned: we used not to have these channel crossings, and we used to be able to solve this problem by working with European partners, and it is vital that we get back to that situation.
There are huge benefits to immigration, which some colleagues have talked about, but some have tried to undermine this afternoon. Immigrants are statistically more likely to be employed in the health and social care, hospitality and agriculture sectors. Foreign-born individuals are more likely to be in work than UK-born citizens. Those remarks are not from a “woke” institution, but from the House of Commons Library. Immigrants make this country better financially and culturally, and we need to stand up for the benefits that immigration brings.
I will highlight agriculture. My right hon. Friend the Member for Orkney and Shetland (Mr Carmichael) warned that the Home Office’s decision to end visas for around 75 specialist overseas sheep shearers risks up to 1.5 million sheep going unshorn, creating both an animal welfare problem and a food shortage. The Home Office had no answer to that warning by my right hon. Friend, as Chair of the Environment, Food and Rural Affairs Committee. I hope the Minister will be able to respond to it this afternoon—or if not, take it away. It is a crisis of the Government’s own making, and it needs to be corrected.
I will take in turn some of the particular issues that the Government are introducing. ILR should not be retrospective, and I would welcome the Minister’s views on what assessment the Government have made of the legal challenges if it were made retrospective. I am pleased that the Government have done yet another U-turn and agreed to lift the ban on asylum seekers and refugees working—but, despite the fact they are so in love with the rules of Denmark, they have made the rule one year rather than six months. Why have they not followed Denmark?
I also want to talk about the Government’s proposal to review refugee status for every refugee, every two and a half years, for 20 years. The Government do not seem to be able to make a decision on applicants and then cope with the appeals, yet they are adding more work for themselves. Can the Minister give me a cast-iron guarantee that the Home Office can cope?
I want to briefly mention student visas. In Afghanistan, women and girls have been persecuted just because of their gender. Last year, the Home Office closed safe and legal routes for Afghan women, and this month it closed them for women studying. What does the Minister, who I know has a heart and soul, say to that?
Finally, I was last in this Chamber to talk about homeless people, and I want to mention homeless refugees, and particularly their families. The Government have changed the rules on move-on rights, and that has had a profound impact. There have been exemptions for pregnant women and disabled and elderly people; will the Minister agree to ensure that the move-on rate is changed to exempt families with children?
David Simmonds (Ruislip, Northwood and Pinner) (Con)
It is a pleasure to serve with you in the Chair, Mr Stringer. I draw Members’ attention to my entry in the Register of Members’ Financial Interests: I host a researcher from an asylum charity in my office. I am sure that the Minister is glad to have a friendly face in this debate, so it is particular pleasure to speak and to congratulate the hon. Member for Perth and Kinross-shire (Pete Wishart) on securing it. I agree entirely with what he said about the timeliness of the debate. It has been a very broad-ranging one, so I will make a few observations on the debate and then finish with some questions, which I hope the Minister might address.
It is clear that there is a degree of commonality between the official Opposition and the Government on many of the measures that are being brought forward. As the Leader of the Opposition said very clearly, the Government will have our support in implementing them, should they run into any difficulties in that respect. However, it is also clear that many of the challenges around asylum and migration, like many of the challenges that face our Government and our country more generally, are getting worse. The situation is deteriorating.
My own entry into this area of work came because, as a local councillor, I saw the consequences for communities of the arrival of very large numbers of asylum seekers. Indeed, to this day, the Hillingdon part of my constituency has the highest per capita level of asylum seekers of any local authority area in the country, with more than 100 different first languages. Diversity and dealing with these issues at a local level are things with which my constituents and I are extremely familiar.
Over those years, we have had many debates—I will touch on this in my questions to the Minister—about how we ensure a fair and appropriate dispersal of asylum seekers across the country. The hon. Member for Perth and Kinross-shire is now hosting some asylum seekers dispersed into his constituency—but for many decades local authorities in Scotland, for example, demanded a more liberal approach to our borders in respect of asylum seekers, while absolutely refusing to be dispersal areas for those people when they were here. While the 31 mostly Conservative authorities in south-east England volunteered to become asylum dispersal areas, the plea fell on deaf ears north of the border.
It is clear that no party has a monopoly on practical compassion when it comes to support for those who seek refuge in our country. Indeed, we can thank my right hon. Friend the Member for Braintree (Sir James Cleverly), now the shadow Secretary of State for Housing, Communities and Local Government, for the actions that he took during his time as our Home Secretary, which produced the significant fall in net migration into this country, which this Government have seen as a benefit.
As my hon. Friend the Member for Mid Bedfordshire (Blake Stephenson) outlined in reference to his report, there remain significant concerns about putting the appropriate package of measures in place to ensure that our borders are robustly and consistently controlled. We need to make sure that these debates are happening. One thing that is very clear—I expect that most of us, as politicians, will have heard this while canvassing—is that voters tend to be very positive about all the migrants they personally know. They like the ones who run the local shop, who work in the GP practice, who drive the bus or who are their next-door neighbours. It is all the others they are worried about. There is therefore a big job of work about demystification.
When we as Conservatives, in the previous Government, decided to open the door to large numbers of refugees from Hong Kong—people who were traditionally associated with our country and had a right to be here under that scheme—it gained very widespread public acceptance. The same was true of the Ukraine refugee scheme. We need to make sure that we have tough measures in place around illegal migration and an appropriate and compassionate response to those in need.
Iqbal Mohamed
Going back to back-door migration, does the hon. Member agree that the comments made by the right hon. Member for South Holland and The Deepings (Sir John Hayes) were about issues under his Government that were inherited by this Labour Government, not created by them? Can the hon. Member explain why the previous Government allowed those back-door routes to exist and why they did not take action to stop them when they were in power?
David Simmonds
The hon. Member for Woking (Mr Forster) spoke about the absence of Members from certain parties from this Chamber. Those colleagues who we saw scuttling off to Reform have serious questions to answer about why, when given free rein in the Home Office, they failed to implement even the measures that this Labour Government have brought forward to address some of the loopholes that the hon. Member for Dewsbury and Batley (Iqbal Mohamed) highlighted.
My right hon. Friend the Member for South Holland and The Deepings (Sir John Hayes) described some of the characteristics of illegal migration. I have been to Calais and I have seen the drone footage gathered by the French police of the boats on the beaches and the camps set up by the traffickers who are bringing people over, and it is clear that we should be robust and extremely cautious. I have watched footage of people in those boats who, seeing the police approach, pick up children and throw them in the sea, knowing that the police will have to rescue them rather than stop the migrant boat. We should make no apology for taking robust action to address those concerns.
Jim Shannon
Does the hon. Gentleman share my concern—I think he probably does—that on many occasions, the French police seem to sit back and do nothing, and let the whole process go ahead? That poses the question whether this Labour Government’s agreement with the French Government means anything at all.
David Simmonds
I do not entirely share that view. I have seen the challenges that the French police face, with something like 1,000 members of their constabulary covering 10,000 km of coastline. The traffickers will sometimes send 50 or 100 boats to sea simultaneously, knowing that there is no way that the French police can possibly deter them. Each of those boats is worth €70,000 to €80,000-worth of revenue to their criminal enterprise, so they have a big incentive.
The Minister is here in an honourable tradition of Labour Governments taking robust action on our borders. The first immigration controls that our country ever had were introduced by the post-war Labour Government in response to concerns about the exit from empire. No recourse to public funds, the first time that asylum seekers were taken out of the standard benefits system and eligibility for council housing, was introduced by the Blair Government. The asylum dispersal system was introduced by the now Mayor of Greater Manchester when he was the Immigration Minister in those years.
On the Conservative side of the Chamber, we are broadly supportive of the measures based on the Danish model that are being brought forward by the Home Secretary. We remain very concerned, however, as my right hon. Friend the Member for South Holland and The Deepings and my hon. Friend the Member for Mid Bedfordshire have highlighted, that many of those measures will still fall short and that our constituents’ concerns will remain.
In the spirit of a constructive approach, may I ask the Minister whether he has given any further consideration to the idea of an asylum visa, going beyond the simple prospect of safe and legal routes? If people wish to study, work, come to get married or live in the United Kingdom for any other reason, they have to apply for a visa, but we do not have any such measures in place for asylum seekers, and that is helping to drive the illegal traffic across the channel.
What discussions is the Minister having across Government about avoiding cost shunts, which are an increasing concern and a consequence of speeding up asylum decision making—in particular, the rapid rise in the cost of temporary accommodation for local authorities as asylum seekers get status and turn up at the town hall seeking help or are left destitute in local communities? What consideration will the Minister give to using protocol 16 of the European convention on human rights, since it is clear that UK tribunals go well beyond the provisions of that protocol in many cases, to ensure that we are not doing more than we should be doing?
Even with all those questions, I can assure the Minister that as the official Opposition we will be providing support in the Lobbies to ensure that those measures are implemented, even if we remain of the view that they should go further.
Graham Stringer (in the Chair)
We have little time, Minister, so please try to leave a minute or two at the end of your speech for the winding-up speech.
The Minister for Border Security and Asylum (Alex Norris)
It is a pleasure to serve with you in the Chair, Mr Stringer; I shall certainly follow that direction. I start by thanking the hon. Member for Perth and Kinross-shire (Pete Wishart) for securing this debate, on a topic he clearly feels very passionate about. He spoke with great power, while also providing a forum for colleagues to do the same and raise interesting and important global, national, regional and local issues.
I will seek to cover the wide range of issues that have been raised in this debate, but I start by saying this, because I did not hear it enough in the hon. Gentleman’s contribution: the system at the moment is disorderly and uncontrolled. The people with the most agency in the system now are human traffickers. I appreciate the power and the anger with which he spoke, but I know that he has the same power and anger towards those individuals.
Personally, I would like to have heard more on that, because we know what the consequences are across the country. Public confidence on this issue is subterranean. The hon. Gentleman made a lot of points about politics, but actually this is much bigger than party politics. Public confidence in the mainstream to deliver meaningful change in this space is subterranean. This is the last go for the mainstream to do this. We know that public order, as a result, is in jeopardy. We must be really careful; I appeal to all hon. Members that there must be no progressive defence of the status quo—they would never hear that from the Government Front Bench. There is only the absolute need to act.
That is set against the instincts of the British people. I know from my own community, in which it is no secret that the immigration conversation is difficult, that those same people who raised those concerns with me about the disorder and lack of control are the same people who leant into the Afghan resettlement scheme, the Syrian scheme, the Hong Kong British national overseas scheme—for which we have one of the biggest populations in the country—and Homes for Ukraine, in which people are literally opening their homes. That showed that when there was control in the system and order, and when we knew those coming forward genuinely needed protection, the community would lean into it. That is an awful lot to build on.
The hon. Gentleman talked about the edges of the argument, but I say to him that the edges of the argument at the moment embody, on one side, a nightmarish vision of a Britain that closes its borders, puts up high walls and offers sanctuary to no one; and on the other, a fairytale that pretends that we can do it in all circumstances with all people. That is not right, and the public know it.
I will cover the points that the hon. Gentleman and other right hon. and hon. Members have made, but I do want to address some of the things the hon. Gentleman said in opening that are simply wrong, starting with the idea that the Home Secretary has changed refuge rules overnight from being permanent to temporary. That is not the case. It used to be a five-year grant of settlement; it is now a two-and-a-half-year one. I will explain shortly how that will work in practice, but that is not the change he described.
The hon. Gentleman also said that the Home Secretary will arbitrarily, at the stroke of a pen, overturn individuals’ protection needs. Again, that is not true. Everybody’s protection need will be individually assessed. I am a white, middle-aged, cisgendered, heterosexual man, but someone who looks like me—just as good looking, Mr Stringer—could be gay, and they would not be safe in certain contexts. That principle will always be the case under this Government, and it is an established principle in this democracy.
The hon. Gentleman talked about it making it impossible to find work. Again, that is not at all the intention, which I will cover when I talk about core protection. He talked about the contraction of safe and legal routes. I am proud that, through our asylum policy statement, this Government were willing to stand up when it was politically difficult to do so, and say that we want to break the model of the traffickers who transport people to this country illegally, while providing safe and legal routes.
I cannot accept, however, that time-limited university schemes designed for an individual to come for one, three or four years—an agreement made between that individual with the state and the university—should act as a de facto asylum system. That cannot be right, which is why we are replacing it. However, I heard a lot from the hon. Gentleman and other colleagues that I found heartening with regards to the desire to provide sanctuary, for everyone to have an opportunity to contribute to this country and for integration, because we share those desires, too.
I will now turn to some of the points on illegal migration. First, on core protection, the 30-month permission, which was mentioned by my hon. Friend the Member for Alloa and Grangemouth (Brian Leishman), is there because, if individuals come to this country and get refuge, but then sit at home without learning the language or contributing to society, we believe that is no life. It is not good for the individual or the collective. If they switch to the protected work and study route, which means they are either working or learning, and are learning the language, not committing crimes, and taking part in society, they can take themselves out of that 30-month renewal regime. It is exactly designed to give people the opportunity to contribute, which is what colleagues have wanted. I think that that is the right balance between the individual and the collective.
The issue of visa brakes was raised by the hon. Member for Perth and Kinross-shire, and by the hon. Member for Mid Bedfordshire (Blake Stephenson) when he talked about “back doors”. It is a really important point. From the four countries for which we implemented visa brakes—Afghanistan, Cameroon, Myanmar and Sudan—asylum applications had risen to more than 470% of their 2021 level. In the case of Afghanistan, 93% of those students—all of whom said they had come to the country for a time-limited period—claimed asylum. If that, as the hon. Member for Perth and Kinross-shire posits, demonstrates that there is a need for an asylum-linked study route, I agree, actually. He knows that the Home Secretary has already announced that we intend to bring that in. But this Parliament and this Government should be the ones to set the terms of that, rather than universities themselves. That must surely be the right balance.
The Lib Dem spokesperson, the hon. Member for Woking (Mr Forster), talked about our commitment to people from Afghanistan. He knows that in the past few years, we have brought 35,000 people over via safe and legal means. Again, we will offer those protected visa routes, but that should be a decision for this country’s democracy, rather than a decision for universities.
My hon. Friend the Members for York Central (Rachael Maskell), for Alloa and Grangemouth and for Clapham and Brixton Hill (Bell Ribeiro-Addy) talked about values —something I think about a lot. First, the idea of an orderly system—one that takes the agency away from the traffickers, closes down illegal routes into the country and opens up safe and legal ones—sits squarely within the mainstream of Labour’s traditions. The idea that we incentivise by making the best route to settlement by working and contributing, being a good neighbour and not committing crime, is also rooted in the values of our movement. My hon. Friend the Member for Mansfield (Steve Yemm) covered that point very well. I am proud that we are part of a Government who have been willing—even when it is politically difficult—to say that we intend to pivot the model in that way.
Brian Leishman
I appreciate it, and I will be quick. I understand what my hon. Friend is saying, but could he clarify what he thinks, with regard to Labour values, about the horrendous social media posts that we have seen, showing people being bundled into the backs of vans?
Alex Norris
That is a very important point. If people are failed asylum seekers or foreign national offenders, and have no right to be in the country, they should be removed. There is a challenge: public confidence, as I have said, is so, so low. It must be demonstrated that that takes place—I have that conversation with constituents, and they do not always believe me. If my hon. Friend thinks that it is too route one, I accept that challenge, but I cannot accept that we do not need to tell that story, because we absolutely do.
The hon. Member for Strangford (Jim Shannon) asked for a meeting about fishing; I will make sure that it happens with me or with my hon. Friend the Member for Dover and Deal (Mike Tapp). For sheep shearers, we have announced the one-year extension.
A number of colleagues raised settlement issues—I will not name them all—including my hon. Friend the Member for Poplar and Limehouse (Apsana Begum), who is no longer in her place. We will retain existing safeguards around domestic violence and abuse. On earned settlement, again, it is about ensuring that people’s contributions are recognised, so that working and earning, learning the language and not committing crimes can accelerate a person’s route to settlement. That is why we brought it in.
On the point about retrospection, it has always been the case that the rules apply at the point of application, not at the point of entry. Nevertheless, colleagues know that we consulted—the consultation only recently closed, and it had 200,000 contributions. We are looking very carefully at it—transitional protection was an element of it, and we will return to it. The hon. Member for Woking asked me what I thought of what the Law Society has said about a lack of clarity. I defend the principle that we are consulting and thereby creating clarity. I think that that is the right balance.
My hon. Friend the Member for Poole (Neil Duncan-Jordan) made interesting points about common sponsorship, and I am talking to the union movement about that. We are looking at it closely. I have covered a number of points that were made in what has been an interesting debate.
Pete Wishart
I wish I had more than a few seconds to sum up what has been an important and significant debate. There are a couple of things that I thought would happen: first, that most of his Back Benchers would be totally against what the Minister said, and secondly, that the Tories would totally agree with this Labour Government on all things immigration and asylum. Those are the friends that the Minister keeps. This is an important debate that is shaping the new dynamic in this country. Profound change is happening. The Minister is on the wrong side of this. Conservative Members are quite content to support this Labour Government. I urge the Minister: review where you are. It is not working. You will continue to get hammered in subsequent by-elections—
Jim Shannon
On a point of order, Mr Stringer. This is not a criticism of yourself, but when the list of speakers is presented to the Chair for consideration, I understood that the protocol and rules of the House were that if those on the list intervened, they would go to the bottom of the list, while those whose names were on the list but had not intervened would be brought to the top. Can you clarify that that is the rule? That is how I and others understand it, but today, that rule was not followed.
Graham Stringer (in the Chair)
It is guidance, as opposed to a rule. With the exception of yourself, I did put to the end of the list those people who had intervened.
Jim Shannon
I ask the Clerk to check that, because my understanding is that that did not happen.
Graham Stringer (in the Chair)
Order. We must start the next debate.
Motion lapsed (Standing Order No. 10(6)).
Child Maintenance Service
(1 day, 4 hours ago)
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Kirith Entwistle (Bolton North East) (Lab)
I beg to move,
That this House has considered the effectiveness of the Child Maintenance Service.
It is a pleasure to serve under your chairship, Mr Stringer. I declare an interest, as I am currently involved in a tribunal with the Department for Work and Pensions concerning my own child maintenance service case, which I will not refer to today.
I am bringing this motion before the House to highlight the urgent need for reform to the child maintenance service, particularly how it deals with post-separation abuse. What should be a system designed to support children is, in reality, too often used by perpetrators as a means of continuing both psychological and economic control and abuse.
For many victim-survivors of domestic abuse, leaving a relationship is the hardest step they will ever take, particularly when children are involved. It is a moment of courage, relief and when they hope the worst is finally behind them. What too many discover is that the abuse does not end when they leave; it simply changes form. Again and again, I hear from survivors who tell me the same thing: the child maintenance service has just become another arena in which the abuse can continue.
Warinder Juss (Wolverhampton West) (Lab)
My constituent Megan contacted me to say that she has escaped from her abusive former partner, who is supposed to be contributing less than £1 a day towards their child’s needs, but is not even managing that, although he does have influence over key decisions such as schooling and where they live. The domestic abuse is therefore still persisting, even though she has left her former partner. The child maintenance service is being weaponised against victims. Does my hon. Friend agree that we have a clear responsibility to help people such as my constituent Megan and her child?
Kirith Entwistle
That is exactly why this debate matters. I will come on to some of the points my hon. Friend raised.
When a public service not only allows, but actively facilitates, the continuation of abuse and fails to recognise the realities of coercive control, it is not just flawed; it is unjust. The national evidence is deeply concerning. Research by Gingerbread, a charity supporting single-parent families, found that 77% of primary carers using the CMS reported experiencing domestic abuse from the other parent.
Jim Shannon (Strangford) (DUP)
I thank the hon. Member for securing the debate. This is a massive issue in my constituency, as it is in hers. In Northern Ireland, a large proportion of parents relying on the CMS face difficulties in receiving timely maintenance, which directly impacts child poverty and family stability. Does she agree that there may be a lack of staff, and that to ensure that the CMS system operates effectively for families not just in her constituency, but in Northern Ireland, more needs to be done to reduce the backlogs and secure the financial support that their children are entitled to?
Kirith Entwistle
Absolutely.
Even more troubling is that 45% of the parents in that research said that the CMS’s involvement had actually led to an increase in abusive behaviour. Those figures should stop us in our tracks.
For survivors, the very experience of using the CMS can be deeply distressing. From the cold tone of emails and letters to the aggressive and harsh text messages, right through to the opaque way payments are calculated, the process can be deeply triggering for those who have experienced abuse. At the very beginning, survivors are asked whether they have experienced abuse and what form that abuse took. For a moment, there is hope that the system might understand the gravity of that disclosure, but what follows is often little more than signposting to a list of organisations before the process simply continues as though the question had never been asked.
Ultimately, the disclosure changes nothing. There is no meaningful change in how the case is handled, no structural safeguards and no recognition that the dynamics of abuse may shape the entire case. Crucially, it does nothing to change the tone of communications with the CMS. For someone who has taken enormous personal risk to leave an abusive partner, that can feel like jumping out of a plane only to find that there is no parachute, no safe landing and no one to catch them when they fall.
Rachel Gilmour (Tiverton and Minehead) (LD)
My team has been absolutely inundated with child maintenance service casework. I agree with the hon. Member’s point about the faceless nature of the service and how unhelpful—in fact, damaging—that is to people who have been subject to domestic abuse.
Some constituents’ cases show a clear and worrying pattern of one parent’s evidence being approved when there is clear evidence on the other side that it is a lie, to use rather frank terms. There are some accounts from constituents who have been driven to suicidal ideation because of the shambles of the system, so I am grateful to the hon. Lady for raising this matter today.
Kirith Entwistle
The hon. Member is absolutely right. I will come on to that issue shortly.
Surely we must ask whether this is really the standard we are willing to accept. Another fundamental weakness lies in how the CMS deals with shared care, in that it absolutely fails to do so. In theory, maintenance calculations are meant to reflect the number of nights a child spends with each parent; in reality, the system largely relies on what parents report themselves. Rather than establishing the reality of shared care, the number of nights is effectively averaged out based on those reports, with no evidence required. When parents try to push back and provide evidence, that is often disregarded unless a court order is in place.
Catherine Fookes (Monmouthshire) (Lab)
I thank my hon. Friend for securing this debate. As a child of divorced parents way before the CMS came into existence, I know that the whole issue of how much the paying parent should pay and getting them to pay on time is extremely stressful—for the children as well.
My hon. Friend raised good points about child maintenance being routinely weaponised. Collect and pay may help lots of families by making it harder for abusers to withhold payment, but I know from my caseload that many parents say that income is being hidden and that the CMS is allowing that income to be hidden—if a parent is self-employed or becomes a “director”, for example. Does she agree that the CMS must be equipped to find that hidden income?
Kirith Entwistle
My hon. Friend raises a particularly important point. I will come on to the collect and pay service and how that is also broken.
The result of how the CMS deals with shared care is a system that accepts unverified claims, but refuses genuine evidence. It is confusing, adversarial and often deeply unfair. The structure of the CMS also creates the wrong incentives. When maintenance calculations change depending on the number of nights a child spends with each parent, disputes over care arrangements quickly become disputes over money. Fortalice, a leading domestic abuse charity in my town of Bolton, is all too aware of that problem. It tells me of cases where a parent seeks increased overnight contact—not because that is in the child’s best interests, but to reduce their CMS payments or claim additional financial support. Children should never become bargaining chips in financial disputes.
Peter Fortune (Bromley and Biggin Hill) (Con)
I congratulate the hon. Member on securing the debate. We are all here because we have been inundated with issues and complaints about the CMS. One of the things I hear about over and over again is the lack of communication. Does the hon. Member agree that if the CMS got the communication right, some of these disputes might not escalate to the point where they become very troublesome indeed?
Kirith Entwistle
As I mentioned earlier, there is a big issue with how the CMS communicates with both parents.
Steve Yemm (Mansfield) (Lab)
We have all received casework on this subject. I often find that what I can only term incompetence by the CMS enables non-resident parents to shirk financial responsibility—at the expense of the child, at the end of the day. Does my hon. Friend agree that we in Government must look into these issues and take decisive action to ensure that the CMS is fit for purpose, gets a grip and actually does the job we are asking it to do?
Kirith Entwistle
I completely agree. These issues are not theoretical; I see them repeatedly in cases raised by my own constituents in Bolton. One constituent, who I will call Emily, left an abusive relationship and is still dealing with the consequences through the CMS. She describes intimidation and harassment from the father of her children, alongside unreliable maintenance payments. Money arrives late, arrives short or does not arrive at all. Her case remains on direct pay, meaning that the system still relies on co-operation between parents, even when there is a history of abuse. For many survivors, that is not a neutral arrangement: it can mean ongoing contact with the person they are trying to escape and persistent fear about what will happen if they challenge missing payments.
Emily has repeatedly asked for her case to be moved to collect and pay, so that payments can be handled through the CMS without that direct interaction, yet delays, missed call-backs and poor communication have left her stuck in a process that exposes her to distress and financial uncertainty. Other frontline charities in Bolton, such as Endeavour, tell me that they see that pattern all too regularly. Survivors describe payments being withheld, not because the other parent cannot afford to pay but because that unpredictability becomes a form of control. Many report that payments stop just before birthdays, Christmas or school holidays, only to restart later. That pattern is not random; it is about maintaining power. Survivors tell us that they feel trapped by the CMS, and we absolutely must listen.
Mr Jonathan Brash (Hartlepool) (Lab)
One of my constituents has raised this issue with me; she is owed nearly £6,000. She says:
“What makes me most mad is if he paid, I wouldn’t need UC to top up my wages. The government is paying twice, once for chasing him and once for covering him.”
Is the system not completely broken?
Kirith Entwistle
That is such a powerful point, and I am really sorry on behalf of my hon. Friend’s constituent. Sadly, that is not an isolated case.
Some say that they are asked to pay far more than they can afford, while others say that the support they receive does not come close to covering the cost of raising their children. When they try to seek clarification, they hit another problem with the CMS: inconsistency. Different advisers give different answers, and staff are working from guidance rather than clear, consistent rules. As a result, parents can end up receiving conflicting advice from the very organisation that is meant to support them and their children through a difficult time.
Joy Morrissey (Beaconsfield) (Con)
I thank the hon. Member for being so brave in introducing this debate; many of us have dealt with this issue on a daily basis.
There is an issue of fairness in the allocation of the rules. I had one father who tried to kill himself because he felt that there was no allocation of fairness in what he was trying to do for his family. The rules do not seem to be clear cut, and there does not seem to be a way through for families who want to work together. The system seems to disproportionately favour the spouse who is willing to lie and say things about the other, and that has to change. It is just not sustainable.
Kirith Entwistle
Absolutely. The system is fundamentally broken. Children must be at the heart of any decision made about them. It is important to recognise that many parents, particularly single mothers, who have experienced abuse do not use the CMS at all. They avoid it because engaging with the system may mean renewed contact with the very person they are trying to escape. They do not see the CMS as protection, but merely as another channel through which a perpetrator can exert control.
Julia Buckley (Shrewsbury) (Lab)
My hon. Friend is making a powerful case for the reform of the CMS. My constituent has been hounded by her ex-partner, with eight consecutive investigations by the CMS triggered by his complaints about her. It has ultimately caused her to give up work. Does my hon. Friend agree that vexatious complaints such as those must be identified and prevented from taking up CMS resources and allowing the continuation of financial abuse?
Kirith Entwistle
Absolutely. My hon. Friend raises yet another issue with the CMS and highlights just how badly the system is set up.
Mothers struggle on alone, absorbing financial pressure themselves rather than risking opening the door to further abuse. That should deeply concern this House. We must remember what is at stake. Child maintenance exists for one reason: to support the quality of life and wellbeing of children. Yet the experiences that we have all described suggest that children are being drawn into adult conflict, rather than being protected and shielded from it.
In the worst cases, the CMS allows children to be weaponised by perpetrators; I can make no stronger point than that. How can we possibly continue with a service that allows that to happen—a service that effectively tells perpetrators that more overnight contact may mean lower maintenance payments; a service where the amount paid can be disputed, delayed or manipulated because the rules are unclear; a service where weak enforcement allows some parents to evade their responsibilities altogether; and a service that some survivors avoid entirely because it does not feel safe?
Campaigning organisations, such as Gingerbread, have already set out practical proposals for change, and I would be grateful if the Minister could address three areas where the system must work better for survivors and their children. First, we need a genuinely child-centred approach to maintenance so that decisions about contact and payments are driven by children’s wellbeing, rather than financial incentives. Secondly, disclosures of domestic abuse must trigger meaningful safeguards, not mere signposting or lip service. There must also be clearer evidential standards for shared care, particularly where no court order is in place. Finally, survivors should have better access to collect and pay alongside a named caseworker so they are not forced into ongoing contact with perpetrators or required to repeat traumatic experiences.
Tonia Antoniazzi (Gower) (Lab)
My hon. Friend is making an excellent case. Has she noticed that child maintenance payments are being stopped when an ex-partner applies for child benefit? That is another source of income that is being manipulated by a partner to keep the money from the parent who is looking after the children.
Kirith Entwistle
Absolutely; it is just another vehicle being used by perpetrators to continue that post-separation abuse.
At its heart, this debate is about the lives of children growing up in separated families across the country. The child maintenance service was created with the intention of supporting those children, but when the system allows post-separation abuse to continue, when it leaves survivors feeling unheard and unsafe, and when children are drawn into that harm, it is clear that reform is urgently needed. The question we must ask ourselves is simple: can we honestly continue with a system that allows children to be weaponised by perpetrators of abuse? I do not believe that we can.
Graham Stringer (in the Chair)
I will call Vikki Slade, but I want to hear from the Minister because this is an important debate. I am going to restrict the hon. Lady to two minutes.
Vikki Slade (Mid Dorset and North Poole) (LD)
I congratulate the hon. Member for Bolton North East (Kirith Entwistle) on securing the debate, and I thank her and the Minister for allowing me time to speak. I will cut to the chase to make sure that the cases I want to reference are heard. I have raised this issue so many times in this House, and it is disappointing that we have only 30 minutes when so many Members wish to speak.
Mark was abused by a partner, but was not believed until she attacked another man. He paid for his child, but was banned from seeing them for six years. It is only now that the court has redressed that injustice. Sarah was forced to undergo the indignity of DNA testing, despite years of her ex-partner seeking custody of their children. He now pays one penny a month in arrears. Nicola’s ex has taken to working abroad to avoid payments. His arrears are going to take 471 years to clear.
After I spoke about this issue in the Chamber last month, 1.2 million people viewed my video and 5,000 people contacted me—mums and dads from across the country with harrowing stories. While most were women who recognised my constituent’s experience, hundreds of men also wrote to me about being denied access, losing money directly from their accounts and being pushed to breaking point. Some told me about men who had taken their lives after being overwhelmed by the CMS process.
The House of Lords has concluded that parts of the CMS are no longer fit for purpose, and it is really time to make this change. We must make sure that people are not hiding income. It is not fair that resident parents are still having to pay their bills to their landlords and Tesco, but non-resident parents can deduct everything else before their child maintenance. That simply does not work.
I know that colleagues across Parliament, from every party and every region, have called for this debate, but debate is not enough. We need to have a full consultation, to learn lessons from other countries that manage child support better, and, ultimately, to have a White Paper so we can create a positive legacy for separated families. I am holding a roundtable on Friday, not just with my own constituents but with all of these people who have asked me for help. We must change this system.
The Parliamentary Under-Secretary of State for Work and Pensions (Andrew Western)
It is an honour to serve under your chairship, Mr Stringer. I am struck, as was the hon. Member for Mid Dorset and North Poole (Vikki Slade), by the level of interest in this debate and, indeed, by the specifics of some of the cases that have been raised. I concur with her that this is an incredibly important debate, and one that perhaps could have used more time. I am sure that Members will look where they can at various mechanisms to ensure that we return to this in future.
I want to begin by recognising the vital role that the Child Maintenance Service plays in supporting families across the country, notwithstanding that we all have examples in our casework of challenging cases—cases where the service could do better. The CMS now supports more than 1.1 million children, a figure that rose nearly 5% in the 12 months to September 2025, through both family-based arrangements and arrangements made via the CMS. An estimated £2.9 billion is transferred each year to children in separated families, keeping around 120,000 children out of relative low income after housing costs.
I know that almost all parents want the best for their children, and that, in spite of the difficulties and conflicts inherent in family break-up, a majority of paying parents consistently contribute towards their children’s upbringing, helping to ensure that they receive the support they need. Compliance levels within the collect and pay service remain strong; in the most recent reporting quarter, 74% of paying parents under collect and pay paid maintenance.
To set the scene, it is worth explaining how the CMS operates. The CMS is statutorily obliged to consider all valid maintenance applications in accordance with relevant legislation. To ensure consistency and fairness across the system, the CMS applies a set of broad rules intended to secure the best overall outcomes for all parents. Clear, simple rules are essential; they make the system more efficient, improve customer service and are vital when dealing with hundreds of thousands of cases.
That is in stark contrast to previous schemes operated by the CMS’s predecessor, the Child Support Agency, which were notoriously complex and inflexible. Those schemes relied heavily on parents providing detailed financial information that was often difficult to obtain or keep up to date. The result was significant delays and, too often, families being let down.
That said, the Government recognise that there is more that the CMS can do to deliver a fair and trustworthy service that is more accessible to parents, and particularly to those who are vulnerable. That is why the CMS is continuing to make significant and meaningful improvements to the service wherever possible, to ensure that parents feel informed, supported and confident in the actions being taken on their case.
Chris Hinchliff (North East Hertfordshire) (Lab)
I thank the Minister for setting the scene. Would he reflect back to the House that, notwithstanding what he has said, there is a clear pattern of a lack of reliable communication, a failure to enforce payments and what often seems like an inability to keep in line with legislation? Does he recognise that what we are all experiencing on behalf of our constituents is an organisation that does not seem to have basic administrative competence?
Andrew Western
I will come to the points about communication and enforcement momentarily. I acknowledge that we all have difficult cases, but the CMS does handle billions of pounds a year in payments to families, and it is important to recognise where it works as well as where change is needed. It is failing for some families, as in the cases that have been outlined, and we want to put that right.
I will now turn to the points made by my hon. Friend the Member for Bolton North East (Kirith Entwistle). I will start with the three asks from Gingerbread. First, on the disclosure of domestic abuse and the handling thereof, the CMS recognises that both receiving and paying parents can be victims of domestic abuse, including coercive and controlling behaviour, and it has put a number of safeguards in place to help them use the service safely. All caseworkers receive extensive domestic abuse training, which has been refreshed to reflect the Home Office’s statutory guidance on controlling or coercive behaviour, so that they are equipped to identify risks and signpost parents to specialist support. The CMS also has a domestic abuse plan and a regularly updated list of resources to support victims.
Where safety concerns arise, though—I accept that they arise in some instances—the CMS can advise on non-traceable payment methods, such as accounts with centralised sort codes to ensure a parent’s location cannot be identified. The Government are also taking wider steps to minimise opportunities for abuse within the maintenance system, perhaps most importantly through plans to remove direct pay, reducing the need for any contact between parents and closing off avenues for economic control or coercion.
The second point concerned evidential standards for shared care, which is a contested area. I absolutely accept that it is a difficult space for our caseworkers to operate in. When a dispute arises regarding overnight stays, the CMS must avoid taking one parent’s word against the other and must consider certain types of evidence, such as a court order or an agreement between the parents, but it may consider other types of evidence as well, including in cases where a court order is not in place. Formal evidence will carry more weight than other evidence in establishing whether there is a pattern of shared care, but the CMS will consider each parent’s statements before making a decision.
Where the parties agree in principle that there is a level of shared care but cannot agree on a number of nights, the CMS can make an assumption of shared care of one night a week, but as I said earlier, shared care disputes are challenging. We understand the frustration and the concerns that they present for parents, and we are keeping the issue under active review and looking at how the process can be improved. I know that my hon. Friend the Member for Bolton North East is due a conversation with my noble Friend Baroness Sherlock. She may want to ask Baroness Sherlock for the specifics on that, given that she is the lead Minister on this issue.
Gingerbread’s third substantive point concerned the welfare of the child, and I want to offer reassurance on that. Clearly, the entire point of the CMS is to ensure the welfare of the child as it pertains to financial stability and to ensure the ability of parents to look after their children, but if specific safeguarding concerns arise, there are procedures in place to report them to the relevant authority, which is usually the local authority where the child lives.
There were a couple of other points that I want to touch on, including the question of enforcement. Clearly, there are always improvements to be made. There was a specific question about hidden income. There is a financial investigation unit in place. If there are specific cases that colleagues would like me to refer to that unit, I am happy to do so. We do have, for want of a better description, persistent offenders who are difficult to pin down. We will all have such examples in our caseload, and we are looking at what more we can do to track people down in those cases.
I am conscious of time. This has been an incredibly important debate. The door of my noble Friend Baroness Sherlock is always open to colleagues who want to talk about CMS reform. We are undertaking a calculation review. We are looking to abolish direct pay as soon as parliamentary time allows. That is a very important step to tackle coercive control and abuse in the system. We can always do more. I am happy to speak to colleagues at any point, but I also strongly encourage them, if necessary, to book in with my noble Friend.
Motion lapsed (Standing Order No. 10(6)).
Rural Roads
(1 day, 4 hours ago)
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Graham Stringer (in the Chair)
Can hon. Members leave quietly, please? We wish to start the debate.
Stuart Anderson (South Shropshire) (Con)
I beg to move,
That this House has considered the condition of roads in rural areas.
It is a pleasure to serve under your chairmanship, Mr Stringer, especially on a topic as important as road conditions in rural areas such as South Shropshire. We will all know that there is no place like South Shropshire, with its outstanding beauty, vast countryside and beautiful winding country roads—but those country roads are where we see the issue.
A dangerous trap has arisen for many of my residents and many of the people who come to see such a beautiful area: its beauty has been blighted by potholes, which are causing a major issue. I have in my area some roads that are now damaging the tyres of tractors when they are travelling along them—let us imagine what that would do to a moped or bike. My constituents do not have to imagine, however, because it has happened numerous times; the son of one constituent in Ludlow hit a pothole recently and wrote off his moped.
Jim Shannon (Strangford) (DUP)
I commend the hon. Gentleman. I spoke to him beforehand about this issue. Insurance claims due to potholes, damage to car rims and tyres, and bicycles driving into potholes and riders going over the handlebars and getting injured—those are just some examples of what has happened back home in my constituency. Insurance claims are going through the roof against the roads Department. Does he agree that the present strategy is penny wise and pound foolish, and that a major strategy to improve rural roads is urgently needed to ensure that people do not get injured and their vehicles do not get damaged?
Stuart Anderson
The hon. Member raises a very good point. I will come on to the preventive measures and what can actually be returned to the economy to help the Department fix this major issue.
Potholes are one of the biggest issues raised with me since I have been an MP, and I am sure the same will be true for many other Members. Obviously when we get bad weather, we see them increase more and more, and that causes a major issue.
There are multiple areas that I would like to cover today. I am not raising one or two anecdotal concerns or bits of evidence; I am raising the more than 2,100 road defects reported to Shropshire council in January alone—that is, in one month. That is almost triple the number of reports in the previous month and double the number in January 2025. I have been told that potholes are not getting fixed quickly enough, which is causing roads to deteriorate and some to become impassable.
John Lamont (Berwickshire, Roxburgh and Selkirk) (Con)
I want to highlight the fact that in Scotland we have a particular challenge. Scottish Borders council is responsible for maintaining 1,900 miles of road, which must be one of the biggest distances in the whole of the UK, but in Scotland, because of the decisions that the SNP Government are making, rural local authorities such as Scottish Borders council are being neglected for the sake of the central belt. Does my hon. Friend agree that local authorities need to be funded properly to allow them to fix these many miles of roads?
Stuart Anderson
I do. My hon. Friend makes an excellent point. There is more money being spent by councils than it costs to fix the roads. I will come on to that in detail in a minute. These are serious issues. I have one constituent that people have stopped visiting because their road is now impassable—talk about remoteness and being cut off in rural areas!
Peter Fortune (Bromley and Biggin Hill) (Con)
As my hon. Friend knows, he is also the Member of Parliament for my mother-in-law, so I congratulate him on all his hard work. [Interruption.] Check the words: I said nothing wrong. One issue hitting rural areas is, of course, road works, because residents cannot just take the next left or right turn and sometimes have to detour for miles. Does my hon. Friend agree that it behoves the utility companies to keep residents informed of any road works they are doing, so that residents can plan their journeys in advance?
Stuart Anderson
We see that across South Shropshire. My hon. Friend’s mother-in-law is a lovely lady and I was delighted to meet her the other week—I get a few points for that. We are finding that Shropshire council is putting cones in the potholes, because they are that big, or putting up traffic lights, and some of the traffic lights are not working. Those have now been up for weeks, and sometimes several months. That is causing an issue, when it is easier to fix the potholes.
There have been a lot of short-term fixes, and we need a longer-term strategy. I set up a survey in my constituency, and 500 people responded in a very short period of time. One in four have experienced vehicle damage, nearly 90% have had a near miss, and 98% said that the roads are in poor or very poor condition. I would love to meet that 2% and see where they are travelling.
Matt Rodda (Reading Central) (Lab)
I thank the hon. Gentleman for securing today’s important debate; thousands of residents around the country, maybe hundreds of thousands, will be very grateful for his work. Does he believe that part of the issue is the way that local authorities manage their resurfacing programmes? In our area, unfortunately, Oxfordshire is full of incredibly deep potholes—well below the depth at which other local authorities would intervene—and my Reading residents often cross the boundary and are shocked by the state of the roads. In contrast, our local authority has resurfaced large sections of roads, and this invest-to-save approach has resulted in a better quality of road surface and fewer potholes.
Stuart Anderson
The hon. Gentleman makes an excellent point. There is not one specific issue here; there are multiple issues, as I will come to.
Constituents have talked about the road just outside Ackleton. They tell me it is like driving in a third-world country. A local resident, Barry, commented to me, “You want to come to Claverley, mate. It’s like driving on the moon.” I have been there—Claverley, not the moon—and he is not wrong. From Bridgnorth to Bishop’s Castle, and from Broseley to Ludlow, the whole of South Shropshire is suffering from the poor state of the roads. The roads around Ditton Priors, in particular, are impassable in multiple areas.
I thank the local press for their great reporting on the issues in Church Preen. I took BBC Shropshire’s Rob Trigg there to see some of the worst roads in Shropshire—he was truly shocked by the state of them—and to meet local residents. The roads are actually damaging tractor tyres in that area. It is a major issue.
Let me turn to the cost of vehicle repair, before we get on to potholes and the solutions. More than two thirds of my residents travel to work on the roads. There is a limited rail line, which goes north to south, and only impacts a few people. I live a mile-plus from the nearest bus station, and there are limited buses. More than 27,000 of my constituents travel to work on South Shropshire’s roads every day. The reason this is such a big issue in rural areas is, as my hon. Friend the Member for Bromley and Biggin Hill (Peter Fortune) mentioned, the number of roads and the distance to travel. One constituent has had a car for 18 months. It was a new car, but it is on its third windscreen and has just recently had a tyre puncture after being damaged on local roads. I have personally replaced two tyres and one wheel on the roads around South Shropshire.
Those issues are not unique. Last year, an astonishing £645 million was spent on repairing vehicles damaged by potholes. That is up from £579 million, and it was £474 million in 2023. Those costs are being borne by all our constituents day in, day out.
Jess Brown-Fuller (Chichester) (LD)
I thank the hon. Gentleman for his impassioned speech about the state of our roads. I was recently speaking to a driving instructor in my constituency who literally relies for his livelihood on having a car that is on the road. Every day that his car is taken off the road, he loses £250 of income, and over the past two years he has spent more than £600 repairing his car because of potholes. Does the hon. Gentleman agree that there is a human and a business cost when our roads are falling apart?
Stuart Anderson
I do. The hon. Member raises a really good point. This is not just about a pothole in the road; it is about the impact on people’s lives and businesses.
That leads me on very nicely to my next point. This is not just about car damage; it is about road safety. We are talking about people’s lives here. Beyond damage to a tire, which can be upsetting or annoying, and is not what anyone wants to see, there is also an impact on safety and people’s lives. People swerve to miss potholes. Why do they swerve? They swerve because the pothole might not have been there a few days earlier, or they might be driving on a new road. It could be at night. It could be raining. All of a sudden, they see a crater that, if they hit it, will take off the front of their car and could leave them in the side of the road, so they swerve.
We recently had this in South Shropshire: somebody swerved and ended up down a bank. A resident in Cleehill also sent me a photo of a car upturned from having swerved to avoid a pothole. I also had a personal experience: two Fridays ago, I finished speaking at an event in the evening. As I came out of Much Wenlock, I was the third person on the scene after a car had overturned, up towards Harley Bank. A woman was screaming, covered in blood. I thank the first two people on the scene. I gave first aid until the police got there. Although it was a serious incident, the woman who brought out a blanket from her house and did an excellent job, said, “Oh, don’t worry—it’s our MP. All will be good.” I was a medic trained in the military; I am not sure how many MPs can give first aid.
The point is that the local residents did a great job. The car was written off. The woman was lucky; it could have been far worse. I thank the ambulance crew and the police for the work they did. According to the lady who lives in that house, it was the third serious accident that she had seen there since August.
Helen Maguire (Epsom and Ewell) (LD)
I am very glad that the hon. Member was able to provide support to his constituent in that really awful case. In Surrey, we have some of the busiest roads and they are absolutely littered with potholes. Longmead Road has over 30 potholes, and there is a secondary school on that road called Blenheim high school. A huge number of students cycle to that school, so this is frankly an accident waiting to happen. Does the hon. Member agree that, as well as fixing the potholes, having a central highways team to answer to councillors and residents might be a good way forward, so that we can better identify where all the potholes are?
Stuart Anderson
I thank the hon. Member for raising an important point. Between us, we are starting to see that we can deal with this issue in multiple ways, and I really hope the Minister will take them on board.
I launched my rural road safety campaign back in August 2024. I urged key partners to get involved in road safety issues and to take them really seriously. I even met the Morville speed group with the police and crime commissioner John Campion. It was impactful to see the issues that the speeding on the road was causing for everybody in Morville.
I have called for the Government’s new road safety strategy to prioritise rural areas more than it does. The previous Government’s safer roads fund provided over £185 million to improve safety on the country’s most dangerous A-roads. When I raised the matter previously, the Minister was unable to clarify whether the fund will be reinstated. The work must be undertaken by the Government. While the road safety strategy published in January identifies that rural roads are the least safe in terms of fatalities, it did not give any tangible results. It identified the problem but not the solution.
I have done my homework and provided a few solutions. Let us have a look at them. We have raised the issue of potholes and damage to vehicles, and to human life. As a few people have mentioned, councils are reportedly spending more money on fixing roads and potholes than they are getting from central Government. That is unsustainable. At the same time, the Government have watered down the formula to remove “remoteness” from rural areas. The removal of that one word has such a significant impact in South Shropshire, a 700-square-mile constituency. Remoteness is a key issue. We have also lost the rural services delivery grant. Those two decisions have taken millions of pounds out of South Shropshire, which has had a massive impact.
Joy Morrissey (Beaconsfield) (Con)
Not only have we lost all that funding for rural roads in places such as Beaconsfield, Marlow and south Buckinghamshire villages, but places such as Denham and Iver back up on to London and the ultra low emission zone. Transport for London gets a disproportionate amount of money for road paving, and all the London local authorities receive extra funding to get their roads paved. However, despite having rural roads directly outside the M25, we have basically no funding for the amount of road space we have to pave. That is disproportionate and should be equalised, to provide better funding to all rural counties.
Stuart Anderson
I thank my hon. Friend for raising that excellent point. We have to look at rural counties, which are not being given the fair consideration that they need. The Government are currently holding back almost £46 million, I believe, from Lib Dem-run Shropshire council, because it has not met their stringent criteria. The council has an amber rating at the moment, and we are not getting the money that we need. Long-term certainty is required to ensure a more proactive approach to road measures, rather than just short-term solutions.
A report published just today by the Annual Local Authority Road Maintenance survey states that the backlog of repairs in England and Wales is worth more than £18 billion. The Government need to provide longer-term highways maintenance funding for councils through to 2032, as the previous Government planned to do. That would provide councils with the certainty they need to effectively plan and undertake repairs to roads. The decisions made by this Labour Government have taken millions of pounds out of South Shropshire.
The second issue is that the Lib Dem-run council now fixes only about half the potholes that were fixed previously. As per its press release last week, the figure was 25,000 over the last year, but if we go back one, two or three years, then we were averaging 38,000 to 41,000.
Helen Morgan (North Shropshire) (LD)
Will the hon. Member give way on that point?
Helen Morgan
The hon. Member is making what is generally a good speech about rural funding, so it is a shame that he has made it party political. Does he not understand that the Conservative administration, under whose budget we are still operating, cut highways funding, including the proportion for preventive maintenance, for every year from 2022 to 2025? That will clearly have had a knock-on impact. If we do not maintain the roads, they will be in a much worse state at the end of that period.
Stuart Anderson
The hon. Member raises an important point—which I thought she might raise when I mentioned the local Lib Dem-run council in South Shropshire. For years, and under successive Governments, rural areas have not received the correct funding. That is not right; however, this is also about how the money is used. At the moment, the local council has an amber rating and is not fixing as many potholes as it should. At the moment, it is fixing only half the number done previously.
The other thing being raised with me that although potholes are being fixed, they come out and fix them on the Monday, and if there is a bit of rain on Tuesday and Wednesday, by Thursday the road is the same again. I have photos of people undertaking different measures to fix potholes that are completely unacceptable. Those roads are as bad at the end of the week as they were at the beginning.
We need to look at prevention. As a general rule, councils across the country are fixing more potholes than ever, but we are not seeing that in Shropshire, as per the local council’s numbers that I have quoted. Shropshire council continues to spend disproportionate amounts on reactive pothole repairs rather than on planned maintenance, because the Government have not given it the necessary long-term funding clarity. Evidence from the Road Emulsion Association shows that surface dressing extends life by around 10 to 15 years and uses 75% less bitumen and 80% less aggregate. It is campaigning for significantly increased investment in preventive road treatments and the maintenance of longer-term funding for councils. Every council will have to plan and will need clear visibility on the necessary funding.
As the Minister will know, developments in areas like artificial intelligence and autonomous robots could also start to future-proof how we deal with roads. I was delighted at the beginning of the year to see—as many others will have seen—the first autonomous vehicle able to identify cracks in the road and seal them early on, before they get worse. That is also reducing the number of lane closures, time invested and cost. As the RAC has stated—
Graham Stringer (in the Chair)
Order. The hon. Gentleman has secured a debate that has attracted a lot of attention—I have 16 Members who have put in to speak. The rules say that I must call the Front-Bench spokespeople at 5.10 pm. At the moment, that means that those who have put in to speak will have a minute, or fractionally over. The hon. Gentleman is entitled to carry on with his speech, but I ask him to bear that in mind.
Stuart Anderson
Thank you, Mr Stringer; you raise a brilliant point.
Before I conclude, I would like the Minister to address the support or approval that local councils need for community action to go ahead to help parish councils to fix certain areas, as they have in Devon.
Residents in South Shropshire deserve better than the roads they have at the moment. The reduced funding for South Shropshire, by removing the remoteness factor and the rural services delivery grant, is beyond what is acceptable. It is having a huge impact, and I am not going to sit by and watch my residents put up with this any more.
Several hon. Members rose—
Graham Stringer (in the Chair)
Order. I am going to put a one-minute limit on speeches. If there are interventions, some people will simply not get in to speak.
Rachel Hopkins (Luton South and South Bedfordshire) (Lab)
It is a pleasure to serve under your chairship, Mr Stringer. I thank the hon. Member for South Shropshire (Stuart Anderson) for securing the debate.
In my one minute, I would like to raise the fact that it is this Labour Government who have brought in record funding to tackle potholes. A record £7.3 billion has been confirmed for local authorities over the next four years to repair and renew roads and tackle potholes. That builds on the £1.6 billion allocated for the 2025-26 financial year alone—£500 million more than last year.
Following the publication of the red-amber-green ratings for road conditions, I launched a road conditions survey across my Luton South and South Bedfordshire constituency. I flag that in the more rural central Bedfordshire area in my constituency, respondents rated their local road conditions as only a two out of 10, and seven of the 10 most commonly mentioned problem roads were in the independent-led Central Bedfordshire council area. I look forward to hearing from the Minister how she will hold all local authorities to account to ensure that they spend their money on fixing our roads.
