House of Commons
Speaker’s Statement
Mr Speaker
Following the Order of the House on 28 April this year, the Chair of the Backbench Business Committee will be elected for the remainder of the Parliament. Nominations are now open and will close at 1 pm on Tuesday 19 May. Nomination forms are available from the Vote Office, the Table Office and the Public Bill Office. No Member may be a candidate if that Member’s party is represented in His Majesty’s Government. Candidates need the support of no fewer than 10 Members from the Government side of the House, and no fewer than 10 Members from a party not represented in the Government, or from no party. If there is more than one candidate, the ballot will take place on Wednesday 20 May, from 10 am to 1 pm, in the Aye lobby.
Business of the House
(1 day, 4 hours ago)
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Jesse Norman (Hereford and South Herefordshire) (Con)
Top of the morning to you, Mr Speaker. Will the Leader of the House give us the forthcoming business?
The Leader of the House of Commons (Sir Alan Campbell)
The business for the week commencing 18 May will include:
Monday 18 May—Continuation of the debate on the King’s Speech, on backing business to create economic growth.
Tuesday 19 May—Continuation of the debate on the King’s Speech, on energy security.
Wednesday 20 May—Conclusion of the debate on the King’s Speech, on defence readiness.
Thursday 21 May—Second Reading of the Steel Industry (Nationalisation) Bill.
The House will rise for the Whitsun recess at the conclusion of business on Thursday 21 May and return on Monday 1 June.
The provisional business for the week commencing 1 June will include:
Monday 1 June—Second Reading of the Health Bill.
Tuesday 2 June—Committee of the whole House on the Armed Forces Bill.
Jesse Norman
I thank the Leader of the House very much for announcing the business, and I welcome all colleagues back to the House. I am sure that the whole House will wish to join me in congratulating His Majesty the King not only on the Gracious Speech yesterday, but on his glorious triumph in the United States of America, in particular reminding our American cousins of the joy not of monarchy, which they know well enough from recent experience and over the years, but of a genuinely constitutional monarchy.
The House will know of my obsession with building NMITE—the New Model Institute for Technology & Engineering—our new university in Hereford. I hope that colleagues across the House will join me in celebrating its second graduation ceremony last Saturday. Its flagship degree was recently accredited for chartered certification by the prestigious Institution of Engineering and Technology, making its graduates, in that sense, holders of degrees equal to those to be found at Oxbridge or Russell group universities. Its latest crop of graduates have gone on to companies including Airbus, Hitachi Energy and GKN, and there is huge interest from applicants in its new bachelor’s and master’s degrees in autonomous robotics and drone technologies, which start in September. If Members will excuse the pun, as an engineering institution, NMITE is really starting to motor. I strongly encourage any Members who might be interested and wish to know more to drop me a line, because this route to local economic growth is of great potential significance.
It is fair to say that we have known quieter weeks than the couple since we last convened. What have we discovered during that period? A previously undisclosed gift of £5 million from a foreign cryptocurrency donor to the leader of Reform UK is now being investigated by the Parliamentary Commissioner for Standards. We are reassured that it is entirely unrelated to that hon. Member’s recent interest in investing in Bitcoin.
The leader of the Green party, Zack Polanski, has admitted that he failed to pay council tax, was not in fact a spokesman for the Red Cross and was never a full member of the National Council for Hypnotherapy, which I am sure will come as a great relief to women across the country. He must be an acute embarrassment to my neighbour, the hon. Member for North Herefordshire (Dr Chowns), and we thank her for her resilience. All that news will come as a surprise to precisely no one.
Lest we forget, nearly 100 Labour Members of Parliament, including four Ministers, have gone public with their opposition to the Prime Minister remaining in office. Three Cabinet Ministers have called on him to set a public timetable for his departure. Few Labour MPs, if any, believe that the Prime Minister will lead them into the next election.
Mr Speaker, you will be aware, I am sure, of the famous lines:
“The boy stood on the burning deck
Whence all but he had fled”.
It may be that the Leader of the House is the last person to occupy the position of standing on the burning deck when all but he has fled. Others are fleeing, and it is astonishing that Buckingham Palace had reportedly been forced to ask whether the King’s Speech was, in fact, really going ahead. Even now, I notice the slight sparsity of Members—actually, on all sides of the House—in this earlier sitting, and the Secretary of State for Health and Social Care is widely reported to be preparing a bid for the leadership of the Labour party. King Lear asks in his bewilderment:
“Who is it that can tell me who I am?”
So it is with the Prime Minister. He does not know and nor, it seems, does anyone around him.
Amid all this Westminster madness, it falls to me to insert a nugget of something that actually affects every Member of this House in their constituencies—a matter of great local importance. The House will know that the Construction Industry Training Board is meant to be the guardian of construction skills in this country, funded by a statutory levy on the industry. Yet employer confidence is rapidly being eroded by the CITB’s recent behaviour. An Ofsted “requires improvement” judgment, the Farmer review’s call for a “fundamental reset”, poor communications with levy payers, a rarely updated website and a slow, cumbersome booking system all point in the same direction. At the same time, firms report duplication, delay and poor value for money.
For some courses—forklift training, for example—the CITB route can cost more than twice as much as the non-CITB route, take considerably longer and yet lead to precisely the same qualification. Many of the courses are not optional. Small construction firms must keep up with industry standards and legal health and safety requirements. They need a system that is fast, clear and good value, not one that makes compliance harder, especially for small and medium-sized enterprises that are so crucial to our economy. Meanwhile, the levy is a tax in all but name that must be paid regardless of the services offered.
The CITB has expenditures of nearly £300 million, but gives less than half of that away in grants, while its wage bill and headcount steadily rise. Will the Leader of the House ask the relevant Ministers to write to me explaining how they intend to restore employer confidence in the CITB, particularly among small construction companies, improve course access and value for money, and reform an organisation that appears to be losing its way?
Sir Alan Campbell
I am grateful to the right hon. Gentleman for his remarks—well, for some of his remarks. On a serious matter, I am sure that the whole House will join me in sending our condolences to the families of the three young women who died yesterday in the tragic incident in Brighton. Following the local elections, which took place last week, I wish to put on record my thanks to councillors for their service to their communities, irrespective of parties or of whether they are not party-aligned, and particularly to those who were not re-elected.
The King’s Speech opened our new parliamentary Session. Members will have heard your words, Mr Speaker, about how we should conduct ourselves. I fully support those remarks and thank you for setting them out to the House. This Session will be about economic growth, building infrastructure, improving public services and strengthening our national security. I have published a written ministerial statement this morning, which lists the Bills that we have announced, and Members will have an opportunity to debate the King’s Speech over the coming days. This is a serious, long-term plan, bringing about change and putting the country back in the service of working people.
Curiously, and in contrast, the Opposition brought forward an alternative King’s Speech, which, like most of the country, I had failed to notice until the Leader of the Opposition referred to it yesterday. I have a copy here, if anyone needs any night-time reading to put them to sleep. I read it with interest. The shadow Leader of the House is a distinguished author—I have read some of his works—who writes with genuine interest, clear thinking and even wit sometimes. All that demonstrates is that he had absolutely nothing to do with this alternative King’s Speech. The alternative King’s Speech is no more than a description of the long-term ills of our country, which merely serves to remind us that the previous Government had 12 legislative programmes and 14 long years to test these ideas, and they failed, so we will take no lectures from them.
I draw the House’s attention to the report published by the Modernisation Committee this morning. The report recommends a new pilot to allow Members to participate virtually in Select Committee meetings in limited circumstances. That is part of the Committee’s ongoing work to ensure that the House’s procedures remain effective, accessible and resilient. A motion will be brought forward in due course to allow the House to consider those proposals, which I hope will be supported.
Let me turn to the other remarks of the shadow Leader of the House. I certainly congratulate NMITE in his Hereford constituency. I have said this before, but I will say it again: the success of that organisation is due not least to the right hon. Gentleman’s commitment and leadership on this matter, and we should congratulate him on that.
I absolutely agree with the shadow Leader of the House on the matter of the donation to the leader of Reform. These are serious allegations. I welcome the fact that the Parliamentary Commissioner for Standards is looking into this, and I also welcome the independent Rycroft review into foreign financial interference in our democracy.
As for the other comments that the shadow Leader of the House makes about the current political situation, I encourage him to stop doomscrolling. The Prime Minister and the Government are getting on with the job of governing, and this King’s Speech is spreading opportunity and building a fairer Britain. On the CITB levy, this is a serious issue, and I will raise the matter with the relevant Minister and get them to write to him.
Anna Dixon (Shipley) (Lab)
On Monday I attended the Bradford City football club fire disaster memorial service. We remembered the 56 football fans who died in the tragic stadium fire 41 years ago. Young players from the club attended alongside fans who had survived and families of those who died. Will the Leader of the House join me in paying tribute to the club for keeping alive the memory of those who suffered, and will he find time to celebrate the role that football plays in bringing communities together?