Katie Lam (Weald of Kent) (Con)
It is always a pleasure to serve with you in the Chair, Mr Stringer. I thank my hon. Friend the Member for South Shropshire (Stuart Anderson) for securing the debate.
The condition of rural roads is an ever-present issue for those of us who represent rural constituencies. In the Weald of Kent, where we have mile after mile of country lane used by massive lorries that have crossed the channel and are hoping to avoid traffic on the main routes, the situation is especially dire.
I visited the Falkland Islands on a parliamentary trip last year, where many of the roads have not even been fully laid. When I explained to the officer driving the car where I lived, he said, “Ah! I know your constituency. It’s the only place in the world I’ve been where the roads are worse than here.”
I sent a survey to every household in the Weald of Kent last year. Of the 1,500 responses I received, street works were mentioned more than 500 times. I do not have time today to talk about all the challenges that they pose, but the Transport Committee, of which I and the hon. Member for Didcot and Wantage (Olly Glover) are both members, published a report on that last year. I would love to hear an update from the Minister on the Government’s response to that report.
Sean Woodcock (Banbury) (Lab)
For residents of north Oxfordshire, simple tasks such as driving to work or doing the weekly shop have become a daily slalom, swerving left and right to avoid potholes. We need to be very clear: that is a direct result of 14 years of largely Conservative Government neglect.
Between 2010 and 2024, Oxfordshire saw its real-terms spending power slashed by 15%. However, we must also address the administrative failure at County Hall. Under successive administrations, the focus has too often drifted towards urban traffic experiments in Oxford, while rural arterial routes have been left in a reactive state of decline.
The council’s own data is damning. In January 2025, 35% of category 2 defects—defined as serious, albeit not urgent—had missed their 28-day repair deadline. That represents 875 reports across the county. For many in north Oxfordshire, driving is a necessity, not a choice. The winding down of rural bus routes under previous Governments saw to that. That makes the record funding provided by this Labour Government even more vital, and I will not let my residents down.
Brian Mathew (Melksham and Devizes) (LD)
I thank the hon. Member for South Shropshire (Stuart Anderson) for this debate.
One particularly frustrating problem is the way in which roadworks are planned and co-ordinated, especially in rural areas. I am sure that many Members will recognise the situation where multiple sets of roadworks are scheduled at the same time, often in close proximity, making driving between villages and small towns extremely difficult, if not impossible. For residents, businesses and emergency services alike, the apparent lack of co-ordination can cause significant disruption, delays and unnecessary stress. Although I welcome investment in maintaining and improving our roads, that work must be properly planned and co-ordinated.
Lee Pitcher (Doncaster East and the Isle of Axholme) (Lab)
My asks to the Minister on rural roads are clear. First, will she ensure that funding frameworks properly recognise rural roads so that roads connecting villages and rural communities are not consistently deprioritised?
Secondly, will she strengthen expectations on the quality and durability of repairs so that councils and contractors are judged on not just how many defects they fix, but whether those fixes last?
Thirdly, will she look at how Government could better support co-ordination across local authority boundaries so that roads that function as a single route are treated that way in practice?
Finally, will she ensure that preventive maintenance does not become a substitute for the more substantial resurfacing and reconstruction that many rural roads now clearly require?
Robbie Moore (Keighley and Ilkley) (Con)
It is frustrating, yet sadly not surprising, that roads across Keighley and Ilkley are facing so many challenges. I lay those challenges at the doorstep of Labour-run Bradford council, which has consistently shown disregard for the needs of the people across Keighley and Ilkley. That is backed up by a freedom of information request that I made in 2023, which found that over a six-year period, just £4.1 million of the district’s highways funding was spent in Keighley and Ilkley, equating to just 4% of the total funding over that period, yet Bradford East, Bradford West and Bradford South—all held by Labour MPs—received £19.2 million, £17.4 million and £13.1 million, respectively.
It is beyond belief that my constituents have received much less funding compared with other areas across the Bradford district. I would therefore like to understand what the Minister will do to hold to account local authorities that do not share their highways funding equally across the districts they represent.
Anna Sabine (Frome and East Somerset) (LD)
As the MP for Frome and East Somerset, I represent a semi-rural constituency and regularly drive around its more remote areas. Rural roads are often deprioritised because they carry less traffic, but, for the people who rely on them, they are absolutely essential. In many of these areas, public transport is limited or infrequent, meaning that residents have no alternative but to use these roads daily.
Just today, two constituents, Jacquie and John, wrote to me about a pothole near their home in Batcombe. They described what they called a monstrous pothole around two feet wide and up to a foot deep on the back roads between Batcombe and Bruton. It was not formed recently; it has been there for months. It is a serious hazard, and it is becoming an all too familiar sight for many rural residents.
Chronic underfunding has left rural roads behind, and the consequences are visible in every cracked surface and recurring pothole. While the Government have begun to address this issue, it is vital that funding is not only increased but sustained over the long term to tackle the decades-long backlog. Rural communities deserve the same quality of infrastructure as anywhere else, and constituents should not have to navigate dangerous roads or bear unnecessary costs.
Steve Yemm (Mansfield) (Lab)
Responsibility for maintaining roads in my area sits with the Reform-led Notts county council. It is all talk and no action and, frankly, residents are tired of excuses, particularly when they centre on funding. The reality is this: funding is increasing significantly through the Labour Government and the mayor, Claire Ward, rising from £18 million to almost £50 million. When the county council says it cannot act due to lack of funds, it simply does not stack up because the money is coming in.
Nottinghamshire residents deserve better. They deserve roads that are safe, properly maintained and fit for purpose, whether they live on a main road or a rural lane. The funding is there and the need is clear. It is time for Notts county council to deliver for them. I will continue to press it on behalf of my constituents until it does.
Dr Kieran Mullan (Bexhill and Battle) (Con)
I cannot possibly do justice to the frustration of my residents about their local roads in one minute, but I will try my best. They contact me all the time to say how appalled they are at the quality of their local roads. The Labour Government fail to understand the challenges in rural communities, making the situation all the worse with their funding decisions since they came into office.
First, since my constituency has a lot of older people, the Government’s cutting off of our plans to reform social care spending have left us with huge financial burdens. Secondly, they cut the amount of money that was due to be given to East Sussex county council to pay for road improvements. Thirdly, to make it all the worse, they changed the funding formula to make it much harder for rural counties such as East Sussex and so many of the rural constituencies represented by Members in this Chamber to make ends meet and repair their roads. Will the Government finally start listening to rural MPs, councillors and councils, and sort these issues out once and for all?
Dr Roz Savage (South Cotswolds) (LD)
Potholes are dangerous, they are expensive to fix, and they are everywhere. In the South Cotswolds, we know that rural areas are different. Rural roads are narrower, darker, faster and less forgiving, yet they risk being de-prioritised compared with urban areas. That cannot be right or fair. Chronic underfunding has left our council struggling to keep up. I commend Councillors Joe Harris, on the Gloucestershire side of my constituency, and Martin Smith, on the Wiltshire side, for their heroic efforts to turn the tide on potholes since coming to power last May.
I draw attention to the fact that potholes are exacerbated by standing water. Here our farmers have an important role to play, but farmers are not charities. If we want them to keep gullies and ditches clear to drain the water off the roads, we need to pay them to do so. Will the Minister please work with the Department for Environment, Food and Rural Affairs to ensure that farmers are compensated for playing their part in reducing potholes?
Chris Hinchliff (North East Hertfordshire) (Lab)
I guessed that others would raise the issue of potholes and poor safety today, so I want to make another point about the state of our rural roads. To put it bluntly, they are filthy. Driving through the countryside should be a reminder of much that is best and beautiful about our nation. Instead, in many places, it has been allowed to become an ever-present reminder of the sorry state of our country.
With plastic bags, wrappers, cans, bottles, traffic cones, sandbags, tyres, equipment left over after works are completed and gales carrying all sorts of other detritus, some of our rural roadside verges are starting to look like a vast, strung-out landfill. Frankly, if we cannot even manage to keep our roadsides clean, we are hardly a proper country at all. We cannot expect to instil civic pride in the next generation if this is how we leave the roads running through rural areas. We must invest in cleaning this up.
Jamie Stone (Caithness, Sutherland and Easter Ross) (LD)
A few days ago, I had a clinic in Ord bay, and a gentleman came to see me about the state of the potholes. As I drove home between Dundonnell and Corrieshalloch, bang—I had a flat tyre, and I put on record my gratitude to Mr Nigel Shaddick for helping me change my wheel. I know all about potholes. In late 2023, I had a constituent come to me who had hit a pothole, costing her a thousand quid’s worth of damage. She is a working mum—a crofter—and she depends on her car, as there is no public transport. It is really very difficult, and even today, the case is still not resolved.
Where does the blame lie? As my good friend from the Borders, the hon. Member for Berwickshire, Roxburgh and Selkirk (John Lamont), said, the Scottish Government have a whole heap more dosh they have got from Westminster, yet precious little of it goes to the rural areas. As I think the hon. Gentleman will agree, we shall see what happens in May at the next election.
Helen Morgan (North Shropshire) (LD)
The hon. Member for South Shropshire (Stuart Anderson) is right to point out that the roads in Shropshire are in a terrible state after 16 years of Conservative management, so I am pleased that the Liberal Democrat administration has made fixing roads a key priority since coming into power 10 months ago. The council has created three new repair teams and dealt with 25,000 potholes since May, but during a wet and cold winter, it seemed like whack-a-mole, with new potholes appearing just as others are fixed. In January, 2,113 new potholes were reported, compared with just 1,200 the year before.
As Liberal Democrats, we have long called for increased investment in repairing our roads. That is particularly important in Shropshire, where the council manages nearly 3,200 miles of road, but has often received less funding per mile than many other councils. The Government’s additional dedicated roads funding is welcome, but at the same time, they are slashing our overall funding by 10%. That is no good when we need to have a maintenance programme in place, which is what the Liberal Democrats in Shropshire will be prioritising so that potholes do not appear in the first place.
Pippa Heylings (South Cambridgeshire) (LD)
Potholes are not just an inconvenience for my constituents; they are a costly safety risk that causes distress and frustration. Years of underfunding and a policy of managed decline by the previous Conservative county council administration have left Cambridgeshire facing an estimated £800 million backlog in repairs, of which £169 million is for the greater Cambridge area, home to Europe’s largest biomedical and life sciences cluster. One would think that that would have stimulated investment, but the Government allocated just £12 million to address that backlog.
To its credit, Cambridgeshire’s Liberal Democrat-run county council has more than doubled its investment in highways maintenance to £73 million. Results are starting to be seen in some areas, such as the recently resurfaced Granham’s Road. I drove along it last weekend, and it is smooth and safe—if the Government brought the money needed to local councils, that is what roads could be like. On behalf of my constituents, I ask the Minister: will she commit to resolving the £800 million backlog in Cambridgeshire to allow for the proper road resurfacing that my constituents deserve?
Tim Farron (Westmorland and Lonsdale) (LD)
Westmorland and Furness council has seen its budget cut by 31%. We are England’s largest and most rural council. Yet the Government have decided to defund rural communities, which is juxtaposed with the fact that we have the biggest number of visitors to our communities of anywhere in the country apart from London: we have 20 million visitors a year, alongside all the cars that use our roads. We have 3,000 miles of roads, including the Kirkstone pass, which has been closed since November because of expensive work that needs to be done to connect the communities around England’s two biggest lakes, Windermere and Ullswater. We have 1,000 historical bridges, including Eamont Bridge, where Æthelstan created England in 927. We are proud to be the custodians of England’s Lake District national park, and we are appalled that our visitors, and more importantly our residents, are being thrown to the wolves by a Government who have decided to defund rural England.
Gideon Amos (Taunton and Wellington) (LD)
I congratulate the hon. Member for South Shropshire (Stuart Anderson) on securing this debate. This has been a year of records for Taunton, Somerset and the Somerset levels: the Environment Agency reported the wettest week on record for at least 30 years, and in January, the River Tone and the River Parrett received 207% of the long-term average for January rainfall.
The result of that was a massive and record reporting of potholes. One Blagdon Hill resident pointed out to us that the problem goes back 10 years to the period when the Conservatives running the county council reduced funding for highways. At the same time, the Government have reduced Somerset’s funding by removing the remoteness uplift of £20 million per year. The record I want to finish my speech on is that the council has just approved £160 million to be spent over the next three years on highways and potholes. That is a record amount, and at no other time have so many potholes been filled by Liberal Democrat councillors.
John Milne (Horsham) (LD)
In the last 20 years, traffic on locally managed major roads has fallen by around 5%, yet damage has never been worse. Why? Because rural routes are carrying traffic they were never designed for. Heavy goods vehicles are increasingly using villages such as Cowfold, Colgate and Lower Beeding in my constituency as rat runs. In the past five years, the A272 corridor, which has surprisingly been classified as a “primary route” despite slicing through a tiny, narrow village, has seen 79 casualties.
What should happen? First, the coming fair funding settlement will penalise rural councils for making the mistake of being rural, and we need to change that. Secondly, villages need greater freedom to set their own speed limits, reflecting the risks on narrow rural lanes for pedestrians, riders and drivers. Thirdly, the Government must intervene to ensure that commercial HGV satnavs follow the best routes, not simply the shortest ones.
Olly Glover (Didcot and Wantage) (LD)
It is a pleasure to serve under your chairship, Mr Stringer. I thank the hon. Member for South Shropshire (Stuart Anderson) for introducing this very important topic. He made some important points in his speech, and he was on to a strong one when he talked about the importance of remoteness and rurality as a factor in local authority costs that should be taken into account with funding. As we have heard from several hon. Members, the Government’s changes to local government finances are going to have a hard impact on rural areas that are already struggling with this critical issue.
We have heard from hon. Members from many counties today. I am going to list them all, because it illustrates the national nature of the issue, although we all have the temptation to think that it is down to which parties run local authorities and which do not. We have heard two examples each from Shropshire and Sussex; examples from Surrey, Buckinghamshire, Bedfordshire, Kent; two each from Wiltshire, Yorkshire, Somerset; and examples from Nottinghamshire, East Sussex, Gloucestershire, Hertfordshire, the Scottish highlands, Cambridgeshire and Cumbria. That is an enormously diverse geographical list and shows the sheer scale of the problem that we are facing. In my Oxfordshire constituency of Didcot and Wantage, I have repeated examples of major problems with roads that really drive people mad, particularly the A417 through Mellors Garage, Challow station, Stanford, and Shellingford crossroads. There are also problems on the A417 through Upton and Blewbury, and on many roads in Didcot. They are just a few examples.
Many residents look to the current council for responsibility, but the reality is that this is a long-term issue and, as my hon. Friend the Member for North Shropshire (Helen Morgan) mentioned, it is the legacy of the previous Conservative Administration who, in Oxfordshire, implemented a “managed decline” policy in 2014. That was partly driven by national funding constraints. Today’s debate proves that this is a nationwide crisis and that we should treat it as such.
Poorly lit, often narrow and fast rural roads are far more dangerous than urban ones. According to road safety charity Brake, road users are three times more likely to be killed on a rural road than an urban road. That is an indictment of the previous Conservative Government’s utter neglect of Britain’s roads, with the total maintenance backlog now standing at more than £18 billion. The 2026 annual local authority road maintenance survey estimates that 16% of the local road network in England and Wales is “in poor condition”. It is costing road users dearly, with research suggesting that UK drivers are paying, on average, more than £300 a year to repair damage caused by potholes, and rural drivers highlight worse conditions than urban areas.
It is not just drivers. A 2022 survey by Cycling UK found that
“21% of cyclists have been involved in an accident because of a pothole”
and among those, 22% suffered a personal injury; 88% of riders reported having to take a dangerous manoeuvre to avoid a road defect, and 63% experienced bike damage due to poor road surfaces. The current road maintenance guidance focuses primarily on when defects damage motor vehicles—a criterion that fails to capture the far lower threshold at which cyclists can be catastrophically harmed. Perhaps adoption of that higher standard for repairs could also move us closer to a greater focus on prevention and preventive works.
This issue relates to a wider crisis in local government finances, with the cost of social care and special educational needs provision accounting for an ever-growing proportion of local authority budgets. In that context, the Labour Government’s decision to cut Oxfordshire county council’s central Government funding by £24.1 million over three years is a grave concern. Clearly, money is a big part of the problem we face, but perhaps the Minister can share what the Government are doing to learn from other countries and to look at better approaches to road design, maintenance and repair.
Rebecca Paul (Reigate) (Con)
A key point to make is that potholes are often a symptom that roads have not been resurfaced at the right time. In reality, we have billions of pounds in community infrastructure levy funds that are sitting across the country, often just earning interest. They are not being invested in resurfacing roads or our drainage system. Does the hon. Gentleman agree that we can better spend that community infrastructure levy money and ensure that it is put into roads? That often means making sure that—
Graham Stringer (in the Chair)
Order. I noticed that the hon. Lady arrived very late to the debate. It is not allowed, particularly in a massively oversubscribed debate like this, to come in and intervene.
Olly Glover
Councils certainly can do more to better spend the community infrastructure levy, but that partly takes account of the wildly complicated planning system and the negotiations that are needed with developers for both that and section 106.
Perhaps the Minister could share what the Government are doing to learn from other countries and to look at better approaches to road design, maintenance and repair. From my travels in, for example, Ireland, Germany and the Netherlands, potholes are either unknown or very rare. If I can briefly deviate from my usual tendencies towards pessimism and cynicism, and lead my colleagues to wonder about my wellbeing, in an ideal world I wonder whether this debate shows that we should try to move away from pretending that the main issue is who, from a party perspective, runs our councils. It is far more about central Government versus local government, how our local government is structured and funded, and unsustainable local government expectations, given the funding that they are provided. We need significant reform on that, so that we can get our roads in a better place.
Greg Smith (Mid Buckinghamshire) (Con)
It is a pleasure to serve under your chairmanship, Mr Stringer. I congratulate my hon. Friend the Member for South Shropshire (Stuart Anderson) on securing an incredibly important debate for all of us who represent rural communities. If there is one issue that unites motorists across our country, and certainly across Buckinghamshire, it is that our roads are simply not good enough.
In rural areas, roads are not a convenience; they are a necessity. They connect people to work, school, healthcare and family, yet too often, as we have heard this afternoon, those roads are deteriorating before our eyes. The national picture is stark. As others have said, the backlog for road repairs now stands at £18.6 billion. Local rural roads are resurfaced, on average, only once every 90 years. That is not maintenance; it is neglect.
The AA recorded over 613,000 pothole-related call-outs in 2025, an average of 1,679 every single day. The Royal Automobile Club has reported a sharp surge this year, with February alone seeing more than 6,000 pothole-related breakdown reports. Meanwhile, compensation claims to councils have risen by over 90% in just three years, yet the vast majority are rejected. Motorists are paying twice: once through their taxes and again through their repair bills.
First, we must recognise the growing strain on our road network. Much of our local infrastructure, particularly in rural counties like Buckinghamshire, was never designed for the volume and type of traffic that the roads now carry. Many roads began life as literal cart tracks, without the deep foundations needed to withstand modern use.
The state-mandated transition to battery electric cannot be divorced from infrastructure realities. Electric vehicles are significantly heavier than their petrol and diesel equivalents, particularly in goods vehicles. The physics is simple: as weight increases, the damage inflicted on road surfaces increases exponentially. Yet there has been very little acknowledgement from Government of how the increased wear will be managed, or how dealing with it will be funded.
We must also consider the impact of major infrastructure projects, of which we are seeing the misery at first hand in my county. High Speed 2 has brought thousands of additional heavy goods vehicle movements on to rural roads that were never designed for such use. The result is roads being churned up at an alarming rate. Too often, the burden of repairing that damage falls on local authorities and local taxpayers, which cannot be right. Where infrastructure projects cause damage, they must fix it. It is incumbent on HS2, as much as other projects, to fix what it breaks. We have seen that it can be done: projects such as East West Rail have resurfaced rural roads where construction traffic has taken its toll. HS2 must follow that example.
On the question of funding, in Buckinghamshire there is a £210 million road repairs backlog, alongside significant financial pressures on the council. Despite that, the council carried out over 30,000 repairs last year, and even released additional funding from reserves to try to tackle the problem, finding a highways repair budget of £120 million. But that is not sustainable as the Labour Government take £44 million of spending power away from Buckinghamshire.
The situation in Buckinghamshire is not unique. As we have heard from places such as Oxfordshire, councils across the country are repairing millions of potholes each year, yet the backlog continues to grow. Even with increased national funding, the gap between what is needed and what is delivered remains substantial. We cannot continue to pile pressure on to a system that is already at breaking point, so what is needed is clear: we need honesty about the scale of the challenge and sustained long-term spending that matches the backlog, not short-term sticking plasters. We are beyond pothole repair and into an era when we need full resurfacing.
We need fair funding for areas facing significant infrastructure pressures; all too often it is rural communities that are being let down. We need accountability so that those who damage our roads pay to repair them. For my constituents, and rural communities across the country, driving today feels less like a journey and more like navigating a patchwork obstacle course.
Graham Stringer (in the Chair)
Minister, if you could, please leave a minute or so at the end of your contribution for the Member in charge to wind up.
The Parliamentary Under-Secretary of State for Transport (Lilian Greenwood)
I shall attempt to do that. It is a pleasure to serve, with you in the Chair, Mr Stringer. I congratulate the hon. Member for South Shropshire (Stuart Anderson) on securing today’s debate on the condition of roads in rural areas.
First, let me respond to some of the hon. Member’s points. He suggested that his local authority, Shropshire council, has seen its funding for local roads maintenance cut. It has not. In 2024-25, Shropshire received £23.2 million. For 2025-26, the figure is £33.7 million—more money to fix more roads and to undertake preventive maintenance.
The hon. Member suggested that Shropshire council does not have certainty of future funding. It does. For the first time, councils have multi-year funding for local roads maintenance. We have given them four years of funding, specifically to allow them to plan ahead.
The hon. Member also suggested that Shropshire will not receive its incentive funding. There is no reason to believe that is the case. Last year, only one local highway authority out of 154 did not receive its incentive payments. If an authority does what we have asked of it, there is no danger of it not receiving that incentive payment.
Lilian Greenwood
Let me make a bit more progress and then I will, of course, come back to the hon. Member.
We all recognise that rural Britain depends on reliable, safe and resilient roads. When those roads fall into poor condition or suffer flooding, the impacts on rural residents and businesses—often with limited alternative routes—can be significant. As numerous Members highlighted, potholes are costly and dangerous to drivers, bikers, cyclists and pedestrians.
Lilian Greenwood
I will not just now. I am going to make some progress.
There is no question but that severe and persistent bad weather has taken a real toll on highways in all parts of the country. The very wet start to 2026 has made repairs more difficult and maintenance windows shorter. Local authorities in many areas have been working around the clock to make emergency repairs and keep local people safe.
But weather alone does not explain the scale of the problem. We must also be clear about the historical underfunding of our local roads networks. The Conservative spokesperson, the hon. Member for Mid Buckinghamshire (Greg Smith), talked about neglect, and he is right to do so, because that is precisely what happened under the previous Government. Years and years of short-term funding settlements have made it difficult for councils to plan ahead, invest in preventive maintenance or build resilience into their networks.
Lilian Greenwood
Not right now.
Rural residents are all too familiar with the reality, which is why this Government have taken decisive action. We are providing record funding for local highways maintenance, supporting councils not only to repair damage caused by recent winters but to break the cycle of deterioration that has built up over more than a decade.
Sean Woodcock
I am grateful to the Minister for outlining the steps the Government are taking to make up for the years of underfunding of council highways by the Opposition parties. The Liberal Democrat spokesperson tried to defend Oxfordshire county council; will the Minister address what that council has done? I get complaints from constituents about the quality of the work. The newly repaired Stratford Road in Banbury has already disintegrated to expose under-street cables.
Lilian Greenwood
My hon. Friend is right to raise his concerns. It is of course the case that, where local authorities undertake repairs, we want them to be proper, permanent repairs that do not immediately deteriorate.
Lilian Greenwood
The funding formula for local roads maintenance has not changed under this Government, and all local authorities, urban and rural, are receiving additional funding—an additional £500 million for local roads maintenance this year—as part of the largest uplift to the highways maintenance block in England’s history. Over the next four years, we are delivering a record £7.3 billion funding package, giving local authorities the long-term certainty they have asked for time and again. This is not a one-off: it is a sustained shift in how we fund roads, designed to empower councils to move from reactive repairs to genuinely strategic network management.
Lilian Greenwood
Not right now. The Transport Committee in the previous Parliament specifically asked for that change.
We are also making sure that taxpayers know how money is being used. Every local highway authority is now required to publish clear, accessible information on the condition of its roads, its maintenance plans and how it is investing the uplift it has received. That goes precisely to the point made by my hon. Friend the Member for Luton South and South Bedfordshire (Rachel Hopkins) on accountability.
The transparency reports help residents to understand what is being delivered, and ensure that authorities remain accountable for the outcomes they achieve. The reports are a tool for public confidence and a driver of improvement, and there are already encouraging signs. Last year, for the first time since 2017, the proportion of local roads receiving maintenance treatment increased.
Alongside better reporting, we are updating the well-managed highway infrastructure code of practice, which is the cornerstone guidance for risk-based asset management. We want to ensure that it reflects new technologies, climate adaptation needs and modern expectations of highway resilience. The UK Roads Leadership Group and industry experts are leading the comprehensive refresh. We are working with AtkinsRéalis, which has 20 representatives in the World Road Association, so I hope we are learning from the international best practice raised by the Liberal Democrat spokesperson, the hon. Member for Didcot and Wantage (Olly Glover). We expect the new guidance to be issued later this year.
The focus on improving guidance goes hand in hand with strengthening the capability of the sector. Last summer, we provided funding for the UK Roads Leadership Group to deliver a programme of climate resilience workshops for local highways authorities. The sessions brought together practitioners and experts to strengthen emergency response and to improve preparedness for the increasingly severe weather and climate-driven hazards we face, supporting our wider climate adaptation strategy for transport, which was published in December.
As we improve resilience, we are also helping councils to adopt new and innovative approaches to managing their networks. Rural authorities are directly benefiting from the Government’s £30 million Live Labs 2 programme, which tests new ways to decarbonise local highways. Maintenance projects include a Devon county council scheme that is using the A382 upgrade to trial new materials, digital technology and working practices to cut emissions across construction and operations. In the East Riding of Yorkshire, I have seen for myself how teams are exploring low-carbon street-lighting alternatives such as solar-powered studs and highly reflective markings, to reduce reliance on traditional lighting on rural routes.
Similarly, I have seen local authorities across the country using new machinery and new technology to improve the quality of their road repairs. In West Sussex and South Gloucestershire, the Greenprint project is developing and testing sustainable construction materials with direct application to mixed rural networks.
To conclude, this Government will continue to stand behind rural communities and the councils that serve them. We will continue to invest at record levels and to support local authorities to improve and maintain their roads, so that every rural resident, no matter where they live, benefits from a network that is safer, stronger and built for the future.
Stuart Anderson
I thank the Minister for winding up, and I want to respond to two of the points she made. We talked about the funding, but we were calling for funding up to 2032, not 2030; and the incentive payment that was withheld is still withheld—it is not with Shropshire council, so it cannot plan when it does not know that the money will come through.
Stuart Anderson
I would, but I do not have the time, so I will talk to the Minister afterwards. I invite her to South Shropshire to see the roads, many of which are not suitable for driving many cars on. Whatever plan she outlined, it is not suitable to my constituency. The rural services delivery grant really hurt South Shropshire. The removal of “remoteness” in respect of local government funding is absolutely hammering us. We are not able to provide the services that our constituents need. Roads are now in a state, and people are cut off and remote. The roads are in a state and I invite the Minister to come to see them. They are in a bad way, with an impact on cars, business, the economy and safety. This is a major issue, as we heard throughout the debate. We need more funding in South Shropshire to sort out the problem.
Question put and agreed to.
Resolved,
That this House has considered the condition of roads in rural areas.
Written Statements
Mais Speech
(1 day, 4 hours ago)
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The Chancellor of the Exchequer (Rachel Reeves)
I am updating the House on the Government’s economic plan to increase living standards, build resilience and bolster the security of the UK economy.
Today, I am reaffirming and building upon what I set out in my 2024 Mais lecture: that in this age of insecurity, the right solution for Britain’s economy is “securonomics”. This is a strategy for building secure and resilient growth by increasing public and private investment through an active and strategic state which works in partnership with business, steps up its role in expanding the supply side of the economy, and makes conscious and deliberate choices about the sectors in which we pursue leadership and the capabilities we must protect or grow.
In Iran and the middle east, we are witnessing further symptoms of that age of insecurity. This week, the Government have intervened to protect the most vulnerable households reliant on heating oil, who are not shielded by the energy price cap, and we have been clear that any exploitation of the crisis for excess profit will not be tolerated.
The effects we have already seen are likely to put upwards pressure on inflation in the months to come. However, the actions that this Government have taken to secure our economy and our national resilience have put us in a better position to respond. We have substantially uplifted defence spending, with £270 billion investment planned over the spending review. Our energy security plan is taking effect, with the UK importing 17% less gas in 2025 than we did in 2021, and from next month, the energy price cap will be £117 lower.
The age of insecurity affects every country. But since the global financial crisis, the UK has experienced the sharpest slowdown in productivity growth of any G7 economy compared with the pre-crisis trends. To address this, we must capitalise on our strengths as set out in the modern industrial strategy and fix our structural weaknesses, and the mistakes of the past caused by a passive state that believed markets should be left to their own devices and that growth could be built on a narrow geographical base of too few places.
The Government’s plan for righting these wrongs is securonomics. Securonomics provides a response to a more unstable world, prone to shocks, by focusing on economic security for working people, by increasing domestic productive capacity in areas of strength or strategic importance, and by working closely with international allies to build more resilient supply chains. Since 2024, the Government have been pursuing this strategy, and driving growth through stability, investment and reform.
Rather than turning back now, the Government must continue to take active, bold decisions. That is why we are going further on our three big choices: empowering regional growth, embracing AI and innovation, and establishing a closer relationship with the EU.
I want every part of Britain to do well. The Government have already committed to this agenda: we published the regional growth strategy in 2024, and our National Wealth Fund is already supporting local places to build on their existing strengths: investing in wind power in Orkney and critical minerals in Cornwall, while building on the north of England’s strengths to create a global clean energy supercluster. Meanwhile, our growth mission fund is driving local growth across Britain through projects such as Kirkcaldy high street, the Peterborough sports quarter and the reopening of Southport pier.
I am now going further to drive regional growth across the UK. I am backing Britain’s cities and ensuring towns do not lose out by connecting them into those city regions through better transport, housing and skills. This includes accelerating action in the Oxford to Cambridge growth corridor, doubling the Government’s initial commitment by making over £800 million available for up-front land acquisition and infrastructure to help unlock land for new homes. I am providing £2.3 billion of new grant, loan and patient capital funding over five years for city investment funds, with up to £1.7 billion going to mayors in the north. This funding will go directly into hands of mayors in major city regions to deliver city densification, supporting priority projects in local growth plans and development in the areas around Northern Powerhouse Rail stations. I am also backing growth-driving sectors by investing over £150 million through the industrial strategy-8 cluster programme in areas across the north.
Looking ahead to autumn Budget, I can also confirm that I have asked my officials to work with mayors, businesses and other experts to develop a road map for future fiscal devolution. This will set out plans to give regional leaders control of how they allocate a share of some national taxes that for too long have been allocated by central Government, looking at income tax alongside other taxes. To ensure that Government are achieving our objectives of providing our mayors with the long-term certainty that they need to invest in the foundations of growth in a way that is practical and responsible, the development of this road map will be guided by four key principles: empowerment, accountability, sustainability and fairness. This is not about new taxes or higher tax rates. I will not ask taxpayers to pay more. Reforms will be fiscally neutral, focused on sharing and retaining a portion of existing revenues, with the proceeds of growth benefiting the places that generated them.
I am also committed to going further on innovation and AI. This will ensure the UK is a world leader in AI and will enable us to benefit from the clear opportunities AI presents, while managing the risks. We are taking concrete steps to make the UK the best place for innovative firms to start, scale and stay, with a £500 million sovereign AI unit, regulatory reforms to support safe and trustworthy adoption of innovative products and services across the economy, including responsible AI applications, an AI adoption summit and a commitment worth up to £2 billion to fund quantum technologies over the next decade—including up to £1 billion to procure commercial-scale quantum computing capabilities. We want to ensure that AI serves in the interests of working people, creating good jobs that pay well, and security and hope for the future. That is why we are setting up a new AI economics institute to work with the future of work unit to understand the impact of AI on our productivity and labour markets. In January, we announced our ambition to upskill as many as 10 million workers through our AI skills hub, alongside providing £27 million to kick-start the Government’s techlocal scheme and AI scholarships at top UK universities to link training and industry.
I am also reaffirming the Government’s commitment to strengthening our partnerships with the EU to increase our resilience and our trade opportunities. We have seen instability on Europe’s border, in the middle east and in our economy—not aided by the costs of a damaging Brexit. We need to deliver security amid this volatility, strengthening resilience in the economy and stabilising trading conditions for businesses. There is now a strategic imperative for deeper integration between the UK and EU, and so today I set out more detail on the Government ambition to strengthen our relationship with Europe to benefit both partners. There are red lines in the national interest, but we choose growth and security over instability and decline, and so will be prepared to align with EU rules: if it boosts long-term growth, consumer benefits and jobs, if it fits with stable and compatible policy goals, and if it protects or strengthens the UK’s security and resilience. This is all while keeping the option of regulatory autonomy where needed in strategically important sectors.
Further supporting our commitment to defence and security, and strengthening our wider international relationships, I can also announce today that a core group of NATO allies—Finland, the Netherlands, and the UK, together with other partners—are exploring setting up a new mechanism for financing by 2027. This has the aim to aggregate demand, drive joint procurement, accelerate defence investment, and increase the availability of critical capabilities such as munitions as we step up shared defence and security commitments.
All announcements are funded from within existing departmental budgets within the current spending review period, except for the city investment funds and additional Ox-Cam financial transactions, which will be accounted for at Budget 2026.
This is the right economic plan in this age of uncertainty. I look forward to continuing to update Parliament as we pursue this strategy to deliver for the UK economy.
[HCWS1413]
Local Media Strategy
(1 day, 4 hours ago)
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The Secretary of State for Culture, Media and Sport (Lisa Nandy)
Today the Government launch our local media strategy, “Amplify: The Local Media Action Plan”, setting out our plans to support the sustainability of local journalism in the UK and empower communities through a thriving local media that highlights the issues that matter to them, helping to drive community wellbeing, social cohesion and local growth.
Local media plays a vital role in the fabric of our society, keeping citizens informed about decisions and events that directly affect them, scrutinising the activities of local public services and other institutions, and helping to reflect the views and perspectives of citizens and communities.
As audiences converge online, the business models of many local media outlets have been challenged, posing a risk to the sustainable provision of high-quality, trustworthy news and information at local level.
The local media action plan outlines our proposed approach to tackling these challenges, building on previous studies into the sustainability of public interest journalism in the UK, including the Cairncross review and inquiries conducted by the Culture, Media and Sport Committee and the Lords Communications and Digital Committee. Our approach is based around three central pillars.
Financial sustainability in the short-to-medium term
We will support the industry’s existing innovation to accelerate the transition toward sustainable, digital-first business models by:
Launching a multi-year local news fund of £6 million in the first year—and up to a further £6 million in the second—to invest in digital innovation and infrastructure, ensuring funding is distributed in ways that benefit a broad range of local news providers and the diverse communities that they serve.
Increasing DCMS community radio funding to £1 million per year to strengthen the vibrant community radio ecosystem.
Making best use of local media as a key trustworthy channel for Government advertising and public information campaigns, for the benefit of both local media and audiences.
Meeting long-term challenges of changing audience habits
We will ensure that local media reaches younger audiences and thrives alongside BBC and the largest tech firms by:
Starting in the north-west, launching an inspiring the future campaign, to connect local media to schools, building news literacy and inspiring the next generation of journalists.
Ensuring young people from all backgrounds and in all parts of the country have access to high-quality local journalism.
Ensuring through the BBC charter review process that the BBC does more to support local media diversity, including future-proofing the local democracy reporting service.
Exploring greater transparency options and developing a healthy licensing ecosystem between AI developers and rightsholders including local media, helping local news providers to adapt to the emerging challenges of AI-generated news summaries.
Incentivising public interest news
We will make it easier for journalists to scrutinise local institutions and conduct other public interest news-gathering without fear or favour by:
Establishing a best practice framework for engagement between journalists and public services through a new regional media forum, in partnership with the West of England combined authority.
Consulting on the future of statutory notices to ensure they continue to support both community awareness and journalistic scrutiny.
Refreshing the national action plan for the safety of journalists to assess and mitigate the specific risks faced by local reporters.
A thriving local media is essential to a healthy democracy and a cohesive country. This action plan presents a robust programme of work in support of this vital industry but it is also only the beginning of our commitment to support local media. We intend to monitor our progress, and the impact on our communities and on citizens, over the coming years, and will provide a short annual update to summarise and track progress.
Our country is richer for the diversity of voices, views and experiences in every nation and region, and those voices will be heard.
[HCWS1414]
Online Advertising Taskforce Progress Report 2025
(1 day, 4 hours ago)
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The Minister for Creative Industries, Media and Arts (Ian Murray)
The online advertising taskforce is today publishing its progress report for 2025, summarising work carried out since publication of its last progress report, covering 2023-24.
The taskforce brings Government and the advertising industry together to help improve trust, transparency and accountability in advertising. It specifically works to reduce harms, tackle illegal advertising and minimise the advertising served to children for products and services illegal to sell to them.
Six industry-led working groups have continued to work across our priority areas to improve the evidence, develop and enhance voluntary initiatives or standards, and identify any gaps in industry initiatives where they already exist. These groups have membership from across the online advertising ecosystem, including regulators and Government, with working groups covering age assurance, the use of AI, influencer marketing, information sharing to counter malvertising, the Internet Advertising Bureau UK’s gold standard, and principles for intermediaries and platforms in their hosting of online adverts.
I chaired meetings of the taskforce on 10 November 2025 and 26 February 2026, and commend the group for the progress it has led across the online advertising ecosystem.
Specifically, I want to highlight progress to understand the impact of AI in advertising, and welcome the publication of the Advertising Association’s best practice guide for the responsible use of generative AI in advertising: https://adassoc.org.uk/our-work/best-practice-guide-for-the-responsible-use-of-generative-ai-in-advertising
This was developed under the auspices of the taskforce’s AI working group and is now being adopted across the sector. Similarly, the influencer marketing working group has driven adoption of the influencer marketing code of conduct: https://www.isba.org.uk/knowledge/isba-imtb-influencer-marketing-code-conduct-version-4
The taskforce estimates to now cover over 50% of the relevant market. I also welcome indicative findings from the taskforce’s age assurance working group that online and platform targeting tools are largely effective in ensuring children are not served adverts for age-restricted products. Finally, the information sharing working group has made significant progress in removing barriers to cross-platform information sharing on malvertising, with a live pilot already allowing real-time information sharing between trusted partners. Further details of the focus and achievements of working groups are set out in the progress report: https://www.gov.uk/government/publications/online-advertising-taskforce-progress-report-2025
While I warmly welcome this progress, there remains significant work to do. The continued work of the taskforce and its working groups is vital for understanding and addressing issues in the online advertising sector, and the progress report published today presents a forward plan for 2026.
As part of that, I am keen to ensure that the taskforce increases focus on transparency in the online advertising ecosystem, with particular work to tackle fraudulent advertising. In response to this renewed focus, the taskforce has agreed to stand up a new ad fraud and standards working group to focus specifically on issues of fraud, scams and malvertising in online advertising. This group will be co-chaired by Government and the Internet Advertising Bureau UK, and will report back to Ministers in 2027.
The progress report is published on gov.uk today, and I will place a copy of the report in the Library of each House.
[HCWS1407]
Flood Defences: Investment
(1 day, 4 hours ago)
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The Parliamentary Under-Secretary of State for Environment, Food and Rural Affairs (Emma Hardy)
Storm Chandra brought heavy rain and flooding to the UK in January. I want to again acknowledge the vital work of local authorities which were badly impacted by the flooding, such as those in Somerset, Dorset and Teignbridge district. My thanks also to the vital work of the emergency services, members of the internal drainage boards, the voluntary community and faith sector, and others who responded. Approximately 24,500 properties were protected by Environment Agency assets across all locations.
This is not an isolated event. That is why in the last 18 months, this Government have built our resilience to these events.
As well as investing £2.65 billion in flood defences in our first two years, and funding actions to make farmland more resilient to the effects of flooding and climate change, we moved quickly once in Government to establish a flood resilience taskforce to provide oversight of national and local flood resilience and preparedness.
The taskforce has been working since September 2024 and has reviewed readiness helping us be in a better position before the storms came, it’s also secured training for over 1,500 emergency responders, introduced an improved forecasting service for surface water flooding and a new risk vulnerability tool, to help better identify those communities most vulnerable to flooding. The taskforce includes DEFRA, Cabinet Office, MHCLG and DFT Ministers, representatives from the Environment Agency, Met Office, local resilience forums, and the National Farmers Union.
Yesterday, I chaired the sixth meeting of the full taskforce which focused on the national and local response to this autumn and winter’s flooding. We considered wider societal flood resilience, the Environment Agency’s refresh of its national floods and coastal erosion risk management strategy, and an update on progress of the implementation of the FloodReady report.
After more than a decade of under-investment by the previous Government in the flood defence schemes needed to protect our homes, this Labour Government are investing £4.2 billion over the next three years—2026-27 to 2028-29—to construct new flood defence schemes and maintain and repair existing defences across the country.
Today, I am pleased to announce how we will invest the £1.4 billion we secured for the first of those three years—2026-27—in over 600 flood defence schemes spanning every region of England.
The schemes include a range of different types of flood defence projects: natural flood management schemes, beach management, and the construction of major barriers to help protect coastal and inland communities.
To name just a few, £8 million will be invested in the Pevensey bay to Eastbourne coastal management scheme, helping to protect over 18,000 properties at risk from coastal flooding; £37 million will be invested into the second phase of the “Our City Our River” scheme, a major flood alleviation and regeneration programme along the River Derwent in Derby; and in the north-west, £15 million will be invested in the Preston and South Ribble flood risk management scheme. The scheme is designed to reduce flood risk and provide protection for around 5,000 homes and businesses and also includes measures to address climate change, enhance local environments, and support growth and regeneration in the surrounding communities.
A map and list of all the schemes that will receive funding in 2026-2027, published on gov.uk, demonstrates how this investment will benefit communities in every part of the country which is available in “Programme of flood and coastal erosion risk management (FCERM) schemes”:
https://www.gov.uk/government/publications/programme-of-flood-and-coastal-erosion-risk-management-schemes#full-publication-update-history
As well as funding new defences, our investment will fund the maintenance of our existing defences. More than £260 million will be spent in 2026-27 managing, maintaining and repairing Environment Agency assets, including those damaged by Storms Goretti and Chandra, ensuring vital protections remain strong when communities need them most.
Looking beyond 2026-27, the new flood defence investment programme will benefit 840,000 properties over the next 10 years and protect communities across the country from the devastating impacts of climate change. Backed by a record long-term capital investment of £7.9 billion, this will be the largest floods investment programme in history.
Through the delivery of natural flood management schemes, the new programme will also enhance our environment. And by unlocking house building, protecting businesses small and large, safeguarding innovation and increasing investor confidence, the new programme will drive economic growth.
The new programme includes several key changes and improvements from the previous one, helping us get the most from every pound of investment.
Thanks to a new funding policy announced in October 2025, funding will be simpler to apply for and there will be a wider spread of flood resilience interventions, including more sustainable drainage and property flood resilience projects as well as more natural flood management.
We have already stabilised the condition of our flood protection measures, arresting the decline seen during the previous 14 years. Recognising the growing pressure on existing assets, refurbishment of existing flood defences will be treated on an equal footing with new projects in the new programme, ensuring vital repairs that cannot be addressed through routine maintenance are eligible for the funding.
To bring in as much investment as possible, changes to the funding formula will also mean that securing funding from partners outside of Government make a proposed new flood defence project more likely to secure Government funding. This change, alongside efficiencies gained through the increased use of technology such as drones, satellites and artificial intelligence, will help make every £1 of Government investment in flood defences go even further.
Overall, this Government will invest more than £10.5 billion in flood defences by 2036, and this investment will see a remarkable return—for every £1 invested we expect to see around £8 of benefits.
This record investment into the biggest floods investment programme in history once again demonstrates that protecting communities around the country from flooding is a genuine priority for this Government. But this has been clear since the start.
[HCWS1406]
Neighbourhood Health Framework
(1 day, 4 hours ago)
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The Minister for Care (Stephen Kinnock)
Today I would like to inform the House about the publication of the neighbourhood health framework, which outlines the next steps that we are asking the NHS and local government to take—working with civil society—to deliver neighbourhood health.
Neighbourhood health is at the heart of the 10-year health plan and our mission to build an NHS fit for the future. It is underpinned by three shifts—hospital to community; treatment to prevention; analogue to digital—and neighbourhood health is pivotal to all three.
The shift to a neighbourhood health service will ensure that services are easier for people to access and professionals to deliver, with multidisciplinary teams that work together to reach people earlier, to support them to stay well and live independently, and to prevent needs escalating. This joined-up approach will deliver more preventive, personalised and digitally enabled care.
The framework builds on our previous publications, such as the NHS medium-term planning framework for 2026-27 to 2028-29, the strategic commissioning framework for integrated care boards, and the better care fund framework for 2026-27. We know that there are already strong examples of neighbourhood working across the country. The neighbourhood health framework aims to provide clarity and consistency for local leaders to develop and scale their neighbourhood health services and plans.
The neighbourhood health framework outlines a minimum set of interventions that all ICBs should deliver over the next three years. While reforms will be led locally, we have heard from systems that there are many common-sense actions that work well everywhere—these actions are the building blocks of successful, joined-up neighbourhood health services. Importantly, this set of interventions is not the ceiling of neighbourhood health, but the foundation on which local priorities will be built. The framework is designed to create the conditions for local leaders to succeed, giving them the flexibility to design services that best meet the needs of their local communities.
The framework outlines 10 core steps that we are asking local government and ICBs to take in 2026-27, including agreeing neighbourhood footprints and confirming intentions to use pooled funding under the better care fund. Progress made in 2026-27 will form the basis for action in 2027-28, when, working through health and wellbeing boards, ICBs and local government are expected to develop local neighbourhood health plans.
Central to our plans are neighbourhood health centres, which will bring care closer to where people live. Our ambition is for there to be a neighbourhood health centre in every community. To kickstart delivery, in the 2025 autumn Budget we announced our commitment to deliver 120 neighbourhood health centres by 2030, and 250 by 2035, funded through a mix of public-private partnership and public capital, and starting in the areas of greatest need.
At the heart of our work to deliver neighbourhood health are people, particularly those working hard across health and care, wider local government, and with our civil society partners. Through their efforts, we will see increased and improved join-up between public services, as multidisciplinary, cross-sector teams work in a system that focuses on keeping people well, using the workforce, funding and local assets to their best effect. We recognise that the current system is too siloed, and we are committed to supporting the culture change that is a prerequisite for building the seamless, integrated, person-centred care that patients and the workforce are crying out for.
The 10-year workforce plan will set out aggregate assumptions and scenarios to inform local NHS workforce plans when published later this year.
We will support local systems to deliver through the national neighbourhood health implementation programme, which will build capability and identify success criteria for the scaling of new neighbourhood health models. So far we have launched the national neighbourhood health implementation programme across 43 places in England.
We will also support ICBs to commission new outcomes-based neighbourhood health services through the development of contractual levers, including single neighbourhood provider and multi-neighbourhood provider contracts. We will also support the goals of neighbourhood health in national reform agendas, such as Best Start family hubs, Pride in Place initiatives, local Get Britain Working plans, and workwell.
I am proud to be the Minister driving neighbourhood health. I have seen that every day across health, care and wider local government, people work tirelessly to improve our services and make them better for communities. Neighbourhood health is the beginning of an exciting new chapter in how we build an NHS, and wider health and care system, fit for the future.
[HCWS1411]
Local Government: Best Value
(1 day, 4 hours ago)
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The Secretary of State for Housing, Communities and Local Government (Steve Reed)
I have previously updated the House on this Government doing what it takes to fix the foundations of local government. That includes taking prompt and direct action when councils are failing their best value duty. In that context, today I am updating the House on the steps we are taking in Tower Hamlets.
On 19 January, I informed the House that, having carefully considered the evidence, I was concerned that a year into the statutory intervention, the council was not making sufficient progress and had not understood the severity of its situation or moved beyond planning for improvement into action and impact. I considered that the council was not yet complying with its best value duty in relation to continuous improvement, governance, leadership, culture and partnerships, and that the evidence amounted to new failure to comply with the duty in relation to its use of resources. I therefore proposed changes to the current intervention package to accelerate and strengthen the required improvement work, and invited the council and other interested parties to provide representations on the proposals by 2 February.
I received five responses. I also received the envoys’ second report, which I am publishing today. The envoys recognise the progress the council has made in some areas, including engaging more effectively with its partners, the delivery of a staff survey and the development of a more mature continuous improvement plan. They conclude, however, that
“the overall pace of change and the grip of the officer and member leadership to drive improvement is insufficient.”
They describe the council’s leadership as “unnecessarily defensive”, noting that their energy is centered on
“managing the message and writing a plan, rather than on deeper ownership of the council’s issues and driving forward key deliverables".
The envoys welcome the proposed package and believe that it will support a necessary shift in the approach of the council’s leadership.
I have carefully considered the representations, the envoys’ second report and other relevant material. I am satisfied that the council is continuing to fail to comply with its best value duty, which includes additional failure in relation to its use of resources. I am also satisfied that the council is not yet making sufficient progress or demonstrating the required level of leadership grip under the existing model of intervention. I have therefore concluded that it is both necessary and expedient for me to exercise intervention powers under the Local Government Act 1999 as I have proposed, to accelerate and strengthen the improvement work, with some minor amendments, in order to:
Streamline the governance of the intervention,
Increase the transparency and scrutiny of the council’s reporting against its improvement journey, and
Clarify the scope and intended effect of the powers being issued to the envoys.
I have today issued the council with revised directions under section 15(5) and 15(6) of the 1999 Act which in summary require the council to
Continue to implement its continuous improvement plan in a timely manner, including action to continue to address the statutory recommendations and significant weaknesses identified by the council’s external auditor
Continue to achieve improvements in scrutiny, recruitment, transparency, procurement, contract management, internal investigations, officer structure and the scheme of delegation
Co-operate with the envoys to adequately resource and deliver the deep dive project into alleged misconduct at the council
Disband its transformation and assurance board and establish an envoy-led improvement board to oversee its delivery against the ministerial directions
Take appropriate action to ensure compliance with its best value duty in relation to leadership, governance, culture, partnerships and community engagement, continuous improvement and use of resources.
To safeguard the improvement process, the envoys will be able to exercise the following functions of the council, which are to be treated by the envoys as held in reserve. In summary, these functions are associated with the
Governance, scrutiny and transparency of decision making
Strategic financial management, financial governance and scrutiny of financial decision making
Operating model and redesign of local services, and
Recruitment, appointment, structure, performance management and dismissal of senior and statutory officers.
To reflect the need for additional finance expertise and capacity in the envoy team, I will appoint an additional assistant envoy with finance expertise in due course.
For the envoy model to be successful, the council and its leadership need to grip and drive its own improvement at pace, supported, challenged and overseen by the envoys. I want to be clear in my expectation that the council’s political and officer leadership now demonstrate true acceptance and ownership of the issues and embed improvement at every level of the organisation, with clear evidence of impact and progress. I expect the envoys to see a clear change in the current behaviours of the council’s leadership, and I know they will hold them accountable if change is not forthcoming.
Additionally, I would like to highlight to all members of the council that their individual and collective contributions to the council’s improvement journey are crucial to its success. It is disappointing that some members have demonstrated a lack of commitment to improvement thus far and it is my expectation that members from all parties can put aside their personal and political differences to prioritise constructive scrutiny and debate. It is time for all members to put the residents of Tower Hamlets first and contribute wholeheartedly to the council’s improvement journey.
As we approach local and mayoral elections this May, it is of upmost importance that all interested parties work closely together to deliver safe and secure local elections. I would also like to remind the council of the importance of adhering to the code of recommended practice on local authority publicity, particularly its principles of objectivity and even-handedness, especially in times of heightened sensitivity.
The revised directions take effect from today. The envoys will provide their next report on progress in the summer, with further reports as agreed with them. As with other statutory interventions led by my Department, the council will meet the costs of the envoys and provide reasonable amenities and services and administrative support. The envoys’ fees are published on gov.uk. I am assured this provides value for money given the expertise being brought in and the scale of the challenge.
I will review the directions and the envoys’ roles at the appropriate time, to ensure Tower Hamlets has the right support to secure its recovery and to protect the public purse. Subject to clear and sustained evidence of improvement, certain functions may be returned to the council ahead of the expiration of the directions. As set out in my 19 January statement, I remain committed to working in partnership with the London borough of Tower Hamlets to provide whatever support is needed to ensure its compliance with the best value duty.
[HCWS1410]
Inclusive and Sustainable Growth: Greater Oxford
(1 day, 4 hours ago)
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The Minister for Housing and Planning (Matthew Pennycook)
I am today setting out further steps that the Government are taking to expedite ambitious growth in Greater Oxford as part of our ongoing efforts to realise the full potential of the Oxford-Cambridge corridor.
The Oxford-Cambridge region is already a world-leading innovation corridor. Anchored by two of the world’s best universities, it is a hub for globally renowned science and technology firms, a breeding ground for internationally successful start-ups, and a magnet for talent and ambition. It has the potential to become one of the most innovative and economically dynamic areas in the world.
Maximising the full potential of the Oxford-Cambridge corridor requires us to identify and take advantage of the numerous growth opportunities that exist in the region. Oxford and its surrounding areas offer one such opportunity. Located at the western end of the corridor, Oxford already has one of the fastest-growing economies in the UK, driven by its world-leading technology, life sciences, and knowledge-intensive sectors from advanced manufacturing to artificial intelligence.
However, while the city and its environs are perfectly placed to deliver nationally significant growth to the benefit of existing and new communities and the country as a whole, numerous long-standing constraints risk undermining its full potential. These include inadequate transport connections, a lack of affordable housing, and energy and sewage capacity pressures.
In May 2025, I appointed Neale Coleman as chair of the Oxford Growth Commission and tasked him with identifying how best to unlock new development and accelerate growth across Oxford and its surrounding areas. The OGC’s interim report, published on 15 December 2025, recommended that a priority for the next 12 months should be consideration of the need for an appropriate delivery vehicle to support development in and around Oxford.
To take full advantage of Greater Oxford’s unique assets and ensure that we maximise its contribution to national economic growth, the Government are convinced that a bold place-based intervention is required to address the constraints it faces. I am therefore announcing today that we intend to consult on establishing a centrally-led development corporation to deliver nationally significant growth in Greater Oxford.
To ensure that such growth is inclusive and sustainable, and that its benefits will be felt by existing as well as new communities, we are committed to an ongoing partnership with local leaders, communities and residents. Their insights, knowledge and direct input will help shape the delivery vehicle’s ambition and focus. Should a decision be taken to establish a centrally-led development corporation, it is our intention that local democratically elected leaders would be invited to join the board. There will be opportunities to formally shape the Government’s proposals as part of the future consultation process.
Finally, to strengthen our commitment to supercharge growth in the Oxford-Cambridge corridor, I am pleased to announce that the Government will double its initial £400 million investment, meaning that up to £800 million will now be available to help bring forward development in this critical economic area.
We will continue to update Parliament on the Government’s work in Greater Oxford and the Oxford-Cambridge growth corridor.
[HCWS1412]
Family Courts: Child Focused Model
(1 day, 4 hours ago)
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The Lord Chancellor and Secretary of State for Justice (Mr David Lammy)
I am pleased to announce today the national roll-out of the child-focused model, formerly known as the private law pathfinder, in the family courts.
The child-focused model implements substantial reform to private law children’s proceedings. With the help and close collaboration of hard-working professionals across the family justice system, the model delivers improvements to the court process and to the outcomes experienced by children and parents involved in these cases, including where domestic abuse has been a feature.
This Government remain steadfast in our commitment to tackle the scourge of domestic abuse and violence against women and girls. We are committed to halving VAWG within a decade, supported by systemic change across society and sustained support for victims right across the justice system. The national roll-out of the child-focused model will contribute to this through co-ordinated early identification of risk in the family court, ensuring that children are heard and that victims of domestic abuse are provided with specialist support.
The model is currently active in 10 out of 43 court areas across England and Wales, equivalent to around a quarter of relevant cases. Under the model, families benefit from a streamlined, problem-solving approach that brings forward a holistic assessment of needs and risks, and that enables the court to make safe decisions without delay. The percentage of children seen by social workers more than doubles. Victims of domestic abuse and other harms receive expert support from independent domestic violence advisers.
The model was first piloted in Dorset and North Wales in 2022, and learning from these original pilots has informed our approach to implementation in other areas. Evidence from across the existing pilot areas shows that it is working. The model reduces the number of cases returning to court, protecting children and families from further trauma. The length of time that families are in proceedings has reduced significantly, with cases being resolved up to seven and a half months sooner. The backlog in pilot court areas more than halved, freeing up capacity for other proceedings. Learning suggests that the model is leading to significantly fewer cases per hearing and improvements in timeliness. The model requires all the dedicated professionals, magistrates and judges in our family courts to collaborate better and to adopt a problem-solving approach. A published process evaluation found that professionals are working more closely together and hearing the voice of the child.
The Government are committed to rolling out the child-focused model nationally over the next three years, investing £17 million in 2026-27 to fund the next expansion in the north east, the north west and the east midlands, which I announced in my statement of 25 February. This funding includes a permanent increase in social worker capacity for CAFCASS and CAFCASS Cymru, and for new domestic abuse specialists to work in the family courts. We will work to ensure that all areas are preparing for implementation of the model as part of a phased approach to roll-out that will see the model live across England and Wales by the end of this spending review period.
By putting victims at the heart of our approach, we are strengthening trust in the justice system and guaranteeing that the protection of children remains paramount.
[HCWS1408]
Quantum Technologies
(1 day, 4 hours ago)
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The Secretary of State for Science, Innovation and Technology (Liz Kendall)
Today we are announcing the UK’s commitment to procuring and deploying large-scale quantum computers on our shores by the early 2030s, backed by up to £2 billion of Government investment in quantum technologies. These systems will be developed, built and rolled out in Britain—creating British jobs, new opportunities for British businesses, and opening new routes of investment to flow into our economy from all over the world.
This ambitious commitment is the first of its kind in the world. It will strengthen the United Kingdom’s position as a global leader in quantum technologies, supporting our modern industrial strategy. The programme will include a range of support for quantum computing, sensing and networking, including research and development grants, procurement contracts, skills investments and scale-up infrastructure upgrades. These targeted interventions will contribute to long-term economic growth, creating British jobs, new opportunities for British business and opening a new wave of investment to flow into our economy from all over the world.
As part of this, the UK is pioneering a forward-looking, advanced procurement plan for quantum computing infrastructure, backed by co-ordinated funding for R&D and manufacturing. We are uniquely connecting resources across software, hardware and error correction, supporting all development areas. This integrated strategy accelerates progress and puts British expertise ahead globally in delivering practical quantum solutions.
This first-of-its-kind quantum computing programme will launch next week, where companies will be invited to table proposals to partner with us to deliver state-of-the-art prototypes for evaluation. Prototypes will then be assessed, with the most promising companies invited to deliver larger-scale machines for use by scientists, researchers, the public sector and businesses, as part of our national computing infrastructure—transforming the UK into a hotbed for the latest cutting-edge quantum technology.
Quantum technologies offer new ways to tackle some of our most challenging problems. By harnessing the behaviours of atomic and subatomic particles, quantum technologies will be vastly more powerful for specific tasks than the most cutting-edge technology of today. This could lead to faster, more accurate and more reliable solutions across industries and will be important for national security.
These technologies are now reaching maturity, and it is our ambition to consolidate the UK’s leadership in this area to unlock breakthroughs for the UK in areas such as medical diagnostics, treatments and the discovery of new materials for clean energy.
For the UK specifically, Oxford Economics estimates that quantum computers could increase productivity across the UK economy by up to 7% by 2045, potentially delivering up to £212 billion of gross value added to the economy and 100,000 new jobs.
This Government are committed to ensuring that the UK can be one of the first countries in the world to benefit from the transformative potential of quantum technologies, and the plan that we have set out today will deliver on this.
[HCWS1409]
Grand Committee
Arrangement of Business
The Deputy Chairman of Committees (Lord Duncan of Springbank) (Con)
My Lords, no votes are anticipated so the Bell really should not ring, but if it does, noble Lords know the drill already, so let us kick off.
I call the noble Baroness, Lady Smith of Malvern—sorry, I see it is the noble Baroness, Lady Blake of Leeds.
Higher Education (Fee Limits and Fee Limit Condition) (England) (Amendment) Regulations 2026
Baroness Blake of Leeds
That the Grand Committee do consider the Higher Education (Fee Limits and Fee Limit Condition) (England) (Amendment) Regulations 2026.
Relevant document: 51st Report from the Secondary Legislation Scrutiny Committee (special attention drawn to the instrument)
Baroness in Waiting/Government Whip (Baroness Blake of Leeds) (Lab)
My Lords, unfortunately, my noble friend Lady Smith is unwell, so I shall speak to the draft Higher Education (Fee Limits and Fee Limit Condition) (England) (Amendment) Regulations 2026. To begin with, I should take this opportunity to explain that within the Explanatory Note there was a discrepancy, in that the percentage increase for 2026-27 was stated as 2.7%, whereas it should be 2.71%, and the percentage increase for 2027-28 was stated as 2.8%, whereas it should be 2.68%. I can reassure Members that a correction slip has been arranged.
I thank the Secondary Legislation Scrutiny Committee for its scrutiny of the draft regulations. This statutory instrument, which was laid in draft on 5 February, will increase the limits on tuition fees that higher education providers can charge students studying undergraduate courses at approved fee cap providers in the 2026-27 and 2027-28 academic years. The SI preserves the fee limits for lower-fee foundation years at 2025-26 levels for 2026-27 and 2027-28. A separate SI making changes to maximum fee loans and student support for the 2026-27 academic year was laid before the House on 12 February.
As many Members have previously acknowledged in this House, our higher education sector is one of our country’s most valuable strategic assets, one that we should feel proud of and endeavour to protect, so that future generations of students can continue to benefit from it. Our higher education sector is admired across the globe. International students from all over the world choose to study here, making an enormous contribution to the sector, to the economy and to society as a whole. Our universities are home to world-leading research across a broad range of sectors including clean energy, digital technologies and life sciences.
The Government have set out a clear vision for the future of the sector in the Post-16 Education and Skills White Paper—a vision for a sector that drives economic growth, delivers a world-leading, high-quality experience for all students, provides national capability and increases the UK’s international standing, while also delivering regional impact for everyone who lives in this country.
There have been countless examples heard in this House about how providers are anchors in their communities, helping to break down barriers to opportunity, supporting local businesses, strengthening social cohesion and delivering important local jobs as well as outreach. Higher education providers transform the lives of the students who attend them, not only by enabling them to boost their incomes and progress in a career that they choose, but by enriching their lives through new experiences and allowing them to develop life skills, grow their networks and experience new perspectives.
However, this House has spoken at length about the challenges the sector faces. A growing number of providers are facing financial challenges. Analysis from the Office for Students from November 2025 suggests that, without mitigating action, 45% of providers could face a deficit in 2025-26. Indeed, English providers are contending with a number of financial pressures, one of which is the £1.7 billion aggregate loss on domestic teaching and the need for providers to draw on other income to cover it. Such challenges have been unaddressed for far too long, and seven years of frozen tuition fees plus overly optimistic strategic and financial planning and potential issues with governance have contributed to the financial challenge facing providers.
The Government took the immediate action needed and responded by increasing fee caps for the 2025-26 academic year and by also making reforms to the Office for Students. But the Government must go further to ensure that our higher education sector is put on a secure footing, to allow it to face the challenges of the next decade and to ensure that all students receive the world-class education they deserve. Government and the sector have a shared interest in fully realising the benefits of higher education for students, taxpayers, the economy and wider society. Government has a responsibility to ensure that the higher education sector is suitably funded, and the sector has a responsibility to ensure that it delivers the best value for students and maximises its contribution to our economy and society.
This SI is intended to put our higher education sector on a more secure footing and provide greater certainty over future funding, so the sector can focus on delivering quality provision. It will mean that, for the 2026-27 academic year, from 1 August 2026 onwards, tuition fee limits for undergraduate courses will increase by 2.71%, and for the 2027-28 academic year, from 1 August 2027 onwards, by a further 2.68%, in line with forecast inflation, based on the RPIX inflation measure. This means, for example, an increase from £9,535 to £9,790 for a standard full-time undergraduate course in 2026-27, and an increase to £10,050 in 2027-28.
Increasing fees for the next two academic years will mean that providers have greater certainty and can focus on delivering the Government’s ambition for a more specialised and more efficient sector that is better aligned with the needs of the economy. This will provide long-term certainty over future funding for the sector. We will then legislate, when parliamentary time allows, to increase tuition fee caps automatically for future academic years. These annual increases in fees, linked to inflation, will balance the need to give the sector stability with fairness to students and taxpayers.
I understand that this may raise concern about the affordability of higher education for students, but the Government are committed to ensuring that higher education is open to all who have the ability and desire to pursue it. The student finance system removes upfront financial barriers and provides additional support to those with the greatest needs, so that higher education is open to all. The Government are already making improvements to the student finance system that we inherited. To help students from disadvantaged backgrounds progress and excel in higher education, the Government are reintroducing targeted, means-tested maintenance grants of up to £1,000 per year, from academic year 2028-29. The Government have also committed to future-proof our maintenance support offer by increasing loans for living costs with forecast inflation every academic year from 2026-27 onwards.
The OfS has consulted on its future approach to quality. It will continue to hold providers to account for the outcomes that they achieve for their students, and this Government will ensure that only high-performing providers are able to charge the top rate of fees. Eligible students can continue to apply for upfront fee loans to meet the full cost of their tuition.
It is also important to remember that student loans come with a range of unique protections designed to support borrowers throughout the lifetime of the loan. Unlike commercial loans, student loan repayments are calculated solely on a borrower’s earnings, not on the amount borrowed or the rate of interest applied. Any outstanding balance, including interest, is cancelled at the end of the loan term, with no detriment to the borrower, and student debt is never passed on to family members or descendants.
The Government’s ambition is to have a more sustainable, more specialised and more efficient sector, which aligns with the needs of the economy. It is vital that higher education continues to contribute to closing the gap between people from disadvantaged backgrounds and their peers. The Government want to recognise each provider’s unique contribution and encourage them to capitalise on their comparative advantage. The Government are not going to force this specialisation; it is clear that the diversity of the sector is a strength, but each provider needs to be clear on its distinctive role in the system and move away from a one-size-fits-all approach. Each provider needs to be well run, collaborating with others to deliver the best value for students, and to operate as efficiently as possible.
In December, the Government announced reforms to the research excellence framework—the REF—to ensure that it better supports curiosity driven research, government missions, industrial strategy priorities, innovation and commercialisation. It will also reduce administrative burden and encourage greater collaboration and specialisation across universities. At the same time, the Government will protect and grow quality related research funding and redirect some UKRI funding toward areas of strategic national importance, while addressing sustainability challenges in the sector.
To conclude, this SI will put our higher education sector on a more secure footing, enabling it to continue to deliver the world-class higher education that current students and those in future generations deserve. I beg to move.
Lord Mohammed of Tinsley (LD)
My Lords, as we heard from the Minister, the purpose of this statutory instrument is an increase in tuition fee limits, indexed to inflation. The Minister has presented this as a technical adjustment that is necessary to maintain financial stability in our higher education sector. However, we must be clear: there is nothing merely technical about increasing the cost of accessing education. This is a decision with profound consequences for students, social mobility and the very character of our universities.
We recognise the genuine financial pressures facing higher education institutions. Years of frozen fees, rising costs and uncertainty over overseas students have created a challenging environment. Universities must be properly funded if they are to continue delivering world-class teaching and research. However, this instrument places the burden of that funding disproportionately on students, many of whom are already carrying significant debt and facing difficulties during this economic downturn. Our position is clear: we cannot support a policy that increases fees without wider, fairer reforms of higher education funding. Simply uprating fees by inflation risks entrenching a system that is already failing too many. It does nothing to address the long-term sustainability of the sector, nor does it tackle the inequalities faced by students from disadvantaged backgrounds.
Moreover, this approach lacks ambition. Many will ask, “Where is the comprehensive strategy for higher education? Where is the consideration of alternative funding models, maintenance support and lifelong learning?” Piecemeal adjustments such as this do not meet the scale of the challenge before us. There is a question of timing and fairness. At a moment when students and graduates are grappling with the cost of living, and when young people are questioning the value and affordability of higher education, this Committee should be wary of endorsing measures that risk further deteriorating participation.
In that spirit, I ask the Minister three questions. First, what assessment has been made of the impact of these increased fee limits on the participation of students from lower-income backgrounds? Secondly, can the Minister set out whether the Government intend to bring forward a comprehensive review of higher education funding—and, if so, when—rather than continuing with the incremental adjustments? Thirdly, what consideration has been given to increasing maintenance support alongside these fees changes to ensure that students are squeezed no further by the cost of living?
We must not accept a false choice between underfunded universities and overburdened students. By the way, I should declare my interest, as I have done on several occasions previously: my daughter is in the first year of her degree at Sheffield Hallam University, so she may well be impacted by this change.
The Earl of Effingham (Con)
My Lords, like the noble Lord, Lord Mohammed, I would like to register my interest: my daughter is a first-year student. These changes will probably not impact me because she pays and has a student loan, but, just for the record, I have a daughter who is at university and has a student loan.
I welcome the opportunity to speak to these higher education regulations, which His Majesty’s loyal Opposition oppose. These regulations will once again push tuition fees higher for students. The noble Lord, Lord Mohammed, quite correctly said that they will have profound consequences for students. Under this SI, the maximum fee cap will rise to £9,790 in 2027 and exceed £10,000 the following year. This comes despite repeated promises from both the Secretary of State for Education and the Prime Minister that graduates would pay less under this Government. That is simply not the case. Fees were already raised last September for the first time in eight years, and repayment thresholds have been frozen. As many noble Lords understand, this is effectively a tax rise on graduates.
Baroness Blake of Leeds (Lab)
My Lords, I will respond to the comments of both noble Lords together, since they raised similar, although not identical, themes. I thank them both for contributing to today’s debate. Of course, this is an exceptionally topical subject, on which there have been three OQs recently in as many weeks, so it has been much highlighted.
I reiterate the importance of the SI for putting our higher education sector on a secure footing and providing greater certainty over future funding. Obviously, we have heard many views today and previously about the importance of the sector, not only for students themselves but for economic growth, world-leading research and the contribution that it makes to communities. I do not want to dwell on this, but I have to wonder at the comments of the noble Earl, Lord Effingham, given the lack of action from the previous Government, when it was clear that the higher education sector was heading into very difficult circumstances yet there was no sense of commitment.
I emphasise that running through all our work on this is fairness and sustainability. There needs to be fairness to all students who apply, by making sure that access is open to all—a point which perhaps both noble Lords did not emphasise enough. To too great an extent in the past, family wealth and ability to pay were hugely determinative in whether young people went to university. This Government have made the commitment that we will make sure that quality education is open to all.
On that issue of quality, which both noble Lords raised, I again emphasise that the UK higher education sector is a world-leading sector in our economy that creates opportunities and supports local communities. But, as both noble Lords rightly said, we have to make sure that we root out any low-quality provision wherever it may exist. That is why the Office for Students has driven forward significant regulatory reform in recent years, strengthening its regulatory tools, holding higher education providers to account for the quality of their provision and investigating where there are risks to the students’ best interests.
We are determined to ensure that higher education providers go further in giving their students the best course, making sure that they work individually but with links to employment outcomes and to our industrial strategy, by ensuring that student destinations are a factor in considering providers’ performance. Sir David Behan’s independent review highlighted that, and we are working through the recommendations in supporting institutions to implement a more integrated quality system through the teaching excellence framework. The aim is for a regulatory approach that combines tackling poor quality with a greater focus on driving continuous improvement for all registered providers.
To answer the noble Lord’s concerns, that approach will be proportionate and will reward the highest-quality provision. That was clearly laid out in our Post-16 Education and Skills White Paper. In the future, the Government plan to make fee uplifts conditional on providers achieving a high-quality threshold through the OfS’s new quality regime.
I am also delighted to emphasise that the Government are bringing back maintenance grants and, through maintenance loans, helping undergraduates from the most disadvantaged backgrounds to progress and excel in higher education. The Government will future-proof the maintenance loan offer by increasing loans for living costs in line with forecast inflation every academic year from 2026-27 onwards. I hope that addresses the concerns.
We are ensuring that students from the lowest income families receive the largest year-on-year cash increases in support and providing students with long-term financial certainty on the financial support they receive while studying. Maximum loans will rise by 2.71% across 2026-27. In addition, vulnerable groups of students who are eligible for benefits—such as lone parents, some disabled students and care leavers—are all exceptionally important and we must make sure that we support them. I am delighted that many local authorities, as well as universities and other institutions, are looking at how they can further support disadvantaged students.
The noble Earl, Lord Effingham, raised the issue of repayments. I reassure him that, when it comes to students repaying their loans, their monthly repayments will not increase because of the changes to the fees or maintenance support. Student finance works very differently from standard consumer lending. Repayments are determined solely by a borrower’s income rather than the total amount borrowed or the interest that accrues. Those earning below the repayment threshold will make no payments at all. At the end of the repayment period, any outstanding balance—including any accumulated interest, which I mentioned earlier—will be cancelled in full.
We have to be realistic: we inherited a terrible fiscal situation and some of the decisions we are making are tough but necessary to protect both taxpayers and students. On the question about the review, there is a continuous review into student finance to ensure that it remains fair, sustainable and supportive of students from all backgrounds. I know there is a lot of interest in this area at the moment, so I reassure noble Lords that these matters are constantly under review. I cannot be more specific about where we may go.
I think we have agreement across the Grand Committee that the higher education sector is one of the country’s most valuable strategic assets. We need to protect it on behalf of the institutions themselves, while making sure that future generations of students can continue to benefit from it. The system of course has financial challenges but, despite that, the number of students from disadvantaged backgrounds has not diminished as was feared. That is due, I think, to the extensive work in engaging with them to make sure that they feel that the courses on offer are for them. We know that seven years of frozen fees have contributed to a significant real-terms decline in providers’ incomes. I hope that that addresses the noble Earl’s concerns.
The Government and the sector have a shared interest in fully realising the benefits. The Government have already taken decisive action to boost income, as I have outlined. We of course need to do more. We need to keep reviewing this and making sure that stability runs through this very important sector. However, to be absolutely clear again, the Government continue significantly to subsidise the HE system. In addition to the subsidised fee loans provided to students last year, the Government also provide support to world-leading research. That is why this statutory instrument will increase, for a further two years, the limits on tuition fees that higher education providers can charge students studying undergraduate courses. With those comments, I commend the regulations to the Grand Committee and hope to get approval from other noble Lords.
Further Education (Initial Teacher Training) Regulations 2026
(1 day, 4 hours ago)
Grand CommitteeRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Baroness Blake of Leeds
That the Grand Committee do consider the Further Education (Initial Teacher Training) Regulations 2026.
Relevant document: 50th Report from the Secondary Legislation Scrutiny Committee
Baroness in Waiting/Government Whip (Baroness Blake of Leeds) (Lab)
My Lords, I thank the Secondary Legislation Scrutiny Committee and the Joint Committee on Statutory Instruments for their scrutiny of this instrument. These draft regulations were laid in Parliament on 22 January 2026.
As noble Lords will be aware, the quality of teaching is critical to securing the best outcomes for pupils, learners and students in all parts of our education system, from early years right through to adult education. In October last year, the post-16 education White Paper set out an ambitious vision for the future of our skills system in England. The further education sector is the driving engine of that vision. We must ensure that high-quality teaching is hard-wired into our colleges and training providers.
We are taking decisive steps now to improve and secure the quality of teacher training for the FE sector. Ensuring that there is an accessible, attractive and high-quality training offer for new teachers will help improve the recruitment and retention of teachers in the FE sector, contributing to the Government’s commitment to recruit an additional 6,500 teachers for our schools and colleges. It will also send a clear message about our focus on securing high and rising standards of teaching in our colleges.
This instrument marks an important step towards creating a regulated system of teacher training for FE, covering the full range of providers delivering relevant courses across the sector and based on clear, evidence-based quality standards. It dovetails with the focus on quality that comes with the new Ofsted inspection framework for initial teacher education, which will now encompass significantly more FE teacher training providers than it previously did.
For many years, successive Governments have focused efforts on securing standards of teacher training for our primary and secondary schools—with considerable success—but, until recently, that focus had not been extended to how well our FE teachers are being prepared. There is excellent practice in parts of the system, and regulation must not constrain or discourage innovation and excellence. However, there is too much inconsistency across the sector, and some deeply concerning examples of poor practice in FE teacher training have emerged in recent years. Trainees have not always been guaranteed a high-quality training experience that prepares them to be great FE teachers, and employers have not always been assured that teacher training courses are equipping new teachers with the skills and knowledge they will need.
The regulatory system created by these regulations will place new requirements on all providers of specified FE teacher training courses in England. This includes universities, colleges, training providers and any other organisations delivering such courses. These providers will be required: to have regard to guidance issued by the Secretary of State on the curriculum content of FE teacher training programmes; to have regard to guidance on delivery standards for FE teacher training courses; to register with the Department for Education as a provider of FE teacher training courses; and to submit regular data and information to the Department for Education relating to any specified FE teacher training courses provided.
These measures are proportionate but significant in their intended impact. For the first time, we, employers and potential new teachers will have clear sight of what teacher training provision is being offered, where and by whom. Such transparency is a key ingredient of a quality-focused system. That focus will be enhanced further by requiring all providers of specified courses to have regard to clear, evidence-based standards on course delivery and curriculum content.
DfE officials have worked closely, over a sustained period of time, with stakeholders from the FE provider and teacher training sectors. There is widespread consensus that the approach we are pursuing will deliver a clear, positive dividend in driving up standards, while ensuring that providers continue to have the flexibility they need to exercise their own professional and expert judgment.
These measures have been shaped by public consultation, a formal call for evidence and sustained engagement with professionals from across the sector. I record my thanks to all those who have contributed their time and expertise to the process.
Particular thanks are due to the expert group convened by the Department for Education, chaired by Anna Dawe OBE, principal of Wigan and Leigh College, one of the first technical excellence colleges, which has played a pivotal role in advising on the evidence for high-quality content in FE teacher training. I beg to move.
Lord Addington (LD)
My Lords, as the noble Baroness, Lady Blake, has just said, this statutory instrument is probably well overdue. It is something that we have not looked at, because Governments of whatever colour or combination really just did not get around to it. So, I congratulate the current Government on having taken this first step.
Being as fair as I possibly can be, they are starting on a process that may not get the standards we want consistently for something like a decade. There are existing staff structures going through and there is the institution of training. Every standard will take time to bed in and normalise, and it will take time to find out where it has have worked and where it has not. This is not so much a criticism as an observation of what is obvious. It will take time.
Having said that, I do not have any objection to the SI, but it would be interesting to hear some of the things that will be needed to speed up the process of guaranteeing the quality. One is continuing professional development and how we are going to bring up the standards of those teachers already in place, who may be below the standard of what we would want. What is going to be done to intervene to do that? This will vary across the board.
We are dealing with a huge number of students here, every bit as wide as the school system. Their degree of success or failure has probably meant they have ended up in the further education system. Let us face it: as both the previous and current Government have said, even with improved career information and guidance, people are ending up there because they have not succeeded or have not been perceived to be succeeding to the highest level. How are we getting through to these students who may not have succeeded very well?
This brings me on to the subject—which I am sure the noble Baroness would have been disappointed if I had not raised—of special education needs. The new White Paper talks of early identification. The fact that it is being said that this needs to be improved means that people going through this system stand a very good chance of not having their needs identified or having the support structures there. It is a historical problem, and this Government just happen to have been brave enough to hit the wave and go through with it. So, what will they do to improve that structure to get these students through?
A high percentage of people on level 1 or 2 courses will almost certainly have special educational needs. What are we doing to identify these and make sure their teacher has the access to both the knowledge and in some cases the technology—I remind the Grand Committee of my interest with Microlink—so they use the right stuff and identify the right assistive technology to get their students through? Recognising there is a problem and not giving them more of the same is very important for these groups, because they have failed with more of the same already—so you need to work smarter to deliver.
Making sure that is done will mean we stand a better chance of getting people who are in the training phase of their lives, getting ready to go out and earn a living, to actually benefit from this. It would be normal to expect those providing this training to be able to identify whether people can do this. It also means that other support provided in adult life to enable people to do this can be identified through jobcentres et cetera. Whatever people are doing out there, it has to be identified, and they need to be accessed.
We are dealing with a historical problem here; it has been recognised by the previous Government, and we have started taking steps, but what is going to be done? In other words, we thank the Government for this, but what are we going to do to bring the rest of the staff up to the standard? When it comes to special educational needs provision, what are you going to do to identify those on the margin in particular, who are failing—often just failing—because they are not getting that little bit of help?
Baroness Garden of Frognal (LD)
My Lords, further to what my noble friend has just said, can I say that there used to be a very highly regarded City & Guilds qualification for teachers in further education, which virtually all of them held? Of course, teachers in FE are nearly always also practitioners, so they spend time actually doing the thing that they are teaching about. It is really important that that is reviewed as well.
I agree with what the Government are doing, but the biggest worry about FE is with the scale of pay. FE teachers are paid considerably below schoolteachers; they often have a bigger burden to bear—they have a very wide variety of students of different ages, and they get landed with things like the resits for GCSE maths and English, which is just iniquitous. What are the Government doing to address the pay of FE teachers, who are fundamental if we want to upgrade the skills of the country?
The Earl of Effingham (Con)
My Lords, His Majesty’s loyal Opposition agree that all initial teacher training courses should set and achieve the highest possible standards so that every learner benefits from high-quality teaching. There is no disagreement across this Committee about the importance of well-trained teachers in further education. The sector plays a crucial role in equipping people with the skills that they need to succeed and thrive, and the quality of teaching is central to that mission.
The Government’s own assessment makes clear why action is needed. The current system has led to inconsistency in provision, and Ofsted has expressed serious concerns about the quality of some courses. That is not acceptable for trainee teachers, employers or students. In that context, introducing a clearer framework for initial teacher training in further education is a reasonable step. Establishing expectations around course content and delivery and requiring providers to meet them should help to drive greater consistency across the sector.
However, there are important questions about how this framework will operate in practice. Its success will depend heavily on effective oversight and enforcement. The Government have made it clear that compliance will be monitored primarily through Ofsted inspections, yet they also acknowledge that this will place additional demands on the system, with further resourcing decisions deferred to future fiscal events. So it should be fair and reasonable to ask how the Government will ensure that Ofsted is provided with the adequate funding that it needs to carry out this role properly. Without sufficient resource, there is a real risk that these new standards will exist on paper but not be consistently upheld in practice.
More broadly, your Lordships’ House will note that the Government have left open the possibility of further intervention in future, including tighter controls over the provider market. That underlines the importance of getting this right now and ensuring that the system is both robust and workable from day one.
In conclusion, we support the principle that initial teacher training in further education must be of the highest quality. However, the Government must ensure that the necessary resources and oversight are in place so that these reforms can be meaningful in practice.
Baroness Blake of Leeds (Lab)
My Lords, I thank the noble Lords and noble Baroness for their contributions to this important discussion. I personally had the benefit of attending an FE college and, from a very early age, I recognised the extremely important contribution that FE makes to our rich landscape of educational provision.
I will try to pick up the main points made across the discussion. This Government are absolutely focused on improving the quality of teaching across the whole education system. This is an important turning point for FE teacher training. We have to be honest—— I hope noble Lords will recognise this from previous years in government—that it has been the Cinderella of the teacher training system for too long. We have to emphasise the Government’s commitment to promoting high and rising standards in teaching, recognising that there are examples of exceptionally good practice. We need to make sure that that excellence is protected and that trainee teachers and their employers have full confidence in the training they receive.
Lord Addington (LD)
Actually, there is quite a lot of good practice and basic support in virtually all further education institutions. For things such as information capture, there is a standard for everywhere. It can be used in a few ways; for example, lectures and so on can be taped and transcribed into any digital or written format you like. Have the Government looked at using this more roundly in colleges—especially those colleges that also provide higher education—as an extra way of supporting people who have problems with, for instance, note-taking? Dyslexic and dyspraxic people would be the classic example of that.
Baroness Blake of Leeds (Lab)
We are always grateful for the noble Lord’s insight into these areas, but we know that FE colleges are incredibly inclusive. We must, as I think the noble Lord is suggesting, look out for good practice and make sure that, where we see it, it is replicated and becomes the norm. That is the exact point: we have patchy provision. We want to make sure that, wherever young people go to study, there is a good standard right across the piece. We also want to make sure that the transition between different stages is smoother and information exchange between the different settings much more user-friendly. We collect data, but I do not think we use it effectively enough to assist teachers in making sure that their students get off to the flying start they need.
In her comments on pay, the noble Baroness, Lady Garden of Frognal, in fairness, highlights an important area. The latest data show that the average salary for FE college teachers increased by 6.1% in 2023-24, compared to 2022-23, but the Association of Colleges and the Sixth Form Colleges Association recommended a 4% increase for FE teachers in 2025-26. Actual pay awards are decided in colleges in line with local circumstances. In May 2025, the department announced a further investment of £190 million for colleges and other 16-to-19 providers, in addition to the £400 million of extra funding that we are planning to spend on 16-to-19 education. A significant amount of funding is going in and we want to make sure that these issues are addressed.
On the Ofsted comments, mentioned by the noble Earl, Lord Effingham, the Secretary of State recently wrote to the chief inspector confirming that funding will be made available in the year 2026-27, to ensure that Ofsted can have an impact in the first year of the new four-year inspection cycles. Future funding will, of course, be subject to fiscal events.
I have tried to gather information from, and respond to the information given in, the comments made and the questions asked. I hope noble Lords will feel reassured that every aspect has been addressed with extreme seriousness, recognising just how important the FE sector is and how important it is for learners to feel supported in every setting, responding particularly to their needs. The proposed measures enjoy wide support from across the FE and teacher training sectors and have been developed in close collaboration with leading experts and representatives from those sectors. I commend the regulations to the Committee.
Data (Use and Access) Act 2025 (Consequential Amendments and Transitional Provision) Regulations 2026
Lord Leong
That the Grand Committee do consider the Data (Use and Access) Act 2025 (Consequential Amendments and Transitional Provision) Regulations 2026.
Lord in Waiting/Government Whip (Lord Leong) (Lab)
My Lords, these regulations were laid before the House in draft on 2 February. They make consequential amendments to references to the Information Commissioner and their office—the ICO—across the statute book. They reflect the reforms to the regulator’s governance structure introduced by the Data (Use and Access) Act 2025.
Specifically, that Act abolishes the office of the Information Commissioner, which is a corporation sole, and transfers its functions to a new body corporate—the Information Commission—led by a chair and a chief executive, as well as other executive and non-executive members with collective decision-making responsibilities. This will increase diversity and resilience at the very top of the organisation, so that the Information Commission can function effectively with integrity and independence. It will also bring the commission in line with how other regulators, such as Ofcom, are governed.
These regulations prepare the statute book in anticipation of the transfer of functions from the ICO to the new Information Commission later in spring this year. They will ensure that the statute book is coherent, consistent and provides full legal clarity to support the transition from the ICO to the Information Commission. The regulations also make amendments to the title of the regulator across relevant Scottish, Welsh and Northern Irish legislation, on which devolved Governments were consulted.
In addition, Regulation 3 contains a transitional provision that provides for the Information Commissioner to retain their existing pension arrangements for the duration of their tenure as first chair of the Information Commission, a role that the Information Commissioner assumed on commencement of Schedule 14 to its parent Act on 20 August 2025, under paragraph 2(2) of that schedule.
Finally, the regulations also contain three minor and technical amendments to the Data Protection Act 2018, in consequence of Sections 67 and 91 of the Data (Use and Access) Act. These changes are intended to signpost references correctly and to reflect numbering changes, and do not have substantive legal effect. The consequential amendments, alongside the transitional provision and other minor and technical amendments contained in these regulations, will facilitate the smooth governance transition from the Information Commissioner’s Office to the new regulator, the Information Commission. I beg to move.
Lord Clement-Jones (LD)
My Lords, I thank the Minister for his introduction. Of course, we recognise that this instrument is a technical necessity. It ensures that the statute book remains coherent as we transition from the Office of the Information Commissioner to the new Information Commission. Obviously, not to agree these regulations would be to invite legal ambiguity across hundreds of pieces of legislation, from the Public Records Act to the UK GDPR.
However, accepting the technicality of this SI does not mean that we on these Benches have moved past our deep-seated reservations regarding the original Data (Use and Access) Act 2025. The Liberal Democrats argued throughout the passage of the original Bill that the governance upgrade that the Government describe is in reality a threat to regulatory independence. By replacing a singular independent Information Commissioner with a commission, the members of which are largely appointed by the Secretary of State, the Government have increased the risk of political interference. We remain concerned that the Act has weakened the rights of citizens, as we debated during the passage of the Act, and specifically we regret the reduced independence, with the new structure allowing the Secretary of State to have a greater hand in the commission’s strategic priorities.
Viscount Camrose (Con)
My Lords, I too thank the Minister for introducing these regulations. I note that he is having a spectacularly busy day. Clearly, these regulations are essentially technical in nature, as the noble Lord, Lord Clement-Jones, said, but they play an important role in ensuring that the statute book remains coherent following the passage of the Data (Use and Access) Act 2025.
That Act, as a partial continuation of the itself much-debated DPDI Bill, made a great many important changes, not least a significant structural change to the United Kingdom’s data protection regulator, replacing the previous officeholder model with the new corporate body of the Information Commission. The purpose of these regulations is therefore straightforward. They update references across the statute book so that legislation refers to the new body rather than the former Information Commissioner’s Office.
These are consequential amendments that are technical but necessary to provide legal clarity and continuity. We on this side recognise the importance of maintaining a regulatory framework that is both clear and workable. Data protection and digital regulation now sit at the heart of our modern economic and civic lives. In an increasingly digitised world, the institutions responsible for overseeing that framework must be capable of responding to fast and far-reaching technological developments while maintaining public trust.
The creation of the Information Commission as a board-led body is intended to support that objective by strengthening governance and resilience at the top of the organisation. Needless to say, structural reform is a necessary but not a sufficient condition for the regulator’s effectiveness. The commission’s responsibilities will continue to expand as new technologies and new risks emerge. It is therefore at least as important that it has the strategic clarity and operational capacity required to discharge its functions effectively. Will the Minister explain how the Government propose to ensure, today and in future, that the commission is able to balance two objectives, both vital to the United Kingdom: protecting individuals’ rights and privacy; and enabling innovation and economic growth in our digital economy?
It seems to me that without a principles-based adaptive approach, we are going to enjoy a great many repeats of this debate, in one way or another, as the Government of the day, of whatever flavour, struggle to keep up with emerging technologies. I look forward to the Minister’s response to the points raised by myself and by the noble Lord, Lord Clement-Jones.
Lord Leong (Lab)
My Lords, first, I am really grateful to the noble Lord, Lord Clement-Jones, and the noble Viscount, Lord Camrose, for their contributions. The Government are committed to the integrity of the new data protection regulator, the Information Commission. Having regulatory powers and responsibilities shared across an independent board, rather than vested in one individual as is currently happening under the Information Commissioner, will ensure diversity and resilience in the decision-making process.
As I have outlined, the Information Commission needs modern, effective governance structures in place to enable it to perform as a dynamic regulator and sustain its well-established international reputation. This ties in with the question that the noble Lord, Lord Clement-Jones, asked earlier about independence. These regulations, in line with the governance structures established by the Data (Use and Access) Act 2025, lay the foundations to achieve this. As I mentioned, the new governance structures model will safeguard the Information Commission’s independence. It is important that the regulator continues to operate independently, and the Government believe that having its responsibilities spread across a board with executive and non-executive directors will ensure greater independence and integrity. The new governance models will create greater clarity and certainty, allow for the appropriate public appointment processes by the Government and are commonplace for UK regulators.
The noble Lord also asked about the transfer of functions from the current ICO to the Information Commission. The Government are currently concluding the public appointments process for the Information Commission’s non-executive directors. DSIT is also working closely with the ICO to ensure operational readiness and a smooth transfer of all functions from the Information Commissioner’s Office to the Information Commission. A separate instrument containing commencement and transitional provisions will bring Sections 118 and 119 of the Data (Use and Access) Act into force, abolishing the Information Commissioner’s Office and transferring all regulatory and other functions from the ICO to the new Information Commission. This is due to occur later in spring—I cannot be clearer than that, I am afraid—and I am happy to keep the House informed on progress in this area.
Lord Clement-Jones (LD)
My Lords, I am sorry to interrupt the Minister, but there must be a planning date. If any private business were transforming itself, it would have a target date of April the 5th or 6th, or whatever it might be, but there seems to be no certainty here, and therefore the Minister does not even know when this statutory instrument will actually become live. It is important that it becomes live, I am assuming, on the same day that the transfer of functions takes place.
Lord Leong (Lab)
I said earlier that the appointment process is currently taking place. The current Information Commissioner will be chair, and the current CEO will be interim CEO until the new Information Commission is set up. The composition of the governing board—the executive and non-executive directors—is currently in process; we have appointed some, but not everybody. We have to get that first before we can decide on the date that everything is rolled over. That is the situation we are in.
Regarding devolved Administrations, the power to make consequential amendments conferred on the Secretary of State by Section 139 of the DUA Act, under which this instrument is being made, does not require the consent of the devolved Administrations. Nevertheless, in line with usual practice, the department has consulted with the Northern Irish, Scottish and Welsh devolved Administrations on the changes to legislation within their competence, and they are content with the approach taken in the instrument. Additionally, the Minister for Digital Government and Data has written to the relevant devolved Ministers to inform them of the nature and scope of the changes made to devolved legislation at the time of laying this regulation.
On the point made by the noble Viscount, Lord Camrose, about the functions of innovation and growth, I will have to come back to him on that.
We look forward to being able to announce in due course the conclusion of the appointments process, as I mentioned earlier, for the non-executive members of the Information Commission board. The board will provide independent oversight alongside constructive scrutiny and challenge to the complex, wide-ranging and important regulatory work of the Information Commission.
Renewables Obligation (Amendment) Order 2026
(1 day, 4 hours ago)
Grand CommitteeRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Lord Whitehead
That the Grand Committee do consider the Renewables Obligation (Amendment) Order 2026.
Relevant document: 52nd Report from the Secondary Legislation Scrutiny Committee
The Minister of State, Department for Energy Security and Net Zero (Lord Whitehead) (Lab)
My Lords, the renewables obligation scheme has incentivised UK renewable electricity generation through a system of tradeable certificates called renewable obligation certificates. Three separate but complementary renewables obligation schemes cover the UK: the RO and the renewables obligation Scotland—ROS—were introduced in 2002, and the Northern Ireland renewables obligation —NIRO—was introduced in 2005. The UK Government are responsible for RO legislation in England and Wales. The Scottish Government and the Northern Ireland Executive are responsible for the legislation of their respective schemes. Ofgem administers all schemes across the UK. The scheme is now closed to new applications—indeed, it was closed in 2017—but existing sites continue to receive support until the scheme ends in 2037. The scheme has been instrumental in taking a nascent renewable energy sector to where it is today, with the scheme supporting around 30% of total UK electricity generation.
Electricity suppliers are required each year to present a set number of renewables obligation certificates to Ofgem reflecting the amount of electricity they supply. Where a supplier does not present enough certificates, it must instead pay a buy-out price for each missing certificate. Those buy-out payments are then recycled back to suppliers that have complied, which supports the overall value of certificates and ensures the scheme operates in a fair and predictable way.
Earl Russell (LD)
My Lords, I thank the Minister for his introduction. I begin by recognising that this draft Renewables Obligation (Amendment) Order 2026 makes a specific and, on the face of it, sensible change in the way the renewables obligation is updated over time. By moving from RPI to CPI calculations for inflation, it should slow the growth of RO costs and in turn ease some of the pressures on energy bills paid by households and businesses. As the Minister said, during a new energy crisis when far too many families and households are living in fuel poverty and we are seeing rapid rises in our energy costs, we remain acutely conscious that many are watching every pound being spent on their energy bills. This SI, if everything goes to plan, as the Minister said, would save £1.9 billion over the next 11 years.
We therefore welcome the measures, as they are designed to reduce the cost of energy. However, bringing down bills cannot be separated from maintaining the pace of the clean energy transition and maintaining market confidence and those who finance it. As the Minister said, the RO has been instrumental in building our capacity, particularly for mid-scale onshore wind and solar. Many have made investment decisions years ago based on an understood indexing regime. Can the Minister tell us what assessment has been made of the impact on projects that have had financing assumptions predicated on RPI? How many generators are judged to face material changes to their expected revenues as a result? What modelling has been done to check whether these measures could have a disproportionate impact on those at the smaller end of the generating scale?
There is also, for us, the question of overall approach. From the Government’s point of view, this is a small, important, but technical, pragmatic and consumer-focused change. But, for many in the industry, this is yet another incremental tweak to the legacy schemes. I note that, of the 257 responses to the consultation, most did not support either option put forward, citing a preferred option not to change the system at all, based on concerns around investor confidence, minimal consumer benefit and a need—from their point of view—for financial stability and predictability. Do the Government accept that this kind of piecemeal pattern risks the possibility of further eroding investor confidence? That would not be because any one of the individual changes is huge on its own but because it creates a sense that the rules for existing long-term investments are constantly up for potential revision.
As the Minister said, the impact is £1.9 billion. The measures will curtail the existing revenue for RO generators—reductions of around 1% for the financial year 2026-27, which will rise to 5% by the financial year 2030-31. As we know, these are large-scale, long-term investment decisions, so even relatively minor changes can have, over a prolonged period, quite large and sustained impacts on what were expected revenue returns and investment decisions. The Explanatory Memorandum says that, overall, the department does not expect that there will be a disruptive effect on small generators. What does that mean in practice? How confident is the Minister in that statement? Also, how will this be monitored going forward? I note that there is no statutory review clause here, so how will any unintended impacts or consequences of the SI, once it is passed, be monitored? Furthermore, if there are unintended consequences, would there be a willingness by the Government to look again at these changes, particularly if they happen to impact the smaller schemes?
More generally, is it the Government’s intention, over time, to mitigate remaining RO schemes into contracts for difference-type frameworks? Instead of having this piecemeal approach, is there a more fundamental plan, as part of this framework, to reduce bills? I welcome those measures, but is it not time that there was an overall plan for this, rather than looking at individual orders one by one? Is there not a better way of doing this, agreeing it with the investors and the market, so we can both reduce the cost for bill payers and maintain the investor confidence on which we depend to secure future investment? We generally welcome what is here, although we have a few questions about it. We do not oppose this SI in any way, but we want a bit of clarity on those points.
Lord Moynihan (Con)
My Lords, I am delighted to stand before the Committee in agreement with the noble Earl, Lord Russell, on this occasion. If I may, I will build on some of the questions he asked. Before I do, I declare my interest as the chairman of Acteon, which is a global specialist subsea services company providing integrated seabed-to-surface engineering solutions for the worldwide offshore energy sector, including oil and gas and wind energy.
During the consultation exercise for this order, almost half—48%—of respondents expressed a preference for not going ahead with either option. Many respondents raised concerns about the wide-reaching, longer-term impacts that these changes could have on investor confidence and regulatory stability. What does the Minister believe will be the effect on investor confidence in this sector?
Many argued that indexation changes could raise risk premia and depress valuations, and that they would likely increase the cost of capital on new investments, which could deter future investment and, ultimately, have an impact on consumers. Does the Minister agree with this? If not, why not? Most respondents felt that both of the options proposed by the Government would represent a breach of legitimate expectations based on prior commitments from the Government. Some believed that the proposals could attract legal challenge. Does the Minister consider legal challenge likely? If not, why not?
Some respondents warned that the estimated consumer bill savings from switching to CPI would be modest or otherwise offset elsewhere by increases to the cost of capital of future projects, and few agreed that the switch to CPI is necessary at all. The UK law firm Burges Salmon said:
“A switch to CPI or a temporary freeze to tariff/buy out levels will therefore unnerve everyone involved. Many investors have modeled returns based on RPI-linked revenues over the full support term. Any switch (whether Option 1 or 2) will therefore undoubtedly result in slower growth of support income which may, in turn, impact projected equity returns and dividends and trigger a downward adjustment in NAV estimations of affected ProjectCos”—
that is, net asset values. It went on to say:
“In addition, projects financed with RPI-linked debt may face a mismatch between the generating asset projected revenues and debt liabilities. Coupled with uncertainty around the introduction of an FPC scheme”—
that is, the fixed price certificates scheme—
“it is clear that the threat of sizable and costly changes to renewable support schemes being implemented is increasingly real and one which the industry may fight hard to resist whether by way of legal challenge or robust responses to the various consultation papers”.
What is the Minister’s response to Burges Salmon?
That firm was not alone. Commercial law firm Travers Smith wrote:
“Although many, including generators, investors and financing parties with interests in existing assets benefitting from these subsidies will be relieved that the more drastic ‘freeze-and-realign’ option (i.e. ‘Option 2’) was not taken, the immediate shift to CPI indexation is nonetheless expected to be a blow to confidence and cause headaches across the sector, with investors seeking to protect valuations and dividend capacity against erosion of RPI linked cash flows, and lenders scrutinising headroom and covenant resilience in the context of the risk of refinancing. The timing—as Government seeks to encourage a ramp-up in investment as part of its Clean Power by 2030 plan—is unfortunate”.
I was going to conclude on this point, but the Minister could not resist the opportunity to refer to the current global crisis and the need to “accelerate to homegrown energy” as his solution—that is, accelerate to intermittent power when what we need is, in essence, firm power.
As we know, three-quarters of our wind and solar power is generated through renewable obligation subsidies. This means that, every time electricity is generated, suppliers get the wholesale price, plus higher subsidies than in all other OECD countries outside China—subsidies that signal the direction of future energy prices for consumers. Every time the wind blows, some wind farms get up to three times the market price of electricity. If wholesale prices are £80 per megawatt-hour—they were roughly at that level before the crisis—wind farms are getting two renewables obligation certificates on top of that, at about £70 each. This means that they have been getting £220 per megawatt-hour, which is almost three times the market price for electricity.
As was evident to those noble Lords who were fortunate enough to see the Secretary of State on Sky News this weekend, he used the word “incredible” in most of the sentences that he spoke. Is it not incredible that the Government continue to say that gas is the problem? In the last week, the price of gas, which generates our electricity, has been high, at around £120 per megawatt-hour. But is it not incredible that the renewables on the scheme will always get more than the gas price? Right now, there are wind farms getting up to, as I mentioned, £270 per megawatt-hour because they get whatever the wholesale price is plus the subsidies on top.
Lord Whitehead (Lab)
First, I thank noble Lords for their valuable contributions to this debate. The Government have listened carefully to the concerns expressed, particularly in relation to investor confidence, which I will come back to in a moment, to policy stability and to the long-term credibility of the UK’s renewable support schemes.
In considering the valuable and detailed contributions from noble Lords, I must say one thing to start with. The noble Lord, Lord Moynihan, is tempting me into a widespread debate about energy changes, energy prices and so on, but I kindly suggest that that is not the subject of our discussion this afternoon. The points that he makes are certainly ones that need replying to, and I hope that replies are being undertaken—but of course we are undertaking those replies at a time of energy crisis, and indeed a period of great volatility and uncertainty. That perhaps underlines why it is a better idea for the long term to have homegrown sources of energy that are not volatile and which can actually inform what is happening in the domestic market without inevitable consequences on the international market. The move towards renewables and low-carbon energy sourced from within the UK is a very effective way of doing that in the long term.