Sir Alan Campbell
I absolutely join my hon. Friend in paying tribute to Bradford City for keeping the memory of the 1985 disaster alive. Some of us remember that day and will never forget. I extend my heartfelt condolences to the friends and families of those who lost their lives on that tragic day. As she rightly points out, football and sports more widely bring communities together and can be a force for good. I hope we will see that in the coming months, not least when the world cup kicks off.
Mr Speaker
I call the Liberal Democrat spokesperson for today, Wendy Chamberlain.
Wendy Chamberlain (North East Fife) (LD)
May I start by associating myself with the remarks of the Leader of the House in relation to Brighton and the elections? It is not easy to stand for elected office, particularly if you are not successful, and it does take a toll, so I thank him for those remarks.
I also thank the Leader of the House for providing us with the first set of business for the new Session, but I have to note that at the beginning of the previous Session the new Government made a virtue of the fact that they would be putting an end to the incessant chaos of the Conservatives, yet we find ourselves again with a Prime Minister who appears to have lost all authority. We all know that changing Prime Minister over and over again is deeply damaging for our economy and our place on the world stage. I heard us described in recent days as, “Italy without the cuisine.”
When we look at the content of the King’s Speech, we see the reason why this Prime Minister has run out of road, despite having such a large majority: there is no real change offered by this Government’s policy agenda, just a tinkering around the edges. There is an EU reset Bill that offers no reset and no attempt to boost growth by moving beyond the Government’s red lines. There are no measures to boost national security by introducing a programme of defence bonds, and there is nothing to fix the crisis in social care that plagues so many of our constituents.
Will the Leader of the House schedule a debate in Government time on how to stop this continued chaos of successive Conservative and Labour Governments? Perhaps some of the Prime Minister’s Cabinet colleagues might want to come along and make contributions. After last week’s results, one of the solutions that should be discussed in that debate is the need to move to a system of proportional representation for general elections, as well as for local government elections in England. That need has never been greater. We Liberal Democrats will always support calls for making every vote count, and that is despite results in Richmond upon Thames and some of the Scottish constituencies—including my own, I have to say—that would make Kim Jong Un blush. Will the Leader of the House speak to the Prime Minister and try to persuade him that if he wants to leave some form of legacy that he can be proud of, he should make time for a Bill on fair votes?
Sir Alan Campbell
The King’s Speech made it clear, as has the Prime Minister, that the long-term national interest does require a closer relationship with our European allies—now more so than ever—because there are huge opportunities to strengthen our security and cut the cost of living. We have made progress with closer co-operation on agriculture, electricity, emissions trading and more, but I have to say that the previous Government’s Brexit deal did deep damage to the economy. We will not be joining the customs union or the single market and we will not be returning to freedom of movement, but legislation will be coming forward to reset the relationship with Europe, because the Prime Minister and the Government are very clear on the need for closer partnership.
On proportional representation, our party’s position is very clear. I note that the Liberal Democrats have an opportunity to table an amendment to the Address in reply to King’s Speech on this, if they so wish, and if they do so, I think they will get an answer they do not want to hear.
Dr Marie Tidball (Penistone and Stocksbridge) (Lab)
I recently held an event in High Green to listen to local people’s priorities for the area, because they have felt overlooked for far too long. Two of the areas in High Green have a bottom 3% and 7% score of deprivation in England. I want to change that so that High Green can receive £20 million of funding from the Government’s Pride in Place programme. I am ambitious for High Green, the home of the Arctic Monkeys, and I know that this investment will fulfil the potential of the talent and community spirit in that place. Will the Leader of the House advise me how I can work with Ministers to secure Pride in Place funding for High Green to breathe new life into our community and ensure that everyone locally can stay near but go far.
Sir Alan Campbell
My hon. Friend is a doughty champion for her communities, and I once again pay tribute to her for that. We are committed to regenerating communities through our waste action plan and by investing in libraries, cultural venues and youth services, ensuring that communities across the country get the investment they need. She draws particular attention to Pride in Place, which is not just about investing in local neighbourhoods; it is also about putting people in charge of decisions about their local communities, and the things that they care about and that affect their lives. She makes a strong case for further funding, and I will ensure that the Secretary of State hears that.
Sir Roger Gale (Herne Bay and Sandwich) (Con)
First, I thank the Leader of the House for his unfailing courtesy at the Dispatch Box, and for the meticulous manner in which he refers Members’ concerns to the appropriate Ministers. Whoever emerges as the leader of the Labour party, I very much hope that he will remain in his post.
Sir Roger Gale
I would not wish that on him.
Given the Labour party’s manifesto commitments, some of us had rather hoped we might find in the King’s Speech a Bill to ban the proceeds of trophy hunting, something to do with hare coursing or improving farm animal welfare. The sad fact is that there was no such mention of any animal welfare issue whatsoever in the King’s Speech, and I would be grateful if the right hon. Gentleman addressed that.
While I am on my feet, could I also say that, with the hospitality industry on its knees, now is not the moment to introduce a tourism tax?
Mr Speaker
Order. I would just say that a good old stager knows how to take advantage, but questions should cover one area, not two at the same time.
Sir Alan Campbell
I am sincerely grateful to the right hon. Gentleman for his comments. I do think it is important that we uphold standards wherever we can. As for his reference to not wishing the ultimate job on me, I suspect he has been talking to my wife in that regard, and I can assure him that it is clearly not going to happen, because apart from anything else there is no vacancy.
On the issues the right hon. Gentleman raises, I think we made a good start on animal welfare in the first Session, and there will be further Sessions in which we can bring forward such measures. Depending on the progress made in this second Session, there is also the possibility that other legislation will be brought forward. I am not promising him anything, but there is some flexibility there. There are also other routes that Members can take, not least private Members’ Bills, to address some of the important matters he raises.
Paul Waugh (Rochdale) (Lab/Co-op)
On Sunday, there were scenes of wild celebration among the Dale fans at Wembley, as our beloved club staged a fabulous comeback and won the play-off final to return to the English football league. There were also fantastic civic celebrations at Rochdale town hall, where Jimmy McNulty and his lads could see for themselves just how proud we all were of the team’s heroics, grit and togetherness. Will the Leader of the House join me in congratulating the Dale on a fabulous season, and on proving that our club, like our town, never, ever gives up?
Sir Alan Campbell
I thank my hon. Friend for his question, and I certainly will join him in congratulating Jim McNulty and the Dale team on their successful season. Our local football teams give us pride in local communities. That is why, in the last Session, we delivered the Football Governance Act 2025, which gives fans a greater say in how their beloved clubs are run. I am sure that if my hon. Friend wants to raise this matter, perhaps in a Westminster Hall debate, it would be an opportunity for colleagues from across the House to celebrate the importance of local football in our communities.
Sir Christopher Chope (Christchurch) (Con)
Next week, can the Leader of the House produce a Government statement in response to the Hallett review on covid-19 vaccines? Lady Hallett recommended major reform of the vaccine damage payment scheme. The Government said that they were considering the matter, but it is now more than five years since thousands of people suffered severe loss, or in some cases bereavement, as a result of covid-19 vaccines. Justice must be done sooner rather than later.
Sir Alan Campbell
The hon. Gentleman raises an important matter, as ever. I do not know the answer to the question that he asks about progress on this matter, but I will raise it with the Department and get an answer from the Minister for him on where we are with this issue.
Carolyn Harris (Neath and Swansea East) (Lab)
The Welsh, known for our singing, are united in concern for Swansea’s global superstar Bonnie Tyler, who has been hospitalised in Portugal due to ill health. Will the Leader of the House join me in wishing Bonnie a safe and speedy recovery? As the song that she first recorded in ’88 says, she is simply the best.
Sir Alan Campbell
I am saddened to hear of Bonnie Tyler’s situation. She is an inspirational voice for a generation. I send our best wishes to her family and her fans. I join my hon. Friend in wishing Bonnie Tyler the very best and a speedy recovery.
Dr Danny Chambers (Winchester) (LD)
Women trying to flee domestic abuse are sometimes coerced into staying by their partner’s threatening to harm their pet, especially their dog or cat. May I pay tribute to organisations such as the Dogs Trust, which runs a dog fostering service for women while they find a new permanent home, so that they do not have to give up their pet permanently, and Trinity Winchester, which has opened new rooms for women fleeing domestic abuse, and lets them bring their pets with them? This is really needed; it breaks down another barrier that prevents women from fleeing domestic abuse.
Sir Alan Campbell
The hon. Gentleman raises a very important matter, and I pay tribute to the Dogs Trust and Trinity Winchester for their fantastic work. He is right to point out that there should be absolutely no barrier in the way of anyone fleeing domestic abuse, whether it be worry about a pet or anything else. The Government are absolutely committed to ensuring that victims in those circumstances get the support that they need, and that nothing stands in the way of their accessing that support.
Michelle Scrogham (Barrow and Furness) (Lab)
Will the Leader of the House join me in congratulating Shed One Distillery in my hometown of Ulverston on being selected as a finalist in VisitEngland’s awards for excellence? Does he agree with me that Barrow and Furness, the most beautiful constituency in the country, has much to offer visitors of all ages, and will he visit, to sample the award-winning gin and meet some fantastic tourism businesses?