Lord Moynihan (Con)
I absolutely do not want to start a debate this afternoon, because we will unquestionably have plenty of opportunities in the future to cover this ground, but there is nothing more secure, in terms of our security of supply, nothing that creates more firm power, than our natural gas in the UKCS, which is much cheaper and far less polluting than importing gas from Qatar or liquefied natural gas from the United States. That reserve is critical, and if there is one lesson that comes out of this crisis, it is that we should maximise that reserve for our own country, for our own people, in exactly the same way as the Norwegians are doing at the moment for their people—unless the Minister thinks that the Norwegians are hopelessly wrong and should have shut in their basin, which he may wish to say. I think that our differences on this subject are worthy of future debate, but I think it is important to place them on the record.
Lord Whitehead (Lab)
I thank the noble Lord for placing that on the record. The Norwegian basin, of course, is far less mature than the UK basin, and indeed the Norwegian system works on substantially the same basis of international pricing as the UK system as far as gas is concerned.
The noble Lord has used the word “incredible” on several occasions. It was incredible, over the years, how much gas we were exporting from UK fields, even at a time when it was absolutely necessary to have the maximum supplies bought and used in the UK. Indeed, even during the Ukraine invasion crisis, there were still substantial exports on to the international market of gas that had come into the UK in the first instance. It is also the case, of course, that as far as marginal cost pricing is concerned, gas still makes the market over 65% of the time, so the whole market is still informed by international gas prices and international gas market-making in a way that is inimical to the stable, homegrown future energy that we need to import so that those positions are no longer taken.
Lord Moynihan (Con)
To place it firmly on the record, Norway and ourselves share the same basin in the northern North Sea, delineated by a median line. Geology does not recognise a median line, which is why in 1990 we were, broadly speaking, producing about 2 million barrels a day each, and in 2010 we were, broadly speaking, producing about 4 million barrels a day each. Today, we have gone right down to 400,000 barrels, and the Government are driving it down lower, while the Norwegians are going north of 4 million barrels.
My second point is that yes, the Minister is absolutely right that the Norwegians are exporting it to the international market. They do that because they can satisfy their domestic demand from hydroelectricity. As a result of that, however, they have managed to set up a sovereign wealth fund that assists their healthcare and their social security. The money they are earning is fundamentally important to the success of their economy. If we had done the same thing, we would have been in a far stronger financial position and would be able to take significant tax receipts to the Treasury to assist us with the many other challenges that the Government face.
Lord Whitehead (Lab)
The noble Lord is exactly right about a sovereign wealth fund, and it is our joint regret that the UK did not pursue that path many years ago. However, that is not the fault of the current Labour Government, as those actions were taken many years ago. He is right to point out that we would be in a much better position had that path been taken, but we did not take that path. We are where we are and we need to move on from that in terms of homegrown energy of a different form.
I am anxious to make progress with the business in hand, and I am pleased to see the overall welcome for these measures from both sides of the House. I will very briefly deal with one or two concerns that were raised. For example, on the concern about the effect of these measures on investor confidence, the future investment is of course not going to be carried out through the renewables obligation. As I mentioned, the renewables obligation is a sunset measure: indeed, it closed to new entrants in 2017. We are therefore talking about the remaining years of this measure, not the years in front of us of future and present measures, which we are undertaking in order to expand and stabilise the renewables and low-carbon world. Investor confidence will, therefore, be determined by how those measures are working.
In any event, the path that was taken to not freeze the RO, but to relate it to CPI rather than RPI, actually continues to allow RO to grow, albeit at a slightly lower indexed case. Therefore, in terms of the returns that those historic companies thought they were getting as far as the RO is concerned, there is not a great deal of difference—especially since we are so far past the point at which new entrants were accepted to the scheme.
As for legal challenges, we have been very scrupulous in making sure that we have received full advice, and that we are well entitled to make these changes. It is difficult to see how a legal challenge on the basis of not liking the changes very much might succeed, as opposed to a legal challenge on the basis of making the changes in the first place.
The noble Earl, Lord Russell, asked whether there could be a more comprehensive measure as far as future ROs are concerned, and this is something I have been quite interested in doing myself. It would involve trying to move RO recipients on to a CfD contract, which can be done in various ways. I suggest that if we did that forcibly, it would probably result in a legal challenge, but there are other ways of making the change.
Electricity Supplier Payments (Amendment) Regulations 2026
(1 day, 4 hours ago)
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Lord Whitehead
That the Grand Committee do consider the Electricity Supplier Payments (Amendment) Regulations 2026.
The Minister of State, Department for Energy Security and Net Zero (Lord Whitehead) (Lab)
My Lords, you have got me again. These draft regulations were laid before the House on 2 February 2026. I trust that since they are very technical in their nature and very modest in their effect, they will be agreed, because they are an essential element of making sure that our supplier payments and supplier collection work well for the future; they are an integral part of how the system works, so I hope that they will meet with general agreement.
This statutory instrument amends regulations concerning the levies used to fund the operational cost budgets for the Low Carbon Contracts Company and the Electricity Settlements Company. Before I proceed, I apologise to the Committee for the enormous number of acronyms that will no doubt emerge during this debate and in my speech. Let me start with the LCCC and the ESC, which I have already explained.
The LCCC administers the contracts for difference scheme on behalf of the Government under the Energy Act 2013. Under that Act, the LCCC also administers schemes modelled on the contracts for difference, including the dispatchable power agreement, the DPA, and the low-carbon dispatchable contracts for difference, or LCD contracts for difference. The LCCC also acts as the revenue collection counterparty for the regulated asset base for new nuclear under the Nuclear Energy (Financing) Act 2022.
It is anticipated, subject to future policy decisions and the will of Parliament, that the LCCC will conduct additional work to support government energy objectives under the Energy Act 2013. This includes work on a new scheme supporting the deployment of large-scale power bioenergy with carbon capture and storage electricity generators, work relating to DESNZ’s proposals to support nuclear generation, and work relating to DESNZ’s proposals to potentially support landfill gas generation.
The ESC administers the capacity market scheme. Those schemes will incentivise the significant investment required in our energy infrastructure to keep costs affordable for consumers and help to deliver our clean power mission, while keeping our energy supply secure.
Contracts for difference—CfDs—provide long-term price stabilisation to low-carbon generators, allowing investment to come forward at a lower cost of capital and therefore at a lower cost for consumers. AR7, the most recent CfD auction and the seventh to date, secured a record 14.7 gigawatts of new clean energy capacity across Great Britain, making it the largest round ever delivered. It brought forward a diverse range of renewable technologies while delivering a good deal for bill payers. The LCCC is currently signing 197 CfDs with projects that were successful in this auction.
Dispatchable power agreements—DPAs—under the Energy Act 2013 are agreements modelled on CfDs. They have been designed to instil confidence among investors in power carbon capture and storage projects and incentivise the availability of low-carbon, non-weather dependent dispatchable generation capacity. The LCCC signed its first DPA on 19 November 2024 for the Net Zero Teesside Power project. This pioneering project in the north-east aims to build the world’s first commercial-scale gas-fired power station with carbon capture and storage.
Over the next three years, the LCCC is expected to sign additional DPAs, which will drive the private sector investment required to bring forward further power carbon capture and storage projects by the mid-2030s. The LCCC will be the counterparty for these DPAs, as it was originally for CfDs, and funds have been included within the budgets to support this role.
The LCCC also signed its first low-carbon dispatchable CfD—LCD CfD—with Drax Power Ltd on 4 November 2025. This agreement will ensure that Drax generates electricity when needed between 2027 and 2031, thus bolstering our energy security. It is also a good agreement for consumers, saving them around £6 per year on their household bills compared to previous arrangements.
The Government also agreed heads of terms with EP Lynemouth Ltd on 6 February 2026 for an additional LCD CfD. If a full contract is concluded in the following month, this will further bolster our energy security by ensuring that Lynemouth continues to generate when needed between 2027 and 2031. Funds have been included in the budgets to support the LCCC’s role as the intended counterparty for this LCD CfD, as well as its role as counterparty for the existing contract with Drax Power Ltd.
The revenue collection contract with Sizewell C Ltd, the first project to use the regulated asset base—RAB—model for new nuclear, became effective on 4 November 2025, and funds have been included in the budget to cover the LCCC’s operational costs as a revenue collection counterparty for the RAB. As noble Lords can see, this all amounts to a large amount of additional work and activity for the LCCC, which is important in terms of this particular SI.
Turning to the ESC, the capacity market is tried and tested and is the most cost-effective way of ensuring that we have the electricity capacity we need now and in the future. It provides all forms of capacity and the right incentives to be on the system, delivering capacity when needed by increasing generation or by turning down electricity demand in return for guaranteed payments. The capacity auctions held to date have secured the capacity we need to meet the forecast peak demand out to 2028-29. A T-1 auction is currently ongoing and a T-4 auction will take place next week, securing most of the capacity we need out to 2029-30. In both the CfD and capacity market schemes, participants bid for support via a competitive auction that ensures that costs for consumers are minimised.
In the DPA, agreements are allocated through a process involving competitive assessment, followed by shortlisting then a final stage of bilateral negotiations between project developers and DESNZ. In the LCD CfD, contracts are agreed following a structured negotiation process between DESNZ and the generator. This process ensures that only those contracts are signed that offer value for money for consumers and include strict sustainability criteria.
Revenue collection contracts under the RAB model are agreed through a structured process involving DESNZ, Ofgem and the LCCC. These contracts provide a stable, regulated revenue stream to projects during construction and operation. In turn, we expect the RAB to lower the cost of financing for nuclear, one of the biggest drivers of new project costs, resulting in better value for money to consumers.
The LCCC and ESC’s effective administration of the CfD, the capacity market and other schemes to date has demonstrated their ability to deliver such schemes at least cost to consumers. It is in part for this reason that the LCCC has been working with DESNZ and other departments to develop new schemes for incentivising deployment of more low-carbon technologies. For example, the LCCC has supported DESNZ in the development of incentives for bioenergy with carbon capture and storage. Although this has not been confirmed, contracts for such projects could potentially be entered into following a process established under the Energy Act 2013. Were DESNZ to move forward with this option, the LCCC would need to undertake activity to prepare for acting as the counterparty in the next three years. Consequently, funds have been included within the budget for this purpose.
The LCCC and ESC are mindful of the need to deliver value for money, as their guiding principle is to maintain investor confidence in the schemes they deliver while minimising costs to consumers. They have taken a number of actions to date to reduce costs, such as bringing expertise in-house rather than relying on more expensive outside consultants. It is because of actions like that that CfD operational costs per contract are expected to fall by 27.3% per CfD across the budget period, despite the growing size of the CfD portfolio. It is a similar narrative for the ESC, which expects the number of capacity market electricity meters to exceed 1.2 million over the budget period, a 450% increase on current meter numbers. It estimates that costs per meter will fall by 23% over 2025-26 to 2028-29. The operational cost budgets for both companies were subject to consultation, which gave stakeholders the opportunity to scrutinise and test the key assumptions in the budgets and, importantly, ensure that they represent value for money. Subsequently, the budgets remain unchanged.
In conclusion, to summarise this rather detailed and technical narrative, the LCCC has done a great job in managing as the counterparty for taking money in for contracts, giving money out and balancing between the two—and, indeed, when it runs a surplus it gives it back to the companies that are paying the money back in. Its activities have changed very substantially over the years, and the levy that goes into those companies has not changed since 2022. Therefore, it is right that the levy coming into the LCCC and the ESC for the expanded work that they do is reviewed, which is what the Government have done, to make sure that the LCCC can cover its costs for the relevant financial years up to 2029-30.
I assure the Committee that the Government are also mindful of the uncertainties involved in setting a budget for the next three years, such as world events impacting energy demand and policy decisions on new schemes that have not yet been taken. Consequently, DESNZ will keep the companies’ budgets under careful review throughout the budget period to ensure that costs to consumers are minimised. I commend these draft regulations to the Committee.
Lord Fuller (Con)
My Lords, there is a reason why UK energy prices are some of the most expensive in the world. We are starting from a high base and we are increasingly vulnerable. At the moment, our gas prices are six times higher than you might find on an ex-NOLA basis: that is, exported from New Orleans. We are more expensive than the rest of Europe, apart from Germany, which has its own particular industrial problems, and we are increasingly vulnerable because we are trying to run our 24-hour-a-day, 365-day-a-year economy on energy sources that do not work at night or when the wind does not blow. I understand that, and I am not against using renewable energy—we need to have an energy mix—but the way we are going at the moment is to put too many eggs in the renewables basket.
With this statutory instrument, the name is on the tin: it is all about nuclear energy, but the speech that the Minister gave was not really about nuclear at all, but about the mission creep that has led to us having the world’s most expensive industry, whereby we are deindustrialising. Only today, what a shame that the Huntsman Group has announced that the Wilton facility, that last vestige of ICI at Billingham, could be closed. How ironic it is that the obituary of Sir Ronald Hampel, the architect of ICI, was in the Times this week: he must be turning in his grave.
This debate has all been about carbon capture and storage. I did not realise it was going to be, I thought it was about nuclear, but there we are. Carbon capture and storage is expensive, technically challenging and hard to implement. It does not work, it is the most expensive way of doing it and it is unproven. If it were proven, it would be eligible to be discounted against CBAM, but it is not. One of the main things by which this Government want to take carbon reduction on board—they are parroting and trumpeting carbon capture and storage—is ineligible for the headline carbon reduction process. Can noble Lords not see the incompatibility here?
What we have heard so far in this debate, and I know it is early days, is that—
Earl Russell (LD)
This is not a debate. This is an SI about the mechanism for contracts for difference. It is not a debate on energy policy.
Lord Fuller (Con)
I thank the noble Earl, but he will forgive me for having made an introduction, and now I come immediately to the substance, because what we have heard, and it came from the Minister’s mouth, is that this is all about investor confidence. This is about subsidy farming; this is about underwriting the most emitting power station in Britain, Drax, which is responsible for the desecration of huge tracts of forestry on the other side of the world, the shipping costs associated with getting it and its transport to that power station, as if it is somehow renewable. That is a fantasy.
What these regulations underpin is a false economic market that says, “No matter how high the gas price is”, and, my goodness, gas prices are high now, “we’re going to bid up the costs of renewables in an unearned income”. This is financial engineering. We are kidding ourselves that we are doing this for low carbon. We are creating a false market in unproductive assets such as carbon capture and storage. When we invest in carbon capture and storage, and I use the word “invest” advisedly, we are not investing in productive assets that will generate an economic return; we are just burying money, money that we need.
I do not deny that, as a result of this regulation, the authorities—forgive me, there are so many acronyms, I cannot remember them all, the LCCC and so forth—have to be paid for. However, this debate has exposed that it is not just about paying for the authorities, it is about financing a mission creep into all sorts of areas that collectively and cumulatively are driving the cost of our energy. Householders are paying more and industry is paying more—and, candidly, industry is now voting with its feet to go to other parts of the world because it cannot afford all this.
At some stage, we need to draw a line. I am grateful that the Minister has used the word “crisis” to describe the circumstances currently being visited on the Middle East and, by extension, on our own economy. When the facts change, you need to alter your position, and when it comes to this panoply of extra burdens on industry—not least contracts for difference—we need to have a fresh look, because the definition of insanity is doing the same thing over and over again and expecting the outcome to change. This nation cannot afford it, and neither can our industry or our householders. Clearly, we are going to note this statutory instrument, but at some stage the music needs to stop.
Baroness Redfern (Con)
My Lords, it is a pleasure to follow my noble friend and to have the opportunity to speak to this statutory instrument. I support and welcome the update levies to fund operational costs of low carbon and nuclear energy schemes. However, it is the wider context that is my concern: the continued high prices of electricity, which are among the highest in the world for our heavy industry—such as steel, which is truly disadvantaged when having to compete worldwide. Our high-energy intensive industries—not only steel, chemicals and ceramics, which are the industrial base of the UK—are, therefore, left inadequately supported.
We all know that lower electricity costs directly help to retain manufacturing reinvestment and jobs, and support the supply chains, so it is disappointing to see manufacturing jobs moving abroad in the past 12 months. For high-energy intensive industries to compete on a level playing field, confidence must be targeted, building that elusive confidence and bringing the precious private investment into the heavy sector. The Government know they have to develop and go further with serious long-term plans, and possibly introduce a two-way contract for difference to provide a competitive wholesale electricity price to support and restore our British industrial competitiveness for the next decade.
Finally, the Government must support further—rather than undermine—the UK’s wider industrial strategy and growth emissions. I look forward to the Minister’s reply.
Earl Russell (LD)
My Lords, the draft Electricity Supplier Payments (Amendment) Regulations make technical but necessary changes to the levies that electricity suppliers pay to fund three of the UK’s key energy schemes: the contracts for difference—CfD—scheme, the capacity market and the nuclear regulated asset base, or RAB model.
There is a sense of gravity on these Benches in that we fully recognise the role that CfDs have played, since they were introduced by the Liberal Democrats a long time ago, in helping to fund and secure funding for our energy transition. We recognise that these are necessary updates, and we welcome what the Minister has said to introduce these amendments. We welcome the measures that are being taken to ensure that efficiency savings are gained. Therefore, we fully support this SI.
Lord Moynihan (Con)
My Lords, I am very grateful to my noble friends Lady Redfern and Lord Fuller for their contributions. They bring a great deal of expertise to this Committee from a lifetime outside London in places where industries’ success has depended on low energy prices. For them to give up their time and dedicate it to the work of this Committee is commendable, and I associate myself with everything that both of them said.
That helps me in one way because it means that I can be short on this occasion. I will make just make four points. First, Drax has been raised. There are still major issues with Drax, as the Minister knows. Billions have been spent in public subsidies on it. As I recall, it was axed from the S&P green bond index because it clearly did not add to the net-zero objectives of either this Government or the previous one. Indeed, the burning of pellets releases CO2 immediately and does not achieve anything except for carbon debt. That undermines our net-zero goals, not least because the pellets come from the west of Canada; they are brought right the way across Canada and must then be transported to the United Kingdom by boat. The sooner we grasp the nettle and stop biomass burning, the better. In fact, it is unfair even to call it biomass: it is a CO2 pellet-driven wrong solution for Drax. Today, it has contributed a significant amount of electricity generated into the grid—not much less than comes from solar energy in the UK at the present time.
However, these are technical changes—this has been made very clear—and we on these Benches will not oppose them. I would just say three things. One is that the heart of this is, in fact, nuclear energy; look at the introduction and the rest of the statutory instrument. On the nuclear energy policy question, I welcome the fact that the Government have committed to implementing the recommendations of the Fingleton review in order to make nuclear power much cheaper. That is really important; we need to make it affordable, and it needs to be quicker and easier to build. We look forward to receiving the relevant legislation—even if I anticipate that, on that particular Bill, it will be colleagues from the left of the Labour Party and the Green Party who will give the Minister a lot of airtime because there is no doubt that the environmental impact is going to light the red touchpaper of the Labour left and the Green Party, which the Secretary of State has done so much to court.
Secondly, this Government cancelled the previous Government’s full-system cost analysis of the energy system. This statutory instrument highlights that such an analysis is important and would help all of us in this Committee—indeed, all of us in the House—to understand the cost of energy. I ask the Minister to consider reintroducing it, certainly before any further legislation comes before the House.
Finally—I was not going to make this point but I think it is important—I echo the comments made by my noble friends. The Government have not fulfilled their pledge to cut energy bills by £300. Pushing the costs on to tax bills is simply sleight of hand. The truth is that the Secretary of State’s made-up promise to cut bills by £300 has become, understandably, a national embarrassment for the Government, so they have turned to the already-struggling taxpayer for a bailout of £7 billion.
With all that said, I promised to be brief and make only a few comments on this instrument. These are technical changes, and we on this side will not oppose them, but it has been exceptionally helpful for the Committee to hear the comments made by my noble friends and the noble Earl, Lord Russell; I look forward to hearing the Minister respond to them.
Lord Whitehead (Lab)
I thank noble Lords for, as I have said on previous occasions, their valuable, extensive and wide-ranging contributions to the debate. I am similarly tempted to follow the wide-ranging comments that have been made—some of which I agree with and a lot of which I do not—but I do not think that this is the place to undertake that particular debate.
As noble Lords have reflected on, this SI is, in essence, about a practical and straightforward measure to ensure that the body that administers the working of the CfDs and an increasing amount of further contracts—acting as the counterparty and the proper regulatory body to make sure that there is value in all directions from the money that is collected—simply has the wherewithal to make sure that it can do that job. As I have said, the levels of that wherewithal were set in 2022 and have not been revised since then. They really need to be revised so that we are not in a position where the taxpayer has to come in and bail out the LCCC or similar bodies, come 2028-29, if they do not have sufficient funds to administer the contracts in the way they should.
Tertiary Education and Research (Wales) Act 2022 (Consequential Amendments) Order 2026
Lord in Waiting/Government Whip (Lord Katz) (Lab)
My Lords, this draft order was laid before the House on 2 February and is needed following the passage of the Senedd’s Tertiary Education and Research (Wales) Act 2022. The Act provides a new statutory framework for what is now known as tertiary education and research in Wales, which encompasses higher education, further education and training, apprenticeships, sixth forms, and adult community learning. The Act established the Commission for Tertiary Education and Research in Wales to regulate and fund the sector; I will refer to this body as the commission.
The Act provides the commission and Welsh Ministers with powers to fund the tertiary education sector in Wales. It repeals corresponding functions that were previously in place, including powers in the Learning and Skills Act 2000. Various pieces of UK legislation therefore currently reflect the previous system, in which the Welsh Ministers regulated and funded the sector through powers that are now being repealed.
The amendments in the order ensure that UK legislation is updated by making amendments that account for the changes introduced by the Senedd’s 2022 Act. It mainly does that by removing any references to the repealed powers and replacing them with references to the corresponding powers in the 2022 Act. These consequential amendments ensure that the legislation being amended will continue to operate in largely the same way as it does now, but with the commission integrated into the legislative framework.
Article 2 of the order updates the list of exemptions in the Value Added Tax Act 1994. It ensures that education and vocational training provision funded through powers in the 2022 Act will be an exempt supply for the purpose of value added tax. The order also amends the Income Tax (Earnings and Pensions) Act 2003. This Act makes provision about the tax treatment derived from shares in research institution spin-out companies. Article 3 of this order ensures that the definition of “research institution” in that Act includes any university or other educational institution receiving funding under powers in the 2022 Act.
Section 113 of the Higher Education and Research Act 2017 allows educational regulators across the UK to work jointly, where doing so would make delivery more efficient or effective. Article 4 of the order amends this provision to enable Welsh Ministers to exercise functions in the 2022 Act jointly with other public authorities, including the Office for Students and UK Research and Innovation.
As noble Lords may be aware, some charities are exempt from registering with the Charity Commission. The compliance of these charities with the relevant laws is instead overseen by their principal regulator. Article 5 of the order amends the Charities Act 2011 (Principal Regulators of Exempt Charities) Regulations 2013, to designate the Commission for Tertiary Education and Research as the principal regulator for specific charities in Wales. This reflects the fact that the commission will now be responsible for regulating further education and training in Wales under the 2022 Act, whereas previously Welsh Ministers were responsible. Article 5 also ensures that existing restrictions on principal charity regulators relating to the onward sharing of HMRC information are applied to the commission.
Article 6 of the order amends the Seafarers’ Wages Regulations 2024. The amendment ensures that the apprenticeship rate for seafarers can apply to those carrying out apprenticeships funded by the commission under powers in the 2022 Act.
The amendments to UK legislation in this draft order fall outside the legislative competence of the Senedd, as they relate to reserved matters such as tax, charities and employment. Taken together, these amendments ensure that existing legislation will continue to operate as intended by taking account of the changes made by the 2022 Act. The order needs to be in force by 1 April, to coincide with the Welsh Government’s commencement plan for the 2022 Act.
I welcome the continued implementation of the Senedd’s Tertiary Education and Research (Wales) Act and the positive impact that the commission is already making in Wales. This draft order will make the consequential amendments necessary to keep UK legislation up to date in light of the new legislative framework for tertiary education in Wales introduced by the 2022 Act. I beg to move.
Baroness Humphreys (LD)
My Lords, it is a pleasure to speak in the debate on this SI, which I hope is the final stage of the formation of the Commission for Tertiary Education and Research in Wales. As the draft Explanatory Memorandum to this SI explains, this consequential amendment order is made under Section 150 of the Government of Wales Act 2006, which allows the Secretary of State to make provision in consequence of Acts of Senedd Cymru. In this case, the SI makes permission in consequence of the Tertiary Education and Research (Wales) Act 2022 and of two other orders that followed the 2022 Act.
The 2022 Act brought forward welcome changes to the tertiary education sector in Wales by bringing together the higher education and research sector, the further education sector and the training sector under the umbrella of the newly created Commission for Tertiary Education and Research. As the Minister has already explained, the commission has the responsibility for funding and regulating the tertiary education sector in Wales. The 2022 Act provided a list of provisions in existing education legislation that were to be repealed. This 2026 order seeks to replace references to the repealed legislation when they appear in pieces of UK legislation. The 2026 order also takes account of the new functions of Welsh Ministers and the commission.
I was especially pleased to see that an amendment has been included that addresses the situation regarding seafarers’ wages. The amendment ensures that the apprenticeship rate can apply to seafarers carrying out apprenticeships that are provided or funded by the commission. We welcome this added incentive for young seafarers to follow their desired careers.
On these Benches, we welcome the clarity that the order provides about the powers of Welsh Ministers. As Liberal Democrats, we support the principles of devolution and believe that decisions affecting Wales should be made by democratic Welsh institutions. The SI simply implements changes to UK legislation required by legislation passed by the Senedd, and we therefore support the instrument wholeheartedly.
The Earl of Effingham (Con)
My Lords, this is a technical but necessary instrument made under the Government of Wales Act 2006, ensuring that the statute book reflects the reforms introduced by the Tertiary Education and Research (Wales) Act 2022. That Act abolished the Higher Education Funding Council for Wales and created the new Commission for Tertiary Education and Research—Medr—which became operational in August 2025. The commission now brings together responsibility for higher education, further education, apprenticeships, sixth forms, adult learning and research under a single strategic body.
The order does not revisit that policy decision; it simply updates legislation so that it continues to function properly following the creation of Medr. It transfers certain funding powers to Welsh Ministers or the commission, updates definitions relating to research institutions, enables joint exercise of functions, confirms the commission as the principal regulator of exempt FE charities and makes related amendments to reflect the new governance structure. Both the Secondary Legislation Scrutiny Committee and the Joint Committee on Statutory Instruments have considered the order and raised no concerns.
Lord Katz (Lab)
I thank the noble Earl and the noble Baroness for their valuable contributions to our short and focused debate. I appreciate the comments from the noble Baroness, Lady Humphreys, who welcomed the SI and supported how it helps to embody and enact further the devolution settlement within Wales, specifically for education.
I also thank the noble Earl, Lord Effingham, for his comments. He asked about the process of developing the commission. I can confirm that the transition has been smooth. He will be aware that the commission has undertaken a series of consultations to ensure the steps it takes to implement the 2022 Act fully are informed by the views and experience of the tertiary education sector and other partners. We take that very seriously.
The commission has made substantial progress in its role as the national steward for raising standards, delivering for learners of all ages, and improving institutional collaboration and co-ordination. It is worth noting that this has included supporting over 1,000 employees facing an uncertain future at the Port Talbot steelworks to develop new skills through an innovative programme of local learning. It is important that the order allows the full transition to the commission and the switching-on of its powers, but it is not the case that the commission has not been up and running, active and delivering good for the tertiary education sector in Wales.
Having said that, it is worth noting that the Welsh Government have taken a phased approach, which is probably the right approach, to bringing the 2022 Act into force, to ensure a smooth transition from previous arrangements and to prevent disruptions for providers and learners. As I said, the next phase of implementation will take place on 1 April, when a number of the new functions will come into force. That is why we are debating the order today, pending which we will formally move the Motion to approve the order in a few days’ time in the Chamber, to make sure that it can come into force to coincide with the Welsh Government’s commencement timetable for these powers. I hope that that satisfies the noble Earl’s question on the transition.
The order provides for a number of changes to UK law, including amendments to tax, charities and employment legislation, that are necessary following the Senedd’s Tertiary Education and Research (Wales) Act 2022. I offer my thanks for the productive manner in which the UK and Welsh Governments have worked in preparing the order, and I commend it to the Grand Committee.
House of Lords
Arrangement of Business
(1 day, 4 hours ago)
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Captain of the Honourable Corps of Gentlemen-at-Arms and Chief Whip (Lord Kennedy of Southwark) (Lab Co-op)
My Lords, following on from the questions I was asked yesterday, I thought today, before Oral Questions, was a good time to remind all noble Lords that at Question Time the House wants short, sharp, crisp, clear questions, not speeches. Ministers responding have an equal duty to be short, sharp, crisp and clear in their answers. The House does not want speeches in either asking or replying to questions. The same applies when we move on to Back-Bench questions on the Statement repeats—questions not speeches. In my roles as Government Chief Whip and as Captain of the Honourable Corps of Gentlemen-at-Arms, I try always to make myself available and accessible to Members on all sides of the House. My door is open. If any noble Lords have any concerns or issues, then talk to me outside the Chamber; I will always do my best to try and find a solution and deal with the issues before me.
Plan 2 Student Loans: Repayment Terms
(1 day, 4 hours ago)
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Lord Balfe
To ask His Majesty’s Government what plans they have to ease the repayment terms of Plan 2 student loans.
Lord Lucas (Con)
My Lords, on behalf of my noble friend Lord Balfe, and at his request, I beg leave to ask the Question standing in his name on the Order Paper.
Baroness in Waiting/Government Whip (Baroness Blake of Leeds) (Lab)
My Lords, before I answer the noble Lord’s Question, I thought it appropriate to start by mentioning the devastating news regarding the outbreak of meningitis in Kent at the weekend. Our thoughts are with the families, friends and loved ones of those who have died and with everyone who is currently unwell or affected by this terrible situation.
In response to the noble Lord’s Question, this is a complex system that remains open to review. The Prime Minister and Secretary of State for Education are looking at ways to make it fairer, and ranges of options will be considered, but we must consider how any change would be funded to be fiscally responsible. For graduates, we are working hard to tackle the cost of living by extending government-funded childcare, reducing energy bills, freezing rail fares and rolling out free breakfast clubs.
Lord Lucas (Con)
My Lords, I am grateful to the noble Baroness for that Answer, and I declare an interest as the father of a daughter who is currently accumulating these loans. Does the noble Baroness agree that, particularly for students whose courses are not of the quality required to generate returns of the order of the amount spent on them, and who have accumulated student loans, it would be a good idea to audit what universities are doing and why they are putting our children in this degree of debt?
Baroness Blake of Leeds (Lab)
In our manifesto we committed to raising teacher standards in higher education. Every student deserves the best possible quality from their investment. I am pleased to say that we are working closely with the education sector and providers to make sure that that quality is, first, across the board but also maintained.
Baroness Deech (CB)
Does the Minister agree that the situation has gone too far for tinkering? We need a fresh start. As I said yesterday, we need a Select Committee in this House on education. But does she agree that it is time for something radical, such as a graduate tax or complete exemption for those who repay their debt to society immediately—the students of medicine, teaching and nursing?
Baroness Blake of Leeds (Lab)
I always listen to the noble Baroness’s questions with interest. I do not think it would be right for me to pre-empt the ongoing discussions. I think there is a general recognition that something needs to change, but it has to be done in the spirit of fairness while maintaining access for all students and making sure, as I said at the outset, that it is fiscally responsible in a complex financial situation.
Lord Mohammed of Tinsley (LD)
My Lords, I declare my interest, as I did last week, as my son recently graduated and my daughter has just started university. Will the Government consider reducing or capping the interest rates applied to Plan 2 loans, particularly during periods of high inflation, because students may well see their debt grow while they continue to make repayments?
Baroness Blake of Leeds (Lab)
The noble Lord refers to a complex situation, and it would be completely wrong of me to make any suggestion about changing interest rates or methods of repayment. But of course, all these matters are under consideration in such an important subject.
Baroness McIntosh of Hudnall (Lab)
My Lords, does my noble friend agree that is quite difficult to determine the value of certain kinds of degree course if the only measure used is what you can earn after you have completed them? Would she further agree that there are some sectors which are extremely important to the health of our economy and our general well-being, such as the arts and the cultural sector, in which it is pretty difficult to earn very high salaries, but the value of the people who are in those sectors is worth appreciating just as much?
Baroness Blake of Leeds (Lab)
I absolutely support my noble friend’s view of the value of a university education; it cannot always be measured in monetary success. But obviously, the outcomes of students going to different institutions is a measure that is looked at—how many of them get into employment, what that employment is and whether they go on to further training. It is true that there are some narrowly held preconceived views about the value of some courses that actually do an enormous amount, not only for the well-being of the students but for the economy and well-being of the country.
The Earl of Effingham (Con)
My Lords, it appears that EU officials are demanding that EU students pay home fees rather than international fees in order to benefit from a UK university education under a new youth mobility scheme. This was not in the framework signed last year. It may cost our universities up to £140 million annually. Surely it is our students who deserve help. Will the Minister rule out international students paying domestic fees?
Baroness Blake of Leeds (Lab)
I think it is well above my pay grade to interfere in the ongoing negotiations with the EU. It is imperative that we let those negotiations take their full course, and then we will report back at the appropriate time.
Baroness Butler-Sloss (CB)
May I ask the Minister whether she accepts that the present system is unfair?
Baroness Blake of Leeds (Lab)
What I will say is that the imperative, for whatever comes in, is that fairness is at the centre of what we do. We have to make sure that the question of being able to afford studying is not something that puts people off. Courses should be available to all young people, regardless of their family backgrounds. That is a principle we have to hold on to and make sure is at the centre of any discussions we have going forward.
Lord Watts (Lab)
My Lords, is the Minister as amazed as I am that, after 14 years of the previous Government, when they introduced no changes and left us with a mess, they are now coming up with policies to reduce costs for students? Why did they not do it for 14 years?
Baroness Blake of Leeds (Lab)
My noble friend is absolutely right. The student loan situation is one we inherited from the Opposition. I think they have questions to answer about the approach they took. We will not take any lessons on how to do this. We are determined to move forward and do it properly on behalf of the young people of this country.
Lord Tarassenko (CB)
My Lords, the proportion of home students in full-time postgraduate study has fallen from 46% to just 29% in five years. At the start of a PhD, a home student with a typical undergraduate loan will have a debt of around £55,000. At the end of the PhD, that debt will be somewhere between £65,000 and £70,000. Most PhD students from disadvantaged backgrounds take out a doctoral loan, which also accrues interest during the PhD. Will the Government consider freezing both the undergraduate and doctoral loans at the start of a home student’s PhD so that these loans do not accrue interest during the PhD?
Baroness Blake of Leeds (Lab)
That is an interesting observation and one that I am sure will be considered in the round. These matters will be looked at and reviewed as we go forward, through the lens of fairness for all.
Lord Sandhurst (Con)
My Lords, the problem was well known before this Government came into office. The Government have been in power for 20 months or so. Why is there still no plan?
Baroness Blake of Leeds (Lab)
My Lords, a month of us being in power roughly equates to almost a year of the Opposition being in power. As I said at the beginning, we are moving forward in addressing affordability and cost-of-living measures, as well as looking at this very complicated area of student loans.
Baroness Garden of Frognal (LD)
My Lords, the presence of EU students in our universities has always been a net benefit to our students, enhancing their breadth of vision and making them understand how other people live. Is it not time we looked again at introducing better ways for EU students to attend our universities?
Baroness Blake of Leeds (Lab)
Any young person who has the opportunity to mix with other young people from around the world will talk of the benefit that brings. This area is of enormous importance. It is not only about students coming here, but where our young people want to go to achieve their future success.
BBC World Service: Sustainability
(1 day, 4 hours ago)
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Baroness Royall of Blaisdon
To ask His Majesty’s Government what steps they are taking to ensure the sustainability of the BBC World Service.
The Minister of State, Foreign, Commonwealth and Development Office (Baroness Chapman of Darlington) (Lab)
My Lords, the Government highly value the BBC World Service; it is a soft power asset and the world’s most trusted news provider. The significant uplift in our funding to £137 million this financial year, despite the difficult fiscal context, demonstrates our support for it. Grant-in-aid funding for the next three years is being decided through the FCDO allocations process and will be made before the 2026-27 financial year. Potential longer-term funding mechanisms will be considered through the BBC charter review.
Baroness Royall of Blaisdon (Lab)
I am grateful to my noble friend for that Answer, and I am delighted that the settlement has been announced. The BBC World Service is one of the greatest instruments of soft power that we have. It is a lifeline to many in our difficult and divided world, including those in Iran, and I pay tribute to the very brave journalists of BBC Persian. When the world is full of dangerous propaganda, the World Service projects and protects our democratic values while delivering value for money. Although I am grateful for the information provided by my noble friend, I urge her to ensure that, in due course, funding will be moved back to the Government to provide stability and long-term planning. That is important for the service and for the journalists who serve the service.
Baroness Chapman of Darlington (Lab)
I thank my noble friend. Her support for the World Service is long-standing and well known, and quite right too. The longer-term funding proposition for the World Service will need to be considered as part of the charter review. To be absolutely clear, the £137 million funding uplift that I referred to in my initial Answer is for this financial year. I think my noble friend may have misheard what I said. The allocations for next year will be made very shortly.
Lord Birt (CB)
My Lords, in a few years, we will be celebrating the centenary of one of the UK’s many great inventions, the BBC World Service, which now reaches a remarkable 400 million people each week. It is the most trusted news service on the planet and a significant contributor to promoting British values across the globe. Can the Minister articulate any argument whatever—I cannot see one—for why the BBC World Service should be majority funded by the licence fee payer rather than fully funded by the taxpayer, which, for the overwhelming majority of its history, it was?
Baroness Chapman of Darlington (Lab)
As the noble Lord will know, this is not a situation of our making but one that we inherited, and we are where we are. Our task, together with the BBC, is to make sure that the World Service is funded in a way that means it can continue to do the incredible work that it leads around the world, because, as the noble Lord says, it is the world’s most trusted source of news.
Lord Purvis of Tweed (LD)
My Lords, on 15 January, I made the case that the BBC Persian Radio service needed to be sustained, and recent events have shown that to be necessary. I welcomed the Government issuing emergency funding so that the BBC Persian Radio service could be sustained. Does the Minister not agree that that illustrates one of the problems—namely, if we have critical World Service services funded by emergency funding then we cannot plan on a sustainable future? The delay in the allocations being made is regrettable. Can the Minister assure the House that, when those allocations are made soon, they will be over a three-year period, so that the BBC World Service can plan and make sure that we sustain these vital services for our country?
Baroness Chapman of Darlington (Lab)
Multi-year allocations are incredibly important. That is why, in all the allocations that we are making as part of this process—not just for the World Service but for our teams in countries and for our partner organisations—we are seeking to do just that, because it means you get better value for every £1 you spend. We work closely with the World Service on issues around language. I am incredibly impressed and in awe of the way that the BBC has responded to the situation in Iran. Even with services having been banned, the latest figures I saw were that 28 million people are accessing that service. It is a real and good example of what can be achieved.
Lord Grade of Yarmouth (Non-Afl)
My Lords, following up the question of the noble Lord, Lord Birt, I ask the Minister a simple question: does she think it is fair that UK licence fee payers should have to pay so much towards the World Service?
Baroness Chapman of Darlington (Lab)
Do I think it is fair? I guess that depends on what you think the licence fee is for. That is part of what the charter review process will tease out. I accept that what a licence fee payer may have wanted to pay for in the 1950s and 1960s may well be different now, because things have changed. The World Service is a tremendous asset to this country. There are many licence fee payers who enjoy the World Service here in the UK, as well as around the world. What we need to achieve, certainly from my perspective, is the longer-term stability and success of the World Service.
Lord West of Spithead (Lab)
My Lords, what is the future for BBC Monitoring?
Baroness Chapman of Darlington (Lab)
BBC Monitoring provides an exceptionally important service. If noble Lords have not had the chance to look into what it does, I would highly recommend it, particularly for situations such as that in Ukraine, where it is probably the most reliable source of information on the Russian war dead. Its work on misinformation and disinformation is highly significant to our ability to bring everything we can in support of Ukraine.
Lord Callanan (Con)
My Lords, as Russia and China spend about £8 billion a year on international state broadcasters, the BBC World Service is broadcasting trusted and generally balanced reporting in over 40 languages to 300 million people a week. However, that trust is undermined when BBC Arabic journalists are reported to have celebrated attacks against Israel. What work have Ministers done with the BBC to ensure that our taxpayer-funded broadcaster is maintaining impartiality, both here and internationally?
Baroness Chapman of Darlington (Lab)
It is important that the BBC has editorial independence, but there is no doubt that there were issues that needed to be responded to following the Prescott revelations. I was pleased to see the way that the BBC reacted to that; it owned the problem and it has put in place measures to deal with it. The noble Lord started his comments by saying that we are being outspent by other nations, and that is undoubtedly true—welcome to the enlightened side of this debate.
Lord Alton of Liverpool (CB)
My Lords, has the Minister had the chance to read the debate in your Lordships’ House on 26 February about the report of the Joint Committee on Human Rights on transnational repression? Specifically, has she read the evidence that was given by Reporters Without Borders about the plight of journalists who have been reporting on events in Iran? In particular, she will see there that women journalists have been treated in the most appalling manner conceivable—independent journalists who have been left bleeding on the streets of London. Will she ensure that we take the cross-departmental action that is recommended in that report at the earliest opportunity?
Baroness Chapman of Darlington (Lab)
I have not read that evidence, but I will do. What the noble Lord describes is transnational repression and criminality. We will do whatever we need to do to stamp it out, and he is right to draw our attention to it. We are deeply concerned, and this is another reason why we must do everything we can and use our leadership to protect, preserve and enhance the vital role that journalists play across the world.
The Lord Bishop of Southwell and Nottingham
My Lords, the World Service has been particularly effective at communicating issues of faith and freedom of religion, and, notably, at addressing misinformation during times of global conflict. In the light of the increasing importance of this, what steps are the Government taking to ensure that it is well placed to play an increasing educative role in the understanding of faith?
Baroness Chapman of Darlington (Lab)
As the right reverend Prelate says, the World Service does a very good job of this, as it does in so many areas of public life. Although it is independent of government, and it is vital that that remains the case, we talk to and work closely with it on areas of priority for the government, including freedom of religion and belief, language services and geographical priorities. It is right that we do so. I highlight the work being done in Afghanistan on the education of girls in particular, which is especially impressive.
Baroness Kennedy of The Shaws (Lab)
My Lords, picking up on the question from the noble Lord, Lord Alton, the risks of transnational repression are experienced by BBC journalists and by journalists from Iran International. Are the Government aware that, only yesterday, a leading commander in the Iranian armed forces warned that if “certain institutions and countries” continue to co-operate with Iran International, a broadcasting company like the BBC, locations and infrastructure linked to the broadcaster may be included in Iran’s military targeting? Are we doing anything about that threat?
Baroness Chapman of Darlington (Lab)
I will look into the issue that my noble friend raises. I was not aware of it, but I will make sure that officials and the relevant Ministers attend to that.
Birmingham City Council and Unite: Refuse Workers’ Pay
(1 day, 4 hours ago)
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Lord Woodley
To ask His Majesty’s Government what discussions they have had with the parties involved in the industrial dispute between Birmingham City Council and Unite regarding the pay of refuse workers.
Lord Woodley (Lab)
In begging leave to ask the Question standing in my name, I declare an interest as the former general secretary of Unite the Union.
The Parliamentary Under-Secretary of State, Ministry of Housing, Communities and Local Government (Baroness Taylor of Stevenage) (Lab)
My Lords, the Government recognise the deep frustration of residents with the ongoing waste dispute. The people of Birmingham must be at the heart of resolving this issue. While the Government are not a party in this dispute, the Secretary of State has met both parties and urged them to bring about a sustainable solution to end it. We continue to monitor the situation, alongside the associated impact on local communities.
Lord Woodley (Lab)
The Minister is well aware that, almost a year ago, an agreement was reached at ACAS between the chief executive of the council and Unite to end this dispute, only for it to be vetoed by the commissioners appointed by the last Government on about £1,200 a day. Does the Minister agree that this agreement must be honoured, or the commissioners replaced, to end this rat-infested, unnecessary dispute that has cost over £33 million to date and is badly damaging services that are so important to the people of Birmingham?
Baroness Taylor of Stevenage (Lab)
We all want to see the dispute brought to a resolution as quickly as possible. The government-appointed commissioners have been in place at the council since 2023 to oversee its improvement journey. That involves working with the council to make sure that its decisions align with its statutory duties. On the waste dispute, it is not true that the commissioners are blocking a viable deal. As noble Lords would expect, the commissioners are supporting Birmingham City Council to ensure that its approach is in line with its legal obligations, including the best value duty. They report regularly to the Secretary of State, but they are independent of government and Ministers do not dictate their decisions or approve their actions.
Lord Bird (CB)
Is it possible for us to agree that one of the reasons we are in this dispute is that refuse workers are so badly paid? I am a former refuse worker —I was a road sweeper for the Royal Borough of Kensington and Chelsea—and I can honestly say that this is a disgrace. If we do not have the removal of rubbish, cities just fall apart.
Baroness Taylor of Stevenage (Lab)
The noble Lord raises an important point about the pay of public service workers, and it is very important that they are recognised for the real value they provide in our communities. But even before the strike, Birmingham’s waste service was failing residents. For example, in 2024-25 residents registered over 120,000 missed bin collections. The council now has to press ahead with the much-needed transformation to build a waste service that is fit for purpose and delivers for the people of Birmingham. That of course includes recognising the staff as they should be recognised.
Lord McLoughlin (Con)
Bearing in mind the words of the noble Lord, Lord Woodley, on the position of the commissioners, do the Government have full confidence in the commissioners appointed to do that job?
Baroness Taylor of Stevenage (Lab)
The commissioners are reporting regularly to the Secretary of State. They are independent of government, but they are carrying out valuable work in Birmingham. In their most recent report, they highlighted that the council has made very positive progress in key areas, including in service delivery. They also noted that the waste dispute has diverted attention and that the council has significant work to do to meet the best value duty. The commissioners are providing good support to Birmingham City Council, and I am sure they will continue to do so.
Baroness Thornhill (LD)
My Lords, my concern is that for a whole year, the residents of Birmingham have had to endure worsening public health conditions. What additional public health powers are Ministers prepared to use if the situation deteriorates? How bad do things have to be before the Government intervene? A year is far too long.
Baroness Taylor of Stevenage (Lab)
Throughout the dispute, the Government’s priority has been the residents of Birmingham. During the worst disruption, in spring 2025, the Government provided intensive support to local partners to respond to the public health crisis that was arising then because of the all-out strike action. The result was to establish a regular contingency waste collection service, despite the industrial action. While the contingency service delivers basic services, there have been periods of missed collections. We continue to monitor the situation and the associated impact on local communities, but for the moment the contingency service is delivering a service to the people of Birmingham.
Lord Jamieson (Con)
My Lords, last year Birmingham’s Conservative group published a clear plan to end the bin strikes, reinstate weekly collections and resolve the equal pay liabilities. Labour rejected that plan, claiming that negotiations were progressing well. Do the Government regret that decision, which could have stopped the strikes 12 months ago? Will the Government ensure that constructive opposition proposals that put residents first are properly considered?
Baroness Taylor of Stevenage (Lab)
The Conservative Party in Birmingham should not wash its hands of some of the part it played in creating the crisis that Birmingham is facing overall. Birmingham’s recent history has seen one of the largest equal pay crises in modern times. Over the past 15 years, this has cost the council and the people of Birmingham a great deal of money. In October last year, the council signed the agreement with the unions to settle the historic equal pay claims that had amounted. This was a significant step forward to move past a dark moment in the city’s history and in resetting relationships with staff and their trade union representatives. Talks are ongoing to resolve this current issue.
Baroness Jones of Moulsecoomb (GP)
My Lords, I do not quite understand what went wrong last May, because an agreement was reached and the news was that the commissioners had blocked that deal. Have the Government looked any further into this to be sure of exactly what happened, what went wrong and how it can be improved?
Baroness Taylor of Stevenage (Lab)
As I have said, it is not correct to say that the commissioners blocked a viable deal. We want to urge both parties to get back around the negotiating table to find a sustainable solution to end the dispute in the interests of residents. Of course, it is very important that both the equal pay settlement that has been agreed in Birmingham and the best value duty are met in the course of those negotiations.
Lord Hannan of Kingsclere (Con)
My Lords, is the truth not that these insanitary and insalubrious horrors being visited on our second city are the result of an act of grotesque judicial activism? Everyone understands what equal pay means: men and women should get the same for the same job. Here is a court saying that if one profession mainly has men, that allows it to intervene. That disregards what the law says in favour of what it thinks the law ought to say. How many other local authorities in this country face potential bankruptcy because of these perverse and expansionist rulings by politicised judges?
Baroness Taylor of Stevenage (Lab)
I am pleased to tell the noble Lord that this year, very recently, the council passed a balanced revenue budget without the need for exceptional financial support for the first time in recent years. This is possible because the Government delivered fairer funding, meaning that Birmingham will receive an increase in core spending power of 45% to help restore its services and the recovery of the local economy. That is very positive progress for delivering financial sustainability for the residents of Birmingham. I commend the hard work of the council leader, members and officers, and the commissioners, in getting to this point.
Lord Watts (Lab)
My Lords, would it not be a good idea for ACAS to get involved again to see whether progress can be made with this dispute? At the moment it does not seem to be going anywhere, and both the people of Birmingham and the workers are suffering.
Baroness Taylor of Stevenage (Lab)
We would certainly encourage all parties that can help with this dispute to get around the table and make sure that this is resolved. It is not in the interests of the people of Birmingham for this to carry on a day longer than it needs to.
Lord Scriven (LD)
My Lords, for two years the poor council tax payers of Birmingham have paid a 10% council tax rise and a 7.4% council tax rise but have not been able to get the basic service of having their bins emptied. What would the Minister say—other than that people need to get around the table—to those people in Birmingham to get the most basic of council services?
Baroness Taylor of Stevenage (Lab)
The noble Lord makes a point that I want to expand on. It is very important for Birmingham and the people of the West Midlands that the economy can be driven forward so that we can develop the potential that we know Birmingham has. Having this dispute hanging over both the council and the people of Birmingham is not helping that to take place. That is why I say that the sooner we can get this dispute resolved, the sooner we can start building the economy, the potential and the future for Birmingham that we know are there and waiting to happen.
Lord Evans of Rainow (Con)
My Lords, the Minister did not answer my noble friend’s question. How many other councils could be in this position on equal pay?
Baroness Taylor of Stevenage (Lab)
I think it is fair to say that the situation on equal pay has now been resolved in most councils. In my own council, it took a very long time indeed to resolve because it had not been looked at for a number of years. It often results in large costs for the councils. I cannot say specifically how many councils have not resolved it yet. I think there are probably very few, but I am happy to look into that and come back to the noble Lord.
Fujitsu: Post Office Horizon Case
(1 day, 4 hours ago)
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Lord Arbuthnot of Edrom
To ask His Majesty’s Government what representations they have made to Fujitsu regarding making an interim payment towards the costs of investigation and redress in the Post Office Horizon case.
Lord in Waiting/Government Whip (Lord Leong) (Lab)
My Lords, I pay tribute to the noble Lord and to my noble friend Lord Beamish, whose unwavering determination, moral courage and steadfast advocacy over these years have ensured that the voices of Horizon victims were heard, believed and ultimately vindicated.
Fujitsu has acknowledged its moral responsibility and has indicated its intention to make a financial contribution. The figure will be set once the Williams inquiry publishes the final volume of its report. We have made it clear to Fujitsu that an interim payment would be a valuable demonstration of intent. However, whether to make such payment and the level of any contribution remains a decision for the company.
Lord Arbuthnot of Edrom (Con)
My Lords, I thank the Minister for that Answer. Given that Fujitsu knew from the beginning that its system was faulty; that it knew that it was altering remotely sub-postmasters’ accounts without the knowledge of the sub-postmasters; that it knew that the Government and the Post Office were denying that these things could happen while prosecuting the sub-postmasters, how can Fujitsu possibly be a fit and proper organisation to do business with anyone in this country, let alone the Government? Or are we over a barrel?
Lord Leong (Lab)
My Lords, the anger shown by the noble Lord, which I share, is completely understandable, considering the serious injustice experienced by so many sub-postmasters. These are exactly the issues that the independent inquiry is examining in detail. Fujitsu has acknowledged a moral obligation to contribute to the costs of redress, and the Government have made it absolutely clear that it should do so. Decisions regarding its future role as a government supplier will be made carefully, based on the full findings of the inquiry.
Lord Beamish (Lab)
My Lords, the situation outlined by my good friend, the noble Lord, Lord Arbuthnot, is right. Fujitsu provided the equipment for the Post Office and knew what was wrong with it, and, even worse, it had a contract to provide information in court to prosecute individual postmasters. Fujitsu was at the centre of this scandal.
My noble friend said that Fujitsu has announced that it has a moral obligation. Well, moral obligations do not pay bills. The taxpayer is on the hook already for over £1.4 billion paid out. Those postmasters—some, unfortunately, are no longer with us—need answers to this injustice. Fujitsu is hiding behind the inquiry. It could make the interim payment now. The Government must stop giving this company contracts: that is the only thing which will stop it and wake it up. Can my noble friend indicate when that decision will be made to stop giving Fujitsu work?
Lord Leong (Lab)
I share the frustrations my noble friend expresses. The Government are absolutely committed to ensuring that this inquiry takes place, and the findings will be published soon. As he will note, the first volume of the inquiry has been published, and it makes it clear that Fujitsu has an obligation to make compensation for the sufferings of all these postmasters. We are determined to ensure that Fujitsu plays its part.
Lord Fox (LD)
My Lords, it might help if your Lordships understand the scale of our commitment to Fujitsu. On my count, there are 30-plus live UK contracts, worth at least £5 billion through the lives of those contracts. Since the 2019 High Court ruling, HMRC alone has awarded eight contracts to Fujitsu. We do not need an independent inquiry to know that Fujitsu should be paying compensation, so what is stopping the Government pushing it to do that?
Lord Leong (Lab)
The noble Lord touches on several points; let me go through each of them. First, the suggestion that we should simply walk away from existing Fujitsu contracts does not take account of the impact on public services.
Lord Leong (Lab)
Bear with me. For instance, Fujitsu provides communications between our submarines at sea and HQ. It supports HMRC’s self-assessment scheme and the Home Office border operation. It is also supporting the current Horizon scheme. Although a replacement is being developed and the Government are committed to the Green Paper that we just published, we are investing £483 million over the next two years to support the transformation, replacing Horizon and transitioning away from Fujitsu.
Lord Clarke of Nottingham (Con)
My Lords, if there is sufficient evidence to support the assertions two noble Lords have made about the extent of Fujitsu’s knowledge of the failures in their system—and I believe there is such evidence—have the Government not considered taking legal action against Fujitsu to enforce what would almost certainly be its legal liability to pay compensation for the massive losses its action has caused? Why are the Government just relying on a vague indication by Fujitsu that it has a moral obligation? A very great deal of money could be recovered for the taxpayer if a successful legal action was brought against this international company.
Lord Leong (Lab)
I have the utmost respect for the noble Lord but, as a former Secretary of State and Minister, he should know that the Government speak to government lawyers on a regular basis. An inquiry is taking place, and we should wait for it to finish and for the report to be published. An interim report has been published, and Fujitsu has committed to making a payment. When and how that happens is being consulted on and discussed between the two parties.
Lord Cromwell (CB)
Can the Minister confirm that Fujitsu has a role in the national emergency alert system on which our entire society depends? If so, is it time for a rethink?
Lord Leong (Lab)
I am afraid I do not know the answer to that, but I will definitely find out and write to the noble Lord.
Lord Wigley (PC)
My Lords, is it not inconceivable, in the circumstances that have developed, that Fujitsu could get away without making a payment? Should there not now be a ring-fenced fund into which it is required to pay, so that all the liability does not land on the taxpayer?
Lord Leong (Lab)
As I mentioned earlier, we are in constant conversation with Fujitsu. It has already committed to pay compensation, but how and when that happens is currently being consulted on.
Baroness Finn (Con)
My Lords, does the Minister accept that it is wholly unacceptable for the taxpayer to be picking up the full cost of this scandal while Fujitsu, whose systems were at the heart of the failings, has yet to make any meaningful financial contribution? Can he confirm whether the Government will take advantage of the new procurement regime put in place by the previous Government, which allows the exclusion of suppliers from future procurement processes on the grounds of professional misconduct?
Lord Leong (Lab)
My Lords, the Government’s expectation is clear: Fujitsu should bear the cost of redress resulting from the Horizon scandal. We are engaging constructively with the company and have communicated our position at the highest level. I cannot go further than that. However, it is not appropriate for the taxpayer alone to bear the burden of the failure in which Fujitsu was significantly involved.
Baroness Chakrabarti (Lab)
My Lords, if the litigation strategy rightly suggested by the noble Lord, Lord Clarke of Nottingham, does not bear fruit, I would urge my noble friend and the Government to consider legislation to ensure appropriate legal restitution.
Lord Leong (Lab)
My Lords, the Government are open to all suggestions, and that is something we will consider.
Lord Clement-Jones (LD)
My Lords, in Questions answered by the Treasury, I was told that it did not have the power under procurement rules to prevent Fujitsu being awarded new contracts. If that is the case, are the Government going to change the rules?
Lord Leong (Lab)
The noble Lord mentions procurement. I am sure that the Cabinet Office is looking into whether any changes need to be made, but a live inquiry is happening at this time. We have to follow it through, and its findings will be published in due course.
Lord Sterling of Plaistow (Con)
My Lords, I make the point that my noble friend’s work has been wonderful—
Captain of the Honourable Corps of Gentlemen-at-Arms and Chief Whip (Lord Kennedy of Southwark) (Lab Co-op)
I believe it is the turn of the Conservative Benches.
Lord Sterling of Plaistow (Con)
My Lords, I think the Prime Minister should personally ring the Prime Minister of Japan, who had an amazingly successful outcome in the election, and suggest that she lean—this is my word—on Fujitsu, as it is in our interests to trade with them. I know that it is a bit late to ring tonight but, first thing tomorrow morning, the Prime Minister should speak to her personally and ask her to lean on Fujitsu.
Lord Leong (Lab)
As I mentioned, the Government are having conversations with Fujitsu regularly, which I am sure are also at government level. I take the noble Lord’s point.
Grenfell Tower Memorial (Expenditure) Bill
GP Contract
(1 day, 4 hours ago)
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Lord Kamall (Con)
My Lords, I am grateful to the Government for this repeat. The Minister in the other place pointed to 1.3 million referrals being diverted through something called “advice and guidance”. This means that GPs must seek input from a specialist before making a referral, but some professional bodies have warned that this mandatory approach will risk creating barriers to patients accessing specialist care and may compromise patients’ safety if they are not referred in a timely manner. To address these concerns, can the Minister set out what clinical safeguards are in place where a GP believes a patient needs to be referred directly to a specialist but is instead referred to go through this advice and guidance process? If a patient comes to harm as a result of any delay due to not being referred directly to a specialist, who will bear responsibility for that decision and how will accountability be determined?
The Parliamentary Under-Secretary of State, Department of Health and Social Care (Baroness Merron) (Lab)
As the noble Lord said, we have seen 1.3 million people diverted since April 2025. Otherwise, they would have been added to the electives waiting list, in clinical terms, unnecessarily. The main thing I can say to the noble Lord on advice and guidance is that I think the figures speak for themselves. That is why we are embedding it into the core contract. We are recognising it as routine practice. It provides more predictable funding and removes annual sign-ups. More generally, I must emphasise to the noble Lord that it does not take away a GP’s right to refer. That remains a matter of clinical judgment and, as in all things, clinical judgment will rule the day.
Lord Scriven (LD)
My Lords, the Government have now mandated a cast-iron guarantee that GP practices’ online portals must remain open in core hours, but a portal is merely a digital letterbox, it is not a clinician. Has the department conducted a full clinical risk assessment of the danger of red-flag symptoms being buried in high volumes of routine digital traffic? If so, will the Minister publish those findings today? If not, how can the Minister guarantee that this always-on requirement is clinically safe for patients?
Baroness Merron (Lab)
When we develop digital approaches, I have to say again that the figures speak for themselves on, for example, patient satisfaction with general practice: people believe it is finally moving in the right direction. According to the Office for National Statistics, some 77% of people described contacting their GP as easy. That was in January this year, and it was up from just 60% in 2024. I think the public are giving their own view. On development of online access, we always ensure that patient safety is at its heart. I cannot give the commitment to publish that the noble Lord seeks, but I will be very happy to write to him and place a copy of the letter in the Library of the House, giving all the detail about how patient safety is assured. That is core to all our work and developments.
Baroness Bottomley of Nettlestone (Con)
My Lords, it is evident all over the country that there is an epidemic of sick notes. Is there anything that the Government are doing to strengthen the arm of GPs who try to resist giving a sick note on simple request?
Baroness Merron (Lab)
If I have understood the noble Baroness correctly—forgive me if I have not—the GP contract does not address that directly. That is obviously a more general but important point about GPs’ practices and how they deal with matters. GPs are given advice in their updated training on how to manage those situations, and I expect them to follow it.
Baroness Gerada (CB)
My Lords, the new GP contract appears to be baking in access over continuity: my GP, when I want to see him. How will the Government protect continuity of care, which is after all what keeps the NHS safe and provides value for money, and which patients welcome?
Baroness Merron (Lab)
We have already said that through our 10-year plan, and this contract very much ties into the main pillars of the plan. We found GP services in a very difficult and challenging state, as I know the noble Baroness will be more than aware. We regard GP services as the front door. We want to see that continuity of care and we expect GPs to organise it accordingly. We all understand that it is not always possible, but clearly the best form of care, whether in the community or in hospital, is on a continuous basis and wrapped around the patient’s needs, not the other way around.
The Lord Bishop of Manchester
My Lords, the Statement made in the other place refers explicitly to coastal areas and deprived places, and I welcome that. Will the Minister say something about how we can ensure that there is good access to GP services in rural areas?
Baroness Merron (Lab)
The right reverend Prelate is right to raise this. We have been very concerned for some time about the inequalities in coastal areas and areas of greatest need, where healthy life expectancy is the lowest. That includes communities with higher deprivation levels. That is why we began our reforms last year with an independent review of the outdated Carr-Hill formula. That is about the distribution of GP funding, which is fundamental to the point the right reverend Prelate makes. It is based on data that is around 25 years old in some cases, and clearly our population has changed. I look forward to updating the House when that review is concluded.
Baroness Manzoor (Con)
I welcome some of the criteria that are going to be used, particularly for deprived communities, in relation to access, but there remains a postcode lottery in terms of access to GPs, particularly in deprived communities. My concern is that, with some of the algorithms and IT being used as a postbox, patients are being referred directly to A&E departments. Will the Government assess in A&E departments which people are being referred that way so, that we can ensure that that loophole is addressed?
Baroness Merron (Lab)
It is important to say that online access does not sit alone. There is also in-person access, including telephone access if people prefer that. The intention is not—and it is not the practice—that they are just postboxes. They are dealt with. We constantly keep those approaches under review. Our expansion is about access to GPs. That includes, for example, in answer to some of the points that have been raised today, including by the noble Baroness, repurposing £292 million from primary care network incentive scheme moneys to fund additional GP sessions to create more capacity, because that is necessary whatever way people make contact. That was based on feedback from the BMA, which said this would be a more effective use of funding.
Baroness Browning (Con)
Is there any monitoring of when GPs insist on a telephone call rather than a face-to-face meeting, or when things are sent by email to the surgery and they are then triaged by others rather than their normal GP? Is there any identifying of just how many cases they miss of those very serious conditions that subsequently end in serious illness or even death? I am particularly thinking of such things as sepsis, where the symptoms are not always so overt to begin with as they are as the disease progresses. Is there any monitoring of how successful these new systems are in picking up those types of diseases?
Baroness Merron (Lab)
All the systems are under constant review. It might be helpful if I point out to the noble Baroness that one of the key things in the GP contract for 2026-27 is the requirement for all clinically urgent patients to be dealt with on the same day. That is not required currently; I think that will make a huge difference. Again, I emphasise that we will not be defining “clinically urgent”: it will be down to practices to use their clinical judgment, and that is the right place.
Lord Mandelson: Response to Humble Address Motion
(1 day, 4 hours ago)
Lords ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Baroness Finn (Con)
My Lords, in discussing this matter we must, as always, keep Jeffrey Epstein’s victims and their families at the forefront of our minds. I pay tribute to the brave women and girls who were abused by him who have spoken out and called for justice.
The Prime Minister told the House of Commons on 4 February that Peter Mandelson, when questioned about his relationship with Jeffrey Epstein, “lied repeatedly”. To date, we are yet to see evidence of those lies, but we do now have proof that the Prime Minister was directly informed that Mandelson had maintained his relationship with Epstein after the latter had been convicted for child sex offences.
Upon receipt of this information, the Prime Minister, a former Director of Public Prosecutions, did not undertake a searching inquiry for the truth but instead left it to two personal friends of Mandelson, Morgan McSweeney and Matthew Doyle—now the noble Lord, Lord Doyle—to engage in a farcical form of due diligence consisting of questions we are yet to see and answers that continue to be withheld. As if that were not concerning enough, it has been reported in the Times that no written record of the appointment of Mandelson exists. I find this extraordinary. As others who, like me, have worked in Downing Street know, there simply has to be an audit trail to transmit the Prime Minister’s decision. The decision, we are asked to believe, was made in an informal meeting with senior advisers.
The House should pause at this stage to recollect that a previous Prime Minister was heavily criticised by the House of Commons Committee of Privileges report of 15 June 2023, when, in making statements to the Commons, he relied on assurances that
“did not emanate from senior permanent civil servants or government lawyers”.
Can the Minister say whether the Prime Minister misled the House of Commons when he gave the assurance that full due diligence was followed? Does she accept that the sole basis on which the Prime Minister gave that statement was the undocumented assurances of two personal friends of Peter Mandelson?
I turn to other matters. Why was Peter Mandelson paid £70,000? The Government’s argument is that not paying him would have resulted in a claim in the employment tribunal, with associated costs to the taxpayer. Can the Minister explain why the Government did not have the courage to stand up to Mandelson to ensure that he would not receive a penny of taxpayers’ money following his dismissal? The Prime Minister has said on the record that Mandelson acted dishonestly to gain the post of ambassador. If that was true, surely Mandelson’s case would not have been successful at the tribunal. Does the Minister understand why the public are so angry about this? He should not have received a penny.
When we last repeated a Statement on the Government’s response to this humble Address, I asked whether the Government would publish a schedule that would show which documents are being withheld and which are being published. I did not get an answer then, but the Chief Secretary to the Prime Minister said in the other place
“I would need to take advice from lawyers in the Metropolitan Police before I could say whether these documents are being held for their criminal investigation”.—[Official Report, Commons, 11/3/26; col. 364.].
Yesterday, the Official Opposition reiterated the need for this, given that at least 56 documents are thought to be missing. Has that advice been sought? When will the Government give a formal answer to this important question, which has already been put to Ministers a number of times? For the sake of public confidence in the process that Ministers and officials are following in response to the humble Address, we must be able to see the amount of information that is being withheld and for what reason.
Evidence that we have already seen shows that the Prime Minister knew as a fact that Mandelson maintained his relationship with Epstein after the latter’s conviction. The Prime Minister knew that Mandelson was unfit to be our ambassador but appointed him anyway and allowed two of Mandelson’s personal friends to synthesise an entirely farcical, illusory form of due diligence. At the end of this, the Prime Minister placed into our most prestigious and pivotal diplomatic post a man who is, as a matter of public record, already known to be a serial liar. Surely the truth is that the misplaced trust is not that of the Prime Minister in Peter Mandelson but the trust that the British people placed in the Prime Minister at the last election—a trust that all too many now feel to have been entirely misplaced.
Lord Wallace of Saltaire (LD)
My Lords, we on these Benches hesitate to criticise the due diligence process by the security services and the Civil Service; it seems to have been effectively and efficiently done but disregarded by the Prime Minister’s political advisers and overridden by the Prime Minister. Presumably he thought the task of establishing and maintaining a close relationship with President Trump demanded someone like Peter Mandelson in spite of, or even because of, his flaws.
Can the Minister tell us when further files will be released? I have just looked through the first package that has been released, which is actually very thin. There is clearly an awful lot more to come out—to repeat, there is a lot to come out not just from London but from Washington, which will overlap on to this.
I am sure the whole House will be happy that the Minister has been appointed by the Prime Minister to look further into this. We will all do our best to co-operate with her in making sure that standards and procedures are improved. Can she tell us more about her work programme in her new responsibilities on ethics and standards? Will that work be primarily within government or across the parties and both Houses to make sure that, as far as possible, it gets the maximum buy-in from everyone concerned and interested in politics, and will therefore have the best chance of succeeding? Will she, for example, consider strengthening the parliamentary oversight of major public appointments, which is, after all, a common occurrence in a number of other parliamentary democracies?
How do the Government propose to strengthen further the Ministerial Code? Will they commit to regular revisions with advice from committees in both Houses?
Does the Minister recognise that the case that many of us keep making for putting the Ethics and Integrity Commission, ACOBA and a number of other bodies on a statutory basis is a matter of future-proofing? We do not know what the outcome of the next election will be but it could be extremely messy and lead to some form of coalition Government. We need to make sure that we future-proof our standards and commitments to make sure that any new Government who come in will find it easier to accept them than to override them. We have plenty of lessons from Washington of how easily things can go wrong, and we need as far as we can to prevent them similarly going wrong over here.
Can the Minister say a little about implications for the House of Lords? I note that the Conduct Committee is being charged with the rather difficult task of looking at our standards. The Leader of the House reprimanded me the other week for referring to us as a part-time House and replied that we are now effectively a full-time House. Yes, we are, but the way in which we are managed and governed still assumes that we are part-time and earn other things outside the House, and that that requires us to have a different set of concerns about private, commercial and financial interests and activities outside from those in the Commons. If we are now to be judged on the same level as the Commons as a full-time House then that is quite a radical readjustment of the way one thinks about the second Chamber.
Can I also ask a little about what happens when Peers are disbarred from the House? Will the Government consider putting before the House the idea that they should no longer be able to hold their titles? Removing them from the peerage roll would be perhaps a more important way of signalling that they no longer have a position of honour within our political system.
Of course, behind all this there are some broader issues about the financial and political culture in London, Washington, New York and Westminster. Wealth and money in politics is something we are all going to face as the Representation of the People Bill arrives in this House in a few months. We will need to look at that very carefully. I hope we may be assured that the Government will work with us to make sure that money does not override other matters in our life.
The Parliamentary Secretary, Cabinet Office (Baroness Anderson of Stoke-on-Trent)
I thank the noble Baroness and the noble Lord for their questions. It is incredibly important that these matters are addressed, not least because they now drive a huge amount of my own personal work. I will come on to that.
First, I will provide an update following the Statement made in the other place last week by the Chief Secretary to the Prime Minister on the release of the first tranche of documents in response to the humble Address Motion of 4 February. As the Chief Secretary to the Prime Minister rightly stated:
“Jeffrey Epstein was a despicable criminal who committed … disgusting crimes that destroyed the lives of countless women and girls. What he did is … unforgivable”.
His victims must be
“our first priority. Peter Mandelson’s behaviour”—
including encouraging Jeffrey Epstein to fight his conviction for abusing a vulnerable young girl—
“was an insult to them and their suffering”.—[Official Report, Commons, 11/3/26; col. 359.]
We should also never forget that every time we discuss Epstein’s horrendous behaviour, his victims relive awful experiences. These survivors must be front and centre when we debate all issues related to Jeffrey Epstein, his network and their impact.
That is why there is a cross-party consensus in both Houses for full transparency and accountability. The Government are committed to publishing all documents relevant to the humble Address and last week published the first tranche. These documents relate specifically to the decision to appoint Peter Mandelson as ambassador to the US and the discussions that subsequently led to his dismissal. Further work is ongoing to compile the rest of the information in scope. The Government recognise the urgency with which this work must be completed and will keep your Lordships updated as it progresses.
The Prime Minister has taken personal responsibility for Peter Mandelson’s appointment as ambassador. He has acknowledged that it was a mistake and apologised, not least for believing Peter Mandelson’s lies. While the documents point to public reports of an ongoing relationship between Peter Mandelson and Jeffrey Epstein, the advice did not expose the depth and extent of their relationship, which became apparent only after the release of files by Bloomberg and then the US Department of Justice.
As the Chief Secretary to the Prime Minister set out last week, there are specific documents that this Government would like to disclose but the Metropolitan Police has asked us not to do so yet to avoid prejudicing the ongoing criminal investigation into Peter Mandelson. We have agreed to that request. We will publish these documents once the Metropolitan Police has confirmed that this will no longer prejudice its investigation.
The Government have already taken steps to address weaknesses in the system and I will update your Lordships on the further steps we will take. As noble Lords will be aware, the Government have asked the Conduct Committee of your Lordships’ House to review the Code of Conduct to consider what changes are required to ensure that Members of your Lordships’ House can be removed when they have brought the peerage into disrepute. We are also exploring whether the committee can further strengthen the rules on lobbying and paid advocacy.
The Chief Secretary to the Prime Minister also announced that the Prime Minister has asked the Ethics and Integrity Commission to conduct a review of the current arrangements relating to financial disclosures for Ministers and senior officials, transparency around lobbying, and the Business Appointment Rules, and I look forward to receiving its report before the Summer Recess. The Chief Secretary also confirmed that we will conduct a review of the national security vetting system to ensure that we learn the lessons from the policy and process weaknesses related to the Mandelson case.
With regard to some of the specifics that were asked, I think some of the questions from the noble Lord, Lord Wallace, will be slightly easier for me to answer, given that they are in my direct purview. On the questions asked by the noble Baroness, Lady Finn, we have been clear that many more documents will follow in coming tranches. The noble Baroness was concerned about who is seeing what and when. I want to be clear that, while we are withholding some documents at the request of the Metropolitan Police, we have agreed with Simon Hoare MP, the chair of PACAC in the other place, that he is seeing all documents being withheld, so a member of His Majesty’s Opposition is seeing everything as we go through it.
Given the scale of what we are doing and the fact that we are complying and will comply with both the spirit and the letter of the humble Address, it is appropriate that we are releasing the documents in such a way that is sensible given their nature, but also that the ISC is seeing them so that it can deal with them. I assure noble Lords that all the documents will be published and that noble Lords will have the opportunity to see them all—but, given the live police investigation, we have to take this step by step.
I just want to touch on the 56 documents. I have read the paperwork related to them but I do not recognise the 56 documents. The noble Baroness asked specifically whether legal advice had been taken on the schedule. I have not seen that, but I will revert to her if such advice exists. She also questioned whether the Prime Minister had misled the Commons. He absolutely has not; his comments all the way through are in line with the paperwork being released in each tranche.
On some of the specifics raised by the noble Baroness, obviously she is aware that I cannot comment on the Committee of Privileges of the other place—that was Parliament holding a former Member to account. She asked about some of the things that we have already done, as did the noble Lord, Lord Wallace. I will touch on severance payments, which were a core theme from the noble Baroness. As the documents show, Peter Mandelson initially requested a sum that was substantially larger than the final payment—more than six times the final amount—despite the fact that he was withdrawn from Washington because he had lost the confidence of the Prime Minister. As the Chief Secretary to the Prime Minister explained yesterday, the Government obviously found that to be inappropriate and unacceptable. The settlement that was agreed was to avoid even higher costs from a drawn-out legal claim at the employment tribunal, given Peter Mandelson’s employment as a civil servant rather than a Minister.
As noble Lords will know, Ministers can be dismissed without recourse to the employment tribunal—let us hope I am not experiencing that soon—but civil servants are treated differently. As can be seen from the documents, Peter Mandelson’s settlement was in line with his employment contract and standard Civil Service HR processes, avoiding the risk and high costs of drawn-out legal action and ensuring he was quickly removed from the payroll. As set out in the documents, the Chief Secretary to the Treasury approved this payment in line with standard HMT guidance on the use of severance payments.
I have already touched on the issue of vetting, but I want to spend a couple of moments responding to the questions from the noble Lord, Lord Wallace. On the question about the release of further documentation, given that this request is supported by both Houses but is about the Commons and complying with the Commons, obviously we need to lay those documents when the House is sitting. Those documents will come forward in due course, either before or after the Recess.
I look forward to discussing many details of my own work programme with Members of your Lordships’ House, not least the noble Lord, Lord Wallace. I truly believe that if we are to rebuild faith in politicians, and in what I consider to be one of the most important buildings in the country, it has to be a cross-party, cross-government and cross-Parliament project, so I will actively seek to work with all Members of your Lordships’ House on where we believe the gaps are, what we can realistically fix and how we can rebuild trust.
With regard to the Ministerial Code revisions, the noble Lord will not be surprised that, unlike his colleagues in the other place, who suggested that we may want to put it on a statutory footing, we will not be seeking to do that, but I am very aware of what he said about future-proofing standards. Many people who have been at this Dispatch Box and at Dispatch Boxes in the other place are aware that we rarely get to look at standards in the round. The last time that was done with a clear objective was in establishing the Nolan principles. I view this as a once-in-a-generation opportunity to make sure that we get this right. We have a Minister dedicated to it—I do not know the last time that happened—so it is about how we can ensure we use this moment to fix the things that typically get pushed to one side.
However, I agree with my noble friend the Leader of our House, Lady Smith: we are a full-time House with part-time Members and we are different from the other place. Noble Lords will be aware that I used to be a Member of the other place and am married to a Member of the other place; what he is expected to do and what I did before I was on the Front Bench are two very different sets of responsibilities. We need to make sure that we do not lose what is so special about this building and our Chamber, and some of the expertise we have because of people’s outside interests compared to the other place.
The noble Lord raised the Representation of the People Bill and the impact of money. He did not touch on the Rycroft review, which will be coming forward and will very much tie into our discussions on these issues.
I conclude by reiterating that Jeffrey Epstein was a despicable individual, and Peter Mandelson’s decision to put their relationship before his victims and the vulnerable is reprehensible. As the Prime Minister said, the victims of Epstein have lived with trauma that most of us can barely comprehend. They have had to relive it again and again, and they have had to see accountability delayed and too often denied. Peter Mandelson should never have been appointed. The Government will comply with the humble Address and I will provide further updates to your Lordships’ House in due course.
The Deputy Speaker (Baroness McIntosh of Hudnall) (Lab)
My Lords, the noble Lord, Lord Foulkes of Cumnock, is participating remotely and I invite him to speak now.
Lord Foulkes of Cumnock (Lab Co-op) [V]
My Lords, first, I thank my noble friend the Minister for bringing to the House this excellent Statement. I congratulate her on her very appropriate appointment, which shows the sincerity and determination of the Government to take this issue seriously. I recognise that the Liberal spokesperson asked some sensible questions, which the Minister has responded to. However, I was really disappointed that the Official Opposition took this as another opportunity to attack the Prime Minister and his integrity. That was an unfortunate lapse of judgment by their Front Bench.
Will the Minister confirm that this House needs to look at its own procedures and arrangements as well? The recent Chadlington case shows that we are not above reproach. Will she indicate that this will be a much wider look at the whole aspect of how the Government and Parliament operate? Will she indicate how much the whole long and complicated exercise might cost, because it is not without substantial cost?
Baroness Anderson of Stoke-on-Trent (Lab)
It is a true joy to see my noble friend, if only on a screen. I am so pleased that he is well enough to participate, if remotely. I cannot wait to see him back in his place.
My noble friend asked me several questions. I want to focus on the fact that there is a responsibility on every Member of your Lordships’ House and everyone who serves in this building, whether in the other place or here, as well as those who support all of us, to help rebuild trust in politics. My noble friend spent a long career door-knocking and campaigning, and we know how important this is. With regard to the costs, I do not have a total cost to give my noble friend at this time and it will not be possible to give a running update. However, I can confirm that Civil Service resource has been redeployed, meaning that this will not create any net cost to the taxpayer. Any additional costs will be set out in due course.
Lord Pannick (CB)
Would the Minister agree that one of the ironies of this sorry saga is that His Majesty’s Government had a highly competent ambassador in Washington DC, Karen Pierce, who had the confidence of the Trump Administration and was widely respected in that city? Does the Minister agree that no Government should be appointing political cronies to this type of position but should be selecting from the wide category of highly competent professional diplomats?
Baroness Anderson of Stoke-on-Trent (Lab)
The noble Lord, as ever, raises an interesting and non-straightforward point for me to answer. On the process, while this was unusual it is not unheard of. Three Members of your Lordships’ House were political appointees from both parties to hold ambassadorial roles, both by previous Labour Governments and by the Conservative Government. There is a clear process for such appointments. The process was followed; the process did not work; the process has now changed.
Lord Clarke of Nottingham (Con)
The private lives of the decadent rich are always going to arouse interest in the media and with the general public. The Prime Minister has failed to answer some very embarrassing questions about what he knew when he made this appointment. In my opinion, this whole thing became overwhelmingly more serious when allegations were made that Lord Mandelson and Andrew Mountbatten had been repaying the hospitality they received by giving classified government financial and economic information to a financier to help him with his investments. If that is true, it is one of the most serious allegations of corruption in public life in recent years. We normally assume that we do not have that in this country. Can the Minister assure me that the Metropolitan Police is being given full support in getting on with the task of investigating that, and that there will be no suggestion of political pressure at any stage to stop the full force of the law being brought forward? Others must be deterred in future from being tempted to go in for that kind of corrupt behaviour.
Baroness Anderson of Stoke-on-Trent (Lab)
Before I answer the substance of the question, while I appreciate the issues that were raised, the private lives of the decadent rich are of no odds here. It is about abuse and violence against women and girls, and illegal behaviour; it is not about a decadent life. Regardless of whether they are rich or not, people should be held to account with the full force of the law. On classified government information, noble Lords will be aware there is a live police investigation so I cannot comment on the detail. However, I would expect the Met Police to receive absolute full support. If laws have been broken, people should be prosecuted.
Lord Swire (Con)
The noble Lord, Lord Pannick, made an extremely pertinent point about Lord Mandelson’s predecessor, Dame Karen Pierce. First, can the Minister confirm that, during the scope of this investigation, we will look at the representations the Prime Minister will have received arguing that Dame Karen should have been kept in place to handle a very unpredictable and volatile president? Can the Minister confirm what pressure the Prime Minister came under, and from whom, to replace her with Lord Mandelson? Secondly, if we are investigating Lord Mandelson’s suitability for public office of any sort historically, will the scope of that investigation be extended to his time as an EU commissioner in Brussels? There are some very serious questions and allegations surrounding his time there.
Baroness Anderson of Stoke-on-Trent (Lab)
It may be helpful to inform your Lordships’ House that the previous ambassador to America had come to the end of her tenure. The question would have been whether the tenure would be extended or not, not whether she should have been removed. I do not believe that is within the scope of the paperwork; the paperwork being released directly pertains to the appointment and withdrawal of Peter Mandelson as His Majesty’s ambassador. If I am wrong, I will write to the noble Lord. On the scope of the humble Address and the EU processes, I believe other organisations are looking at other roles and some of the history. On the scope of what is currently in play, there is a live police investigation. The matter before us relating to the humble Address concerns the immediate period before and during his appointment.
Lord Harper (Con)
My Lords, the humble Address referred on several occasions to electronic communications between officials in the Government and political appointees. Under the Freedom of Information Act, it has been long-standing practice that communications between Ministers and officials, on whatever device, and whether they are private or government emails, are within scope of freedom of information laws. Can the Minister confirm that the Government are working on the basis that all such communications, whether they are private or government emails, are within scope? Assuming they are, what steps are being taken to secure and recover such information from those officials who are no longer within the Government’s employ—specifically, the Prime Minister’s former chief of staff, Morgan McSweeney?
Baroness Anderson of Stoke-on-Trent (Lab)
To confirm, all electronic communication is in scope and will be released in future tranches of materials. On the steps being taken to secure the materials, the Permanent Secretary to the Cabinet Office has contacted all other Permanent Secretaries to make sure that materials are being secured and passed on. Those materials are currently being collated for further release. On the former chief of staff, as set out by my right honourable friend the Chief Secretary to the Prime Minister, there was correspondence between No. 10 and Lord Peter Mandelson, in which a number of follow-up questions were asked. I would assume that those materials are going to be released as well.
Lord West of Spithead (Lab)
My Lords, I understand that the complexities of employment law mean that you have to pay someone some money when they work for you. Has anyone approached Mandelson, who has done disgraceful things, to ask whether he wants to give this money to a buy-a-warship fund, or some other charity, rather than take it for himself?
Baroness Anderson of Stoke-on-Trent (Lab)
My Lords, I wondered how my noble friend was going to get a warship into this question—and, as ever, he succeeded. My noble friend is right; from my perspective, Peter Mandelson should donate his severance to any charity that campaigns for, or protects, women who have been targeted and have experienced horrendous violence. That is probably the least we are owed.
Lord Redwood (Con)
My Lords, is it the Government’s case that Lord Mandelson misled them to get the appointment? Can the Minister give us a couple of examples of what he said to fool the Prime Minister?
Baroness Anderson of Stoke-on-Trent (Lab)
The noble Lord will be able to read any and all correspondence for himself as further tranches are published.
Lord Faulks (Non-Afl)
Further to the question from the noble Lord, Lord West, I understand that the amount that Lord Mandelson is to receive is much less than he asked for. The Minister said that that was to save costs. In many cases, there is surely a commercial reason for settling, but, given that this case is of such constitutional importance, would it not be far better to see whether a court agrees that Lord Mandelson is entitled to any compensation at all?
Baroness Anderson of Stoke-on-Trent (Lab)
The noble Lord raises an important and valid point. In this instance, it was considered a sensible move to remove Lord Mandelson from the payroll as quickly as possible.
Baroness Hoey (Non-Afl)
My Lords, the Minister quite rightly referred to Epstein as a despicable person, as did the Prime Minister and other members of the Government. However, was he not a despicable person the first time he was put in jail for the appalling abuse of young women? Peter Mandelson stayed in Epstein’s house in America after that, which the Prime Minister knew. A lot of the public will think that that must have been enough to make it clear that he could not be appointed as our ambassador.
Baroness Anderson of Stoke-on-Trent (Lab)
The noble Baroness is absolutely right that Mr Epstein was a despicable and horrendous human being. The Prime Minister was genuinely not aware of the depth of their continuing relationship, which did not become clear until after the publication of the Bloomberg papers.
Lord in Waiting/Government Whip (Lord Katz) (Lab)
My Lords, we have time to hear from both Benches. Let us go to the Labour Benches first and then the Conservative Benches.
Lord Harris of Haringey (Lab)
My Lords, this is not the first political appointment to an ambassadorship, including that in Washington, which has not been without controversy. But would the Minister confirm that there are some circumstances in which it is appropriate for there to be a political appointment, rather than one which is selected from Civil Service ranks, provided it is quite clear that that is the responsibility of the Ministers making the appointment?
Secondly, could she confirm that it is quite common for organisations that are facing what may seem quite unreasonable severance requests from individuals to make a judgment about what the cost is of fighting those arrangements and to reach a balanced decision?
In the circumstances where people are criticising the nature of some of the material being published and trying to read too much into it, is it not the case—as Bismarck said, if you ever like laws or sausages, never watch either being made—that this minute inspection, which quite properly the Opposition have demanded should be released, will reveal the imperfections of any process in government, or indeed anywhere else?
Baroness Anderson of Stoke-on-Trent (Lab)
My noble friend is absolutely right. There have been several political appointments, as I have said, including of Members of your Lordships’ House, to ambassadorial and diplomatic roles. Also, there have been direct ministerial appointments made outside this. This is not an unusual process. However, I appreciate it is rare in the diplomatic field. What we have to do is make sure that, as and when political appointees are considered to be appropriate, the nature of our politics should not suggest that we are therefore excluded from other roles, but we should make sure that due process is followed. Given recent events, we have changed due process both on direct ministerial appointments and on any future political appointments in the diplomatic space.
The noble Lord also asked about negotiations around severance payments. I am a former trade union officer and spent a great deal of time negotiating other people’s packages. Negotiations in this space are not unusual, but the noble Lord’s most important point was about imperfections in the system. I am viewing this as an opportunity to reflect on what has gone wrong and what we now need to fix. But let us be clear that there have been significant weaknesses in processes. The onus now is on this Government to strengthen the processes.
Lord Grade of Yarmouth (Non-Afl)
My diplomatic friends tell me that, if they are up for a sensitive posting abroad, the due diligence that the FCO carries out is a brutal, intrusive and pretty degrading exercise, but a very effective one. Why is the system of due diligence for a political appointment different?
Baroness Anderson of Stoke-on-Trent (Lab)
My Lords, it is not. It is exactly the same in terms of the security and vetting processes. I would like to reassure noble Lords that the vetting process that was undertaken on Peter Mandelson was expedited but followed every step.
Baroness Foster of Oxton (Con)
My Lords, following the comment from my noble friend, and as I mentioned before, the vetting process is not really the issue here. We have Members of this House who are former diplomats and ambassadors, and it is very rare in my recollection that we have had any issues with those who have taken up posts abroad on our behalf. To widen this discussion into codes of conduct for Members in the future and how we must now move towards different vetting procedures is obfuscation.
The points raised by my noble friend Lady Finn on the Front Bench are the questions we need answered. The hub of this matter is that we have a Prime Minister of the United Kingdom who knowingly appointed Peter Mandelson, who had remained friends with a convicted paedophile, to represent us in one of the most key posts as ambassador to the United States of America. So, my question to the noble Baroness on the Front Bench is: given the reality that the Prime Minister of the United Kingdom clearly has no judgment and that to obfuscate and try to blame everyone else is really inappropriate, will he, on this issue, stand down, because clearly his judgment is lost?
Baroness Anderson of Stoke-on-Trent (Lab)
My Lords, I have tried not to be party political on this, but I find it a little rich to be taking lectures from the Opposition Benches, given what we experienced with “partygate” for years and what Liz Truss’s Government did. I find this very difficult. Also, for the record, the idea that the appointment of a Minister—
Baroness Anderson of Stoke-on-Trent (Lab)
Noble Lords can listen to me or not, but the concept that our appointing a Minister to review the standards landscape in the whole is an obfuscation is disappointing to say the least. In terms of the Prime Minister’s responsibilities, he has apologised for appointing Peter Mandelson. He believed Peter Mandelson’s lies in response to the questions put to him. As soon as the Prime Minister became aware of this in September, Peter Mandelson was dismissed promptly.
Lord Katz (Lab)
My Lords, we will hear from somebody on the Conservative Benches.
Baroness Anderson of Stoke-on-Trent (Lab)
My Lords, we are, hopefully, discussing the concept of rebuilding trust in politics and how we talk to each other. I will answer questions from either the noble Lord or the noble Baroness, but it is for them to decide.
Lord Sherbourne of Didsbury (Con)
My Lords, is it the case that, in the course of the appointment of Lord Mandelson, the Prime Minister never spoke to him?
Baroness Anderson of Stoke-on-Trent (Lab)
Noble Lords will appreciate that there is ongoing material, which will be published. All of that will be a matter of public record in due course.
Baroness Coffey (Con)
My Lords, this feels a bit “Hear no evil, speak no evil, see no evil” in the casual way that the Prime Minister followed process in appointing the US ambassador, the then Lord Mandelson. There is a concern that, when the humble Address was passed, former chief of staff Morgan McSweeney still worked for the Government and did not resign until a few days later. Yet Darren Jones, Chief Secretary to the Prime Minister, has said that everything the Government have has been published. I am concerned that all the documents have not yet been released by the Government. What has happened to the communications between Morgan McSweeney and anybody else involved in this while he was still working for the Prime Minister?
Baroness Anderson of Stoke-on-Trent (Lab)
My Lords, I believe I have said on numerous occasions that this is the first tranche of material that has been published, as did the Chief Secretary to the Prime Minister. More material will be published in due course. I have answered several questions on that. I look forward to discussing it again with noble Lords when that is done.
Victims and Courts Bill
(1 day, 4 hours ago)
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The Parliamentary Under-Secretary of State, Ministry of Justice (Baroness Levitt) (Lab)
My Lords, I will make a short statement on the position regarding legislative consent on this Bill. A legislative consent Motion was received from the Senedd on 24 February 2026. The amendments voted in by your Lordships’ House on Report engage the LCM process. Conversations are ongoing with the devolved Governments on how these amendments would apply to them. It has not been possible to complete this process before Third Reading. Amendments will be made if they decline to grant approval. The amendments on court transcripts are currently drafted to extend UK wide; we presume that this is an error and that the intention is that they should extend to England and Wales only, because they use terminology specific to this jurisdiction and that has been the focus of debates on this topic.
Clause 21: Commencement and transitional provision
Amendment 1
Lord Sandhurst
Member’s explanatory statement
This amendment removes a cross-reference in the commencement provisions to a clause which was removed by an amendment in Lord Keen of Elie’s name at report stage.
Lord Sandhurst (Con)
My Lords, I am grateful to all noble Lords for their constructive engagement with this important Bill at every stage of its passage. On behalf of my noble and learned friend Lord Keen, I thank noble Lords for their contributions both in Committee and on Report. Although there were several areas of disagreement, we on these Benches believe that the Bill, as amended on Report, leaves this House as better legislation than when it entered.
I am particularly pleased that noble Lords across this House voted in favour of Amendments 16 and 20. Open and transparent justice is a fundamental principle: it underpins democracy and the rule of law. It is therefore only right that sentencing remarks, which explain judges’ reasoning for the sentences they impose, be made available to members of the public who are not present in court.
Equally, private prosecutions are an integral part of our justice system. Where the CPS is unwilling or unable to act, private prosecutions are a vital avenue for parties to get access to justice. In particular, many charities use private prosecutions to recover losses by theft and fraud. The removal of Clause 12 preserves the current system. Clause 12 would have created a state of uncertainty in the legal market. It would have had a detrimental effect on the availability of private prosecutions for those who need that service. I thank the noble Lord, Lord Marks, for his support on these points.
Amendment 1, in my name and that of the noble and learned Lord, Lord Keen, will remove a cross-reference to a clause that no longer stands part of the Bill.
I also commend the Liberal Democrats on their engagement with the Bill. It was pleasing to find areas of agreement during the Bill’s passage. I am grateful for their amendments on both notification and exceptional circumstances for unduly lenient sentence applications. I strongly urge the Government in the other place to recognise the importance of these reforms and to support all the amendments that passed on Report. Both of the amendments before us have the support of the Conservatives and of the Victims’ Commissioner.
Turning briefly to Amendment 29, it was disappointing that the Minister spoke against our opposition to the automatic release of sexual offenders and domestic abusers at the one-third point of their custodial sentences. If the Government are still committed to their manifesto pledge of halving violence against women and girls, the amendment deserves serious consideration. I thank the noble Baroness, Lady Brinton, for her expression of support on this point. We, in turn, intend to return to this issue at a later date.
I remain grateful to all noble Lords for their contributions during the various stages of the Bill. I urge the Government to reflect carefully on the amendments relating to the publication of sentencing remarks, private prosecutions and the unduly lenient sentence scheme. I have no doubt that these issues will return to your Lordships’ House in due course. I beg to move Amendment 1.
Baroness Levitt (Lab)
My Lords, this is a minor and technical amendment following Report, and the Government will not oppose it today.
Baroness Levitt (Lab)
The Bill represents a significant step forward in strengthening both the rights of victims and the way in which our courts operate. At its heart, it seeks to ensure that victims are treated with dignity, compassion and respect throughout the justice process, while ensuring that our courts are able to deliver justice more swiftly and effectively.
I thank all Members of your Lordships’ House who contributed during the debates; the officials for all their support during its passage; and all noble Lords who have given their time and expertise to scrutinising the Bill during its passage through your Lordships’ House and, through their engagement, have strengthened the Bill in the process.
I am especially grateful to the noble Baroness, Lady Brinton, the noble Lord, Lord Marks, and the noble Earl, Lord Russell, for their support for and engagement on the key measures in the Bill. I look forward to continuing to work with them on the recent amendments regarding the unduly lenient sentencing scheme, court transcripts and support for victims of homicide abroad.
I also thank the noble and learned Lord, Lord Keen, and the noble Lord, Lord Sandhurst, for their informed, thoughtful interventions and the constructive challenges that they have put forward. I look forward to discussing further their recent amendments regarding court transcripts and private prosecutions.
I am grateful for the broad support for this Bill across the House, and I look forward to working on its implementation. I beg to move.
Baroness Brinton (LD)
My Lords, on behalf of the Liberal Democrat Benches, I am very grateful that the Conservatives have already expressed their thanks for the Bill. We echo that thanks. I welcome the very constructive engagement from all sides of the House. I particularly thank my noble friends Lord Marks and Lord Russell, with whom I have worked closely on victims’ issues for many years. I also thank the House more generally. The timely passage of this Bill is unusual, and I am very pleased that we were able to conduct our business in the time allocated and still come to the end of the Bill and feel that real progress has been made.
This is where I thank the Minister and all her officials because, despite the fact that a number of votes were won on Report—we look forward to continuing to work with her—many of the items we discussed in private between Committee and Report have been resolved to some extent or another. On behalf of all the groups and the individual victims who got in touch, not only now but in the run-up to the Bill, we are grateful for the progress that has been made. That does not mean, however, that everything is done; I and many others will continue to work on those particular issues. From our side, as has already been mentioned, we particularly want to see some movement on court transcripts, homicide abroad and unduly lenient sentences. We are very grateful for the discussions that are already beginning between now and ping-pong.
Lord Hacking (Lab)
My Lords, in speaking on the Motion that the Bill do now pass, I readily start with praise and thanks for my noble friend the Minister for her entire conduct on the Bill throughout its passage in the House. I particularly thank my noble friend for her willingness to hold meetings with us on a number of occasions, despite her very heavy and busy diary.
The Bill does well in strengthening the position of victims in our judicial processes and in strengthening the powers of the Victims’ Commissioner. However, there is unfinished business relating to the victims of trafficking of women and girls, particularly related to the provision of sexual services. As I told your Lordships in Committee, the numbers are large. They are not in the hundreds but in the thousands.
As this is Third Reading, I do not seek to repeat arguments made in Committee or on Report. It suffices to say that these women and girls, who are often illegally brought into this country, are in a fraught and difficult position. For example, they are terrified, when they are drawn to the attention of the authorities, that they will be deported. They need our help. Help, I have to say, is not being provided to them either in this Bill or in the Crime and Policing Bill.
The Independent Anti-Slavery Commissioner produced an excellent report, which I strongly commend to your Lordships. I strongly urge those responsible in the Home Office to read it as obligatory reading. As she rightly says in her foreword:
“Tackling modern slavery is everyone’s business”.
Indeed it is. I recognise, when speaking to your Lordships and to my noble friend the Minister, that modern slavery is in the remit of the Home Office and not the Ministry of Justice, but I ask my noble friend to speak strongly in government of the need to give the victims of modern slavery the support that they are not currently receiving and which they need.
Lord Russell of Liverpool (CB)
My Lords, I rise briefly—conscious of my noble friend to my left—to pay tribute to the Minister for how she has handled her first Bill through your Lordships’ House with good humour and considerable judicial skill. It is always slightly challenging to put an amendment or an argument to a Minister when it is quite clear that she has understood exactly what you are trying to say and all the flaws in your argument before you have got past the first paragraph.
I thank the noble Baroness, Lady Brinton, for our working together so effectively. I also congratulate the Minister on the extraordinary achievement in having, on occasion, got the Conservative and Liberal Democrat parties to be on speaking terms, let alone voting terms.
Spring Forecast Statement
(1 day, 4 hours ago)
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Lord Livermore
That this House takes note of the Spring Forecast Statement.
The Financial Secretary to the Treasury (Lord Livermore) (Lab)
My Lords, it is a privilege to open this debate on the spring forecast and the Second Reading of the finance Bill. I very much look forward to the valedictory speech from the noble Lord, Lord St John of Bletso.
On taking office, this Government inherited three major crises: a crisis in the public finances, a crisis in our public services and a crisis in the cost of living. That is why we have repeatedly taken the action necessary to bring stability to the economy. The choices we have made are the responsible ones. The spring forecast showed that the economic plan that we have been driving forward since the election is the right one.
In our first Budget, we took action to fix the foundations of the economy by repairing the £22 billion black hole in the public finances left by the previous Government. At the spending review last summer, we stuck to our non-negotiable fiscal rules, keeping a tight grip on day-to-day spending while investing an additional £120 billion in growth-driving infrastructure and getting debt on a downward path. In the Budget last November, we built greater resilience by doubling the headroom against the stability rule and cutting borrowing as a share of GDP in every year of the forecast.
Our economic plan is built on three pillars: stability in our public finances, investment in our infrastructure and reform to Britain’s economy. Stability is the cornerstone of this plan because it is the single most important precondition for economic growth. That is why we have committed to one fiscal event a year, limiting major policy changes to the Budget, helping to give businesses and households the certainty that they need to plan and to invest.
The forecast from the Office for Budget Responsibility, published last month, shows that our plan is working and that we enter this period of global uncertainty with the fundamentals of our economy strong. We have cut inflation, which stands now at 3%—a lower base than at the outset of Russia’s illegal invasion of Ukraine. We have prioritised growth to drive up living standards. The OBR forecast showed GDP per head set to grow more than was expected at the Budget, with growth of 5.6% over this Parliament. We have stabilised the public finances, having already reduced the deficit by £20 billion this year from 5.2% to 4.3% of GDP.
These forecasts pre-date the current conflict in the Middle East. The full economic impact of that conflict will depend on its severity and its duration. The movements on energy markets that we have seen are likely to put upward pressure on inflation in the coming months. Our economic approach will be responsive to a changing world and responsible in the national interest. As the Government have demonstrated time and again, we will take the necessary decisions to help families with the cost of living and to protect the public finances.
This Government are delivering the biggest uplift in defence spending since the end of the Cold War. The Chancellor has also approved access for the Ministry of Defence to the special reserve to deploy additional capabilities in the Middle East, meaning that no net additional costs of these operations will be funded by the Ministry of Defence, but instead will be funded by the Treasury.
Last week, following her call with other G7 Finance Ministers, the Chancellor set out her further priorities for international co-operation: for immediate de-escalation and a return to a diplomatic process; guaranteeing the security of vessels passing through the Strait of Hormuz; supporting a co-ordinated release of collective International Energy Agency oil reserves, the release of which has since helped to stabilise international oil markets; and setting out how the UK will play its part as the global hub of maritime insurance. On Friday, the Chancellor met petrol retailers and energy suppliers to make it clear that the Government would not tolerate any company exploiting the current situation to make excess profits at consumers’ expense.
While we do not yet know how long this conflict will last, it underlines the importance of building a stronger, more secure economy able to withstand whatever instability we may face. The strength of our economy and public finances is possible only because of the Budget last year and the measures contained in the finance Bill before us today.
That Budget had at its heart three pro-growth choices. First, by choosing to maintain economic stability, getting inflation and interest rates down, we helped give businesses the confidence to invest and our economy the room to grow. Secondly, by choosing to reject austerity, we protected £120 billion of additional investment in growth-driving infrastructure. Thirdly, by choosing to back the fast-growing companies of the future, we supported the investment, innovation and economic dynamism that will increase growth in the next decade and beyond. That includes measures in the Bill to make Britain the best place in the world for firms to start, scale and stay. We are doing that by widening eligibility for our enterprise incentives so that scale-ups can attract the talent and the capital that they need. We are expanding the enterprise management incentive so that more companies can offer tax relief share options, and we are re-engineering our enterprise investment and venture capital trust schemes so that they do not back just early-stage ideas but stay with companies as they grow. For all businesses, large and small, we are also maintaining the lowest corporation tax rate in the G7 and the joint most generous capital allowances in the OECD.
In her Mais Lecture today, the Chancellor went further on our growth agenda by setting out how we will deepen our economic relationship with our European partners, how we will back innovation and harness the power of AI, and how we will take the necessary action to build growth on a broad, stable basis right across the UK.
Of course, the pro-growth choices we made in the Budget need to be paid for, and that means asking everyone to make a contribution. The previous Government froze the main income tax thresholds from 2021 to 2028. This finance Bill maintains all income tax and equivalent national insurance thresholds at their current level for a further three years from 2028. I accept that maintaining these thresholds is a decision that will affect working people. The Chancellor and I both said this in 2024 and I will not pretend otherwise now.