Sir Alan Campbell
I absolutely join my hon. Friend in congratulating Shed One Distillery and all the nominees for this year’s VisitEngland awards. She may have some competition for the most beautiful constituency, but I thank her for highlighting the vital contribution that tourism makes to our national economy. I too am happy and lucky to have a constituency that is a popular tourist destination, and I would be delighted to take up her offer of a visit, should my diary allow.
Martin Vickers (Brigg and Immingham) (Con)
Last Sunday, along with the hon. Member for Great Grimsby and Cleethorpes (Melanie Onn), I attended the annual service for lost fishermen at Grimsby minster, organised by the Fishermen’s Mission. The timing was unfortunate because the EFL scheduled Grimsby Town’s play-off game for the same afternoon, and despite being only 10 minutes late to the game, I missed two goals—but that is by the way. Would the Leader of the House join me in congratulating the Fishermen’s Mission on the work that it does? Although it is over 30 years since the deep-sea fishing industry in Grimsby went into decline, there are still many families affected by the loss of brave fishermen who went out in all weathers.
Sir Alan Campbell
I join the hon. Gentleman in thanking the Fishermen’s Mission for the work that it does, not least in North Shields, where it is led by the Rev. Peter Dade in an exemplary way, as I know it is in the hon. Gentleman’s area. The lost fishermen’s service is an important part of the annual diary for fishing communities. It is an important reminder of the tragedies that have too often taken place in those communities, and of the price that is paid for bringing fish back to our country.
Warinder Juss (Wolverhampton West) (Lab)
At one of my recent surgeries, I met a constituent diagnosed with premature ovarian insufficiency, also known as early or premature menopause. This required her to take fertility preservation treatment and to go off work with stress. Her employers failed to provide reasonable adjustments, and she has now lost a lucrative job that she loved, and is having to spend large sums of money to pursue a sex discrimination claim. Does the Leader of the House agree that the Equality Act 2010 must better reflect sex-based conditions to provide clarity for those tackling sex and disability discrimination, and will he make Government time available for a debate on this important issue?
Sir Alan Campbell
I am sorry to hear of the case that my hon. Friend raises. The Government are committed to helping working people balance their jobs with their personal lives, including by managing their health conditions. I will ensure that the relevant Minister is made aware of this concerning case, but my hon. Friend may also want to take an opportunity to make those points during the debate on the King’s Speech, as this is an important part of ensuring that people can fully contribute to the economy, and to the economic growth that the country is looking for.
Dr Ellie Chowns (North Herefordshire) (Green)
It is clear that the tired old first-past-the-post voting system is utterly unfit for purpose. This winner-takes-all system means that a party can secure a huge majority of seats on a minority of votes, which poses a major democratic risk. It is long past time we had proportional representation is this country, so that every vote is represented equally and seats match votes. Will the Government finally take the opportunity to legislate for proportional representation in the Representation of the People Bill, which is set to return to this House, so we can have a fair voting system in which every voter’s voice is heard and given equal weight?
Sir Alan Campbell
This is the second time this morning that proportional representation has been raised, and it is a good illustration of how, when the Lib Dems and Greens agree on an issue, they are invariably wrong. It will be possible for the hon. Lady’s party to raise and vote on the issue during the debate on the King’s Speech, and as she points out, there are Bills being considered that will allow her to raise the matter as well. However, I fear that when the House gives its verdict, it will not be the result that she is looking for.
Phil Brickell (Bolton West) (Lab)
I know that you will join me in wishing Bolton Wanderers all the very best in the second leg of the play-off semi-final at Bradford tonight, Mr Speaker.
Solicitor Andrew Milne has been arrested by South Yorkshire police after allegations of fraud and blackmail from leaseholders up and down the country. In Horwich in my constituency, Milne bought freeholds on the cheap and threatened to take my constituents to court if they did not pay him thousands of pounds. After repeated engagement with me and my hon. Friend the Member for Sheffield Hallam (Olivia Blake), the Solicitors Regulation Authority has now imposed interim conditions on Milne’s licence after a separate stalking conviction. Regrettably, my constituents were never given the opportunity to buy their own freeholds before they were purchased by Milne. Will the Leader of the House make Government time available for a debate on the merits of extending first refusal rights to homeowners?
Sir Alan Campbell
This is a case that my hon. Friend has raised with me before, and I pay tribute to him for the way that he has championed the rights of his constituents. As he will have heard in the King’s Speech yesterday, we are taking action in this area, and I encourage him to speak in debates as the relevant legislation passes through the House. I understand that, as he says, assurances have been received from the Solicitors Regulation Authority on this case, and that an investigation has been opened. I once again pay tribute to my hon. Friend for his sterling efforts on this.
David Mundell (Dumfriesshire, Clydesdale and Tweeddale) (Con)
I begin by commending Craig Hoy on his election as MSP for Dumfriesshire, and on ensuring that the blue wall of Scottish Conservative and Unionist seats in the south of Scotland remains intact. Ahead of those elections, the leader of the SNP, John Swinney, asserted that if the SNP gained a majority in the Scottish Parliament, there should be another independence referendum, despite there being no constitutional or factual basis for that. Of course, the SNP fell well short of a majority; indeed, the majority of Scots who voted did so for parties that oppose independence. Will the Leader of the House convey to the Prime Minister—whoever that is—that he should make it absolutely clear to John Swinney that last week’s elections provide no basis for a section 30 order or another independence referendum?
Sir Alan Campbell
I can assure the right hon. Gentleman that the Government do not support the SNP’s position, and I join in what he says. As we set out yesterday, the King’s Speech is for the whole of the United Kingdom; it is about bringing prosperity to every part of our country, because the reality is that we are stronger together.
Kim Johnson (Liverpool Riverside) (Lab)
I am a very proud Scouser, and very proud that in 2015, the city was designated a UNESCO city of music for our musical legacy. Indeed, I have lots of grassroots music venues in my constituency. However, the Music Venue Trust has said that many of these organisations have been denied business rates relief because of local authorities’ inconsistent interpretation of the guidance. Will the Leader of the House find Government time for a debate on ensuring that grassroots music venues are correctly recognised in the valuation methodology, and protected in the business rates system?
Sir Alan Campbell
As my hon. Friend says, Liverpool has been home to some of the most influential artists of the modern age, and we want to see that proud tradition live on. She is a strong advocate for the city she loves. Every pub and live music venue is receiving 15% off its business rates, and local authorities should be applying the guidance fairly. My hon. Friend may wish to raise these matters in the King’s Speech debate on Monday, when we discuss backing business to create economic growth, because the issues that she raises are important drivers of growth in our cities.
Wera Hobhouse (Bath) (LD)
Two of my constituents have received letters addressed to multiple individuals unknown to them who appear to have used their address to obtain Disclosure and Barring Service checks. If false addresses are being used to obtain DBS certificates, that raises serious concerns about the robustness of the system. The DBS has confirmed to me that it does not routinely monitor the volume of basic DBS applications linked to individual addresses. Can we have a statement from the relevant Minister on the steps that are being taken to address this obvious weakness?
Sir Alan Campbell
The hon. Member raises some very concerning matters. If she gives me the details of this case, I will ensure that it is raised with the relevant Minister, and that she gets the answers that she seeks.
Danny Beales (Uxbridge and South Ruislip) (Lab)
I hope you will join me, Mr Speaker, in wishing Wealdstone football club good luck in their FA trophy final at Wembley on Sunday.
The early access programme gives the NHS access to life-changing and innovative drugs for free. I recently met Sarcoma UK, which told me of the difference that these drugs make to many patients. However, as a result of a recent decision by His Majesty’s Revenue and Customs to charge VAT on these drugs, which are provided for free, the BioIndustry Association has withdrawn from the programme, and other pharmaceutical companies are considering following BIA’s approach. This is very worrying to many patients who already have access to drugs, and to others who would like access to innovative drugs in future. Will the Leader of the House make time for a debate about improving access to innovative new medicines on the NHS, and on the importance of removing barriers such as this one?
Sir Alan Campbell
My hon. Friend raises an important point. We are committed to improving health outcomes across the UK, and to ensuring that the UK remains an outstanding place to start a company, scale and invest. We are actively discussing the matter that he raises with the industry, and I will make sure that he receives an update from the relevant Minister.
Sir Ashley Fox (Bridgwater) (Con)
Madison Chilcott is a student midwife from Bridgwater. She pays fees of £9,500 a year, and must complete a minimum of 2,300 unpaid clinical hours. She works 12-hour shifts at nights and weekends, while her protected learning time is routinely overridden to fill staffing gaps. Despite that, she and many student midwives face graduating into unemployment. This is happening during a national midwife shortage. Can we have a debate in Government time on the graduate guarantee made by the Health Secretary in August 2025, which induced many midwives to start training with what appears to have been a false guarantee of employment?
Sir Alan Campbell
The hon. Gentleman raises important matters. The Health Secretary is absolutely committed to making sure that the healthcare professionals that the NHS needs, going forward, are in place. I will raise the case that he mentions with the relevant Minister, and will ensure that he gets an update, or a meeting, if he would like one.