However, while we are asking everyone to make a contribution, we are keeping that contribution as low as possible through reforms to our tax system to make it fairer and to ensure that the wealthiest contribute the most. That includes increasing taxes on property, dividend and savings income to narrow the gap between tax paid on work and tax paid on income from assets. Currently, a landlord with an income of £25,000 will pay nearly £1,200 less in tax than their tenant with the same salary because no national insurance is charged on property, dividend or savings income. That is not fair. That is why this finance Bill increases the basic and higher rate of tax on property, savings and dividend income by 2 percentage points, and the additional rate of tax on property and savings income by 2 percentage points. Around two-thirds of the revenue from these increases are expected to come from the top 20% of households.
We are also reforming the tax system to ensure that it keeps pace with a fast-changing economy. This finance Bill increases taxes on online gaming and online betting, while protecting UK horseracing and abolishing bingo duty. It prevents private hire vehicle operators exploiting a tax administration scheme so that everyone pays fairly. We are going further to close the tax gap to ensure that everyone pays the tax that they owe. Reforms contained in this finance Bill will help to collect more unpaid taxes and modernise the tax system to make it easier for taxpayers to get their tax right first time.
We have listened carefully to feedback from the farming community and family businesses, and the Bill raises the threshold for the 100% rate of relief on agricultural property and business property from £1 million to £2.5 million. This means that a couple will now be able to pass on up to £5 million of agricultural or business assets tax free on top of the existing allowances such as the nil-rate band.
Since coming into office, this Government have implemented an economic plan to bring stability to the public finances and to strengthen Britain’s economy for the long term. The spring forecast shows that this plan is the right one, with lower inflation and borrowing, higher living standards and a growing economy. Britain today is in a stronger position to withstand whatever uncertainty comes our way, but that is possible only because of the action we took in the Budget last year and the measures contained in this finance Bill. They are the right choices to protect families and businesses in an uncertain world, and they demonstrate that this Government have the right economic plan for Britain’s future. I beg to move.
Baroness Neville-Rolfe (Con)
My Lords, my first point is that the world economic situation now is very different from that existing at the time of the Spring Statement, let alone that in place when the finance Bill was introduced—different and significantly worse. The Middle East war has overturned economic expectations, especially optimistic ones.
A major factor in this deterioration is, of course, increased oil and gas prices, which are an inevitable consequence of political instability in the Middle East. This exacerbates the unfortunate effects of the Government’s own policies, which all agree have led to the highest fuel prices in the developed world. The resulting inflation, already mentioned by the Minister, adds to of the elevated levels we have already experienced during the Chancellor’s time in office. That in turn risks pushing interest rates higher, meaning rising mortgage costs for homeowners and greater pressure on household finances.
Investors are now pricing in a 70% chance that the Bank of England will increase rates by a quarter point before the end of the year having previously expected two quarter-point cuts this year; unfortunately, gilt yields have jumped here more than in any other G7 country.
Public finances are already under severe strain. Borrowing is running higher than forecast when the Government took office, and the country is now spending well over £100 billion a year simply servicing debt.
Since this Government came into office, gilt yields are up, growth is down, inflation is up, unemployment is up, debt is up, and the UK goes into this potential energy crisis already facing some of the highest energy prices in the world. It is extraordinary that Mr Ed Miliband, at a time when we face some of the greatest fuel insecurity in modern history, is content for the country to rely on oil from the Middle East but is against investing in the oil and gas from our North Sea.
This is a very serious moment. When the global outlook darkens, our domestic economic resilience matters more than ever. Yet the Government’s stewardship of the economy has left the country more exposed to shocks like this, and, when that happens, it is ordinary taxpayers who end up paying the price.
A lot has been said about the Government’s level of preparedness on the military front, but what is also true is that they were poorly prepared on an economic front. The economy that has developed under this Government and this Chancellor is profoundly precarious—and we are finding ourselves at the mercy of events.
The Minister has again waxed lyrical about the legacy of the last Government. There were things we did wrong, notably on immigration, but I remind the House that we had to cope with the legacy of the financial crisis, Covid and the Ukraine war, but we still delivered low inflation and an economy that was growing, and we now have a new Conservative leader with a refreshing determination to change things.
I turn to the Spring Statement. This was largely a non-event. Once the rhetoric—feeble rhetoric at that—is stripped away, it is difficult to identify any clear substance in what the Chancellor had to say. There were a few fairy tales, such as the Chancellor’s willingness to blame everyone else, from Trump to Putin, for the state of our economy—when, the last time I checked, she is the Minister responsible.
Looking at the statistics, we see that unemployment is rising sharply, hitting a staggering 7.6% in the capital, including a nine-year high for young Londoners. Youth unemployment in London is above that for the eurozone because of massively tightened employment regulations and much-reduced economic incentives to employ them through changes to NICs and the minimum wage. Yesterday’s youth jobs grant is a drop in the ocean and a poor attempt by the Government to cover up the immense harm they have done to employment in this country since assuming office.
Meanwhile, the OBR has predicted that the Government will spend £333 billion on welfare this year, at 10.9% of GDP, and by 2030-31 it is forecast to be £407 billion, at 11.7% of GDP. Working people will be asked to pay ever more in tax to fund the Government’s failure to get people back to work. Above all, the OBR has downgraded its forecast for growth from 1.4% to just 1.1%, which in truth amounts to growth that is barely there at all. When elected, the Prime Minister and the Chancellor talked endlessly about growth as their prime objective, promising planning reform, speedy infrastructure investment, world-leading AI and a skills revolution—all good things which I supported—but the delivery has been abysmal. Now, they have almost stopped talking about growth, in favour of vain efforts to subsidise the cost of living. History tells us that subsidies do not constitute a viable long-term strategy. Indeed, the OBR warns that inflation is expected to rise again, bringing with it the real prospect of higher mortgage rates and higher borrowing costs for the Government.
The reality for working people is stark. Wages are being eroded by rising prices, while taxes continue to climb. Millions more people will be dragged into higher tax bands by the so-called stealth tax of frozen income tax thresholds, now locked in place until April 2031. Despite all this, the Chancellor has boasted that her economic plan is the right one for Britain. I really doubt whether anyone believes that. What Britain needs is growth, jobs and investment. What the Chancellor has delivered is rising unemployment, ever- expanding welfare and a flatlining economy. The failure to tackle welfare reform is particularly worrying when we need to fund extra defence spending to protect ourselves and our citizens in an increasingly dangerous world. As it is, we are not yet on the path to prosperity.
I now turn to the Bill. First, perhaps the Minister can kindly confirm that the fuel duty increase of 5p provided for in the Bill is being delayed. With oil prices sky-high, this makes good sense, as we have argued.
This Bill lays bare the Government’s priorities. It makes a clear and deliberate choice to raise taxes on those who work, save and invest and to use a substantial share of that money to expand the welfare bill. In doing so, the Government are targeting and taxing precisely those people who sustain the productive heart of our economy—namely, savers who put money aside, investors who back enterprise, and the businesses that create jobs and growth.
Take the continued freezing of the income tax thresholds. This is fiscal drag on an enormous scale. Around 800,000 people will be pulled into the basic rate of income tax and around 1 million more will be dragged into the higher rate. By 2030, it is expected that one in four taxpayers will be paying either the higher or the additional rate of income tax. It does not stop there. In addition to the unfair arrangements for salary sacrifice, which this House has voted against, the repayment threshold for student loans is frozen, in effect imposing another hidden tax on younger generations starting their careers. Even those citizens who rely solely on the state pension are now at risk of being pulled into the income tax net.
The Government are reaching into the pockets of those who invest in Britain. The 2% increase in the tax on dividends, a £1.2 billion tax grab, sends exactly the wrong signal. Instead of encouraging investment in British companies and rewarding those who take risks to build and grow businesses, it penalised them. It is no surprise that 16,500 of them last year signalled their intention to move abroad.
We then come to the deeply troubling changes to IHT, the family farm and family business taxes. Just before Christmas, under enormous pressure, the Government attempted a partial retreat, but let us be clear: this so-called concession does not solve the problem. Many farms and family businesses may own valuable land or machinery, but they operate on tight margins. A paper valuation is not the same as spare cash sitting in the bank. The consequences are predictable. When faced with this kind of uncertainty, businesses do not expand; they pull back, they postpone investment, they do not buy new equipment or improve their restaurants, and, as we have seen, they reduce employee numbers.
Before I close, I should refer to the troubling letter that I have received from the Chartered Institute of Taxation about the difficulties that the various IHT changes will cause for personal representatives of the deceased, the costs in administration due to the Bill’s complexity and the defects of the tax avoidance provisions. It will not be easier for taxpayers, as the Minister suggested.
When we step back and look at the Spring Statement and the finance Bill, a clear picture emerges of the direction in which this Government are taking the country. Instead of policies that reward work, encourage investment and drive growth, we see rising taxes, a growing welfare bill and a struggling economy. The people who carry the greatest burden under this Government are precisely those who sustain our economy: the families who work hard and pay their taxes, the entrepreneurs who take risks to start and grow businesses, the investors who back innovation, and the farmers and family farms who keep our communities and supply chains alive. A healthy economy is built on confidence—the confidence to invest, the confidence to hire and the confidence to plan for the future. The Spring Statement and the finance Bill will give no confidence to anybody. On the evidence before us today, it is clear that the Government are moving in precisely the wrong direction, at a time of international challenge. Against that rather difficult background, I very much look forward to the valedictory speech of the noble Lord, Lord St John of Bletso.
Lord St John of Bletso (CB) (Valedictory Speech)
My Lords, it is with a mix of sadness and excitement that I address your Lordships’ House this last time. The sadness is because I shall miss participating in debates, particularly on Africa, and especially participating in the Select Committee work of your Lordships’ House and the APPG work. It has been an enormous privilege. I shall also miss seeing noble Lords who have become great friends over so many years. I had hoped to make my valedictory speech on the Space Economy report by the Select Committee so ably chaired by the noble Baroness, Lady Ashton, but sadly we have run out of time on that score.
I am enormously grateful to the doorkeepers, the refreshment department and all the staff of the Palace for the incredible support that they have given me over so many years and continue to give to all of us. I am very grateful to my noble friend Lord Kinnoull for his able stewardship and leadership of the Cross Benches.
I have to say that I joined the House of Lords more out of curiosity than desire. I say that because I was just 21 when my father died. I joined your Lordships’ House six months before the Islamic Revolutionary Guard Corps took control in Iran and six months before Margaret Thatcher became our Prime Minister. I joined for one primary reason: namely, I wanted to speak about the opportunities and challenges facing South Africa and southern Africa, and to petition for the release of Nelson Mandela, known as Madiba to all of us. After my health challenges last year, I decided that time was up. I am excited now to be spending more time in Africa. That is enough about me.
I shall restrict my comments today to the Spring Statement and not the finance Bill. There are three points that I want to raise. Clearly, the Chancellor’s forecasts have been overtaken by geopolitical events in the Middle East, leaving more questions than answers. We are now exposed, once again, to the very conditions that we thought we had escaped: energy-driven inflation and stagnating growth. The Statement underestimates the scale of the structural challenges that we now face. Surely, against a backdrop of spiralling fuel costs, now is the time to reconsider the strategic role of our domestic energy resources—more specifically, the North Sea. Would it not be wiser, during a period of geopolitical instability, to support responsible domestic production while we continue the transition to cleaner energy sources? It is not a question of abandoning our commitment to net zero but of recognising that the transition must be managed in a way that preserves resilience.
My second point is that the public procurement of goods and services now accounts for between one-quarter and one-third of all government expenditure, amounting to in excess of £300 billion a year. Even modest inefficiencies within a system of that scale can translate into tens of billions of pounds of avoidable costs. At a time of constrained fiscal headroom, it is essential that we focus not only on what the Government spend but on how effectively they spend it. What steps are His Majesty’s Government taking to deploy artificial intelligence to improve efficiencies, reduce duplication and identify cost savings across the procurement ecosystem?
I was fortunate way back in 2017 to be a member of the sub-committee on artificial intelligence so ably chaired by the noble Lord, Lord Clement-Jones. None of us then had any preconception about the impact that AI would have on all our lives. We now need to confront the other side of the AI revolution: the impact it is likely to have on employment. Artificial intelligence will undoubtedly drive productivity as well as growth, but it will also displace roles, particularly in admin and in the professional and middle-income sectors. We are in effect entering a period where technological progress may coincide with structural labour market disruption, and this presents a fundamental policy challenge. I cannot assume that the labour market will adjust itself organically. We need to act deliberately.
Thirdly, the noble Lord, Lord Hunt of Wirral, has been constantly questioning what measures His Majesty’s Government are taking to reduce spiralling unemployment in the UK. Can the Minister elaborate on what is being done to invest in promoting large-scale reskilling programmes, incentivising businesses to retrain their workforces and forging closer partnerships between industry, government and education? If we fail to do so, we risk creating a two-speed economy where opportunity expands for some but contracts for many.
In conclusion, the Chancellor’s spring forecast reflected a world of gradual recovery and relative stability, but the world that we now face is far more volatile, more uncertain and more complex, and this demands a shift in thinking.
I close with the Xhosa words from South Africa: “Enkosi kakhulu, sala kakuhle”, which means “Thank you very much, goodbye”.
Lord Bilimoria (CB)
What an excellent speech by the noble Lord, Lord St John of Bletso, the 22nd Baron St John of Bletso—a title that has existed for 460 years. I declare my interest: in the nearly 20 years that I have been privileged to be a Member here, my noble friend Lord St John—Anthony—has been my best friend in this House.
My noble friend entered this Chamber at 21 years old, as we have heard—the baby of the House—and he has been here for nearly 50 years. He has been a Lord in Waiting, he has phenomenal expertise in African affairs—in fact, he is the expert on Africa in this Chamber—and he has held positions such as vice-chair of the All-Party Parliamentary Group on Africa, as well as being a member of other committees on Zimbabwe and South Africa. I remember speaking in the tribute debate when Nelson Mandela passed away, and what a brilliant speech my noble friend made. He has had a very successful business career. After going to school at Bishops, the finest school in Cape Town, and the University of Cape Town, and then here at the London School of Economics, and then qualifying as a lawyer, he has brought that real-world international business experience to bear in this House. When I joined, the doorkeepers said, “Ah, there is our James Bond Lord”.
My noble friend is merely 68 years old. The average age of this House is 71. He has not even reached it. In my book, you are young until you are 60. He is middle-aged. Old age is from 80 onwards. It is so sad that the hereditary Peers are leaving the House in the way that they are, and there is no better shining example of their dedication, commitment and contribution than Anthony—my noble friend Lord St John of Bletso.
My noble friend is cheerful, energetic, charming, gracious and active, and has friends in every corner of this House. I have never heard a bad word said about him, and everyone loves him, Peers and staff alike. Although my noble friend is retiring, we look forward to seeing him back in the House regularly. I say “Farewell, my dear friend—and I mean fare well”.
Lord Bilimoria (CB)
The Statement on 3 March focused primarily on presenting the latest OBR forecasts, rather than announcing new policy measures. It forecast growth of about 1.1%, which is very low. It forecast inflation to fall from 3.4% to 2.3% this year. It forecast unemployment to rise to 5.3%, and net migration—which reached a peak of nearly 1 million just recently—to average just 235,000 between 2026 and 2030. But, as the noble Baroness, Lady Neville-Rolfe, brought to our notice, the forecast was prepared before the escalation of the conflict in the Middle East and is already completely out of date.
The OBR warned that the wider fiscal context remains difficult. It noted that UK public sector debt as a share of GDP has nearly tripled over the past two decades—it is now close to double the advanced economy average on a comparable basis—and borrowing has remained very high. The Chancellor referred to the growing uncertainty generated by the events in the Middle East, arguing that, in times of international volatility, the Government should prioritise economic stability, infrastructure investment and resilience to external shocks.
However, Reuters has reported that economists expect instability. Investors argue that global geopolitical tensions and surges in energy prices are going to have a dramatic effect on the state of the UK economy. Business groups have said that higher taxes and rising operating costs have discouraged firms from hiring. Financial markets have reacted cautiously: government bond yields have continued to rise and investors fear that sustained increases in gas prices could prevent the Bank of England cutting interest rates this year. In addition, motoring groups are calling on the Government to reverse their planned end to the freezing of the fuel duty in September, because of rising oil prices. Ten-year gilt yields have risen to over 4.5%. On top of this, we have nearly 1 million people—the NEETs—not in education, employment nor training.
I chair the International Chamber of Commerce in the UK. The British Chambers of Commerce has called for more decisive policy action to stimulate investment and growth. I was president of the Confederation of British Industry. The CBI has said that the Government still need to do more to reduce the cost of doing business, including tackling delays in planning consents, skills approvals, grid connections and access to innovation.
As my noble friend Lord St John mentioned, to shut down at this time oil and gas supplies that are sitting there and belong to us when we need them desperately—surely the Minister agrees that we need them more than ever. This is a transition, as my noble friend said, to net zero. We need to live that transition; it is not an on/off switch.
The welfare bill is now well over £300 billion. The national health and social care bill is approaching £200 billion. Our debt to GDP ratio is 100% of GDP—almost. After the Second World War, it had gone up to 250%. It took from 1945 to 1963 to bring it down to 100%, which is where we are back up to now.
Then we have a situation where 9 million people of working age are not working. We have a record number of people signed off sick, with doctors signing patients off without even doing assessments. Does the Minister agree that we need to do something to encourage people back to work?
Then there is the sad impression of London, which really annoys me when I travel abroad, where people say, “Oh, the crime in London, people have their watches stolen, their mobile phones stolen; we do not feel safe in London any more”. That is wrong. This is the greatest of the world’s great cities and people should feel safe over here.
We are splurging more on interest than on defence and policing combined. We pay a higher risk premium than Germany, Holland, Spain, Sweden, Ireland, Belgium and other countries. We had austerity after the financial crisis in 2010. That did not work. Rishi Sunak then spent over £400 billion when he was Chancellor during Covid. On top of that, we have this huge pensions commitment where public sector pensions alone are £1.4 trillion.
We all agree that we have one of the most generous welfare states in the world, but that is meant to be a safety net. The Chancellor now seems to recognise that the increase in minimum wages has harmed prospects for young people. I am all for people being paid more, but can businesses afford it, including the hospitality sector? Employers are still burdened with additional costs through increased taxes and more regulation, including employers’ national insurance, and we need to bring spending under control.
We need to focus on nuclear. We need to look at small modular reactors. We need to look at fusion on top of renewables. As the noble Lord, Lord St John, said, we need to look also at the threat and opportunity of AI and focus on skills, with industry and education working together. The reality is that lower net migration in economic terms will pose a medium-term risk to public finances, especially with the conflict going on around the world. We need an industrial strategy that will address what is going on.
I conclude. We have really high borrowing costs. We have a war going on in Iran. Oil is hitting over $100 a barrel and is forecast to go even higher. We have inflation that is not going to go down but is going up. We have had many inflationary spikes in the past five years and there is also the threat of a wage-price spiral. We need an economy that grows, but sadly the last growth figures were flat—the last quarter was 0.01%. We have the highest tax burden, 37%, since the Second World War and a cost of living crisis. This really hurts me because this country has such phenomenal strengths, institutional strengths and entrepreneurship—we have the third-highest number of unicorns, billion-dollar companies, in the world. We have the best universities in the world. We deserve better. Please, I implore the Government. There have been 15 U-turns—I say that the Government are listening when they U-turn. Would it not be better if they listened first, then they would not have to U-turn?
Lord Liddle (Lab)
My Lords, I echo the tribute from the noble Lord, Lord Bilimoria, to the noble Lord, Lord St John of Bletso, and pay tribute to his wonderful public service to this House over many years.
This year, I had the great privilege of chairing a Select Committee for the first time, the Finance Bill Sub-Committee, which examined the measures in this finance Bill relating to inheritance tax on pensions and agricultural and business property reliefs. We worked quite hard. We heard evidence from 33 witnesses and accepted nearly 200 written submissions. I thank the fellow members of that committee, one of whom is sitting on the Front Bench opposite, the noble Lord, Lord Altrincham, but I particularly thank the noble Lord, Lord Leigh of Hurley, who is not in his place but who brought up lots of questions that the rest of us might not have thought of.
While we were pleased to see that the Government have made changes to their initial proposals on inheritance tax, our report raised significant concerns about how these measures would work in practice for personal representatives, businesses and farms. A particular concern is that about personal representatives as a result of unused pension funds being brought for the first time into the scope of inheritance tax. The Government told us that this would be just an extension of what personal representatives have to do when people die. However, we heard that the reality will be very different.
Pensions simply do not fit well in the framework of inheritance tax. There are contradictory timelines, imperfect information and conflicting responsibilities; all these put personal representatives in a very difficult position. Even the most diligent of them risk being charged high-interest late payments by HMRC for not getting the stuff done on time. Worse, I think that many people are unaware that these changes are coming; they are going to hit them hard at a time for many of great personal grief.
For agricultural and business property reliefs, we raised concerns that family businesses and farms will face significant administrative burdens, especially when valuing their estates. Many of these businesses, as our witnesses explained to us, tend to be asset rich and cash poor, so there is a real problem about where the money is going to come from. It was disappointing and concerning that the Government did not appear to have properly considered the liquidity challenges which estates will face as a result of these changes, and the impact they will have on the viability of businesses and farms. As someone who comes from Cumberland, I am very concerned about the impact on farming but also on family businesses, which are one of the really strong points in our community.
We made a number of recommendations in our report about how the Bill should be amended, in particular to extend the inheritance tax deadline. The report also has important recommendations that the Government should take forward once this Bill has passed. They must act quickly to raise awareness of the impact of the pensions reforms for personal representatives and prioritise arranging guidance and practical support. More broadly, we think that the Government should review their approach to tax policy-making. We saw the repeated redesign of these policies, with three or four changes before we got to the present, and the serious impact this uncertainty has for those affected. I look forward to the Minister’s response to our carefully considered report.
Personally, I want to make it clear that I think that wealth should be taxed more strongly than it has been. We have seen in the last 15 years great growth in wealth, at a time when most people’s wages have been stagnant. The question is how you do it properly. The best way for the Government, and they have started down this road, is to think about how we tax property more efficiently than we have in the past. I welcome the measures on the taxing of wealthy property, but if those were extended, it would give us the opportunity to get rid of or mitigate the very high levels of stamp duty, which are economically efficient in deterring people from moving house.
We have also—I am speaking from this side of the House as someone on the left of politics—got to be careful that, in taxing wealth, we do not discourage enterprise. This is very important if we are going to get the economic growth we need. We must have a society where entrepreneurs can make themselves wealthy. A lot of people always say, “Oh, the pity is that we do not have the Mittelstand as they do in Germany”. It is a great pity that we do not have a range of companies that are family owned, where people are the committed owners of those companies. But the truth is also that in Germany many of the families that own Mittelstand companies are extremely wealthy. Therefore, a balance has to be struck between taxing wealth and promoting enterprise, and we should always remember that.
Lord Lamont of Lerwick (Con)
My Lords, I join with others in saying how sad it is to say goodbye to the noble Lord, Lord St John of Bletso. He will be much missed, particularly for his contributions on Africa and the global south, and for his contributions to debate, as his powerful speech showed today. It was quite excellent.
I will concentrate my remarks on the Spring Statement. Apparently, the Chancellor wanted this to be a low-key announcement. She need not have worried; it scarcely qualified as an event. For once there were no leaks, as there was nothing to leak. I do not disagree with the Chancellor’s decision that there should be only one fiscal event a year, but, if one closed one’s eyes while listening to the Statement, it was like listening to a party political broadcast in the House. The Chancellor listed ending the two-child benefit cap as one of the Government’s great achievements, forgetting that she was particularly enthusiastic herself about the Government’s initial policy of refusing to abolish it.
She attacked the previous Conservative Government on growth and inflation, without ever mentioning Ukraine or Covid. Can we expect the Chancellor or the Minister in future to talk about the economy without mentioning oil or war? Judging by today’s speech, certainly not, but the Government surely ought to judge themselves by the same criteria as they judge others.
The Chancellor pronounced that everything that had happened was a great success, while the rapture of the OBR was somewhat more modified, with growth higher this year but lower in future and the same over Parliament as a whole. Unemployment is heading to over 5%, with, as my noble friend on the Front Bench said, a worrying rise in youth unemployment and a welfare budget ballooning to £407 billion. I am pleased that the Chancellor stuck to her fiscal rules and I welcome the increased headroom. But, of course, public sector net debt still remains at 90% of GDP and the 4.75% 10-year gilt yield is the highest in the G7, showing that the markets are not convinced that our fiscal position is under control or that it is robust enough for the potential challenges ahead. The Chancellor claimed that people would be £1,000 a year better off by the next election. The Resolution Foundation, the Rowntree Foundation and the IFS cast great doubt on this forecast. The Rowntree Foundation thinks it will be more like £40 than £1,000.
There can be different views about the Statement, but what is clear is that it is now totally irrelevant. No one knows how long the conflict will last, as the Minister said. President Trump has said that it will be short. Qatar’s energy minister, who presumably knows a thing of two, has warned that the Middle East crisis could
“bring down the economies of the world”.
He predicted that all exporters in the Gulf will have to call force majeure, and European nations will feel significant pain as Asian buyers bid against them for whatever gas becomes available. If the crisis is prolonged, obviously it will bring higher inflation, higher interest rates, rising unemployment and even lower growth.
The Chancellor has indicated that, when the price cap expires in June, she wants to protect families, or is open to doing it, and she has said it will be on a targeted basis. I agree that, rather than doing something across the board, if it is necessary, it would be far better to target help where it is most needed. But where to draw the line is not easy, as the Chancellor herself found out when she tried to strip millions of people of their winter fuel payments.
Households are in a far weaker position today than in 2022. Then, the total amount of unpaid debt owed to energy companies was just over £2 billion. Today it is around £5 billion, and it is expected to reach £7 billion by the end of this year. The reality is that middle-income households now also struggle to pay their bills: that is the new normal. As the noble Lord, Lord Bilimoria, said, the Government need to end their war on the North Sea. If Britain is serious about energy security, we should use more resources from the North Sea, compatible with other policies. As President Trump pointed out, it makes little sense for the UK to be importing gas through pipelines from Norway, which extracts fossil fuels from the very same North Sea gas fields that fall inside British waters.
According to the OBR, the tax burden is forecast to reach 38.5% of GDP by the end of the decade, up from 36.3% this year and higher than the record burden in 1948. With fiscal drag, millions of taxpayers are dragged towards the painful cliff edges of the tax system. Families who get pay increases perhaps turn them down because they leave them worse off. David Miles of the OBR said that both the extent and the design of additional taxes matter. He said:
“Tax increases that increase marginal rates are likely to act as a disincentive”.
We are in “unchartered territory” with the level of taxes. Taxes are now 5% higher than before Covid. It would be a bold person to be confident that this will not hit even the modest growth rates forecast in the Statement.
Alarming as all that is, the IFS has forecast that the Chancellor may be forced to put up taxes even further. Higher inflation will increase welfare spending and the funding cost to government, forcing the Chancellor to find new measures to balance the books. If this happens, stagflation will stalk the land. For all the bluster and boasting, alas, we are far from being in the best position to weather the storm ahead.
Lord Barber of Chittlehampton (Lab)
My Lords, following a distinguished former Chancellor of the Exchequer and a brilliant speech from the noble Lord, St John of Bletso, I rise with some anxiety to make a speech on the economy. Nevertheless, I want to try to bring a note of optimism into our deliberations, because optimism itself may be part of the solution to the challenges that lie ahead.
I congratulate the Chancellor, my noble friend Lord Livermore and the Treasury team for the Spring Statement and the facts set out within it. I know that it came before the conflict began, but growth and retail sales were up, and inflation and interest rates were down. There are grounds there for optimism. Of course, the conflict creates a new situation, but, as we go into that conflict, as a result of the Chancellor’s efforts over the last 18 months, we are better placed to face that storm than we would otherwise have been.
I especially welcome the emphasis in the Statement on spreading growth to “every part of Britain”. This is vital. I will emphasise three factors that will help generate growth and spread it across our country, and I will illustrate this with examples from the south-west of England, where I live. I am anxious about that as well, because the noble Earl, Lord Devon, is in the room and his family has been there for 700 years, whereas mine has been there for only 15 years. Nevertheless, it will be good to hear what he has to say about it. I declare an interest as the unpaid Chancellor of Exeter University, so I am embedded in the system there.
The first message I want to emphasise is stability. I strongly welcome the Chancellor’s emphasis on bringing stability. Of course, you have to adapt to changing circumstances, but stability really matters. The CBI welcomed it when the Statement was made and, given the uncertainty, it is more important than ever.
Obviously, we cannot control global events, but we can control how we respond and how we act within these shores. Let me give an example from the south-west. We all agree that critical minerals are essential to the future of the economy and we all agree that they are a source of global tension, but we have critical minerals right here in Britain. In Cornwall, there are deposits of lithium, and a company called Cornish Lithium is already set up to exploit that. Tata and Agratas are building the biggest electric vehicle battery factory in Europe in Somerset. Altilium, in Devon, is recycling spent EV batteries and recovering 95% of the rare metals from them. The Camborne School of Mines, part of the University of Exeter, is at the forefront of the world’s research and innovation in these areas. These are just emerging factors, but we can see there the beginnings of the circular economy that will drive economic growth, environmental sustainability and national security. All of that is possible without setting foot out of the south-west of England. However, we can see that happen only if we have stability. That is my first point: stability is essential to getting the necessary investment and relationships.
My second point is about education and skills. This has already been mentioned in the debate and is fundamentally important. We should celebrate in this country the big improvement in our education system over the past 50 years. Fifty years ago this year, Jim Callaghan made the famous Ruskin speech, drawing attention to the problems. Successive governments of all parties have built on that, and we now have a much better education system, but there is more to do, especially in relation to skills.
In the south-west of England, traditional employment is low-skill and low-pay—it is agriculture and it is tourism. The economy of the future that is emerging will be high-skill and, I hope, high-wage. Such tech jobs, engineering jobs and software jobs absolutely depend on ever higher levels of skill right across the workforce. Navantia in Devon, Babcock in Devon, Leonardo in Somerset, Agratas in Somerset and the spaceport in Cornwall all need important and detailed engineering jobs and technical jobs. Across the UK, the Royal Academy of Engineering estimates that we will need 834,000 such jobs over the next five years— 4,000 of those will be at the Agratas plant in Somerset.
That is very demanding, and our education system will need to adapt further and faster to keep up with that demand. What we are looking for, surely, is a demand-led skill system where the employers create the opportunities and the education system empowers students to seize them. Education does not just create wealth; it spreads wealth and it turns wealth into family income. If you want to find that out, talk to the apprentices—there were some brilliant young apprentices in the Palace of Westminster yesterday. Talk to them at the Dyson Institute in Malmesbury or, if noble Lords want to come and visit us, at Exeter University, or at Sheffield University. They are doing wonderful things and they see the skills that they learn one day applied the following day.
My third message is about the speed of decision-making. In education, we need to go further, faster and deeper. The Government’s recent announcements will help us do that and are to be welcomed. Generally, however, the speed of decision-making needs to be speeded up.
Noble Lords will be aware that I spent many years in Whitehall trying to speed up the pace and effectiveness of delivery. I have heard all the excuses for delay: “Why don’t we do some more research?”; “Why don’t we try a pilot study?”; “What about another round of consultation just to check?”; or—before my time—“Why don’t we try it out in Scotland first?” These excuses are well known to the Civil Service. I love civil servants, and they too smile when they hear these excuses, because they are very familiar with them, but the problem is deeper than the Civil Service. It is about our processes and our culture, and the way we go about making decisions. It is not just in Whitehall but across local government. We need to shift the default in government across the country, at every level, from delay to delivery, from process to outcome, and from talk to action. The Government’s completion in short order of three major trade deals is a good example that you can get things done rapidly that are important to the future of the economy.
These things significantly affect the south-west. We have a number of fantastic small businesses, such as CMTG in Torrington. The last time Torrington was in the news for military purposes was in 1646, when the Royalist arsenal blew up. Now it is developing software for military helicopters. I could list a number of other businesses. California has its valley, Shoreditch has its roundabout and Devon has its defence innovation ecosystem. All these companies depend on the quality and speed of decision-making at the MoD.
I was fortunate to teach a course at Harvard for several years with the former Prime Minister of Mozambique, Luísa Diogo, a wonderful woman who died recently. She got 15% growth in a single year, as Mozambique was coming out of a civil war. I asked her how she did it. She said: “I didn’t do anything. The people of Mozambique generated that growth, especially the women. What we did was create the right context”. Stability, skills and speed of decision-making will create the right context. To conclude with her words, “If you get the context right, you unlock the music in people”. That is our task in the years ahead.
Lord Patten (Con)
My Lords, I shall certainly miss the noble Lord, Lord St John of Bletso, around the place. With his economic and business acuity, he will be sorely missed—a real person in every sense.
Today I shall address only the so-called spring forecast Statement. With respect, I cannot ever recall such an empty thing being brought before our House by any Government at any time. It is a monument to emptiness. On reading it, I was reminded inexorably of the Empty Quarter in Saudi Arabia; nothing much happens there, nothing much is seen and nothing comes out of it. It is remote from all reality and totally silent, with one exception—the Saudi Government have brilliantly managed to begin pumping wells in the middle of nowhere, getting on with the vital task of fuel enrichment. If only we had the same determination from the Government to do something about our neglected North Sea assets. The delays are shameful.
We can be certain that a substantial amount of public money was spent by the Treasury and its poor civil servants on producing this pointless exercise. This is a serious issue. In the interests of transparency, I ask the noble Lord, Lord Livermore—who is well known in this Chamber for wanting to give the fullest possible answers and maximum transparency, and not ducking difficulties—just how much in real terms it cost to produce. I would not expect him to be able to answer that during his winding-up speech, to which I look forward, but will he pledge to place an answer in writing in the Library? I hope the cost of the expensive legions of special advisers can also be taken into account, as they fail to come up anywhere in the speech—I read it with great care—or what in their dark jargon is called an “announceable”. The only phrase in the Statement that caught my eye was the claim that we have
“a state that does not stand back but steps up”.—[Official Report, Commons, 3/3/26; col. 729.]
That was striking most of all as a triumph of AI drafting. Please can we have the costs, with no hiding behind claims that answers can be provided only at disproportionate cost? We cannot have everything redacted by this Government.
I have great sympathy with and admire the Civil Service; I have had excellent help from it in many places in past years. However, any bright spark contemplating a Treasury career at the moment should be a bit cautious. They are being attacked all the time. Numbers are being reduced; they are being dismissed and categorised as an inefficient lot rightly losing their jobs. That is what most people thinking of coming in are hearing. Of course, the great ones of the Civil Service reach a pinnacle and become a Permanent Secretary, but it is distressing how Permanent Secretaries and others are now at risk of being named and shamed in a most cruel and uncaring way, as the last Cabinet Secretary found.
Lastly, as we stare stagflation in the face, how will all these expensively produced Spring Statement words help our economy? Consider our lamentable productivity. As much as one could ever reasonably expect any group of economists to agree on anything, there seems to be considerable consensus about the reasons. Here is a little list: the national disease of underinvestment; our lagging R&D spend; our escalating labour market horrors, due to the spiralling alleged sickness that we seem to be suffering from more and more; stamp duty issues getting in the way of people wanting to move house to get work; and our poor transport system, which is working against the necessary connectivity to get people to work or to arrive on time, thus increasing cost. One has only to ask the poor would-be traveller— I declare a regional interest—on South Western Railway, which is a true legend in its own timetable for lateness. Regrettably, over the last year or so, although I want to travel by rail for environmental and other reasons, my wife and I have been commuting each week by car, which is not what I want to do, but the Government are not helping. Just why are they doing so little?
Whatever the reason, it is worth noting that all these reasons seem to have led the UK to the worst productivity growth in the G7 in 2025. There is nothing in the forecast about that.
Lord Pitt-Watson (Lab)
My Lords, as many noble Lords have pointed out, we have been living in uncertain times, made considerably more uncertain in the last three weeks by the Iran war. Against that, the Spring Statement is creditable. Growth is returning, and that is the Government’s central mission. Inflation and borrowing are predicted to go down. Lots of that is through government action: beginning to balance the books, trade deals, industrial policy, planning reform, creating new sources of finance, training, sensible investment and direct investment. If I may be a bit cheeky, it has also led to a huge investment in the North Sea in offshore wind.
However, growth is not in the Government’s gift. It is not generated principally by Governments but by people, and particularly by businesses. That is what the noble Lord, Lord Bilimoria, and the noble Baroness, Lady Neville-Rolfe, were drawing our attention to. It was also the point my noble friend Lord Barber made in talking about what is happening in Devon and what Luísa Diogo was saying about releasing the music in people in Mozambique. For that reason, I will address my remarks to the role of business.
Some of the measures that the Government have taken have been tough on business. One in particular is national insurance. But I have not heard of any businessperson who says they do not want the Government to balance the books. Similarly, we need good working conditions for people. The wealth comes from them. It is hard if you are a businessperson and your competitor can undercut you by abusing zero-hours contracts, but it is tough if you are an employer and you have to pay for that. So, we should take off our hats to the businesses that are bearing this burden and that underpin our national prosperity. It is in partnership with them that growth will be delivered.
How does business feel? I was pretty encouraged by a recent interview with Andy Haldane. He is the former chief economist at the Bank of England and, I say to the noble Lord, Lord Bilimoria, the new president—taking over from the noble Baroness, Lady Lane-Fox—of the British Chambers of Commerce, which is part of the International Chamber of Commerce. In its survey, 46% of businesses said they expected to grow this year, up from 35% last year. He said that businesses have
“a pipeline of very investable projects”.
I talked to Andy about this a couple of weeks ago. Of course, Iran was a big concern to him, but he was keen that business should get on with it. He said that, given the economic challenges we face, this is a time for business to step up and lead, not lobby, demonstrating by deed what is needed to fire business dynamism, without which there will be no growth. I was delighted by that, because he is right: without business dynamism, there can be no growth.
As some noble Lords know, my own background is in finance. It is a topic that is debated greatly in the House. I have sat in debates, since my introduction a couple of months ago, on the report of the Financial Services Regulation Committee on how financial services regulators should encourage growth. This week, we are debating the pensions Bill, including provisions on how to get the UK pension funds to invest more domestically.
Here is some good news. I was talking to the chief executive of the ICGN—the International Corporate Governance Network—Jen Sisson. The ICGN, of which I am a former director, represents those responsible for the stewardship of shares and other securities: over £50 trillion of them. That is most of the world’s large institutional investors. It pointed out that international investors overweight the United Kingdom because of its accountable, honest and open capital markets, and its history of stable, code-based corporate governance. These long-term investors are keen for the UK to be proud of its position and to think about how they, the international stewardship community representing those big investments, could help our country engage business to grow and grow profitably.
The new group, the Governance for Growth Investor Campaign—with £200 billion of British pension funds, 40% of which is already invested domestically—is also eager to push for growth. I talked to its chair, Caroline Escott. She said, “Of course, we invest significantly in Britain and want to continue to do so. It is good for our returns and it is also good for the beneficiaries of our funds”. Again, the campaign is keen to work with the Government to see how best it can co-ordinate what is a mission for the nation.
I started by noting that growth was the central mission of the Government. I finish by advocating that, if growth is to be delivered, it needs to be a partnership and a national mission, particularly a mission for business. It needs to sing. The more uncertain the times, the more important that partnership is going to be. The Government already have a strong outreach to the business community. This is something they cannot do enough of. I am sure that I speak for many Members of the House, maybe not just those in my own party, when I say that, if we can help in the delivery of the growth mission, we will be more than happy to do so.
Lord Redwood (Con)
My Lords, I enjoyed the speech from the noble Lord, Lord St John, and I regret that I arrived in this place too late to hear more of his Lordship’s wisdom. I wish him every success with his new ventures.
The OBR is set up to fail. The Treasury asks it to perform an impossible task. As someone who has in past jobs had to advise and comment on economic forecast models, the one piece of advice I would give is to never have a spot forecast for something as difficult as a deficit or an inflation rate five years out. To make sure the OBR fails, the Government set it the task of forecasting without allowing it to make any variations to policy. We all know that, over a five-year period, there is going to be at least one general election, and sometimes Governments get so unpopular that there can be a very major change of Government, with a change of policy. We also know that, over a five-year period in this impatient world, Prime Ministers often get fed up with their Chancellors, or parties get fed up with their Prime Ministers, so there can be changes of personnel and a series of changes of policy from that as well. So, it is a totally unrealistic assumption.
What has the OBR done with its problems this time? The OBR tells us that inflation will be a very timely 2% in every year of the last four years of the forecast. I wish it was so, but experience says it is unlikely. The OBR says that the oil price will gently gyrate between $62 and $67 over the forecast period. I know that these are annual averages, so that reduces some of the volatile swings that we are seeing. But, again, that is a heroic or inaccurate forecast. I suggest that there will be considerably more volatility. If we got an early end to the war and things develop more favourably, you could even end up with considerably lower oil prices. In the meantime, obviously, we are all extremely nervous, the war continues, there is more disruption of oil trade and oil prices will stay very high.
One of the things that I fear the forecast is right about is that our own production of gas will halve. I fear that it will under current policies, and I add my voice to those who have already eloquently said that we should stop all this self-harm and get our own gas out, with more better-paid jobs and a lot of extra tax revenue—and, above all, less world CO2, which is the main preoccupation of the Government. What is not to like? The forecast also says that our oil production will be down by about a third. That, too, is subject to the same analysis, and it would be much more sensible for us to deliver our own oil.
The worrying thing in the forecast, which has already caused some alarm in this debate, is that the OBR thinks that the cost of government borrowing is going to rise in every year of the forecast. We should remember that this is from quite a high base by recent past history, because, over the last 15 months, under Chancellor Reeves, the Government have been paying a higher rate of interest for longer-term borrowing for the whole of the 15 months than on the worst day’s spike under Liz Truss, which they regularly condemn as being an unacceptably high level of interest rates. This OBR forecast says that the interest rates are going to be even higher progressively, in a gentle upwards progression, over the whole forecast. Clearly, the OBR is worried, as we all should be, by the weight of debt already issued and by the progressive increase in the amount of debt over the forecast.
This brings me to my advice to the Government. They should change the remit of the OBR to concentrate on years 1 and 2 of the forecast, where there is more chance of getting it right, and they should amend their fiscal rules again. I know they are bringing it down from a five-year fiscal forecast rule to a three-year fiscal forecast rule, but many of the arguments against five years still apply to three years. The number is invented and will not actually ever take place. Year 5 or year 3 never comes, because it is a rolling forecast, so, in effect, there is no control over the deficit. We need a control over the deficit in years 1 and 2 that is real and biting, at least by moral shame and preferably by government decision. Then I think they would find it easier to keep the interest rates under control.
There was a touching ceremony in this very Chamber last week when the Government advanced their legislation to increase income taxation by reducing the generosity of certain pension-saving allowances. The most remarkable thing about that legislation that we were asked to approve was the date of its introduction, which is to be 2029 to 2030. Why choose such a late date? Indeed, it could well be after the next election, and there could even have been a change of government by then, who might not particularly want that legislation. I assume it is great Treasury intelligence and cleverness, because that, of course, is the control year it is currently on for controlling the deficit; and so clever people in the Treasury invented a tax increase, which actually has, according to the OBR, the magic property of a large increase in tax in year 1, and then it halves for all subsequent years. You therefore get the maximum deficit-breaking effect from putting that tax in in year 5 of the forecast, probably neatly after the general election.
This is creative accounting on a grand scale, and it is a surrogate for the real job of getting that deficit down, so I would suggest to the Government that they look again at their fiscal rules. In all the years we have had OBR forecasts of deficits and fiscal rules, we have seen a mushrooming of deficits and debt under successive Governments of all parties, so it is now trebled over the OBR period. Let us therefore have an OBR with a bit of bite. Let us give it a bit of proper independence. I know it is staffed with civil servants, and they work very closely with the Treasury, but it needs to be independent enough to accurately forecast the deficit in years 1 and 2 and to help the Government control it.
Lord Sherbourne of Didsbury (Con)
My Lords, the Economist magazine got it right about the Chancellor’s speech on the spring forecast. It said that the Chancellor
“did not announce a single major policy decision that will help Britain break out of its malaise”.
The malaise is the OBR’s bleak forecasts for economic growth over the coming years— and that is before the current war in the Middle East. It is no surprise, therefore, that the right honourable Wes Streeting said in one of his WhatsApp messages that the Government had no growth strategy at all. I therefore want to focus my brief remarks today on one subject—the lack of economic growth—and I really want to make just one point.
The ultimate driver of economic growth in an economy comes from people who work in business, industry and commerce. That, I think, was the main point made by the noble Lord, Lord Pitt-Watson, earlier on. Yet all those people and those companies—this is where I disagree with the noble Lord—and all those people in business and commerce have been hit by the Government’s stream of anti-business policies.
We have had the jobs tax: the increase in employers’ national insurance contributions. We have had the burdens placed on business by the new employment regulations. We have had the tax on private pensions and the tax on private farms. And now—about to hit the self-employed—we have new and complex regulations which mean they have to submit four tax returns every year instead of one. Therefore, the question I ask is: are there enough people in government who have any idea of how to run a business?
I grew up in the north of England, and my father ran a small manufacturing company, so I was brought up, like millions of people in this country, in a business culture. I learned about the risks you take when you invest money—and it is not just your own money, because the chances are you are having to invest borrowed money. You have no guaranteed revenue and no guaranteed salary. You hope to make a profit, but your margins are tight and you watch your costs like a hawk because you cannot afford to go into loss. You hope at some point to build up some capital, and you do not want to be penalised for success.
In this House, we have a number of Ministers who have business experience—the noble Lords, Lord Stockwood and Lord Timpson, are two examples. I am sure they understand all of this very well, but—dare I say it—we could do with more MPs who have direct business experience. On the day of the spring forecast, there was published in the Times a very interesting article about how the profile of the House of Commons has changed and how different it was in the 20th century. There were many more people on both sides of the House—the Labour Benches and the Conservative Benches—who had direct experience of industry, and the article listed the names of some of those MPs. They included MPs who had been labourers, who had worked on the shop floor, who had been stokers, and who had been railwaymen. Some had risen to become trade union leaders. There were business leaders who had set up businesses in construction, engineering and manufacturing. We do not have enough such people in the House of Commons today. We should certainly welcome, therefore, the addition of a plumber who was recently elected in the by-election—I think she will be an addition to the House’s expertise.
I conclude by suggesting that it would really help business if there were more people in government who had the outside business experience to shape policy, and who understood the impact of those policies on business and companies. That would stimulate business activity, and that—I say to the Minister—would be a real strategy for growth.
Viscount Chandos (Lab)
My Lords, I am very grateful to my noble friend the Minister for his characteristically clear and cogent introduction to today’s debate on the Spring Statement and the finance Bill, timed also to allow us to take into account the Chancellor’s Mais Lecture, delivered early this afternoon. I very much enjoyed and admired the valedictory speech of the noble Lord, Lord St John, and pay tribute to his service; I also thank him for his friendship. I think he was a veteran aged 24 when I arrived in the House as a new boy of 29.
I strongly support the active and strategic state advocated in the Mais Lecture by my right honourable friend the Chancellor, with its three priorities—stability, investment and reform—which have guided her and the Government’s economic strategy since being elected in July 2024. The restoration and promotion of stability has had to be the primus inter pares of priorities for the Government over the past 21 months. The legacy from the Conservatives’ destructive time in office no longer needs enumerating in detail, but a toxic ABC combination of austerity, Brexit, and concealment has presented a formidably challenging starting point from which to rebuild confidence and stability.
Just as that task had been substantially achieved, the latest of a series of geopolitical shocks has posed new challenges. The attack on Iran by Israel and the US and the indiscriminate response by Iran, creating a wider conflict in the Middle East, will inevitably impact the global economy, including that of the UK. The Government are right to be vigilant in calling out price-gouging and profiteering in the energy and other sectors, as my noble friend has mentioned.
The rise in gilt yields and consequent increase in government borrowing costs are unwelcome but reflect the financial market’s recognition, in the US and the eurozone as much as in the UK, of potential inflationary pressures and other risks. The Bank of England will face difficult decisions in relation to interest rates against this background, with increases in energy prices having inflationary and potentially recessionary implications. I hope and believe that the MPC will strike a wise balance in that context. As my noble friend the Minister said, if the Government had not made the difficult decisions encapsulated in the finance Bill that we are debating today, the UK economy would have been less resilient and less able to absorb this latest geopolitical shock, let alone the unprecedented continuing levels of uncertainty and unpredictability that characterise the current US Administration.
The Government have, in parallel with their restoration of stability, planted the seeds to increase and stimulate investment. This has already begun to bear fruit. As my noble friend Lord Eatwell pointed out even before the Budget Statement last November, PwC predicted—and has confirmed since the Spring Statement—a record increase of £13 billion in public investment in 2026-27, unlocked by the sensible, prudent changes made by this Government as to how capital investment is treated in the public accounts and the fiscal rules.
The OBR applies a factor of 0.3 to the impact of public investment on private sector investment, so £13 billion should catalyse £4 billion of incremental private sector investment. However, it acknowledges that the factor in some circumstances could be as high as 2.0—the quality of public investment is as important as quantity, with policy, governance and management all critical determinants of that. What are the Government doing systematically to ensure that these are all pursued to the highest standards, so that the direct return from public investment is maximised and the indirect return from the highest possible factor of private sector investment is being catalysed?
I end by picking up on one point from the finance Bill. The introduction with effect from 2028 of the eVED tax band on the mileage of electric vehicles reflects a decision to balance the need to encourage the switching to EVs with the need to replace revenues from fuel duty and ensure that drivers of EVs contribute fairly to the maintenance of the road infrastructure. I support the balance that is being struck in this case.
Another stimulus for the switch to EVs is the highly concessionary levels of benefit in kind applied by HMRC to company car drivers: 3% of the on-the-road price of the car concerned, rising to 5% in 2027-28. This represents a huge tax saving for the drivers, with no cap on the price of the car to which the benefit in kind applies. By my calculation, a high-end driver of an EV may pay a tax rate that is as low as 5% on the true cost of that benefit. Does my noble friend the Minister agree that this tax should be given further scrutiny and, at the very least, that a cap on the value of cars to which the benefit in kind applies should be examined?
Baroness Fairhead (CB)
My Lords, I too congratulate the noble Lord, Lord St John of Bletso, on his long, stylish and meaningful service to this House. I wish him well in the future, be he in Africa or anywhere else in the world.
I stand before your Lordships as a member of the Finance Bill Sub-Committee, ably chaired by the noble Lord, Lord Liddle, in his sub-committee chairing debut. I will restrict my comments to the key findings of the committee regarding the inclusion of unused pensions and death benefits in the scope of IHT from April 2027. That will, as the noble Lord has said, make PRs personally liable for paying any tax due within six months of death or incurring a 7.7% increase for interest, with minimal exceptions.
I will confine myself to the practical issues that the Bill raises, which, in the words of one of the witnesses, the noble Baroness, Lady Altmann, speaking in her capacity as an independent pensions expert, will create
“massive chaos and misery to so many people, at a particularly difficult time of bereavement”.
I recognise and welcome the Government’s changes, but they are not remotely sufficient.
Adam Smith outlined four enduring canons of taxation which I will paraphrase as fairness, predictability, ease of payment and cost efficiency. The current implementation plan fails each of these. First, on fairness, after listening to the concerns of the pension scheme administrators, the Government shifted the burden of payment to PRs—not just professional PRs but lay PRs, who are often family members undertaking the task at a grim time in their lives. Personal representatives will be required to contact the relevant PSAs for information to determine exactly what tax is due. As today people retire with, on average, eight to 10 pension schemes, the scale of the task is potentially enormous. In simple cases, six months should be achievable. However, in complex cases, where probate is delayed, which can take years, it simply is not, particularly when many PSAs will not disclose the information until after the probate is granted. That is a Catch-22 situation. Often, personal representatives will not even have control of the assets of the deceased, which makes it difficult for them to pay on time. Charging interest to PRs for such late payments could fairly be regarded as a penalty for taking on the task.