Anna Gelderd (South East Cornwall) (Lab)
Meur ras, Mr Speaker. As the Government work to unlock economic growth and strengthen social cohesion across the country, it is crucial that residents in every part of the UK feel that they are getting a fair share. I am concerned that support for estuary crossings may be allocated differently from support for the Tamar crossings in my South East Cornwall constituency, despite the importance of the Tamar crossings for local economies, healthcare access and nationally significant industries, such as defence. Will the Leader of the House work with me to secure a meeting with the relevant Minister to address my concerns?
Sir Alan Campbell
My hon. Friend has been an assiduous campaigner on this matter, having raised this issue in previous business questions. I know how important it is for her constituents, so I will raise it with the relevant Minister and see if a meeting can be arranged.
Ann Davies (Caerfyrddin) (PC)
On Thursday, the Welsh dragon roared. Before I go on to say who roared on Sunday, I want to thank Eluned Morgan, the previous First Minister of Wales, for her 30 years of unstinting public service to the people of Wales.
On Sunday, the Drovers roared. Llandovery RFC won the Super Rygbi Cymru cup for the third time. Our small rural Carmarthenshire town has produced phenomenal rugby players for Wales. They have won the Welsh premiership twice, the Welsh cup three times, and the national sevens championship five times in a row. The captain of Sunday’s match, Lee Rees, was playing his 402nd match for Llandovery over an 18-season term, which is a phenomenal achievement. Coaches Euros Evans and Gareth Potter have been at the helm for 13 or 14 years—
Mr Speaker
Order. There has got to be a question. This is a lovely statement about how well the team did, but I think the game is over. Come on, give me a question.
Ann Davies
Will the Leader of the House join me in congratulating Llandovery rugby club on its success?
Sir Alan Campbell
The hon. Lady reaffirms the importance of local sports—particularly, in her part of the world, rugby—to communities. I congratulate her on managing to mention just about everybody in her local community in one question. Well done to the team.
Sureena Brackenridge (Wolverhampton North East) (Lab)
I was born and raised in Wednesfield by parents and grandparents who came 10,000 miles from Fiji to make Wolverhampton their home. Today, British Fijians serve in our British armed forces, in the NHS, across public services and business, and, of course, on rugby pitches across the UK. Will the Leader of the House join me in recognising Girmit Day, which commemorates the arrival of the first indentured Indian labourers in Fiji in 1879, in honour of communities like the British Fijians, who quietly and proudly help to drive this nation every day?
Sir Alan Campbell
My hon. Friend is absolutely right to celebrate the rich heritage of the British Fijian community. I join her in recognising Girmit Day, which serves as a powerful reminder of the valuable contribution that British Fijians make to our communities.
Jerome Mayhew (Broadland and Fakenham) (Con)
Further to the question from my hon. Friend the Member for Bridgwater (Sir Ashley Fox), I met two trainee midwives in a surgery just last week in my Norfolk constituency. They are training at the Norfolk and Norwich university hospital, where 250 student midwives are going after just 50 places. What has happened to the graduate guarantee?
Sir Alan Campbell
This question has, as the hon. Gentleman points out, been raised previously, so I make him the same offer: we will get an update from the relevant Minister, or if we organise a meeting, he is free to come along.
Chris Webb (Blackpool South) (Lab)
Pride in Place investment can help to provide the kind of community infrastructure that lets neighbourhoods thrive, but South Shore, in my Blackpool South constituency, which is home to the highest concentration of deprivation in the country, is not currently getting that support, despite its real potential to become a vibrant and thriving place once again. Will the Leader of the House join my call for a Pride in Place funding programme in South Shore, and will he make time for a debate on how community infrastructure supports regeneration and how we can ensure that places like South Shore are never left behind?
Sir Alan Campbell
My hon. Friend is a wonderful champion for his constituency, and I once again commend him for that. We are giving constituents the investment and powers they need to deliver the change they want to see in their communities, not least through Pride in Place. He makes a strong case for further funding, and I will ensure that the Secretary of State hears his remarks.
Jim Shannon (Strangford) (DUP)
May I say what a pleasure it is to have the Leader of the House back in his place again? I look forward to his contributions, and thank him for all the responses that he coaxes out of the Ministers who respond to me. Will the Leader of the House ask the Foreign Secretary to make a statement on China’s law on the promotion of ethnic unity and progress, which is due to come into force in July, and its implications for freedom of religion or belief, cultural identity, and the rights of ethnic and religious minorities in China? China continues to punitively and aggressively persecute Christians, Falun Gong, Muslims and others.
Sir Alan Campbell
I am grateful to the hon. Gentleman for his remarks. There has been a bit of a theme this morning about my being in my place; I am slightly worried that hon. Members have heard something that I have not—you never know. As ever, he raises a serious matter. The Government stand firm on human rights, including the repression of people in Xinjiang and Tibet and the wider erosion of rights and freedoms across China. We continue to monitor developments, and urge China to respect its obligations under international and national laws. We will not hesitate to hold China to account for human rights violations. I will ensure that the Foreign Secretary hears his concerns.
Alison Taylor (Paisley and Renfrewshire North) (Lab)
I recently visited Glasgow airport in my constituency to witness the first direct transatlantic flight by United Airlines between Glasgow and New York. Will the Leader of the House join me in congratulating United Airlines and Glasgow airport on this significant new development, and does he agree that a debate on global connectivity might be a suitable subject for the new Session of Parliament?
Sir Alan Campbell
I do indeed join my hon. Friend in congratulating Glasgow International and United Airlines on their success in securing this important route. Transport links like that are vital to local economies and critical to driving growth, which is why we are bringing forward measures in the civil aviation Bill, and I hope that my hon. Friend will contribute to that legislative process.
Tessa Munt (Wells and Mendip Hills) (LD)
Incredibly, it is now over two years since the Patient Safety Commissioner published her report on mesh, yet the Government appear to have made no meaningful progress in implementing its recommendations. The absence of action is unacceptable. This issue continues to affect many of my constituents—women like Natasha, and Andy, a man who suffered not only significant harm but substantial costs having to pay for surgery to stop excruciating pain and to attempt to remedy the damage caused to him. We are in the absurd position where MPs are resorting to ask not only when a redress scheme will be established, but when the Government will set out a timetable for producing a timetable. Please could the Leader of the House ask someone in Government—anyone—to confirm when mesh victims will receive compensation?
Sir Alan Campbell
The hon. Lady raises an important matter. It has been raised over quite some time in this House, and she is right to raise it again because it is important that people are not left in pain and in the situation that she describes. I will get her an update from the relevant Minister to see what progress is being made and what further progress is planned.
Mr Connor Rand (Altrincham and Sale West) (Lab)
Last week, the BBC revealed a terrifying lack of regulation in the growing infant sleep industry, where literally anyone can call themselves a maternity nurse or a sleep consultant and give vulnerable parents advice that puts babies at risk. Locally, that led to the tragic death of a four-month-old baby who was put into an unsafe sleeping position on the guidance of a so-called maternity nurse who had no medical qualifications. Can we have a debate in Government time on what we can do to regulate the infant sleep industry so every child and parent is protected?
Sir Alan Campbell
I thank my hon. Friend for raising this highly disturbing case, and may I first express our condolences to the family? This case has illustrated just how important trusted advice on safe sleeping is, and we would encourage parents to access support, not least through Best Start family hubs. We are also changing the law so that anyone describing themselves as a nurse without the relevant qualifications and registration will be committing a criminal offence.
Gideon Amos (Taunton and Wellington) (LD)
I am sure we all share the objectives of the Public Service Vehicles Accessibility Regulations 2000, but they are having the effect of denying access to public service vehicles for any child who buys a place on a council school bus. Can we have a debate in Government time on the implementation of those regulations and the support that local authorities need, so that children in my constituency and across Somerset are not being denied places on buses that have not yet met the accessibility regulations?
Sir Alan Campbell
The hon. Gentleman is right to raise this matter, which is important to many of his constituents. I do not know the detail of the issue he raises, but I will get him a meeting with the relevant Minister if he wishes, so that he can raise those matters directly.
Paul Davies (Colne Valley) (Lab)
Recently, I was contacted by a leading manufacturer based in my constituency, Trojan Plastics, which highlighted the findings of the Made in Group’s industrial strategy survey report 2026. It found that one in four manufacturers described their energy costs over the past 12 months as “survival threatening”. While I congratulate the Government on their excellent work on delivering clean power, may we have a statement on their plans to improve energy costs for businesses?
Sir Alan Campbell
My hon. Friend’s advocacy for businesses in his constituency is commendable, and I pay tribute to him. We are currently reviewing the eligibility for the British industry supercharger and the energy intensive industries compensation scheme. I encourage him to raise these matters during the King’s Speech debate on Monday, which is around backing business to create economic growth.
Leigh Ingham (Stafford) (Lab)
Given that it is marathon season, will the Leader of the House join me in recognising the new endurance event in my constituency: the 39-week Creswell roadworks? Before the scheme started, many of my constituents were deeply concerned about safety, disruption and delays, and they were right to be. This week was the first week, and constituents have reported children being late for school in exam season, public transport issues, vehicles driving the wrong way down a one-way street, and confusion after changes to the route were decided but not communicated to anyone. Will the Leader of the House agree to a debate in Government time on how roadworks are planned and communicated, so that disruption is minimised, the cost to businesses is considered, and communities such as mine are not left to bear the burden once again?
Sir Alan Campbell
My hon. Friend is a strong campaigner for her constituency, and she has raised similar concerns on behalf of her constituents with me before. She is right to say that her constituents deserve better, which is why we are clamping down on roadworks that overrun and doubling fines. This is a matter not just of ensuring that people can get to school, but it is also about disruption to business. I therefore encourage her to raise such matters during Monday’s debate on backing businesses to create economic growth.
Alex McIntyre (Gloucester) (Lab)
The fantastic Flowers Band from my Gloucester constituency recently won the prestigious European brass band championships. It was their first time at the tournament, and they are the first English band to win it since 2015. I will not name all the members of the band this morning, but I got to go to their open rehearsal, where I saw their fantastic hard work, dedication and unbelievable talent. Will the Leader of the House join me in congratulating them on their success, and the success of all young musicians in Gloucester?
Sir Alan Campbell
I certainly congratulate the Flowers Band, not least because they are the first English winners for a decade. Brass bands are so important to our local communities. They are part of our heritage, and an important way of providing access for young people to come through, learn an instrument, and take part. I congratulate the Flowers Band, and wish them success in the future.
Gerald Jones (Merthyr Tydfil and Aberdare) (Lab)
Illegal offroad bikes cause regular and unnecessary nuisance to residents across Merthyr Tydfil and Aberdare, and other parts of the country. South Wales police are constantly trying to deal with residents’ concerns, but the situation persists and is widespread. The Crime and Policing Act 2026 will provide the police with additional tools, but can we have a debate or statement to outline what further steps the Government can take to help tackle this issue, which is causing such nuisance to my constituents and others across the country?
Sir Alan Campbell
My hon. Friend is right to raise that concerning matter. As he says, the Crime and Policing Act will give the police greater powers to clamp down on antisocial behaviour involving vehicles such as e-bikes. I am sure that this would make a popular topic for a Westminster Hall debate should he apply for one, because many Members across the House will have similar concerns.
Martin Rhodes (Glasgow North) (Lab)
This week marked the 22nd anniversary of the devastating Stockline ICL Plastics factory explosion in Woodside in my constituency, in which nine people tragically lost their lives. Given continuing concerns about corporate accountability, may we have a debate in Government time to assess how effective the offences of corporate manslaughter and corporate homicide have been since they were introduced, and whether the legislation is delivering justice for families affected by workplace deaths?
Sir Alan Campbell
I join my hon. Friend in remembering those killed and injured in the factory explosion at the ICL Plastics factory in 2004. Through the Crime and Policing Act 2026 we clarified and extended powers to ensure that corporate bodies are held liable for criminal offences committed by their senior managers. It is important that we continue to draw lessons from that avoidable tragedy, and my hon. Friend may wish to raise those concerns directly with Ministers during Justice questions next week.
Supreme Court Dillon Judgment
(1 day, 4 hours ago)
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The Secretary of State for Northern Ireland (Hilary Benn)
With permission, I will make a statement on the recent Supreme Court judgment in the case of Dillon and others. It is a complex judgment, but I thought it right to come to the House at the first available opportunity to summarise its main findings.
The case was originally brought against the previous Government following the passage of the legacy Act—the Northern Ireland Troubles (Legacy and Reconciliation) Act—in 2023. The applicants, a group of families who lost loved ones during the troubles, argued that various provisions of the legacy Act undermined rights protected by article 2 of the Windsor framework and by the Human Rights Act 1998, which gives effect to the European convention on human rights.
In February 2024, the High Court of Northern Ireland found the conditional immunity scheme and other provisions of the legacy Act to be incompatible with our obligations under articles 2 and 3 of the European convention on human rights. Those findings were endorsed in September 2024 by the Northern Ireland Court of Appeal. It also made judgments that two additional matters with regard to investigations by the Independent Commission for Reconciliation and Information Recovery—namely, next-of-kin participation in investigations and the role of the Secretary of State in decisions about the disclosure of sensitive information—did not meet the standard required to be compatible with the ECHR.
This Government have been clear that we are opposed to aspects of the legacy Act, including immunity. That scheme, which would have offered immunity to terrorists, had no support in Northern Ireland or from victims and their families. It was wrong in principle and provided no effective protections for veterans, not least because the provisions were never commenced by the previous Government. That is why, when we came into government, we immediately withdrew the appeal on immunity. However, the Court of Appeal’s interpretation of article 2 of the Windsor framework and its findings on next-of-kin participation and disclosure had wider implications for the Government’s ability to legislate effectively across the UK and protect national security. It was for those reasons that the Government appealed against that judgment to the Supreme Court. I am pleased to report that last week the Supreme Court upheld our appeal, finding wholly in the Government’s favour.
Article 2 of the Windsor framework ensures that there is no diminution of rights, safeguards or equality of opportunity in Northern Ireland as a result of the UK leaving the European Union. The Government are firmly committed to those human rights and equalities provisions but felt that article 2 had been interpreted too broadly by the lower courts. The Supreme Court’s judgment has provided important clarity on this question and confirmed the Government’s long-standing position that the rights protected by article 2 of the Windsor framework are those concerned with ending the sectarian conflict in Northern Ireland. While reaffirming the Government’s position on this matter, the Supreme Court found that the relevant provisions of the legacy Act should not have been disapplied by article 2 of the Windsor framework. The purpose of bringing the appeal was to obtain clarity on how article 2 should be interpreted in the future, not to defend immunity.
On next-of-kin participation and disclosure of information, the Supreme Court found that the commission is currently capable of conducting investigations that are compliant with our obligations under the European convention on human rights. The Supreme Court also concluded that the provision of legal aid for the cross-examination of witnesses is not always necessary for an investigation to be fully compliant with human rights. However, the Government recognise the importance of next-of-kin involvement in the reformed Legacy Commission’s inquisitorial proceedings, and we are providing for that in the troubles Bill.
On disclosure, the Supreme Court was unequivocal, saying that
“there must be a system restricting disclosure in circumstances where disclosure may or would risk prejudicing the national security interests of the United Kingdom”,
but it went on to say that
“the Secretary of State does not have an unrestrained power to ‘veto’ the disclosure of information”
and that
“any decision to do so is subject to challenge by way of judicial review.”
This Government are committed to ensuring the maximum possible disclosure of information while protecting life and national security, hence the changes I am bringing forward in the troubles Bill to create a fairer disclosure regime with greater transparency in how decisions are made.
I now turn to what this means for the question of immunity. Contrary to what has been claimed by some, the UK Supreme Court has not endorsed the immunity scheme—it remains incompatible with our human rights obligations. It is also important to dispel the suggestion that the Government do not have the power to make the remedial order. As I have previously made clear, the conditions for laying a remedial order under the Human Rights Act are that:
“An appeal brought within that time has been determined or abandoned.”
The Government’s appeal regarding the immunity scheme in the legacy Act had already been abandoned. The Supreme Court recognised that, and therefore that was not an issue before it, but it did state very clearly that no exceptions in case law exist to justify the granting of immunity for breaches of articles 2 and 3 of the ECHR.
Finally, I want to make clear why, although we welcome the Supreme Court’s determination of certain aspects of the legacy Act, we cannot leave the statute book as it is. The central underpinning of the legacy Act, which was the immunity scheme, was wrong and has failed, so we need a new system. The troubles Bill is essential for a number of reasons. First, while we know that the commission is capable of doing investigations, it has not delivered so far and it must be reformed. The Bill will implement various changes to address these matters, including reformed governance and enhanced investigatory functions.
Secondly, we need the Bill to avoid endless legal disputes in future—for example, the clauses on interim custody orders will put beyond doubt that the Carltona principle applied in the context of those orders. The Bill will also ensure that all troubles-related cases can be investigated, one way or another.
Thirdly, there is the issue of Irish co-operation. Currently, no information is being shared by the Irish authorities with the commission; the Bill will enable that to happen for the first time, helping to find answers for the relatives of those who were murdered, including service personnel who served our country.
Fourthly, the Bill will enable information to be provided to families through the new Independent Commission for Reconciliation and Information Recovery. Fifthly, we need new and effective safeguards for our veterans and other former service personnel. Crucially, the legacy Act did not provide those protections, and we have developed them for veterans and others who served. As I have made clear, we will be bringing forward more provisions in Committee in response to veterans’ concerns. Simply returning to the legacy Act would leave veterans without immunity or any protections whatsoever.
I am grateful to the Supreme Court for its careful consideration of these matters, and I welcome its judgment. I hope that the combination of this ruling and legislative progress on the troubles Bill will mean that all communities affected in Northern Ireland and the rest of the United Kingdom can have confidence that a reformed legacy commission will be able, where possible, to provide answers to those who have waited far too long to find out what happened to their loved ones.