I turn to predictability and ease of payments, which I group together. Many pension assets are illiquid. Their valuation is unlikely to be predictable or certain, given their complexity and the valuation bottlenecks that must surely arise. For example, the current rules for defined contribution and defined benefit schemes are complex and inconsistent. It is possible that schemes with exactly the same financial outcome can lead to the IHT being payable on DC schemes but not on DB schemes. Think about that. An unintended consequence could be that people are discouraged from investing for their retirement through DC schemes, which is counter to policy and to the desire of this and many other Governments.
In many cases, the PRs will need to recover payment from resistant beneficiaries who have already been paid. These beneficiaries might even come from previous relationships or families of the deceased. You can imagine the strain that that would put on being able to make that payment within six months. Many witnesses believe that the industry is not ready and that, should the regulations be laid out just before April next year, the unpreparedness is almost inevitable.
Finally, on cost effectiveness, the changes will increase admin costs materially, whether or not IHT is ultimately payable, as PRs are likely to require the support and guidance of advisers. Personal liability and admin difficulties may well discourage even professional PRs from serving, leaving HMRC to administer even more estates, substantially increasing government costs.
The Investing and Saving Alliance described the proposal as like
“trying to hammer a square peg into a round hole”.
Given the scale and complexity of the task, this change is being introduced without adequate notice, guidance or communication.
There are many ways the Government could improve implementation, such as safe harbours, grace periods from interest or by improving access to information or ways of payment. At a minimum, the Government should publish timely step-by-step guidance to PRs, with worked examples and clear guidance to the industry.
I urge the Government to do more and pose a couple of questions to the Minister. Would the Government consider pushing back the timeline until the most significant of these issues are resolved? If not, what further actions are they prepared to undertake to ease this unfair burden on personal representatives?
Lord Leigh of Hurley (Con)
My Lords, it is an honour to follow the noble Baroness, Lady Fairhead. I also speak as a member of the Finance Bill Sub-Committee of the Economic Affairs Committee—a lot of words on a business card. It was a delight to serve on it again, and I congratulate our chairman, the noble Lord, Lord Liddle, on his excellent work, and thank the staff and colleagues on the timely production of this report. Sadly, we will not be able to debate the report separately, so I hope the Minister finds some time to comment on some of our proposals today.
We were very troubled by the reforms to inheritance tax. We can see that the burden that will be placed on personal representatives, as the noble Baroness, Lady Fairhead, set out—I agree with every word she said—will risk dissuading anyone from accepting this role. I know that I would be extremely reluctant to accept a job as a personal representative, which I have accepted in the past.
Taxing pensions with IHT is a retrospective tax because people like me—I declare an interest—have saved money into a pension on the understanding that it would be outside my estate. The Government have reneged on that deal, and it is clear from the Bill that they are there only to support those on defined benefit schemes, which is possibly of benefit to those who drafted the Bill and all public sector employees, not those of us earning and saving from our own resources, who have been hammered by the Bill.
The Government have clearly not thought through the complexity of the interaction of BPR, APR and IHT on pensions. As a result, many small family businesses and farmers will face acute liquidity problems on the death of a family member in their business. We argued strongly for the Government to extend the deadline for payment from six to 12 months. That was not a big ask, so I urge the Minister to look at this again.
I will raise one issue that I hope the Minister will not think is political. It has not been discussed elsewhere and it will be a major problem. The proposed introduction of inheritance tax on unused DC pension funds on death will affect a disproportionately female demographic, particularly widows, single older women, lone parents, unpaid carers, disabled older women, early-death survivors and personal representatives. I know that there was an equality statement, but that was based solely on HMRC data, not ONS data. I have had a look at the ONS data and it is clear that there will be a massive impact on older women from this. Women typically live longer than men, and they will suffer as a result of these changes. I am sure that is not the Government’s intent, but that is the effect. The Government have not published any demographic modelling, so we are unaware of the resultant effect. This is a really serious issue that, from today, will gather momentum in the national press as people realise that this effect will hammer widows and women who have to be personal representatives themselves.
Can the Minister also look at the basis of valuation for businesses for IHT and BPR on the owner’s death? It is a bit absurd but, currently, HMRC looks at the value of a business the day before the death. This is completely unfair, because the value of many businesses is dependent on the owner working in that business. It is shocking that HMRC will not accept that, following the demise of a significant shareholder, that business might be worth considerably less, or even nothing. Dependants will have to pay inheritance tax based on the owner still being alive, which is absurd.
I turn to other matters. Many have concerns about tax adviser registration. The CBI, in particular, thinks this will have a chilling effect on access to advice for retail and business clients from, for example, conveyancers and pension providers. We still do not have clarity on the treatment of in-house tax teams, which is critical.
The avoidance legislation in Part 6 and the tax adviser legislation in Part 7 of the Bill is overbroad; it risks capturing legitimate tax advisers who are acting reasonably and deterring them from acting in areas of uncertainty, but not attacking tax advisers based offshore. The best solution for both the promoter and tax adviser registration rules would be to delay enactment by a year to allow HMRC to iron out concerns with professional bodies and businesses. There is no loss of tax by doing this; it would allow the further tweaks needed to be made to the legislation.
To the surprise of many in this House, I thank the Minister for the changes to the EIS and VCT restrictions. Of course, I regret the VCT relief reduction from 30% to 20%. By the way, the last time investment limits were cut by 10 percentage points—from 40% to 30% in 2006-07—the VCT funds raised dropped from £780 million to £270 million, a reduction of over 65%. Who knows what will happen this time round?
I am sure the Minister recalls me banging on to get through more changes on, for example, limits, company age, relationship restrictions in families and so on. I hope that the Government look at this again. Who other than parents will be mad enough to back a young person, so why should they not get the same tax relief?
It is intensely frustrating to many of us that we have only seven minutes to comment on the 500 pages of the Bill. There is an enormous reservoir of knowledge in this House, which has many more businesspeople and advisers than the other place, so it would be great to be invited to a round table sometime to throw out some real-world issues and solutions, as we see them.
In closing, I bid a very fond farewell to the 22nd Baron, the noble Lord, Lord St John of Bletso. I looked it up and the title was not created at the Norman Conquest, but I know that his ancestors came over then, so his family have served this country well and we are grateful. He personifies the huge loss of skill and knowledge that we will suffer with the departure of the hereditaries.
Baroness Bi (Lab)
My Lords, I begin by sharing my tribute to the noble Lord, Lord St John of Bletso. I am a newcomer, so I have not had the benefit of his expertise on southern Africa. I am sorry about that because it is a region I am very optimistic about. I also share the noble Lord’s concerns about the impact of AI on employment.
I declare my interest as the chair of Norton Rose Fulbright, an international law firm, although I speak today in a personal capacity.
Your Lordships will not be surprised to hear that I strongly support the Chancellor’s Spring Statement and the Finance (No. 2) Bill. Together with today’s Mais Lecture, they represent a clear and disciplined approach to economic management—one that prioritises stability, growth and long-term competitiveness.
Over the last decade, businesses have had to navigate an extraordinary succession of shocks: the wars in Ukraine and now the Middle East; the disruption caused by artificial intelligence and new technologies; the societal changes caused by Covid; and the profound economic and constitutional changes triggered by Brexit, which we are still experiencing. In that environment, what globally mobile businesses value above all else is not short-term gimmicks or headline-grabbing announcements but political stability combined with regulatory coherence and fiscal predictability.
Regrettably, that is not what the United Kingdom consistently offered in the period after 2016. Multiple fiscal events each year and uncertainty over our long-term economic direction weakened confidence and made it harder for the UK to compete for investment. The damage to our reputation was real, particularly in financial and professional services, where confidence and continuity are paramount.
That is why the Chancellor has been right not to make any new tax or spending announcements as part of the Spring Statement and to ensure that there is only one fiscal event per year. The Spring Statement demonstrates that this Government understand that credibility is built not through constant activity but through consistency.
The Government’s commitment to reducing borrowing, bringing down inflation and improving living standards is essential. In an era of geopolitical volatility—including, as we speak, the conflict in the Middle East, with its global economic consequences—it is important that the UK is seen as a safe harbour. Markets will tolerate short-term adjustments to forecasts, including those made by the Office for Budget Responsibility, provided the direction of travel is clear and the policy framework is stable. That is exactly what this Government are now providing.
In my own sector—international financial and professional services—the United Kingdom remains one of the world’s pre-eminent centres. The sector contributes over 12% of our economic output and employs nearly 2.5 million people, with the majority of those jobs outside London. This is not a niche interest or a City concern alone; it is a national asset that underpins prosperity across the whole United Kingdom.
At the heart of that success lies the City of London, which continues to evolve as a global hub for capital, expertise and innovation. The recent wave of mergers between leading US law firms and London-based international firms is a powerful vote of confidence in the UK’s future as a centre for global business. Firms do not make those decisions lightly. They do so because London offers an unmatched combination of expertise, legal certainty, time zone advantage and global connectivity.
Yet we cannot afford to be complacent. Our competitors, from Dublin to Singapore, have been energetic in promoting themselves. In the years following Brexit, the UK was not always seen as the obvious place to launch new products or expand new business lines. Left unchecked, that trend would lead to a gradual erosion of the City’s position and, ultimately, to reduced revenues for the Exchequer and fewer high-quality jobs across the country.
This is why the finance Bill matters. Since 2008, layers of overlapping regulation and sector-specific taxation have placed the UK at a competitive disadvantage. What businesses require is not deregulation for its own sake but clarity, coherence and alignment with international standards, combined with a competitive and clear tax regime.
That is why, as a capital markets lawyer, for example, I welcome the changes to pillar 2 in Schedule 8 to the Bill, which address long-standing ambiguities in the tax treatment of securitisation vehicles and bring the UK into line with other major European jurisdictions. This is a practical, targeted reform that enhances the UK’s attractiveness without compromising standards.
Like the noble Lord, Lord Bilimoria, I want to address the increasingly vocal attacks on London itself. In recent months, a deeply cynical narrative has taken hold—particularly on social media and among some politicians who otherwise wrap themselves up in the flag and claim to be patriotic—portraying London as a crime-ridden dystopia in decline. This caricature is not only inaccurate; it is actively harming our national interest.
To denigrate our capital for short-term political gain is to undermine one of the UK’s greatest competitive advantages. Unfortunately, international investors do not distinguish between rhetoric and reality when headlines travel globally. I therefore urge my noble friend the Minister to ensure that this Government robustly and consistently counter this disinformation through a co-ordinated, cross-government campaign to promote London internationally as the safe and business-friendly city that we all know it is.
Looking internationally, I hope financial and professional services will be central to the UK’s trade policy, including the reset of our relationship with the European Union. But while those negotiations continue, we should focus on what we can control, which is to make the UK an easy and attractive place in which to do business.
The regulatory divergence now emerging between the United States and the European Union also presents us with a strategic opportunity. As the US loosens its regulatory framework and the EU moves towards greater standardisation, we are uniquely positioned to offer a third way, combining high standards with global reach.
In conclusion, the world is looking for centres of stability, integrity and expertise. With the right policy framework, and the approach set out in the Spring Statement and the finance Bill, the UK can and should be that place.
Lord Northbrook (Non-Afl)
My Lords, the Spring Statement has been overshadowed by the escalating conflict in the Middle East. There is
“significant chance that the new forecast is already out of date before the ink has dried”,
warned Andrew Wishart of Berenberg Bank. However, even before this, the UK economic forecasts were looking grim. Growth was looking stagnant and downgraded to 1.1% for this year. While 2027 and 2028 forecasts were raised, Paul Dales at Capital Economics has warned that this could be overoptimistic. Helen Miller, director of the Institute for Fiscal Studies, said:
“The economic outlook, and therefore the outlook for borrowing, could shift more materially between now and the Budget in the autumn. The conflict in the Middle East is already pushing up”
commodity
“prices and expectations for interest rates. It could yet cause more far-reaching economic disruption”.
On the inflation front, Mr Dales also predicted that, if remaining for a medium-term period,
“the leap in energy prices will mean UK inflation”
will be
“higher than the OBR is forecasting”.
According to senior OBR official David Miles and the NIESR think tank, the rise in global energy prices, if sustained, will lead to a 1 percentage point increase in inflation. As a result, the Bank of England will have much less scope for lowering interest rates, as this rise will take inflation well beyond its target of 2%.
Moving on to the Statement’s comments on taxation, the OBR said that taxes would hit 38% of national income in 2030-31—a depressing post-war record. After the Chancellor’s decision to increase the employers’ rate of national insurance and freeze income thresholds, revenues as a result of these measures will increase by 25% in the next five years.
Welfare spending is out of control. The Government’s welfare bill, including spending on pensioners, is poised to soar by 23% over the next five years. The number of people claiming disability benefit will rise by 2.3 million over the same period. The numbers claiming incapacity benefit will also increase: this category will be up by 18% over the next five years. However, the OBR said that this could be an underestimate, as it is assuming that new incapacity benefit claimants will rise at a slower rate than in previous years. Overall, welfare expenditure is predicted to cost the country 11.2% of total GDP by 2030, which is a very worrying figure, and even the Government believe something serious must be done to control its increase.
On unemployment, the OBR predicts that almost 2 million people will be jobless by the end of the year, surpassing the highs of unemployment last seen during the Covid epidemic. It forecasts that the unemployment rate will be up to 5.3%, from 4.75% last year. According to the Times, Labour has presided over an almost 30% rise in unemployment since it came to power. The OBR warns that higher unemployment could become structural and persistent, with new technologies such as AI permanently displacing workers.
Looking at the UK economic situation, the Government clearly could not have anticipated the Middle East turmoil. However, they have done things domestically that have been foolish. The lack of business and financial experience on the House of Commons Front Bench has led to poorly thought-through decision-making. The increase in employers’ national insurance, seen as an easy way to raise tax, is a classic example. The consequences were not considered sufficiently. In a difficult economic climate anyway, it has led to businesses laying off staff rather than having to pay the extra tax.
Then there is the minimum wage. Both major parties have made the same mistake here. It is in theory good to give pay increases above inflation, but in practice, especially when the wage for younger people is raised to such an extent, it affects the profitability in particular of businesses dependent on employing this category of worker. Combined with the employers’ national insurance increase, these two measures have had a devastating effect on businesses.
When we look at a third problem, we can see what a hammer blow has hit smaller businesses in particular. It is business rates. The Government failed to realise the effect of the revaluation of properties, particularly on leisure businesses and small shops, which has led to unfair rate increases on many of them.
I made no apology for referring to three areas of tax change which, if implemented, could give a major boost to the economy. First, there is the non-domicile tax changes. Relying on mistaken forecasts of extra tax on these individuals, Governments of both parties have decided to frighten them away from the UK. These non-doms paid much more via PAYE and VAT than the potential extra tax it was claimed would be raised by their status change. This is because they employ people, use hotels and restaurants, and spend money in shops, to name but a few areas. The non-dom legislation should be scrapped.
The next area is duty-free shopping. Again, Governments of both parties have foolishly made and kept the abolition of this. Again, this is very short-sighted and based on erroneous overall calculations of tax loss. What was not factored in was the extra money that could be spent by these shoppers, who go to other European airports instead.
Finally, I turn to inheritance tax. This should be fundamentally changed or abolished. I would like, for a start, to see the UK adopt the American threshold of nearly $14 million before the tax is due, or the Government should consider the example of socialist Sweden, where the tax was abolished. It is a pernicious double tax. As a wise friend from Bexhill with extensive business experience has pointed out, fear of the tax prevents small businesses expanding and being passed on to the next generation. It also cuts back potential spending by descendants in family businesses. It encourages non-domiciled individuals to leave the country—guess who returned when Sweden abolished the tax? It is so disappointing that Conservative and Labour Governments have done nothing about it, except in the case of Labour, which made it worse. A new political approach is needed.
Lord Elliott of Mickle Fell (Con)
My Lords, I shall focus on the choice we face as a country between investing in economic inactivity versus investing in work, a theme my noble friend Lord Northbrook spoke about. The Work and Pensions Secretary announced yesterday a £1 billion investment to incentivise employers to hire young people from long-term unemployment. That is welcome news, given that almost 1 million people are not in education, employment or training. Each of those NEETs faces losing out on £1 million in lifetime earnings, with a further £1 million cost to the state—that is, to all of us as taxpayers—in welfare payments and lost tax revenue.
What struck me is that this £1 billion incentive to employers is far less than the £8 billion increase for non-pension-related welfare payments announced in the Spring Statement. The Government have therefore made an active choice—the wrong choice, in my view—to spend eight times more on paying people to stay out of work than on getting people into work. To put that in context, with £8 billion, the Government could fund almost 900,000 apprenticeships, give a tax break of £10,000 to 800,000 businesses to employ someone out of long-term unemployment, or immediately increase our defence spending to 3%. According to table 5 of the appendix to the OBR’s report, the Treasury will collect £331 billion in income tax in the current financial year, but according to table 4.6 we will spend £333 billion on welfare—a sum that is almost as big as the combined GDP of Scotland, Wales and Northern Ireland. In other words, we are now spending more to facilitate people not working through a rise in income tax from people working.
This comes at a cost—a cost that falls on us through taxation but also on the next generation through increased national debt. In 2000, the national debt per person was, in today’s money, £11,500. Today the share of the national debt for every child born is more than £41,000. This is their inheritance, and the trajectory is not improving. According to page 70 of the OBR’s report, total welfare spending will rise this year by £18 billion, further contributing to the national debt. This £18 billion increase is the equivalent of the entire annual budget of NASA, an organisation that is literally sending people around the Moon this year. Thanks to the work of NASA, we have GPS navigation, satellite weather forecasting, camera phone sensors, infrared thermometers, cordless power tools and even memory foam—technologies that have improved the lives of billions of people and underpin trillions of dollars of economic activity.
This is where the choice between investment in jobs and so-called investment in welfare comes in. The Chancellor opened her 2024 Budget by declaring:
“The only way to drive economic growth is to invest, invest, invest”.—[Official Report, Commons, 30/10/24; cols. 811-12.]
I agree. The question is, invest in what? After her 2025 Budget, she went so far as to describe welfare spending as investment. If additional welfare spending is investment, it is investment in keeping people out of work rather than giving them the joy of a job and the Exchequer a windfall. President John F Kennedy once said:
“We choose to go to the moon in this decade and do the other things, not because they are easy, but because they are hard”.
I urge the Government to make the hard choice to put any additional money they have into getting people into work rather than increasing welfare spending. As the Chancellor once said:
“We are not the party of people on benefits. We don’t want to be seen, and we’re not, the party to represent those who are out of work … Labour are a party of working people, formed for and by working people”.
The spending choices in the Spring Statement speak louder than words: £8 billion is a bigger figure than £1 billion. I urge the Government to make getting people into work a higher priority than keeping them out of work, to put more focus on making the country NEET zero rather than net zero, and to go back to being, in the words of the Chancellor, the party of the worker rather than the party of people who are out of work.
Lord Davies of Brixton (Lab)
I start by paying tribute to the noble Lord, Lord St John of Bletso. I do not know whether he will mind me mentioning that we recently discovered that we share one thing in common—there may be others—which is that we are both stammerers. He is wonderful testimony to the fact that it is not a life-changing condition. In some ways it can be life-enhancing, because it forces you to do things you might not otherwise do.
The first issue I want to raise is in relation to the Spring Statement. A number of speakers have mentioned that, obviously, the war in the Middle East is affecting the figures. Another thing that will affect the figures is the sweeping immigration reforms announced by my right honourable friend the Home Secretary earlier this month to extend the default settlement period from five to 10 years, introduce an asylum visa break and reduce refugee protection grants to 30 months. If they achieve the effects that we are told they will, it is clear that they will have significant implications for the OBR’s projections.
The fiscal consequences of lower migration are, on balance, unfavourable to public finances. Oxford Economics, for example, has pointed out that falling migration
“threatens growth, strains public finances, and leaves productivity carrying the burden”.
More specifically, it estimates that, if net inward migration dips below 100,000—that is its expectation for the current year—the cumulative effect would leave the UK population 1.5 million lower than the ONS projection by 2030. So my question is: if the OBR is going to adjust its assumptions in respect of the proposed changes, what will be the effect on potential output for 2029-30? Oxford Economics estimates a reduction of 1 percentage point, implying that government borrowing will be £19 billion higher and hence wipe out most of the Chancellor’s so-called “headroom”.
The aggregate picture is, of course, much more complicated than that, but I still ask my noble friend the Minister whether the Treasury is engaged in this debate and whether the proposals from the Home Office are set in stone. Is there a chance of the Treasury explaining the potential impact that the proposals will have on the economy?
The second issue I wish to raise is that of inheritance tax on unused pension pots. A number of speakers have explained in detail some of the administrative and personal difficulties that will arise. I hope that my noble friend will be able to reply to those points, but let us not lose sight of the central fact, which is that personal estates not used for pension purposes should be subject to inheritance tax. They are part of the deceased individual’s estate and so should be subject to the inheritance tax that is due.
We are in this situation because of what, in my view, was the ill-judged adoption of the so-called policy of “freedom of choice”, which effectively shifts the focus of provision from pensions to savings. If you are going to provide a tax-advantage method of providing pensions, that is what it should do. It should not be used for the separate purpose of sheltering payments that you want to make to other people.
I was a bit puzzled by the comments of the noble Lord, Lord—
Lord Davies of Brixton (Lab)
Yes, the noble Lord, Lord Leigh of Hurley. That was a blind spot: I am sorry. I always listen with great interest to what the noble Lord says. We take part in many of the same debates. I did not really understand his suggestion that widows would be the main people to suffer from this policy. I would be happy to give up 15 seconds of my seven minutes if the noble Lord could clarify that. Is he saying that they are going to have to do the PR work? Is he saying that their pensions are going to be taxed?
Lord Leigh of Hurley (Con)
As the noble Lord has invited me to intervene, I will. The point is that women live longer than men and it is much more likely that, if a person passes away, it will be the man leaving the woman to be the PR and to pay the tax.
Lord Davies of Brixton (Lab)
Sure, but that is true only if the widow does not get a pension. My whole point is that that arrangement should be providing pensions and not providing capital sums to the widow. If the deceased does not want to place that burden on their widow—or widower: it works both ways—they have to ensure that the money is not unused but is used to provide the dependant, the spouse, with a pension. It is only lump sums that will be taxed in this way. To me, that seems right and proper because it is part of the deceased’s estate, and there are of course the normal tax-free allowances. We are here because pensions are the purpose of these arrangements. They are not for the purpose of estate planning, and yet, since the introduction of freedom of choice, that is what they have become.
I want to pick up a point made by the noble Lord, Lord Elliott of Mickle Fell. He mentioned the total welfare bill. Of course, the main part of the welfare bill is pensions. I was not entirely sure whether he was suggesting that we take the pensions away from pensioners and advise them to get a job. Was that his suggestion?
Lord Horam (Con)
I pay tribute to the noble Lord, Lord Davies, and to the noble Lord, Lord St John of Bletso, who made an excellent valedictory speech. I had no idea that both of them had a stammer. I might mention that Nye Bevan had a stammer as well. That is a rather high level of eloquence to aspire to, but none the less he did: I heard him speak once upon a time.
During this extraordinary period of history we are living through, these very troubled times, the three authoritarian regimes we face—I am thinking of Iran, Russia and China—all have extremely serious economic problems. In the case of Iran, for example, it is not simply that it has pauperised its population, which has been revolting, as we know. It cannot pay its revolutionary guards, which apparently is an even more serious problem than revolt among the ordinary people. Russia has also pauperised its population outside Leningrad and Moscow, but now 40% of the public sector is consumed by war means, and prices are rising between 20% and 40%.
We in the UK have a debt that is 95% of our GDP. In China, debt is 340% of GDP. China is trying to grow at a rate of 5% a year. Most economists think that it can manage only 2%, but to achieve 5% it is producing stuff such as solar panels and electric cars, which no one wants and they cannot sell locally, so they are having to dump them overseas. As a result, no fewer than 40 countries throughout the world have imposed tariff restraints on Chinese imports.
These are unsustainable situations. The reason is that, in all three countries, which are authoritarian dictatorships, policy and politics have triumphed over economics. They have been able to put through policies because they are dictatorships. In the case of Iran, for example, the policies include expanding Islamism throughout the Middle East and so forth, and funding proxies in various countries. In the case of Russia, as we know, the policies have included invading Ukraine and the paranoia about an invasion from NATO.
In the case of China, rather interestingly, as a result of Xi Jinping’s personal ambition, the policy is that the GDP of China should be the size of America’s by 2035. It is widely thought that Xi Jinping expects to be still alive at this point and therefore able to celebrate the great victory of the Chinese Communist Party—communism by Chinese means—as a result.
All these things are examples of politics triumphing over simple economics. To be fair to our Government, they put in their manifesto the simple point that they want to maximise economic growth. I applaud that. In the situation we face, it is clearly central that we should improve our economic growth. We live in a liberal democracy and, therefore, we should be able to adjust policies in a way that is impossible where you have a dictatorship. The problem is the execution. The execution of that aim has been defective because the Government have not been able to keep out the political problems that they face.
Take one small example, in the wider scheme of things: the Chagos decision. You can argue it either way; the Government argue one way about the legal situation and we argue another, and I quite accept that there are different points of view. What shocked me was that the Government are spending not just £100 million a year over 99 years, which is what is in the popular prints, but £145 million a year in rent plus £45 million a year in development aid. That is some £210 million a year going out from this country to Mauritius unnecessarily. That is astonishing. Why do that in a year when the public sector situation is so tight?
Then there is the question of welfare. The existing situation, with a limit on child benefit of two children, has been like that for several years. It is popular—60% of the population support only two children being supported from child benefit—but, none the less, the Government have just spent £3 billion a year on extending that to all children. As my noble friend Lord Northbrook pointed out, the OBR is pointing to the additional welfare provisions that will follow over the next few years unless something is done.
Lastly, on energy prices, we should take account of climate change. Obviously, it is something that we care about, and young people particularly care about it as an issue. We contribute 0.8% of the international problem, yet, as a result of the policies of Ed Miliband, we have the highest energy costs of any country in the western world. That is astonishing. That degree of zealotry must surely not be of cost-benefit in any sensible way, and it is going to get worse as a result of the failure to exploit North Sea oil.
Our problem, therefore, as the OBR pointed out in its forecast, is that tax will go from a general average of 32% of GDP historically to 38.5%, which is entering a wholly new area. Debt will remain at 95% a year—that will not come down—and, as a result, growth, which averaged nearly 2% for the last decade, will come down to 1.5%. That is really bad and extremely disappointing. Unless there is a change of approach, we will be subject to further disappointment.
Lord Skidelsky (CB)
My Lords, the eloquent speech this evening by the noble Lord, Lord St John, reminded me yet again of what this House is losing by chucking out its hereditary Peers.
I want to take advantage of the slightly longer time allowed to Back-Benchers to make a technical point about language, before going on to the question of policy. Whether intended or not, most of the OBR’s prose is unnecessarily unintelligible to the ordinary person. For example, paragraph 1.12 says:
“Labour market conditions continue to loosen”,
with entrants into the labour force facing “subdued hiring demand”. What this means is that unemployment continues to rise, with school leavers finding it harder to get jobs now. Why not say that? What is meant by “subdued hiring demand”? What is unsubdued hiring demand? Even in this august House, I doubt whether many Peers would be able to give an accurate answer to what unsubdued hiring demand means. There is a whole battery of theoretical assumptions behind that sort of phrase which need to be unpicked. My general point is that the OBR should spell out its theoretical positions so that the reader can grasp intuitively whether they make sense to them.
There is another issue here: the problem of forecasting, to which the noble Lord, Lord Redwood, and other noble Lords have referred. This arises from the obfuscation in OBR prose of the distinction between risk and uncertainty. In OBR-speak, those two terms are identical, but actually they are not. Risk gives you a set of probabilities; uncertainty means you do not have the foggiest what is going to happen. The whole business of forecasting outcomes over five years and then protecting oneself against inevitable failure by invoking stochastic shocks seems completely fraudulent. The biggest stochastic shock around at the moment is President Trump, yet you do not find any effect that he has on the smooth undulations of the five-year forecasts presented by the OBR.
Now for a breath of fresh air. The OBR ruminates that:
“If unemployment fell more sharply and returned to its equilibrium rate in 2027-28, two years earlier than our central forecast, borrowing could be lower by £16 billion a year on average from 2026-27”
onwards. In plain English, that means that if unemployment were lower, the budget deficit would be smaller. A striking thought: then why not make unemployment lower? There are many ways in which one might do it, but I will refer to just one. In 1929, the Liberal leader, Lloyd George, pledged to cut unemployment by half within a year by means of a £250 million investment programme. He never got the chance, but it may be of interest to translate it into today’s terms: as a share of GDP, £250 million in 1929 is equivalent to £80 billion to £90 billion today.
The noble Lord, Lord Livermore, has talked of an additional £120 billion programme that this Government have authorised over the length of this Parliament, but my understanding is that that is only £20 billion more than what the Conservatives had planned, and the stimulus of £1 billion to £2 billion in the next year is vanishingly small. I may be wrong, and I will happily be corrected if I am, but one needs to be clear about what stimulus the Government are actually giving the economy at this time.
It will be argued that the output gap today is much lower than it was in 1929, but is this true? Output gap estimates depend heavily on the unemployment rate—the higher the rate, the larger the gap. With headline unemployment only 1% above the equilibrium rate, the output gap seems very small, less than 1%, but is this a proper measure of spare capacity in the economy? Of course not. Our current headline unemployment rate of 5% excludes the 3.3% of involuntarily employed part-time workers—people who say they want to work longer but do not have the chance. If we put those two together, we have something like a spare capacity, accurately measured, of 8% or 9% underemployment. I would like the OBR—maybe the Treasury could instruct it—to put two charts side by side showing the unemployment rate and the underemployment rate, and then we could really see what the extent of our output gap actually was.
My last point is that unemployment is not the only measure of spare capacity. There are 1 million NEETs—young people between the ages of 16 and 24 not in education, employment or training. The Chancellor’s youth guarantee scheme guarantees only 55,000 places after 18 months’ unemployment. What is needed, as Paul Nowak, general secretary of the TUC, has often said, is a genuine youth employment/training guarantee on a far larger scale, organised locally as well as nationally, so that the jobs and training reflect the differing needs of different communities.
We are told that we cannot do any of this because of the fiscal rules. My answer to that is what Keynes said in 1933:
“Look after unemployment, and the budget will look after itself”.
That may be too bold for our rulers today, but I say to the Chancellor that if one wishes to gain anything then one needs to dare in order to gain something. The real risk is to do nothing and be overwhelmed by events.
Lord Massey of Hampstead (Con)
My Lords, the key takeaway from the Chancellor’s speech is that the great plan for growth has now been supplanted by the more modest objective of stability. However, there are a couple of claims in the speech that need challenging.
The Chancellor claims that inflation is down but does not provide a timeframe; the reality is that inflation is higher today than when Rishi Sunak left office—3% versus 2%. She also says that interest rates are down, referencing the six cuts in base rates, which is true, but if we look at longer-term gilt prices, as my noble friend Lord Redwood mentioned, a very different picture emerges. The 10-year gilt when Sunak left office was 4.1%; it is now 4.5%—and this was prior to the Iran war. The 30-year gilt is now trading at 5.3%, higher than in the aftermath of the Truss mini-Budget, when the long gilt hit 5%. The market’s message is clear: it is more worried about long-term inflation and debt levels today than under Liz Truss, and much more worried than under Rishi Sunak.
Since July 2024, it is indeed the case that inflation is up, longer-term interest rates are up and unemployment, which was barely mentioned in the Chancellor’s speech, is at the highest level since Covid. It is surprising that unemployment was referenced only once in the speech as it is becoming a major issue worthy of more extensive consideration, especially the worrying growth in youth unemployment, mentioned by many speakers. Overall, unemployment has risen by 400,000 to 1.9 million since July 2024, which must be a major concern for a Chancellor who came into politics, as she says in her speech, to
“stand up for working people”.—[Official Report, Commons, 3/3/26; col. 732.]
The Chancellor references the OBR forecast that unemployment will peak this year and revert to lower levels later in the Parliament. But it is noticeable that this forecast is much more optimistic than the Bank of England’s and the average external forecast so should be treated with some caution. Indeed, if we read the small print, we see that the OBR warns of the “significant risks” facing the labour market. In the event of even a modest downturn, unemployment levels could rise to 7%, which is 2.3 million people, and we still do not know the effects of the NI increases or the employment impact of Al, both of which, of course, could make the situation worse. Youth unemployment now runs at 16%, with nearly 1 million NEETs, and this could be headed higher.
The Government are very aware of this, and I commend the measure announced yesterday by the Secretary of State for Work and Pensions, introducing financial incentives to employers to hire young people who have been out of work for six months or more. Using incentives in this way is the right financial path. I also agree with the theme of his speech that we need to change from being a welfare state to a working state. We need to make it easier and cheaper to employ young people but, as has been mentioned, recent government measures on the minimum wage, NI increases and extended employment rights have made it more expensive, and indeed riskier, for business to hire new people.
We are now seeing a decline in graduate employment prospects, with AI eating into entry-level jobs, as was mentioned by the noble Lord, Lord St John of Bletso, in his excellent valedictory speech. A study by Stanford researchers in the US found that the areas hardest hit by AI are entry-level occupations, with workers aged 22 to 25. They are experiencing a 16% relative decline in employment. It is likely that this trend will be repeated in the UK, so help for this graduate cohort would also be very welcome. Indeed, we have exempted under-21s earning less than £50,000 from employers’ NI and I ask the Minister whether the Government would consider extending this exemption to 24 year-olds, as graduate job creation also needs a kick-start.
The Chancellor’s objective from day one was to grow our way out of the headwinds of rising public spending and rising debts, but increasing benefits, promoting the interests of trade unions and raising taxes on wealth creators is simply not going to deliver that growth. It is just going to crowd out investment, stifle employment and demotivate entrepreneurs. As mentioned by the noble Lord, Lord Pitt-Watson, and my noble friend Lord Sherbourne, only business-friendly and employment-friendly policies will work, because at the end of the day only business can generate growth and jobs. Trying to achieve growth by bloating the state will simply not work, and we are witnessing this now in real time.
The Government want to be generous, and we saw their delight at the lifting of the two-child benefit cap, but these measures are funded by borrowing and serve to make work less financially attractive than living on benefits, as my noble friend Lord Lamont and others have said. The welfare bill grew by £16 billion last year and is on a trajectory to £400 billion. In the OBR forecast, it is one of the areas of public sector spending set to grow the most over the next five years.
The Government face a dilemma: they have to choose between advancing their political agenda and their aspiration to improve our balance sheet and generate growth. They cannot achieve both and the sooner they accept that reality, the better for our country.
Baroness Gill (Lab)
My Lords, this year’s spring forecast is not just an economic and accounting exercise; it provides clarity, alongside the latest forecasts from the OBR. It is encouraging to see the forecasts of steady growth and falling inflation, resulting in the UK having the fastest growth of any G7 country in Europe. This will give households and businesses greater confidence for the coming years.
However, in a world facing real turbulence and uncertainty, with the wars in Ukraine and the Middle East that have implications for energy prices, inflation and global trade, it is particularly important that this Government are focusing on sustainable growth, meaning that we will be sheltered from the worst of energy shocks. Building on the Government’s successes in entering trade agreements with India and the US and resetting our relationship with the European Union, it shows that by working constructively together with our nearest neighbours and other partners, the UK is in a much better place than many others.
The Chancellor has already outlined in the other place the foundations on which this Government are building a responsible and strong economy, the main components of which are: stability in our public finances, investment in our infrastructure, and emphasis on the growth agenda. These are already reforming Britain’s economy. She has clearly set out plans that support working people and children, encourage investment and keep our public finances sustainable.
The Chancellor’s focus on the digital/AI economy, regional devolution, creating opportunities, and fiscal discipline demonstrates that this Government are determined not only to manage today’s pressures but to build a stronger economy for the future. These measures will be vital in securing growth, particularly in regions and sectors looking to expand and innovate.
It is reassuring to see a clear plan that supports working people, strengthens the public finances and encourages the investment our economy needs to thrive. Yet growth is not driven by domestic policy alone. The UK’s future prosperity is closely linked to a strong and pragmatic economic partnership with our European neighbours. There is enormous potential for deepening trade, attracting investment, and collaboration on cutting-edge innovation, from green energy and low-carbon technologies to digital infrastructure and financial services.
Constructive EU engagement can also help secure supply chains, reduce costs for businesses and open new markets for UK exporters, creating jobs and opportunities across every region in the UK. The biggest prize is with the EU, as the Chancellor stated today in her Mais Lecture. Deepening partnership with the EU is the right thing to do. Britain should align with EU regulatory standards where it is in our national interest: it is a quick win that will reap benefits for businesses and households. Can my noble friend the Minister explain how the improved economic outlook, as highlighted by the OBR, together with the reforms in the finance Bill, will drive investment at home but also allow the UK to fully seize the growth opportunities offered by stronger co-operation with our European partners?
This is the time we must put country before party, militarily and economically. We can have our differences on detail and numbers, but at this time the House needs to come together in the national interest to safeguard our country’s economic future, in the same way as I have heard this House celebrate the contribution of the noble Lord, Lord St John of Bletso. I arrived too late to see the noble Lord’s work in this House: nevertheless, I wish him well in his continuing endeavours in Africa.
Lord Moynihan of Chelsea (Con)
Well, here we are again, my Lords; another spring, another Statement. In autumn 2024, the OBR forecast that 2025 GDP growth would be 2%. The reality ended up at 1.3%. Never mind: in spring 2025, the OBR forecast 2026 GDP growth would be 1.9%. In autumn 2025, it downgraded that to 1.4%, and now it has reduced it again to 1.1%. Actual growth in January, seasonally adjusted upwards, was 0%. In the unlikely event that the OBR’s forecast of 1% growth for 2026 is actually achieved, do we understand how appalling that is? It would mean that GDP per capita growth would be near to zero, which is a dog-eat-dog world. Each individual in this country can become better off by the end of the year only at the expense of someone else becoming worse off.
Year after year, the OBR waxes confident about what the future brings: always jam tomorrow, as my noble friend Lord Redwood pointed out, yet none today. Why does the OBR predict growth in 2027, 2028 and 2029 will be better than it has been for the last few years and this year? Does it, or do the Government, have any validated theory of what creates growth? Numbers are not the Government’s strong suit. The Chancellor says that increasing people’s wages is the number one mission. She claims that wages are up in the past year: well, to an extent. Public sector wages went up because the Government gave them lots more of our money. Did wages rise in the private sector? No. Inflation adjusted, wages in the private sector went down last year. Increasing private sector wages requires growing the economy and that is not happening.
Every year we talk about growth but, as speaker after speaker this evening has said, when offered growth-promoting measures, the Government reliably allow sentiment to prevail over logic: feelings, if you like, prevail over facts. They love to attack the private sector as greedy employers. They allege profiteering at the petrol pumps, but, in a free-market economy there is always another petrol station 500 yards down the road to undercut you if you raise prices by even a few pence per litre. On the other hand, the Government’s take is 55% of the petrol price, 10 times the retailer’s gross margin. When crude goes to $100, of course pump prices go up. But who profits most from that? Why, it is the Government, charging an extra 20% VAT on the uplift, with no petrol station 500 yards down the road to be found with lower fuel duty or lower VAT. How ridiculous, how anti-growth, to accuse business of profiteering when the Government snatch a windfall £1 billion a year from citizens as they go about their business trying to make ends meet. In the US, petrol is half the price it is here.
The triumph of sentiment over logic pervades the Government’s economic approach, with large public sector wage increases with no improvement in productivity and a failure to address the ballooning size of welfare payments—and, as I think the noble Lord, Lord Davies, knows well, neither the noble Lord, Lord Elliott, nor I refer there to pensioners. The minimum wage has been racked up, thus increasing unemployment, especially for youth. An avalanche of regulation is coming from the Employment Rights Act and the Act’s appointed regulator is a former Stonewall board member, trans activist and career civil servant from the Environment Agency, who will know nothing about running a business but will have the power to enter premises, seize records and run wide-ranging and costly investigations whenever they feel like it. This is crazy.
Nowhere is the Government’s logic-free approach more evident than in their disastrous net-zero policy, devastating the economy, threatening key future energy-intensive sectors such as AI, which depend on cheap electricity, and devastating household budgets with electricity costs among, as noble Lords have said, the highest in the world. Our reliance on intermittent renewables requires plenty of gas, which in addition will always have hundreds of different uses across our entire economy. The cheapest source of gas for us, with the lowest carbon footprint, is the North Sea. As my noble friend Lady Neville-Rolfe said, jobs could be created, emissions reduced, energy security transformed and large sums of tax money paid, yet this Government wage war on North Sea gas, fantasising sentiment over logic.
The overwhelming evidence is that you do not get decent economic growth without small government, low taxes and minimal and helpful regulation. Instead, the size of our government, our taxes and our growth-destroying regulation mushrooms. Individuals in even the poorest parts of America can earn twice as much in salary as we do here for the same job, exactly because the shape of the US economy promotes economic growth and ours does not.
To conclude, I respectfully urge this Government to reverse course and make it easier for entrepreneurs to start companies and hire people without fearing that they will be stuck with the employees for life. As my noble friend Lord Sherbourne and the noble Lord, Lord Pitt-Watson, rightly said, growth comes from business, not government. Close down those growth-destroying regulators and quangos and, with what you save, stop taxing enterprise so much and make it more attractive for investment to come to this country. Get the cost of electricity down by abandoning the destructive net-zero initiative so that companies can run more cheaply, home heating will be less expensive, and it will be cheaper to drive to work or on business. If you do this, there may be a chance that growth will gradually recover and, who knows, you might even rescue some of your popularity with the electorate.
Lord Sikka (Lab)
My Lords, what a heroic task this Chamber has undertaken in us having seven minutes to explore 560 pages of the Finance (No. 2) Bill, 481 pages of Explanatory Notes, 131 pages of related OBR analysis and 152 pages of Treasury statements and related policies. On top of that, there is a Spring Statement and its related documentation—and if you can get through the legalistic jargon, you are doing very well.
I welcome the abolition of the two-child benefit cap but would like to see greater emphasis on lifting parents and families out of poverty. Sustained economic growth cannot be achieved without good purchasing power for the masses.
The perpetuation of the Conservative policy of freezing annual income tax personal allowances for another three years will actually create more poverty. The number of basic rate taxpayers has increased from 26.6 million in 2021 to 30.4 million in 2025-26. These are the very people facing a cost of living crisis. The number of people over state pension age paying income tax has jumped from 6.47 million to 8.72 million. Some 25.3 million individuals live below the minimum living standard. There is no such thing as trickle-down economics. The rich have gobbled it all up and people at the bottom just buy worry beads; that is about all they can do. Some 120,000 people a year die in fuel poverty. Despite the triple lock and pension age benefits, almost one in six pensioners die in poverty. It would be helpful to hear the Government’s plans for the equitable distribution of income and wealth.
It is also disappointing that a regressive tax system remains in place. Wages are taxed at the marginal rates of 20% to 45%. In addition, national insurance contributions are levied, starting at the rate of 8% on eligible wages. In contrast, despite the changes, dividends are taxed at the rate of 8.75% to 39.35% and capital gains at rates of 18% to 32%, and the super-rich do not pay any national insurance on either of those elements. The poorest 20% pay a higher proportion of their income in direct and indirect taxes than the richest 20%. Can the Minister explain why the poorest are paying a higher proportion of their income in taxes than the richest? Is that equitable?
The student loan system remains a maze of confusing interest rates, repayment thresholds and repayment rates. It is disappointing that the repayment threshold for plan 2 student loans will remain frozen at £29,385 until April 2030, or maybe even longer. By then it will be closer to the minimum wage and way below the median wage. More graduates will be forced to repay earlier, leaving less for those wanting to buy a home or start a family or a business. Graduates with modest earnings of £31,000 a year, which is way below median wage, face a deduction at the marginal rates of 42% at the moment. That is 20% in income tax, 8% national insurance, a 9% loan repayment on income above the repayment threshold and a modest 5% contribution to a pension scheme. Does the Minister think that this rate of marginal taxation is conducive to economic growth? Would it not really be better to stimulate people’s purchasing power by abolishing tuition fees and finding a way of writing off the student debt?
HMRC’s own estimate of tax gaps suggests that between 2010 and 2024, it failed to collect around £500 billion in taxes, while alternative models put the figure at £1,400 billion. It is therefore good to see that the Government are focusing on tax avoidance. However, at the same time the Government are creating opportunities for tax avoidance: by taxing capital gains and dividends at lower rates than wages, the Government are perpetuating tax avoidance opportunities. The tax avoidance industry will inevitably arbitrage, helping the super-rich to convert income to dividends and capital gains.
I welcome the national insurance and related tax relief changes on employer salary sacrifice pension contributions and urge the Government to crack down on employer national insurance avoidance, especially by limited liability partnerships. Companies pay employer national insurance on directors’ salaries. The role and position of LLP partners is no different from that of a company director, but they receive a share of profits instead of salaries. Therefore, the firm does not pay employer national insurance. This perk enables a firm—effectively its partners—to dodge around £148,000 of national insurance for every £1 million of profit shared by partners. In 2024 the big four law firms in the City of London dodged £4 billion of employers’ national insurance. Billions more are dodged by other LLPs.
Drivers and other staff at companies such as Amazon, Evri and eCourier are treated as self-employed, even though they receive almost all their income from one source and instructions from that same source as well. As self-employed workers, they are responsible for their own tax and national insurance but one consequence is that through such arrangements, companies escape paying employers’ national insurance altogether. Can the Minister explain why the Government tolerate this kind of organised national insurance avoidance and when a crackdown will begin?
Lord Brooke of Alverthorpe (Lab)
My Lords, I think the Minister ought to get my noble friend Lord Sikka a job in HMRC. I have some connections there too. However, I start by paying great tribute to my good friend and associate, the noble Lord, Lord St John, with whom I have spent many hours together over the years. I wish his club Chelsea well, and I wish him and his family a long and happy enjoyment of many years ahead. I thank him greatly for the service he has given to the House.
I am pleased that the Spring Statement was low key and that, to a degree, we have achieved some stability, compared with where we were in 2024. We still have a lot left to do, without any doubt. With the Middle East and Trump, as the noble Lord, Lord Skidelsky, inferred, and with a great many people unemployed—if you count the total who are in part-time employment—we have a whole series of problems facing us. Unemployment could grow to be much bigger than we have seen.
In any event, the noble Lord, Lord St John, referred to AI and the changes that are coming to employment with AI. There are changes in attitude already taking place with younger people, many of whom do not want to be going into work. If you spend time with them, substantial numbers of them have an entirely different view of life from what we had. We are going to have to start looking at the issues from a quite different angle, but for the moment we look at what we have.
Contrary to the great criticisms the Minister has had to bear, I am going to say a few words of gratitude to him. The one thing that the Tories, and the Lib Dems with them, achieved between 2010 and 2024 was that we had growth. We had great growth around the waist and on the weighing scales when we got on them; we saw that particularly among our children. We had the biggest growth taking place that we had seen for a long time.
This young man, the Minister, has done some work with sugar taxes. I congratulate him on the quiet work he has done in the background by making a number of changes, with more to come, to reduce the element of sugar we have, or certainly to raise taxes on that sugar. That will be to the benefit of the youth and their health in the future. I thank him for the work he has done on that. He should keep trying to persuade the manufacturing, food and drink industries, and induce them to change the composition of many products to make them healthier. I suggest to him again that we have a look at an inducement to use stevia instead of sugar, and that the Government might think about offering tax reliefs to encourage people to switch away from sugar to that. It is much healthier and in the long term would be of great benefit to young people, but in particular to the tax we have to raise to run the National Health Service.
I come back to growth and investment. We had a debate last week with the noble Lord, Lord Hunt, complaining that we do not have enough investment in the country. The following day, we had a big debate saying, “Please do not take money from our pensions and put it into home investment”. We would like to see the voluntary Mansion House agreement working, but if it does not we should try to persuade people more strongly to put money into the UK. From the Government’s point of view, we should explore how we can offer tax incentives if people are not voluntarily willing to do it, so that we will see more capital go into investment.
I come to my repeated subject about opportunities for investment. The noble Baroness opposite shares my view on this. We have simply not done the work that we should do on public/private partnerships. The noble Lord, Lord Macpherson, the ex-head of the Treasury, is not present but has said that we need to review the old arrangements—this is not PFI, but PPPs. We should change them and extend how we define the public and the private. A real winner for us in election terms would be to extend the private to include the public, with Joe Bloggs investing on a scale that we saw in some of the periods under Margaret Thatcher. That will be a very useful means of attracting political support, and particularly for raising cash that is needed for infrastructure in the UK. There is money to be found for investment if we simply use our heads and start offering investments rather than perhaps being seen to be hitting people. I hope that my noble friend will look at that.
I have no financial interest in it, but I am linked to some dentists and some American capitalists who are waiting to put money into the UK. They want to open 40 A&E centres for people with dentistry problems, yet we can get no movement. I do not see any reason why we should not be innovative or look to involve the public in investing in such ventures attached to the NHS to remedy some of the great problems that we have with dentistry, particularly among youngsters.
There is much to be done. I hope that we might have more consensus across the House, as I did with the noble Baroness earlier, in finding solutions to these problems. We are going to be hit with changes taking place in the world and with climate change. We need to come closer together and work on solutions commonly, rather than spend so much time banging each other over the heads. There is so much to be gained from working together rather than disagreeing.
Lord Hintze (Con)
My Lords, let us examine the Chancellor’s Statement from a slightly different perspective. We are told that welfare spending will increase by roughly £18 billion. If I understand the figures correctly, that is approximately 0.63% of GDP. We need always to think about things relatively, and 0.63% of GDP is serious. I would be grateful if the Minister could confirm the precise number for the House.
We hear much from the Government about total GDP growth, which I suspect is political expedience, but total GDP, important though it is, does not tell us whether the people of this country are becoming more successful and resilient. For that, we must look at GDP per capita. If overall growth is 1.1% but population growth is 0.7%, then GDP per capita is rising only by 0.4%. That is the figure that matters for living standards and that is the figure that the current Government prefer not to dwell upon. If prosperity per person is rising by only 0.4% while welfare spending alone is increasing by something closer to 0.6% of GDP, then we are entitled to ask whether the country is moving forward at all or merely moving sideways. The House deserves a serious answer.
I ask the Minister now: why do the Government speak so often about the gross size of the economy yet say so little about the prosperity per head? Do they not accept that the true test of economic policy is whether living standards are rising? Are we, in fact, entering a transfer economy or a growth economy—an economy that supports all or supports the few? If we are entering a transfer economy then we will simply fail in the long term, as many socialist economies have failed previously. If we fail, we will hurt the poor, the vulnerable and the striving middle class disproportionately. By definition, business growth is what can bail them out—not individuals, not Governments and certainly not capital seizure, as we are seeing in some of these confiscatory taxes on pensions.
Of course no one in the House disputes the duty to protect those who are vulnerable. A civilised society must support those who cannot support themselves, but a welfare system should enable people, not simply leave them indefinitely outside the labour market. It should be, as was always intended, a safety net—not a lifestyle or a way of life. That means investment in education, healthcare and mental health support, and incentives to get back into the workforce. That is the real welfare: a job. The answer cannot be to accept even greater levels of long-term economic inactivity as though it were inevitable and simply a feature of modern life to be managed rather than challenges to be met.
At the same time, Governments of all complexions have not used the resources of the state as effectively as is prudent—“squandered” is the word. I would be less troubled by a rising tax burden if it were clearly strengthening the nation and reinforcing our resilience, capabilities and security in this more dangerous world. For years, there has been an ongoing failure to invest adequately in defence capabilities. We can see now how seriously they are required. Not to invest in them is not only dangerous but irresponsible. It weakens the country and us as a nation. I will be very clear—I said this in my maiden speech—that soft power without hard power is no power at all. It is all very well to have the sledgehammer of a nuclear weapon, but not every nail deserves a sledgehammer.
You need growth to maintain these things. Without growth, we simply get poorer. Are we building an economy in which both the nation and its citizens grow stronger together or are we purely establishing a transfer economy? I am sure the Minister understands, because he is a very well-educated man on economics—that is very clear to me—that any transfer has zero economic value. In fact, if you look at it under the transfer theorem, it has a negative value.
If the economy grows but we stymie capital growth and the success and prosperity of individuals, then we are in trouble. If the headlines improve but the lives beyond them do not—if the numbers flatter but the reality does not—then we are witnessing not economic success but an economic illusion. However artfully illusions are maintained for political purposes, they do not have a habit of lasting; rather, they fail and hurt us in our quest for economic effectiveness for the nation. This is not a political point; it is a point of good economics.