I commend this statement to the House.
Mr Mark Francois (Rayleigh and Wickford) (Con)
As is traditional, I thank the Secretary of State for advance sight of his statement, in that—as he said himself—the judgment in the Dillon case is a complex one. We on the Conservative Benches certainly agree. I suspect that this judgment will be pored over and, indeed, argued over at considerable length, not least in the other place should Labour’s benighted troubles Bill ever make it there.
I will just make a point about immunity, and the concept that lay behind the Conservatives’ Northern Ireland Troubles (Legacy and Reconciliation) Act 2023. I was serving on the Select Committee on Defence under my right hon. Friend the Member for New Forest East (Sir Julian Lewis)—an excellent Chairman—when, in 2017, we produced an extremely detailed report on this complex issue. In fairness, I think the Secretary of State has read that report. What was proposed by the Select Committee is akin to what the legacy Act turned out to be, and that in turn was based on the South African truth and reconciliation commission.
We never legislated for absolute immunity for anybody; we legislated for conditional immunity, so that if someone who was involved in a troubles-related fatality came forward to give evidence to the Independent Commission for Reconciliation and Information Recovery—I will return to the commission in a moment—the commission could judge whether they had fully co-operated with it, such as by revealing the burial place of one of the so-called disappeared. If the commission believed that that individual had genuinely co-operated in good faith, they would be granted immunity. If not—if the commission felt that that person was lying, dissembling or trying to hide something—the commission could recommend that a prosecution still go ahead. Contrary to the Government’s position, the legacy Act and ICRIR, which the Act established, only ever allowed for conditional immunity. It is important to put that on the record this morning.
I have three specific questions for the Secretary of State about his statement. First, will he say a bit more about the relationship between the Dillon judgment and the Windsor framework? He touched on it, but can he expand? Secondly, as he knows, many of the cases brought against veterans were funded by legal aid in Northern Ireland. He referred very briefly to the implications for legal aid, but can he say something more about that? Thirdly, we heard at business questions a few minutes ago that the Armed Forces Bill will be returning to the House in Committee on 2 June. I was quite involved with that Bill. Under its programme motion, the Northern Ireland Troubles Bill has two days for Committee and remaining stages. When do the Government plan to bring it back to the Floor of the House? Perhaps he could answer that specifically.
I am sad to say that Labour has been cynical today. I humbly remind the Secretary of State that when we debated and voted on the related remedial order back on 21 January, almost a third of the Labour parliamentary party abstained, famously including the Minister for the Armed Forces, the hon. Member for Birmingham Selly Oak (Al Carns). As we all know, he is otherwise occupied today. Even the current Prime Minister abstained. He blew the whistle and sent his troops over the top to vote for this benighted legislation that he did not have the courage to vote for himself.
That brings me to encapsulating exactly what is going on today. While this Government prepare to tear themselves to pieces over a mixture of post-electoral fear and vaulting ambition, what is the Labour party’s absolute priority this morning? It is to advance legislation to facilitate the prosecution of brave Northern Ireland veterans, many of whom gave their lives to uphold the rule of law in Northern Ireland—in essence, to defend all of this around us today. That sums up the Labour party. It has clearly chosen today as a not-so-good day to bury bad news. The very bad news is that despite all its protestations to the contrary, Labour would rather help Sinn Féin chase those who fought for their country. The public will see this for what it is: not a complex legal treatise, but a disgrace.
Hilary Benn
I can agree with the right hon. Gentleman when he describes the judgment as a complex one; he is absolutely right about that. I should make it clear that protected disclosure relating to the location of remains of those murdered by the IRA—in almost all cases, they were buried in the Republic of Ireland—is covered by separate arrangements that were introduced when the independent commission for the location of victims’ remains was created. That had support right across Northern Ireland, because people rightly judged that the most important thing was to enable families to be reunited with the remains of their loved ones. Sadly, there are four individuals whose remains have not yet been found.
The right hon. Gentleman talks about the conditional immunity scheme. The fact remains that if a terrorist who committed one of many horrendous crimes—some of which are being investigated at the moment, such as the M62 coach bombing, what happened at Warrenpoint and the Kingsmill massacre—came to the commission and told the full truth, the last Government’s legislation said that the commission “must”, not “may”, grant them immunity from prosecution.
Hilary Benn
Well, I am afraid it is not a question of nuance. The reason why—[Interruption.]
Mr Speaker
Order. Shadow Minister, you asked the questions; please allow the Secretary of State to answer them without interruption.
Hilary Benn
Thank you, Mr Speaker. The right hon. Gentleman knows that the reason why the immunity provisions had no support from any of the political parties in Northern Ireland and no support from victims and survivors’ organisations in Northern Ireland was that people were outraged by the suggestion that terrorists who committed appalling crimes should be able to walk away scot-free because of those immunity provisions. He also has to recognise that immunity remains incompatible with our human rights obligations.
I turn to the three specific questions that the right hon. Gentleman asked. The first was about the interrelationship between the Dillon judgment and the Windsor framework. Clearly a very important part of the judgment is to do with the Windsor framework. In essence, the issue before the Supreme Court was this: was article 2 of the Windsor framework correctly interpreted by the courts in Northern Ireland when they decided to disapply the immunity provisions and in effect struck them down? The Court said clearly that that was incorrect.
The Government brought the appeal because, although we disagree with immunity as a matter of principle and believe that it never existed, that judgment of the courts in Northern Ireland raised a much bigger question, which could be interpreted in other ways in respect of other policies; hon. Members will have seen some of the issues to do with immigration. That is why the Government brought the appeal, and we now have clarity that article 2 applies to certain things, but it is not capable of the broad interpretation that the Northern Ireland courts had given to it.
Secondly, legal aid is a matter for the Northern Ireland Executive as it is their responsibility.
On the troubles Bill, as the right hon. Gentleman will know, it is a carry-over Bill, and its Committee stage will come early in this new Session. I do not accept what he said about the Bill for the very simple reason that, as he well knows, the basis on which any decisions are taken about prosecutions has not changed and will not change under the legislation that the Government are bringing before the House.
Everybody recognises that with the passage of time, for reasons that all of us understand—and the facts demonstrate it—the chance of further, future prosecutions is rapidly diminishing. I also remind the right hon. Gentleman that any decisions about prosecutions are taken independently by independent prosecuting authorities.
David Smith (North Northumberland) (Lab)
With respect to the shadow Minister, I have to say as someone who ran peacemaking programmes in Northern Ireland and who did a master’s dissertation on the South African truth and reconciliation commission that, sadly, the legacy Act came nowhere near replicating that. Does the Secretary of State agree that as we take forward the Northern Ireland Troubles Bill, we do have both a responsibility to the victims and the survivors and a special duty to our veterans, and that there does not need to be a false dichotomy in creating legislation that supports both groups?
Hilary Benn
I very much agree with my hon. Friend. In the end, the legacy Act failed because it did not command support across all communities in Northern Ireland. How can we hope to make progress if that is the case? What we are trying to do, with the support and scrutiny of the House, is to come up with a system that is fair and reasonable but that enables those many families who are still searching for answers to find them. I hope that what I have said today provides some reassurance, in particular to those representing victims who were crestfallen on seeing parts of the Dillon judgment. I have tried to set out the Government’s commitment to ensuring that we have a system that can command confidence from all.
Mr Paul Kohler (Wimbledon) (LD)
I thank the Secretary of State for advance sight of his statement.
The Supreme Court judgment lays bare the consequences of the previous Government’s catastrophic approach to legacy, which drew a wholly unjustifiable moral equivalence between terrorists and those who serve the Crown. That scheme was declared unlawful and incompatible with our human rights obligations by every court that considered it, and has now been repudiated by this Government. Those on the Conservative Benches who championed it in this House did our veterans no favours, and neither has their ill-disguised and cynical party political mischief-making regarding the remedial order and today’s statement. The Liberal Democrats have opposed the granting of immunity from the outset and maintained throughout that removing it was a legal necessity, not a political choice, and this judgment confirms that we were right.
The Supreme Court set aside the Court of Appeal’s declarations that the ICRIR was incapable of discharging its article 2 investigative obligations. However, that was not an endorsement of the ICRIR’s design. The Court held that the challenges to the absence of legal aid, the absence of provision for next-of-kin questioning of witnesses, and the Secretary of State’s power to restrict disclosure could not succeed as abstract prospective challenges; rather, each of those questions would need to be assessed on the facts of individual cases. That “wait and see” approach is part of the uncertainty that our veterans and their families fear. Will the Secretary of State tell the House what concrete steps he will take in Committee to ensure that genuine, independent protections for veterans are built into the Bill, rather than leaving those safeguards to be resolved on a case-by-case basis?
Hilary Benn
I agree with all of what the hon. Gentleman says about the failings of the 2023 legacy Act, and he has done the House a service in taking Members through the argument as to why it could not be sustained.
As I have repeatedly said to the House, protections are already contained in the troubles Bill, and we intend to bring forward more protections. We have had many discussions with veterans’ organisations, and my right hon. Friend the Defence Secretary and I are determined to ensure that we treat our veterans fairly and with care. The protections will be published in advance of Committee, and then the House will have a chance to debate them. I look forward to that moment.
Fred Thomas (Plymouth Moor View) (Lab)
In Plymouth I represent very many veterans, lots of whom served in Northern Ireland, and I reflect on the fact that the state asked our people to do incredibly difficult things, at enormous personal risk and sacrifice, in a very particular context and with a particular political direction that they were deciphering at the time. Many of those difficult things were necessarily secret, and today we still ask our people to do incredibly difficult things—in secret, necessarily—at enormous personal risk and sacrifice. Many of those people are personal friends of mine. The 2023 legacy Act was unworkable, and we were elected on a manifesto to repeal and replace it. We should do that, but my constituents and my close friends are deeply concerned, as am I. Can the Secretary of State lay out how the troubles Bill will protect them in years to come from being forced into the courts by those who wish them ill?
Hilary Benn
I am grateful to my hon. Friend for his representation of his constituents, and for what he has just said. I join him in paying tribute to those who served with such bravery in Northern Ireland. As he will be aware, the courts and coroners in Northern Ireland have on many occasions recognised the point that was made to the Prime Minister in the opening of the King’s Speech debate yesterday: members of our armed forces had to take split-second decisions. The courts recognise and understand that, and have on many occasions said that what they did was entirely lawful. Nobody who acted lawfully, in line with lawful orders, has anything to fear at all; indeed, the very small number of cases in which members of the armed forces have been convicted for offences during the troubles is evidence of that. The commitment that I give to my hon. Friend, and which I have already given to the Liberal Democrat spokesperson, is that when we come to Committee, he will see the answer to the very fair question that he has put to me about the protections that we intend to put in place, and it will be made absolutely clear that there is no equivalence between those who sought to protect the public in Northern Ireland and those who tried to murder them.
Lincoln Jopp (Spelthorne) (Con)
I thank the Secretary of State for his statement. Unlike others, I have not had the benefit of reading it beforehand, so I hope that he will forgive me when I say that it is very high protein and will take a little while to process. To pick up on the remarks he just made to the hon. Member for Plymouth Moor View (Fred Thomas), with whom I serve on the Defence Committee, about bringing forward more provisions in Committee to respond to veterans’ concerns, the Bill was carried over on a promise that that would be done, so will he update the House on the status of discussions with veterans’ groups to give us some reassurance? Is he in a position to say that they now fully agree with the provisions to protect veterans, which were so lacking in previous versions of the Bill?
Hilary Benn
I am grateful to the hon. Member for his comments, not least because of his service. As he will know, we have been engaged in very close discussion and consultation with many organisations representing veterans. The honest answer to his question is that people will make a judgment when they see the detail of the amendments that the Government are committed to bringing forward, and those amendments will then be carefully scrutinised and debated in the House. Again, we have to strike a balance that is fair and proper, but I assure him that the Government are extremely seized of their obligations to make sure that the arrangements that we put in place are fair to veterans.
What is not fair is to pretend that somehow the immunity provisions contained in the legacy Act were ever going to work. We now know that they were not going to work, they have been found to be incompatible, they had no support in Northern Ireland and they were never commenced by the last Government. We do no service to our veterans by continuing to argue, as some have done, that that is the alternative—it is not.
Alison Taylor (Paisley and Renfrewshire North) (Lab)
The Opposition say that we are somehow letting terrorists off the hook, but is the Secretary of State able to tell the House how many prosecutions there were for terrorist offences during the troubles and how many live prosecutions there are now?
Hilary Benn
The estimates are that between 25,000 and 35,000 paramilitaries were convicted for offences, including murder, bombings and other things, during the course of the troubles. There were four soldiers convicted of troubles-related offences during that time, one of whom was freed on appeal. Since the Good Friday agreement, there has been one conviction of a member of the armed forces, who received a suspended sentence. There are currently 10 live prosecutions, eight of which relate to paramilitaries, including people accused of killing members of the police and our armed forces. That lays to rest the argument that I have heard from some that the paramilitaries are not being pursued any more—that is not the case. Of the two other cases, one relates to the Royal Ulster Constabulary and one relates to members of our armed forces. That gives a very clear indication of where the balance of evidence and effort currently lies.
Jim Shannon (Strangford) (DUP)
I thank the Secretary of State for his statement and for his and his Government’s clarity, which is helpful. This Parliament is the supreme lawmaking body of the United Kingdom of Great Britain and Northern Ireland, and courts must interpret laws, not rewrite them or strike them down based on political sensitivities. That has been made clear and the Windsor framework overreach, weaponised by the courts to override domestic UK human rights and criminal justice legislation, has been rightly stopped, and we thank the Government for that. When will the Northern Ireland Office instruct every Government Department to cease their political games and to do their job and apply the law correctly?
Hilary Benn
I have the greatest respect for the hon. Gentleman, but I do not accept his characterisation or that it is right to accuse the courts of weaponising anything. The courts looked at the case before them and reached a judgment, but the Supreme Court is the highest court in the land and, in the Government’s view, its interpretation of article 2 of the Windsor framework was right: the courts did not have the power to disapply the immunity provisions. That is separate from whether immunity continues to be incompatible—as it does—with the European convention. Secondly, I cannot think of any case where Government Departments are not following the law as it is and as we now understand it to be as a result of a very clear finding by the Supreme Court. That is why I have welcomed that finding on behalf of the Government.
Ben Obese-Jecty (Huntingdon) (Con)
The Secretary of State says that soldiers who complied with a lawful order have nothing to fear. I did not serve in Northern Ireland but I did serve in Iraq and Afghanistan. I know that if I were hauled before the courts to recount my actions from 20-odd years ago to acquit myself, I would be extremely worried about the pressure that would place on me and on my colleagues.
The Secretary of State mentions that there will be changes to the Bill. For those veterans who were not privy to those conversations, will he outline some of the actions that he is prepared to take to address the parts of the Bill that he is not content with, so that they can have a better understanding of how this might change going forward? Members of this House would like to understand what those amendments are likely to be.
Hilary Benn
I quite understand why the hon. Gentleman makes that point, and I thank him for his service on behalf of our country. It is right and proper that it is the House of Commons that sees the detail of the amendments first, and I give the House that commitment.
In addition to what is in the troubles Bill—the hon. Gentleman will see what it says—I have indicated that we are looking at the question of equivalence. The argument has been made strongly to the Government by veterans and others, and I accept it. As I have said at this Dispatch Box on a number of occasions, of course there was no equivalence between those who served the state to protect the people of Northern Ireland and those who were seeking to kill.
We are also looking at how the protections can be overseen to ensure that they work in the way that the Government intended, and at the extent to which both coroners and the commission take into account the circumstances under which those who served were operating at the time, including around things such as orders, instructions and so on. Understanding the context in which split-second decisions were made by those who served is very important to ensuring that there is justice for all.
Tessa Munt (Wells and Mendip Hills) (LD)
Looking to the future, the troubles Bill makes no explicit link between legacy processes and long-term reconciliation initiatives, such as integrated education, sustained community dialogue and cross-community projects. Will the Secretary of State commit to developing a comprehensive reconciliation strategy that connects addressing the past with building a settled, shared future?
Hilary Benn
The hon. Member raises an extremely important point. As I am sure she is aware, our troubles Bill leaves in place part 4 of the legacy Act. Not everything in the 2023 Act was wrong, and that part deals with memorialisation and digitisation of records. I agree with the hon. Member that it is not either/or; these things need to be pursued in parallel. However, for people to be reconciled, it is really important that they are able to feel—in so far as it is possible; it will not be in all cases—that they have finally been given an answer as to how and at whose hands their loved ones died. That is such an important part of enabling people in Northern Ireland who still live in the shadow of the troubles to reconcile themselves with what happened—people come to that in very different ways, as I know from the many conversations that I have had—so that Northern Ireland’s society can move forward. It has already been transformed in the last 28 years and we all applaud that.
Katie Lam (Weald of Kent) (Con)
As the Secretary of State has laid out, the Supreme Court in its Dillon judgment was not able to rule on whether the immunity provisions of the legacy Act were compatible with the European convention, because the Government withdrew that appeal when they came to power. But the right hon. Gentleman must recognise the fear and anger of our soldiers and veterans in response to the changes that the Government have proposed. If the Government felt it was at all possible that these protections for our soldiers and veterans might be compatible with the ECHR, why not test that in the courts? If the Government are convinced that it is not, what better case could there be for leaving?
Hilary Benn
I do not agree with the hon. Member that we should leave the European convention on human rights, because it provides protections for all of us as citizens. The point I was seeking to address—and I thought it was very important to bring clarity to the House in relation to immunity and whether the appeal had been withdrawn—was this. It was argued from the Conservative Benches, because of the Northern Ireland Veterans Movement’s intervention, that in some way the appeal on that matter remained live. It was also put to me that the United Kingdom Supreme Court was likely to rule on the question.