Baroness Kramer (LD)
My Lords, I join the tributes to the noble Lord, Lord St John of Bletso. We do not often get to speak in the same debate, so I am delighted that he could not speak in the space debate and has joined us today. His speech was both gracious and extremely profound, and his is a voice that we are very much going to miss in this House. I thank the noble Lord and wish him all the best from all on these Benches.
This has to be one of the most frustrating debates I have participated in—I say that despite there being so many good speeches. We are talking about the Finance (No. 2) Bill, but of course we cannot amend it, and today the Chancellor made her Mais speech setting out political strategy, but too late for us to do any significant analysis of it. I did pick up one thing, which I will raise with the Minister: the Chancellor apparently told graduates burdened with a crisis in student loans that they were going to be at the back of the queue for a rescue. If that is true, it is frankly a bad decision. It is a different scheme, and the noble Lord, Lord Wilson, should go back and look.
Then we are left with the Spring Statement. We cannot blame the Chancellor for the fact that the Iran war broke out on that day, but it has obviously thrown a wrench into the programme that she tried to lay out in her Spring Statement. I am going to do my best in starting with the Spring Statement, because we might as well deal with the world as it was prior to the Iran war—we have no clue what it is going to look like as that works its way through.
The OBR’s downgrading—I am not the first to raise this; the noble Lord, Lord Skidelsky, mentioned it—of the growth numbers to 1.1% in 2026 is obviously bad news for us all. What leapt out from the numbers was the medium-term growth in real GDP per capita. The noble Lord, Lord Hintze, talked about the importance of per capita. That is growing at 1.1% a year and depends on recovery from persistently low productivity growth, which the OBR confirms is a very uncertain premise. We are now looking at the weakest sustained growth in a century if we exclude crises such as World War II and Covid.
As the noble Lord, Lord Skidelsky, said, unemployment is at 5%, but it is the 1 million young people who are NEETs—not in education, employment or training—who have us all very concerned. Older people—the economically inactive group at the older end—are returning to the workforce, but that is not happening with younger people. I have talked—as I suspect the noble Lord, Lord Skidelsky, has, because he raised this point—with businesses about the youth guarantee scheme and the other schemes, and the answer is always that they are too small to deal with the problem and not sufficiently sustained to provide the long-term support that people who have been trapped in this particular case need. Much more individual support is needed to get them to the relevant skills, and it can take years.
To pick up a point made by the noble Lord, Lord Davies of Brixton, net migration is weaker than the previous forecast, because of both a drop in immigration and a rise in the numbers emigrating—and, as the noble Lord said, it could be pushed lower by the new skilled migration regime. I recognise that that drop in migration is great news to the political right, as it may be to this Government’s Home Office, but to the rest of us trying to focus on the fact that we have an ageing population, when we look at the demographics, that drop in migration is a serious barrier to medium and long-term growth.
Even the good news in the Spring Statement is fragile. Lower inflation and interest rates are vulnerable to any kind of systemic shock. Here we are, right in the middle of the Iran war with its impact on oil prices, so we can see that the impact is already beginning to work its way through. I was more concerned that much of the additional headroom—I was glad at first to see that there was additional headroom—came from higher than expected tax receipts, largely due to a rise in equity prices leading to higher capital gains tax. As surveys have shown, that is very likely to be temporary.
In the more recent period, we have had a steep loss in business confidence. The Federation of Small Businesses is warning that SMEs, the bedrock of our economy, are saying that
“cost burdens have already started reducing growth plans, cashflow and job creation in our local communities”.
Business is in real fear of the surge of new burdens that are going to land in April, and of death by a thousand cuts. This is a warning sign, and we have to respond.
We continue to face fundamental uncertainties. Can we meet the target of raising defence spending to 3.5% by the end of this Parliament? If we continue the current spending trajectory on the NHS, which we have no choice but to do because productivity is very slow to rise, what will happen to the unprotected public sector departments and local government services, and how will people feel? Many of the tax rises that are now locked in will continue to increase the tax take, even with no improvement to living standards, and people will notice it.
The noble Lord, Lord Sikka, talked about the freezing of income tax and other thresholds, which is a major player in this additional tax take that has been built in. The Government need take no action; it is now part of an impact that people will learn about the hard way. My colleague in the other place, Daisy Cooper, pointed out that 600,000 pensioners on state pensions who are currently not paying income tax are in for a big shock when they discover that they have been captured. I say to the Government that telling people that they are better off and that the poorest will have £1,000 more in their pockets is not washing. People’s expectations are not being met.
To pick up a point made by the noble Lord, Lord Lamont, middle-income families are feeling the stress as well as people who might before have been the group on which we could exclusively focus because they were at the poorest end. We now know from the OBR forecast that any improvement in living standards—there have been improvements that have come from wage growth and the lifting of the two-child cap—will be temporary and followed by a period of stagnation and even falling living standards.
Family farmers have lived with a year of anguish after the original Budget announcement of changes to inheritance tax relief for agriculture. Thankfully, they have been partly rolled back.
The noble Lord, Lord Leigh, made the point that many people who saved through pensions now feel really stupid as they realise that 73% of their savings will go to the Treasury unless they quickly give away the contingency pot that they set aside for a care home. Women in particular have followed that behaviour. They have kept assets in case they needed to be in a care home, with the thought that they could pass those assets on to the next generation if they did not. Many of my friends have been in this situation, and I can tell the House that the advice to them is to give that money away and let the state take care of you when you need a care home. That is a place where none of us wants to see this ending up. When the Minister argues that £1 million is sheltered from inheritance tax, he assumes that everyone is in a couple and owns a home, but many are not in this advantageous position.
The tax rises in the Bill will mean that investing in your own business will become one of the least tax-friendly decisions you can make, and property price tax rises will price on to rents. Someone, somehow, has to get a grip on the Treasury, because it seems completely incapable of aligning its choices with the strategy for growth, with the industrial strategy or with pension building.
That is why my party has called for a department for growth to counterweight the Treasury and make driving the economy forward the main focus. We accept that the Government will need more money to achieve all their programmes, but frankly it makes us furious when we can see that setting up a UK-EU customs union would deliver £25 billion more a year to the Treasury, and that it is within reach. It is a prize to be grabbed, and it is more than just the reset.
There are many small reliefs that the Government could enact to deal with the worst of the administrative horrors. The noble Lord, Lord Liddle, and the noble Baroness, Lady Fairhead, talked about those administrative horrors. My colleagues in the other place tried, even on Report, to amend the finance Bill to assist bereaved families dealing with the sheer administrative challenge of new inheritance tax rules, to protect family businesses and farms from being hit with the loss of inheritance tax reliefs multiple times within 10 years—that is a real possibility—and to at least assess the cumulative impact, including the increase in alcohol duty, of the Bill on the already beleaguered hospitality sector. The Government should recognise that this sector is in an emergency condition. We call again for a temporary cut in VAT to get this sector through, at this time of extraordinary pressure.
Ultimately, we need to hear what the Government will do to cushion families if we do not soon see a de-escalation in the Iran war. The Government’s announcement yesterday on heating oil is welcome, but it is far from the proper cap that we have called for. I say to the Government that a strategy of wait and watch really is not sufficient when energy prices could surge after June, and we are in a situation where many family budgets are already close to breaking.
Lord Altrincham (Con)
My Lords, I thank the Minister for his patience and care in listening to this debate. I declare my interest as a director at South Molton Street Capital. I thank the noble Lord, Lord St John, for speaking in our debate this evening, and for his work for this House and our country.
We are privileged to have the Minister with us, because he has been central to the Government’s economic policy and his words carry weight. He has been extremely active from the beginning of this Session. I remind everybody that the first Bill of the Session was to strengthen the powers of the OBR—that was before my noble friend Lord Redwood joined us, when the OBR was quite popular with the Government and possibly with Parliament, though maybe that is not so true anymore. We took that through as the first Bill of the Session. The timing of this evening’s debate is quite interesting because we are towards the end of the Session and we can take a view among us on where the Government’s economic strategy is. It will be particularly interesting to hear the Minister’s responses to the questions and topics raised this evening.
You do not need to be in this debate in the House of Lords to know that unemployment is moving up quite a bit. All noble lords will have family members—children, grandchildren, nephews and nieces—and maybe friends and neighbours, and will know that people in their 20s are seeing a dramatic fall away in jobs at the moment. We might start there. Some of that is part of the NEETs problem, which goes back to the previous Government and seems to have started growing around the time of Covid, but some of it is a new area of graduate unemployment, with people in their 20s unable to start work and their careers. It is a profound economic challenge, because if they are not starting in their careers then they may never start in their careers, and there may be a huge economic consequence from that. I therefore start by asking the Minister to give us some insight into what we can say to people in their 20s who are failing to get a job at the moment, and to their families, and to comment on what the Government might be able to do about that.
Perhaps we all share some responsibility for this situation. The Government would tend to blame the previous Government, but, in doing that, it is implicitly to acknowledge that government policy affects employment. Putting aside the important point that government needs to work with the private sector and the private sector creates jobs, the sheer scale of government in this country at the moment is important. Where we have taxed GDP, as mentioned by my noble friend Lord Horam, at 36% of GDP, while the spend of the Government is over 40% of GDP, they are crowding out the private sector to an extent. Therefore, whether it is that the Government can create the economic demand that is sometimes referred to on the government side as coming from public spending or whether in fact the Government create a tremendous amount of waste and misallocation of resources—potentially in healthcare, energy or wherever—what the Government do is extraordinarily important because of their scale.
In addition to that, the Government have chosen policies with important objectives, but the short-term outcomes have been unemployment. The Government have chosen, one after another, Bills that have an important element of job destruction, whether in workers’ rights or minimum wage or national insurance increases. The Government are choosing a form of policy-driven unemployment. It is almost as though the Government have a revealed preference for unemployment at the moment. That needs an important response, but it is only barely being responded to at the moment by the Government, while the numbers are moving up quite fast.
The Government might hope that unemployment is cyclical or a blip, given that there are a few things going on around the world and a few problems in energy and all the rest of it. But the OBR—which, as I say, was rather popular but is now not so popular, and has made some observations that are really quite unhelpful—has chosen this delicate moment to say that perhaps unemployment at the level we have currently is structural. If unemployment is suddenly becoming structural at 5.5%, that is a huge issue.
As the noble Lord, Lord Skidelsky, pointed out, you have to read the stuff twice to try to understand what the OBR is saying. It uses language such as “equilibrium” levels of unemployment. What that really means is that this is the minimum level baseline of unemployment and we have reached a structural change and need to work on unemployment from here. A specific question for the Minister is whether this is the Government’s position as well. Do the Government believe that unemployment at the current level is the structural level? Could the Government comment on the OBR’s forecast? I am not expecting them to agree with the OBR—they do not have to worry about that—but could they comment on its forecast that unemployment is going to pass 7% and assure us that that is not the case and is not in their plans?
All of this feeds directly into the wider economic decline highlighted today in this debate. Energy costs are rising, hence my noble friend Lady Neville-Rolfe mentioned the North Sea, along with my noble friends Lord Redwood, Lord Patten and Lord Lamont. We need to address what happens in oil and gas. Unemployment is rising, as mentioned by the noble Lords, Lord St John, Lord Bilimoria and Lord Skidelsky. The welfare bill is spiralling, mentioned by my noble friend Lord Horam, and growth is stagnant, mentioned by my noble friend Lord Massey, yet we have a Chancellor who delivers a Spring Statement devoid of any measures to turn this around. I cannot resist mentioning it again, but the Spring Statement was compared by my noble friend Lord Patten to the empty quarter in Saudi Arabia. That is a very unkind way of putting it, but I think we know what he means.
The picture is set to worsen, with looming economic headwinds, driven by the deeply uncertain and escalating situation in the Middle East, fast approaching, yet the response from the Treasury remains complacent, falling far short of the seriousness that this moment demands. I agree with the comments made by the noble Baroness, Lady Kramer, about the Treasury at the moment. Our borrowing now exceeds that of Greece and debt is set to rise in virtually every year of the OBR’s forecast period. We are living on borrowed money, paying a mounting premium simply to service our debts, while what limited resources remain are channelled into areas that do little to drive growth or productivity. Worse still, instead of backing enterprise and rewarding work, this Government are increasingly choosing to subsidise inactivity, paying more and more people to remain outside the workforce.
Several noble Lords commented on savings and pensions. It is important that we touch on this, albeit this is running in parallel Bills on the timetable at the moment, because it is of profound importance due to the enormous amounts of unfunded pension liabilities we have. The Government are not merely making life harder for those trying to begin their careers; they are also making it harder for those trying to secure dignity and security in retirement. As many noble Lords will know, the Government’s Pension Schemes Bill will do nothing to confront the fundamental challenges of pension adequacy. At the same time, the national insurance Bill actively discourages pension saving. But the picture becomes even more troubling. From 6 April 2027, as the noble Lord, Lord Liddle, and the noble Baroness, Lady Fairhead, described—and it was a central piece of the Finance Bill Sub-Committee report—most unused pension funds and certain death benefits will be brought within the scope of inheritance tax.
Incidentally, as a marker for the extraordinary work of the noble Lord, Lord Liddle, on the Finance Bill Sub-Committee, it is worth pointing out that the agricultural and business property relief issues were dealt with earlier in the sub-committee’s work. There was a quiet word from the chairman—possibly in Cumbria—to senior people in the Government and adjustments were made. Unfortunately, we did not get to inheritance tax until later, which may be why that is still outstanding. The chairman was remarkable in escalating those issues. Through our work on the Finance Bill Sub-Committee, serious concerns have been raised about the consequences of this change. It risks deterring long-term pension saving and could create deeply punitive practical effects, forcing executors to use estate cash, sell assets or even borrow simply to meet inheritance tax liabilities.
Auto-enrolment has been one of the great policy successes of recent decades, as the Minister and the noble Baroness, Lady Sherlock, have recognised. However, as the Institute for Fiscal Studies has made clear, the system works only if people contribute beyond the statutory minimum. Without doing so, many will simply not accumulate enough to live on in retirement. Yet the Government have brought forward a pensions Bill that says nothing about adequacy, a national insurance Bill that discourages saving and inheritance tax changes that penalise those who have saved responsibly throughout their lives to secure a decent retirement. I remind the House that the inheritance tax changes come in from April next year and will cause tremendous disruption and unhappiness. In other words, those who do the right thing—who work, save and plan responsibly for the future—are the very people whom this policy framework, which the Government have chosen to create, ends up punishing. Perhaps the Minister could comment on the Government’s attitude to pension savings. We look forward to his response.
Lord Livermore (Lab)
My Lords, it is a pleasure to close this debate on the spring forecast and the Second Reading of the Finance (No. 2) Bill. I am grateful to all noble Lords for their contributions, which I have enjoyed listening to. I pay tribute to the noble Lord, Lord St John of Bletso, for his valedictory speech and his service to your Lordships’ House over many years. It was a wide-ranging speech spanning Nelson Mandela, energy policy and AI, among other issues. In this, it was a perfect representation of the experience he has brought to our debates. I wish him very well for the future.
On taking office, this Government inherited three major crises: in the public finances, in our public services and in the cost of living. That is why we have repeatedly taken the action necessary to bring stability to the economy, as welcomed by my noble friend Lord Barber of Chittlehampton. The choices we made were the responsible ones, and the spring forecast showed that the economic plan we have been driving forward since the election is the right one.
I agree with the noble Lord, Lord Sherbourne of Didsbury, that growth comes from businesses and investors. That is why our economic plan is built on the three pillars, as my noble friends Lord Chandos and Lady Gill reminded us, of stability in our public finances, investment in our infrastructure and reform of Britain’s economy.
My noble friends Lady Bi and Lord Brooke of Alverthorpe rightly spoke about the importance of having just one fiscal event a year and the stability that brings. The OBR forecast published last month showed that our plan is working and that we enter this period of global uncertainty with the fundamentals of our economy strong, as my noble friend Lord Barber said.
The noble Baroness, Lady Neville-Rolfe, spoke about inflation, neglecting to mention that it hit 11% under her Government. We have cut inflation, which now stands at 3%, a lower base than at the outset of Russia’s illegal war on Ukraine. She also mentioned interest rates, forgetting to mention not only that they have been cut six times under this Government but that they were set soaring by the Liz Truss mini-Budget.
We have prioritised growth to drive up living standards. The OBR forecast showed GDP per head set to grow more than was expected at the Budget, with growth of 5.6% over the Parliament. As my noble friend Lord Pitt-Watson said, we have stabilised the public finances, having already reduced the deficit by £20 billion this year from 5.2% to 4.3% of GDP.
The noble Baroness, Lady Neville-Rolfe, and the noble Lord, Lord Moynihan of Chelsea, spoke about the growth forecast. Average growth over the next five years is broadly unchanged, with slightly lower growth this year and slightly higher growth next year and the year after that. The noble Lord, Lord Hintze, and the noble Baroness, Lady Kramer, spoke about the importance of GDP per head. GDP per capita is now set to grow faster than was forecast in the autumn; with growth of 5.6% over this Parliament, GDP per capita is £2,300 higher in the last year of the forecast compared with the first.
My noble friend Lord Davies of Brixton and the noble Baroness, Lady Kramer, spoke about the potential for falling migration to impact OBR forecasts going forward. As my noble friend Lady Gill said, Britain was the fastest-growing G7 economy in Europe last year. That is why we have the right economic plan to deliver higher long-term economic growth.
The noble Lord, Lord Skidelsky, spoke about the language used by the OBR to describe unemployment, which I am afraid I am not responsible for. Many noble Lords focused on unemployment, including the noble Baronesses, Lady Neville-Rolfe and Lady Kramer, and the noble Lords, Lord St John of Bletso, Lord Bilimoria, Lord Lamont of Lerwick, Lord Elliott of Mickle Fell, Lord Northbrook, Lord Altrincham and Lord Massey of Hampstead. Employment is historically high. There are only two peacetime years out of the past 150 when the average annual employment rate has been higher than it was in 2025.
Forecasts from the OBR show that unemployment will peak later this year and then fall progressively for the remainder of the Parliament, ending the Parliament lower than it was when we took office. There is, though, action needed to address in particular the number of young people out of work, something that has been focused on in the contributions of many noble Lords. That is why we are providing £2.5 billion across the youth guarantee to tackle youth unemployment and, through additional investment in the growth and skills levy, to reform apprenticeships and prioritise young people. This will support almost 1 million young people and help deliver up to 500,000 opportunities to earn or learn.
The noble Lords, Lord Lamont of Lerwick and Lord Hintze, spoke about living standards. The last Parliament was the worst on record for living standards. Living standards are now rising. GDP per capita is set to grow more than was forecast in the autumn. Real wages have grown more in the first year of this Government than in the first 10 years of the previous one.
The noble Baroness, Lady Neville-Rolfe, spoke about inflation. We have cut inflation, which now stands at 3%, a lower base than at the outset of Russia’s illegal war in Ukraine. The OBR forecasted last month that inflation would fall faster than predicted in November and will return to target this year rather than next year.
Clearly, these forecasts took place before the current conflict in the Middle East began. Movements on energy markets, as we have already seen, are likely to put upward pressure on inflation in the coming months. As the Government have demonstrated, we will take the necessary action to help families with the cost of living and protect the public finances.
My noble friend Lord Pitt-Watson talked about the need to build growth in partnership with business, something I agree very much with. The noble Lord, Lord Sherbourne, talked about business experience, and he referenced what he described as the Government’s lack of business experience compared with the previous Government. We inherited an economy from the previous Government where the UK was the only G7 country with private sector investment that was below 20% as a share of the economy.
Since the Government came to office, we have secured a record £360 billion of private investment. Retail sales are rising, and the S&P global PMI rose to a 17-month high in January. As several of my noble friends have said, business confidence comes from stability, and that stability underpins our economic plan.
I very much agree with my noble friend Lady Bi on her comments about the value of London and the international importance of the City of London in terms of financial and professional services. I also agree with my noble friend Lord Brooke of Alverthorpe about the importance of public/private partnerships.
The noble Lord, Lord St John of Bletso, spoke about procurement, the role of AI and the potential consequences of AI on the labour market. They are all timely points, following the Chancellor’s Mais Lecture this lunchtime, which focused on all the points that the noble Lord raised. I completely agree with him on the importance of using procurement wisely, and we have set out reforms today to do exactly that. On AI in the labour market, the Chancellor announced that we will establish an AI economics institute to develop policies exactly along the lines that the noble Lord mentioned in his speech.
I agree very much with what my noble friend Lady Gill said about the benefits of deepening our economic relationship with the European Union—something the Chancellor herself set out in her Mais Lecture today.
The noble Lord, Lord Patten, asked about the cost of producing the spring forecast. The Treasury does not calculate or record a stand-alone cost for producing the spring forecast; it is delivered using existing departmental resources across policy and analytical teams and forms part of routine fiscal and economic reporting obligations. As such, no additional or exceptional spending is incurred beyond normal staffing costs.
Several noble Lords, including the noble Lords, Lord Bilimoria, Lord Lamont and Lord Redwood, my noble friend Lord Davies of Brixton and the noble Baroness, Lady Kramer, spoke about the impact of the conflict in the Middle East on the OBR’s most recent forecasts. The forecasts from the OBR, of course, pre-date the current conflict in the Middle East. Clearly, the full economic impact of the conflict will depend on its severity and duration.
The movements of energy markets, as we have already seen, are likely to put upward pressure on inflation in the coming months. Our economic approach will be both responsive to a changing world and responsible in the national interest. As the Government have demonstrated time and again, we will take the necessary decisions to help families with the cost of living and protect the public finances.
Any forecast is, of course, inevitably subject to uncertainty, particularly when global events are moving quickly. Although we do not yet know how long the conflict will last, it underlines the importance of building a stronger and more secure economy that is able to withstand whatever instability we may face.
In the Budget last November, we took £150 off the costs of energy bills. Yesterday, the Government announced immediate support for vulnerable heating oil customers, providing £53 million for the households most exposed. The noble Lord, Lord Lamont, endorsed the view that any support should be targeted.
The noble Baroness, Lady Neville-Rolfe, asked about fuel duty. The UK benefits from a strong and diverse security of energy supplies. The decisions we have taken since the Budget in 2024 will save the average motorist over £90, or 8p to 11p per litre, compared with the plans we inherited from the previous Government.
As my noble friend Lord Chandos said, the Chancellor has written to the Competition and Markets Authority, asking it to remain vigilant across heating oil prices and recommending that it acts to tackle unjustified price increases. The Government are clear that we will not tolerate profiteering or unfair practices, and we urge customers to share any evidence of price manipulation with the CMA.
I agree with what many noble Lords—including the noble Baroness, Lady Neville-Rolfe, and the noble Lords, Lord St John of Bletso, Lord Bilimoria, Lord Lamont and Lord Redwood—said about the importance of the North Sea. Domestic oil and gas must continue to have an important role in the energy mix for decades to come. That is why the Chancellor met with North Sea industry to discuss the consequences of this uncertain period. I also endorse what my noble friend Lord Barber said about critical minerals.
The noble Baroness, Lady Neville-Rolfe, spoke about increasing defence spending. We are delivering the biggest uplift in defence spending since the end of the Cold War. That equates to over £270 billion invested over the spending review period. Defence spending will rise to 2.6% of GDP next year—a level not seen since 2010. We are committed to spending 3% in the next Parliament when economic and fiscal conditions allow.
Although we do not yet know how long this conflict will last, it underlines the importance of building a stronger and more secure economy that is able to withstand whatever instability we face. The strength of our economy and public finances are possible only because of the Budget last year and the measures contained in the finance Bill before us today.
I pay tribute to my noble friend Lord Liddle for chairing the Finance Bill Sub-Committee of the Economic Affairs Committee, as well as to other members of that committee: the noble Lords, Lord Altrincham and Lord Leigh of Hurley, and the noble Baroness, Lady Fairhead.
The noble Lord, Lord Lamont of Lerwick, and the noble Baroness, Lady Neville-Rolfe, asked about the impact on working people from further freezes to the national insurance thresholds. As I am sure noble Lords know, the Government are not increasing the headline rates of income tax, national insurance or VAT, in line with our manifesto, but we are clear that the decisions made in the Budget in November involve asking people to contribute more.
In reference to the points made by my noble friend Lord Sikka, this finance Bill raises revenue in a fair way, reforming the system to ensure that those with the broadest shoulders pay their fair share while limiting what we ask from ordinary workers.
My noble friend Lord Liddle focused in his comments on his concerns about the inheritance tax treatment of unused pension funds and death benefits, as did the noble Baroness, Lady Fairhead, and my noble friend Lord Davies of Brixton. This was a point also mentioned by the noble Baroness, Lady Kramer. This measure removes distortions resulting from changes that have been made to pensions tax policy over the last decade, which have led to pensions being openly used and marketed as a tax-planning vehicle to transfer wealth, rather than as a way to fund retirement. As a result of these changes, more than 90% of estates will still pay no inheritance tax each year, and most estates will not pay inheritance tax on the pension, wealth and income tax that is due only from beneficiaries on inherited pensions in certain circumstances.
My noble friends Lord Liddle and Lord Davies of Brixton, the noble Baroness, Lady Fairhead, and the noble Lord, Lord Leigh of Hurley, raised the issue of personal representatives. Personal representatives who are already responsible for administering the rest of the estate will be liable for reporting and paying inheritance tax on any unused pension funds and death benefits from 6 April 2027. This is the same as the current process for non-discretionary pension schemes and other assets which do not pass directly through the estate but are in scope of inheritance tax. Since the announcement that the liability for paying inheritance tax on pensions will sit with personal representatives, officials have been engaging directly with tax and legal industry professionals to fully understand their concerns.
Budget 2025 announced that, where personal representatives reasonably expect inheritance tax to be due, they can direct pension scheme administrators to withhold 50% of the taxable benefits for up to 15 months from the date of death. Personal representatives can then direct pension scheme administrators to pay the inheritance tax due to HMRC before releasing the rest of those benefits to pension beneficiaries. If the instruction is withdrawn or the period ends, the remaining funds can be paid out. This will not apply to exempt benefits, funds under £1,000 or continuing annuities. Personal representatives will be discharged from liability for pensions discovered after they have received clearance from HMRC.
We are reforming the tax system to ensure it keeps pace with a fast-changing economy. We are going further to close the tax gap to ensure that everyone pays the tax they owe. Having listened carefully to feedback from the farming community and family businesses, this Bill raises the 100% rate of relief on agricultural property relief and business property relief from £1 million to £2.5 million. My noble friend Lord Liddle and the noble Lord, Lord Leigh Hurley, spoke about these reforms to agricultural property relief and business property relief. The status quo is not sustainable and there is a clear need to reform agricultural property relief. A very small number of claimants benefit from a very significant amount of agricultural property and business property relief. The increase in the planned allowances from £1 million to £2.5 million further reduces the number of estates forecast to pay more inheritance tax and further reduces the liability for many of the remaining estates, meaning that a couple can leave £5 million completely free of tax on top of the usual reliefs and allowances.
My noble friend Lord Liddle spoke in favour of taxing wealth. The Government are committed to taxing wealth fairly. That is why, in the Autumn Budget Statement in 2024, we announced reforms to taxation of wealth and the wealthy that will raise over £8 billion, including reforms to non-domiciled tax, mentioned by several noble Lords this evening. We are now building on that action by reforming property taxes so that the highest value homes in England pay the most, and addressing reliefs in capital gains tax and inheritance tax that have grown in cost to the benefit of the wealthy. My noble friend Lord Liddle is absolutely right that we must reward and encourage enterprise, which we are doing, including in measures contained in this finance Bill.
Since coming to office, the Government have implemented an economic plan to bring stability to the public finances and to strengthen Britain’s economy for the long term. The spring forecast shows this plan is the right one, with lower inflation and borrowing, higher living standards and a growing economy. Britain today is in a stronger position to withstand whatever uncertainty comes our way, but that is possible only because of the action we took in the Budget last year and the measures contained in this finance Bill. They are the right choices to protect families and businesses in an uncertain world and they demonstrate that this Government have the right economic plan for Britain’s future.
Finance (No. 2) Bill
(1 day, 4 hours ago)
Lords ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Lord Livermore
That the Bill be now read a second time.
Scottish and Welsh legislative consent granted. Relevant document: 3rd Report from the Economic Affairs Committee.
The Financial Secretary to the Treasury (Lord Livermore) (Lab)
I beg to move.
National Minimum Wage (Amendment) Regulations 2026
(1 day, 4 hours ago)
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Lord Leong
That the draft Regulations laid before the House on 2 February be approved.
Relevant document: 52nd Report from the Secondary Legislation Scrutiny Committee
Lord in Waiting/Government Whip (Lord Leong) (Lab)
My Lords, I note the regret amendment tabled by the noble Lord, Lord Sharpe.
The context of this instrument is that the regulations were laid before Parliament on 2 February and approved by the other place on 2 March. Their purpose is to increase the national living wage and national minimum wage rates. Subject to the approval of this House, the regulations will come into effect on Wednesday 1 April.
The creation of the minimum wage is one of the proudest legacies of the previous Labour Government. We will always defend working people, and the minimum wage remains a key plank of this Government’s plan to make work pay. The Opposition are wrong to suggest that we are not sufficiently taking into account employment opportunities for young people.
These increases are based on the recommendations of the Low Pay Commission, which the Government have accepted in full. We are grateful to the commission and extend our thanks to its chair, the noble Baroness, Lady Stroud, and her fellow commissioners and supporting officials. The LPC is an independent and expert body. It reaches its decisions through consensus between its employer, worker and independent commissioners, following extensive stakeholder consultation and research. The Government recognise and value the commission’s established track record of balancing a multitude of factors when making wage rate recommendations that deliver for workers and businesses alike.
The remit for the 2026 rates was to ask the LPC to recommend rates that minimised impacts on employment prospects for workers and considered the risks for younger workers. In addition, the Government are committed to helping young people get and retain good jobs—including the recent announcement of reducing the cost of hiring younger workers. The Government are also delivering a long-overdue reform to rebalance the business rates system and deliver growth-boosting support with the business growth service to unlock business potential.
Noble Lords will have seen the publication yesterday of the 2026 remit of the Low Pay Commission. The remit continues to benchmark the national living wage to two-thirds of median hourly earnings, while also considering the condition of the labour market, the cost of living, the impact on business and competitiveness and wider macroeconomic conditions. The new remit maintains the commitment to removing the discriminatory age bands for adults. We recognise that the national minimum wage and national living wage alignment must be achieved while protecting jobs and supporting labour market stability. The remit gives the LPC full flexibility to use its significant expertise and social partnership model, including employer and worker representatives, to recommend the appropriate pace and timing of aligning the 18 to 20 national minimum wage with the national living wage. We have asked the LPC to provide its recommendations to government by October. The Government will then confirm the new national living wage and national minimum wage rates to apply from April 2027.
I turn to the detail of the minimum wage regulations. The national minimum wage—the statutory minimum for workers aged 21 and over—will increase by 4.1%, or 50p, to £12.71 an hour. This represents a gross annual increase of £900 for a full-time worker. The national minimum wage for workers aged between 18 and 20 will increase by 8.5%, or 85p, to £10.85 an hour. A full-time worker on this rate will see their gross annual earnings rise by over £1,500. This continues our progress in closing the gap between this rate and the full adult rate.
The regulations will also increase the national minimum wage rate for workers aged above school-leaving age but under 18 to £8 an hour. This increase—equivalent to 45p or 6%—also applies to the apprentice national minimum wage, which relates to apprentices aged under 19 or in the first year of their apprenticeship.
Finally, the accommodation offset—the maximum daily amount an employer can charge a worker for accommodation without reducing their pay for minimum wage purposes—will increase by 4.1% or 44p to £11.10.
By approving this year’s minimum wage increases, we can deliver a significant and deserved uplift for millions of workers in the coming weeks. I refer noble Lords to the comprehensive impact assessment, which was published alongside these regulations by the Department for Business and Trade. The impact assessment contains a full equality assessment and received a green “fit for purpose” rating from the independent Regulatory Policy Committee.
The Government estimate that the minimum wage increases from these regulations will provide a direct pay uplift for approximately 2.7 million workers, while an additional 5.1 million workers may benefit from positive spillover effects as employers maintain pay differentials.
The minimum wage is rightly regarded as one of the most successful and effective economic policies of the last few decades. Since it was introduced, the share of low-paid jobs, in hourly terms, has dropped from 21.9% to just 2.5%, and the value of the national living wage is expected to be 80% higher in real terms this year than the top statutory rate was in 1999.
This progress has been achieved without the negative impact on the economy and employment that was predicted at the time by some Members. Indeed, the impact assessment sets out a range of potential economic benefits of this year’s uprating, including putting more money in the pockets of the lowest-paid workers, creating greater incentives for people to enter work and boosting consumer demand. We also recognise the importance of a robust enforcement regime in upholding workers’ right to a fair day’s pay.
Since the introduction of the minimum wage, the Government have overseen the repayment of almost £200 million to 1.5 million workers and issued over £105 million in financial penalties. The annual budget for HMRC has increased to around £30 million, and we are going further with the creation of the Fair Work Agency. The Fair Work Agency will have stronger powers and a wider remit, delivering for exploited and underpaid workers and ensuring a level playing field, so that the majority of businesses, which already do the right thing by their workers, cannot be undercut by their less scrupulous competitors.
In closing, it is worth re-emphasising the positive impact that these regulations will have on the lives of millions of working people. When the increases come into effect next month, we will continue in our progress towards our manifesto goals—ensuring a genuine living wage and extending it to all adult workers—while safeguarding employers and protecting the employment prospects of younger workers.
Amendment to the Motion
Lord Sharpe of Epsom
At end to insert “but this House regrets that the draft Regulations will make it harder for small businesses to take on staff, especially for first jobs and apprenticeships; risk worsening already elevated youth unemployment by further increasing the cost of hiring younger workers; and fail to reflect sufficiently the fragility of the youth labour market, at a time when the number of young people not in education, employment or training is approaching one million”.
Lord Sharpe of Epsom (Con)
My Lords, I am extremely grateful to the Minister for explaining and introducing this SI, to which I have tabled a regret amendment. But I am afraid I take a slightly different view from the one he has just explained.
Once again, we start with an ill-thought-out, anti-business measure by this Government. It is very interesting to note that the Minister, when he was explaining and introducing the instrument, referenced a number of government agencies that will be enforcing all sorts of fines and whatnot, but he did not really talk about its impact on business, which is regrettable. Quite frankly, this will end up being an anti-worker measure too, and it will price people out of the labour market.
No one on this side of the House opposes higher pay in principle. Of course we want people to earn more but, for that to be the case, there must be work to be had. A wage floor that is set without proper regard to hiring conditions, business confidence and the fragility of entry-level employment does not help the low paid if it helps price them out of a job altogether. That is why this SI is so troubling. From 1 April, the adult rate will rise to £12.71, while the rate for 18 to 20 year-olds will rise to £10.85 and the under-18 and apprentice rates will rise to £8.
The Government may pretend that there is no trade-off here, but everyone outside government understands that there is. If one sharply compresses the wage differentials—the Minister called them “discriminatory”—between inexperienced younger workers and older workers, one makes it less attractive to hire those with the least experience, the least confidence and the least established work history. The key word is not “discrimination”; it is “experience”. That is not only true for those aged 21 to 25 who are entering the workforce but especially true for 18 to 20 year-olds, many of whom rely on part-time, flexible and entry-level work to get that crucial first foothold in the labour market. Retailers themselves are warning that these local, flexible jobs are often the first step into work for young people, including Saturday jobs and short-hours roles around study or caring responsibilities.
Baroness Carberry of Muswell Hill (Lab)
The noble Lord, Lord Sharpe, will not be surprised to hear that I do not agree with his interpretation of the Government’s announcement yesterday of a major drive to create hundreds of thousands of jobs for young people and to radically transform apprenticeships. I suggest that it demonstrates that this Government are not reckless with the youth unemployment market and the economy.
I would like to reinforce the opening remarks of the Minister about the way that the regulations before the House this evening came about. Without labouring the point, they were the product of the painstaking examination of evidence by the Low Pay Commission, a tripartite body featuring representatives from businesses large and small, labour market economists and experts and representatives of workers. I can attest to the thoroughness of that exercise that takes place year after year because I did it myself 11 times.
The commission, as has been said, is excellently chaired by the noble Baroness, Lady Stroud. As it is directly relevant to these regulations, I shall quote briefly from her letter to the Government making recommendations to apply from April this year. She wrote:
“Having comprehensively considered the available evidence base”,
the Low Pay Commission’s judgment was that the recent national living wage increases
“have not had a significant negative impact on jobs”.
On young people specifically, the Government, as the noble Lord, Lord Sharpe, has reminded us, had asked the commission to extend the national living wage to 18 year-olds, but to do this by balancing concerns about youth unemployment. The letter from the noble Baroness, Lady Stroud, said that the Low Pay Commission acknowledged
“a concerning rise in the rate of young people not in education, employment or training”.
These were not reckless recommendations.
The Low Pay Commission also acknowledged:
“Young people are also more likely to work in hospitality and retail, which have seen significant falls in vacancies and employee numbers”
at realistic assessment. It said, however, that minimum wage effects were
“difficult to separate out … from other pressures on these sectors”.
It said that there was not enough evidence to say that previous increases in the minimum rate for 18 to 20 year-olds had
“affected young people’s employment overall”.
It is not me saying this; it was the Low Pay Commission.
The commission opted for caution and recommended waiting until 2028 or 2029 to lower the national living wage threshold to 18, and then only subject to economic conditions. It was similarly cautious and careful with the apprentice rate, keeping it the same as the rate for 16 and 17 year-olds and increasing it to only £8 an hour.
The Low Pay Commission’s wisdom and caution is reflected in the regulations before your Lordships’ House this evening. I ask the noble Lord, Lord Sharpe, to think again about his amendment and about the effects of seeking to deny the lowest paid in our society a few more pounds in their wage packets.
Lord Sikka (Lab)
My Lords, it is a sad day to be speaking on the Conservative amendment objecting to a rise in the minimum wage. I support the rise in the minimum wage and the acceleration of the rate for younger workers, who bear the full cost of living. The product of their labour is not sold for lower prices at Starbucks, Tesco or anywhere else. Some 25.3 million people live below the minimum living standard, and their voices must be heard.
Last week the Conservatives promised to reintroduce the two-child benefit cap if they ever return to office. Over 500,000 children and their families will be pushed back into poverty. That lack of empathy is on display again today, as now they are targeting low-paid workers and depriving children and their families of nourishing food, good housing and other essentials.
The Joseph Rowntree Foundation has estimated that a single person needed to earn £30,500 a year to reach a minimum acceptable living standard in 2025. A couple with two children needed to earn £74,000. Even after the forthcoming minimum wage increase, millions will be well short of that target, yet the party opposite is objecting to this.
It is striking that it is silent on soaraway executive pay. A typical FTSE 100 CEO collects an average UK wage in just two days, and the CEO-to-worker pay ratio is 141 times. Recently, the chief executive of Shell got a pay rise of 60%, rising to £13.8 million. The BP CEO’s pay has doubled to £11.7 million. Her daily pay exceeds the annual median wage of a UK employee. At Melrose Industries, the CEO-to-worker ratio is over 1,110 times.
We never hear anything from the party opposite about such rip-offs and inequalities. The party opposite objects to a rise in the pay of younger workers, but it has not offered a single suggestion for lifting young adults out of poverty. It could support calls for the abolition of university tuition fees or the abolition of prescription charges, or promise free bus passes to under-21s as in Scotland, but it does not support any of these poverty-alleviating measures.
Sadly, the opposition to the rise in the minimum wage is part of a steady decline of empathy for a large section of the population. The political discourse venerates the super-rich and scapegoats children, minorities, the poor, the disabled, the sick and the unfortunate for social problems. Empathy is the glue that holds a society together, but it is increasingly undermined by toxic political discourses. I am reminded of a quote by Hannah Arendt, who said:
“The death of human empathy is one of the earliest and most telling signs of a culture about to fall into barbarism”.
Condemning millions to poverty is barbaric. We must search our souls and aim for equitable distribution of wealth to ensure that every single person in this country can live with dignity and fulfil their life.
Baroness Bennett of Manor Castle (GP)
My Lords, it is a great pleasure to follow the noble Lord, Lord Sikka, who makes the powerful point that there are enough resources in this country for everyone to have a decent life, and for us to look after climate and nature, if we share those resources out fairly.
I thank the Minister for introducing this SI. However, while I agree with the noble Lord, Lord Sharpe, in regretting this SI, I am going to depart in the 180-degree opposite direction from the noble Lord on the Tory Front Bench’s reason for doing so. The noble Lord was keen to quote the Tony Blair Institute. He is quoting an institute that takes its name and leadership from a Prime Minister who saw the wage share—that is, wages as a percentage of total national income—fall significantly; from the 1960s to the 1980s, it was around 60%, but in the late 1990s it fell as low as 51%. Yes, the Blair Government brought in a minimum wage, but then they allowed its real level to decline and workers to suffer, so the noble Lord’s comments were entirely in line with that Blairist approach.
I want to pick up some comments made by the Chancellor in introducing this measure. She said that
“the economy isn’t working well enough for those on the lowest incomes”,
and I agree. She said:
“Too many people are still struggling to make ends meet”—
with which I also agree—and that those on low incomes are not
“properly rewarded for their hard work”.
Again, I entirely agree, but this SI does not take us nearly as far as we need to go in those directions. Where might we actually go?
It is interesting that the statement talks about the national living wage. That term came in when George Osborne gave in to the argument of the Green Party and said there should be a real living wage and rhetorically, if not in practice, introduced the term. However, the so-called national living wage is not the real living wage. The real living wage is calculated by the Living Wage Foundation, and it is £13.45 an hour across the UK compared to the national figure of £12.71, or £14.80 in London. I am sure the Benches around me will say, “Businesses can’t afford to pay that”, but the real living wage is paid by more than 16,000 UK businesses that have chosen to transform their workers’ lives and raise the bar to a basically decent level of work. Nearly half a million employees are covered by this, and the range of employers credited by the Living Wage Foundation includes half the FTSE 100 big household names, including Nationwide, IKEA, Everton Football Club and Aviva, as well as many thousands of small and medium-sized enterprises.
I have a direct question for the Minister. Alongside this announcement is the suggestion that the increase in the rate for 18 to 20 year-olds may slow in future. I note that Labour made a manifesto commitment that the so-called national living wage would apply equally to all adults by the end of this Parliament. Is the Minister prepared to repeat that commitment tonight?
The noble Lord, Lord Sikka, has powerfully made the point that when 18 to 20 year-olds go to Tesco to buy their dinner, or when they pay their rent, they can ask for a discount because they are young but are, astonishingly, unlikely to get it. More than that—you have workers who are doing exactly the same job, shoulder to shoulder in the warehouse or in the shop, but one of them is paid less than the other simply because of their age. That simply cannot be right.
My final point is that the real living wage still does not take us nearly far enough. The Joseph Rowntree Foundation has for a long time calculated the minimum income standard. This is enough to ensure that people who are working get enough to live a decent life, as identified by the people of Britain. These are real measures of how the Government—and this SI—are not going nearly far enough.
At the current levels, a couple with two children where one parent is working full-time on the national so-called living wage and the other is not working reach 66% of the minimum income standard in 2025. That is actually worse than it was in 2024; it is a 1 percentage point decline. A single working-age adult working full-time on the national living wage reaches 76% of the minimum income standard for 2025, compared with 77% in 2024—so, again, a 1 percentage point decrease. We are going in the wrong direction.
I have one final point. I am aware that Jeremy Hunt no longer speaks officially for His Majesty’s Opposition, but he is of course still a Tory MP. He told Radio 5 yesterday that the kinds of measures that we are all looking towards to deal with energy bills—the Government helping in this crisis situation—are unsustainable. He said:
“We are going to have to wean ourselves off the habit”.
But the reality that that fails to acknowledge is that, after decades of workers getting less and less of the share of the product of their labours, they do not have any reserves left for the next shock. People have been left on the edge, and I am afraid that this SI does nothing like enough to help them re-establish stability and security in their lives.
The Earl of Effingham (Con)
My Lords, following on from my noble friend Lord Sharpe, I ask the Minister, the noble Lord, Lord Leong, who has vast, successful business experience, why he thinks that Sir Tony Blair said, via his institute, just two weeks ago that Labour’s policies—such as this SI—are
“harming growth and undermining young people’s job prospects”.
Lord Hannett of Everton (Lab)
My Lords, I declare an interest. My colleague behind me was a member of the Low Pay Commission. I served 11 years on the Low Pay Commission. In fact, I remember its introduction and the howls of despair, sometimes from people who should have known better. Today the Low Pay Commission is in existence. Every party and every Government have accepted not only its recommendations but have actually said it would be a retrograde step to remove legislation that protects—I repeat, protects—the most vulnerable. I often wonder what the rates would be if we had never had the Low Pay Commission: if it was left to the generosity of politicians and employers. It was required, it was needed, and it has sustained its value consistently.
Sometimes there is a lack of understanding of how the commission reaches an agreement. My noble friend Lady Carberry touched on it. It is a tripart commission consisting of economists, employers and trade unions, and it is an evidence-based commission. I emphasise that. It is not something where you pick a figure because you think it is what people should earn. It has to be argued for in a responsible way by taking evidence from stakeholders such as employers, trade unions and entrepreneurs, and you arrive at a settlement. The commission debates heavily the effect on employment, including youth unemployment, but, if we are about anything in politics, it has to be about values as well. It has to be about protecting the lowest paid in society, who require support. The commission has survived so long because it has proved its case. Every recommendation has been accepted, including by the previous Government, and, if it had not been introduced, I repeat that I wonder what the rates of pay would be.
I say to the Minister that, when I listen to many of the views being expressed in the Chamber about regulations that improve the life of the low-paid worker, everything is going to be the straw that breaks the camel’s back. I heard this for years when I was on the commission. But it has survived and gone from strength to strength. I regret the noble Lord’s amendment to the Motion, and I concur with everything my noble friend the Minister said in his introduction.
Lord Goddard of Stockport (LD)
My Lords, I will be relatively brief. We do not regret the minimum wage going up. We support it. What we do regret is the lack of government support for hard-working families and businesses. I have some sympathy with the views of the noble Lord, Lord Sharpe of Epsom, on some of this. Clearly, increasing the minimum wage is always welcome as it takes 2.5 million people to another level. That should be encouraged; we should be able to do that.
We had some arguments in the employment Bill over months and months about the effects of some of the employment rights. Some of that is coming to fruition now. Unless businesses can grow, do more business and create, then there will be fewer businesses and fewer opportunities for those lower-paid people to get a job. That is the problem.
It is blindingly obvious to me that the Government need to make people’s money go further. The trick is to make the money go further and create more jobs and more opportunities. For instance, I think the Minister mentioned reducing energy bills. I think the Government put £58 million in for fuel oil customers, but really they should be capping the price, as there is no cap on fuel oil for domestics. I have evidence of people who were getting charged £200 now being charged up to £800, so the money the Government are putting in is scratching the surface for those people, who might be employing someone else—a low-paid worker. They might not be able to do that now.
The Government can go further by talking about the high streets. Why do they not cut the VAT on hospitality till 2027? Do something that encourages the economy and lets the high street employ more people. To diverge a little bit from the noble Lord, Lord Sharpe, we should be going for growth with better deals with Europe. We should have closer ties with Europe and have more influence there. The NIC decision should be reversed. These measures would actually put more money in people’s pockets.
The increase in the minimum wage is welcome; it should be increased because it is the right thing to do. I have listened to trade union leaders over months, and I totally agree with that. It has taken too long to do and it is in the right direction, but you have to couple it up with how you stimulate the economy to employ those people. I think that is where the argument on the regret amendment is. I cannot support the amendment, but the Government need to be mindful that it is a two-edged sword.
There was an argument that the employment Bill was tilted a bit too much towards employment and employment laws. That is coming to fruition now, sadly. We need a better balance. We need to be reasonable and responsible—I think those were the words we used—because it goes hand in glove. It is almost as if the minimum wage goes up but the employers pay for it. This is not new money; it comes out of the entire pot of the economy. You really do not want to kill the golden goose laying the egg that pays for the minimum wage to go up. My concern is that we need to do more to put money in people’s pockets. That is how you stimulate growth and how you make the economy get stronger, not just by increasing the minimum wage and then putting tax after tax on people, making it disappear.
Lord Leong (Lab)
My Lords, I am grateful for the support for the National Minimum Wage (Amendment) Regulations 2026 and respect the thoughtful contributions from across the House. I thank my noble friend Lady Carberry for her support for the instrument and note with thanks her service on the Low Pay Commission. I also thank my noble friend Lord Sikka for his support and insightful comments.
Let me hit the nail on the head about the Tony Blair Institute. Tony Blair’s Government created the LPC and we trust its judgment to balance competing factors, including businesses, the economy and growth. In 2025, the UK was the third fastest-growing economy in the G7, behind only the US and Canada. To declare an interest, I am a personal friend of Tony Blair. There are a lot of things I agree with him on but I totally disagree with him on this matter.
Contrary to the amendment tabled, the Government are committed to helping young people to get and retain good jobs. The Low Pay Commission was specifically asked to consider the impact of the minimum wage increase on youth employment and participation in education. After thorough consultation and analysis of labour market evidence, the commission has found no clear indication that recent increases in the national minimum wage have led to a decline in employment among young people. The Government remain committed to ensuring that work pays, while making sure that any future adjustments to youth rates do not harm employment opportunities.
Building on the £1.5 billion announced at the Budget for the youth guarantee and changes to the growth and skills levy, the Secretary of State for Work and Pensions has announced an additional package of almost £1 billion in investment, unlocking up to 200,000 jobs and apprenticeship opportunities by reducing the cost of hiring young people. I agree with my noble friend Lady Carberry when she says that the youth jobs grant provides an employer with hiring incentives worth £3,000. Let us not pooh-pooh that; it is money going into employers to employ young people between the ages of 18 and 24 who have been on universal credit and looking for work for six months.
Lord Sharpe of Epsom (Con)
My Lords, I am very grateful to the Minister for his response. I was not expecting Confucius, but of course I defer to that ancient wisdom.
I listened very carefully to what was said, in particular by the noble Baroness, Lady Carberry of Muswell Hill. I think she said—she will correct me if I am wrong—that the Low Pay Commission found it difficult to separate the various cost pressures affecting the hospitality industry particularly, including the effects of higher or rising pay. I would argue, therefore, that that is not particularly evidence-based. It would seem slightly reckless to make that recommendation if you cannot determine the causes of the headwinds—but I will park that for the time being.
Baroness Carberry of Muswell Hill (Lab)
Perhaps I could recommend to the noble Lord that he takes time to read the Low Pay Commission’s report, which sets out its reasoning in full, and the evidence base it is drawing on. I may have made that point clumsily. I certainly did not mean to disparage the Low Pay Commission. I was trying to convey its sense that it could not find evidence to attribute any negative effects on the labour market for young people specifically to the national living wage as applied in the rates for those young people. It was trying to make an assessment of the extent to which the minimum wage rates were the cause of any detrimental effects on the labour market and could not find that it was the low pay rates which had that negative effect. The reasoning is set out in great detail in that report.
Lord Sharpe of Epsom (Con)
I thank the noble Baroness for that clarification. I will definitely make a point of reading that and perhaps return to it, depending on what I see.
I say to the noble Lord, Lord Hannett of Everton, who made some very good points, that the camel’s back is already broken when it comes to youth unemployment. It is at 16.1%—a point I made in my earlier remarks. That is higher than the EU average, which is a pretty woeful state of affairs. In answer to the noble Lord’s question, unemployment is at 5.2% now, but, as we also heard and as I reminded the House, the OBR has forecast that it will rise to 7%.
I am grateful to the noble Baroness, Lady Bennett of Manor Castle, for her remarks. I would also point her in the direction of the Resolution Foundation, which has a direct line into the Treasury; it was not just the Tony Blair Institute. For the time being, I rest my case on Green economics.
It is always a pleasure to hear from the noble Lord, Lord Sikka. I think his argument was, “If you agree with me politically, you have empathy; if you don’t, you haven’t”. In which case, I would argue that it is empathetic to try to keep people in jobs rather than price them out. That is empathy. I beg leave to withdraw my amendment.