I wanted to come to the House today, at the first available opportunity, to make it quite clear that, I am afraid, those two arguments were wrong. The appeal had been withdrawn. The Supreme Court recognised that, and therefore there was nothing for it to rule on. The incompatibility with the convention of immunity remains, but the Court went out of its way to explain why case law means that there is not an exception on grounds of reconciliation that would in any way justify the immunity provisions that were contained in the last Government’s legislation.
National Security
(1 day, 4 hours ago)
Commons ChamberRead Full debate Read Hansard Text Watch Debate Read Debate Ministerial Extracts
Mr Speaker
Before we come to the national security statement, I should say two things in relation to matters that are sub judice. First, there are a number of live cases relating to recent antisemitic attacks. However, to help manage our discussions on an issue of national importance, I am granting a limited waiver to allow passing references to such incidents, as long as they do not engage in discussion of or speculation around the motivation for, detail of or immediate response to any specific individual incidents.
Secondly, I should inform the House that the case relating to two men spying on behalf of Hong Kong is still technically sub judice until sentencing. However, I am granting a limited waiver so that Members may discuss wider issues raised in the context of this case. Members should not speculate about sentencing issues.
The Minister for Security (Dan Jarvis)
With permission, Mr Speaker, I will make a statement on recent national security developments, including the increase in the national terrorism threat level.
The events of the last few weeks have illustrated the breadth and seriousness of the national security threats that we face from both terrorists and foreign states. In the response to those threats, they have also highlighted the strength and resilience of our world-leading law enforcement and intelligence agencies. Over recent weeks we have seen a series of arson attacks and incidents against British Jews and opponents of the Iranian regime, including the horrifying terror attack in Golders Green, which seriously injured two members of the Jewish community. We have seen the recent conviction of a 21-year-old man who planned to commit a terrorist attack to further his extreme white supremacist agenda. We saw convictions last week against two individuals under the National Security Act 2023 for surveilling and intimidating dissidents on behalf of China, and we are seeing record levels of investigative casework on terror plots, espionage and state-linked threats to individuals.
On 30 April, the Joint Terrorism Analysis Centre raised the UK national terrorism threat level from “substantial” to “severe”. The decision to change the UK’s terrorism threat level is taken independently of Ministers, based on the very latest intelligence. “Severe” means that a terrorist attack is highly likely in the next six months. The threat level was last at “severe” from November 2021 until February 2022. This increase in the threat from terrorism follows the recent stabbing attack in Golders Green, but it is not solely a result of that attack.
The terrorism threat in the UK has been gradually increasing. It is driven primarily by the broader Islamist and extreme right-wing terrorist threat from individuals and small groups based here in the UK. While the UK national threat level reflects JTAC’s assessment of the terrorist threat in the UK, it comes against a backdrop of increased state-linked physical threats, which is encouraging acts of violence, including against the Jewish community. In response, we have announced £25 million of immediate funding to strengthen policing, protect Jewish communities and provide reassurance. This brings the total protective security funding to £58 million this year, the largest investment a Government have made in protecting Jewish communities.
I have also initiated a review of the national threat level system, which currently captures only the threat from terrorism, to ensure that it remains fully relevant and that we are communicating as clearly as possible with the public about the national security threats we face today.
Contest, the Government’s counter-terrorism strategy, sets out a clear framework—prevent, pursue, protect and prepare—which aims to ensure that people can go about their lives freely and with confidence. We are broadening our intervention capabilities to better support those at risk of being drawn into terrorism, through the Prevent programme. We have improved training and guidance for frontline professionals and practitioners to better spot the signs of radicalisation. We are working with technology companies, international partners and Ofcom to tackle online content used to radicalise, recruit and incite terrorism.
Co-ordinated intervention is crucial to reduce the terrorist risk, so we are providing children and individuals with the right support with our interventions centre of expertise, which brings together MI5 and Counter Terrorism Policing with expertise from wider public services. MI5 and CTP work tirelessly to stop terrorist attacks, with 19 late-stage attack plots disrupted since 2020, including a chilling ISIS-inspired plot to target Jewish communities in Manchester using firearms.
We have delivered our manifesto commitment to improve the security of public events and venues across the UK through Martyn’s law, and free expert advice, guidance and training are available to owners and operators of venues and public spaces through the ProtectUK website. Through closer working across the emergency services, we are maintaining strong, multi-agency working capabilities to respond to a range of different scenarios. We keep our preparedness under constant review, and the response is exercised regularly, ensuring that our emergency services can respond immediately to terror attacks, as we saw in their brave response to the violent antisemitic attack in Golders Green.
Terrorism and state threats are sometimes interrelated, as we have seen with threats from states such as Iran, and the wider use of both terrorist groups and proxies by state actors, including Russia. We face a sophisticated and persistent challenge in responding to China, which presents a unique set of threats to the United Kingdom. The case last week demonstrates that we have the tools to successfully respond to that challenge, and Members across the House will know that a jury delivered its verdict following the nine-week trial of Bill Yuen and Peter Wai. The jury found both individuals guilty of assisting a foreign intelligence service—in this case, the Hong Kong police force—under the National Security Act. Wai was also found guilty of misconduct in public office.
The verdict represents the first convictions under the National Security Act related to China, and it sends a strong message that the full force of the law will be applied to anyone who carries out hostile acts in the UK on behalf of any foreign state. Both individuals held positions of power, leveraging these to conduct hostile activity on UK soil on behalf of China. It is simply unacceptable that an employee of a foreign power was conducting a shadow policing operation in the United Kingdom. That is why the Chinese ambassador has been summoned, and the Foreign Secretary will be making it clear to Hong Kong’s Chief Executive that this type of activity was, and will always be, unacceptable in the United Kingdom. The Foreign, Commonwealth and Development Office has also made it clear that Yuen’s employment at the Hong Kong Economic and Trade Office must be terminated immediately.
The trial has understandably caused considerable concern within the UK among the Hong Kong community. The safety and security of Hongkongers in the UK is paramount. That is why my officials have been working closely with the National Protective Security Authority to deliver new guidance on transnational repression. The guidance provides examples of what transnational repression might look like and what to do if anyone feels under threat from any state.
Transnational repression from China, however, is just one type of state threat activity. That is why the Government are taking decisive action across a much broader range of state threats. We are: rolling out new training for police officers and staff to increase their understanding of state threats; driving forward the counter-political interference and espionage plan, to protect the UK’s democratic institutions and processes; bringing forward in the coming weeks fast-track legislation that will clamp down on individuals and groups carrying out hostile activity for foreign states, including those who act as their proxies, and which will include new proscription-like powers to ban the activities of state-backed organisations that pose a threat to the UK’s national security; and implementing all the recommendations made last year by Jonathan Hall KC, the independent reviewer of state threats legislation. We are responding to state threats in all their forms.
National security is the first duty of Government. As this House knows, that duty includes being able to respond to a range of threats. We are giving our police and intelligence services the resources they need for that vital role. Last year we provided an extra £140 million for Counter Terrorism Policing, plus nearly £600 million more for our intelligence services. This takes their funding to record levels.
Protecting our communities and standing up to hatred and intolerance is a shared responsibility of every person in the UK. I urge the public to remain vigilant and report any concerns they have to the police. Their contribution is a vital part of our efforts to keep our country safe.
Support to the victims of terrorism is a moral duty, and I would like to acknowledge the profound and enduring impact on the survivors and families of those affected by the attacks in Golders Green, and all terrorist attacks, whose lives have been forever changed.
I want to close by thanking those individuals serving in our police and security services for their dedication to keeping our country safe, and the public for their continued vigilance. We owe them all a debt of gratitude. I commend this statement to the House.
Matt Vickers (Stockton West) (Con)
I thank the Minister for advanced sight of his statement and for his recognition of the importance of working together across the House to make our country safer.
The attacks against the Jewish community in recent months have been devastating. As the Leader of the Opposition and the independent reviewer of terrorism legislation have said, this is a national emergency. The Government noted that the raising of the terror threat level was not solely a consequence of the attack in Golders Green, but we can all see how this community has been targeted. Our thoughts remain with the victims and their families.
We have to speak honestly about what is going on. We have to call out hate when we see it. Jewish people in Britain are 12 times more likely to be a victim of hate crime than any other group. We cannot allow this to go on. That requires not just warm words but robust action. That means authorising the surveillance powers usually reserved for counter-terrorism, which the Minister referenced today, to identify and prevent antisemitic attacks that are being planned. Furthermore, foreign nationals who express antisemitism, support extremism or endorse terrorism should be deported. The Government should place a moratorium on hate-fuelled pro-Palestine marches, because we can see the way in which they are being used as a cover to promote violence and intimidation against Jewish people.
Furthermore, although I welcome the Government’s announcement of legislation in the King’s Speech, they need to act at speed. Steps need to be taken to proscribe groups that fuel this hatred, such as the Islamic Revolutionary Guard Corps. This was recommended almost 12 months ago. I hope it is now a top priority for the Government. Conservative Members on this side of the House stand ready to support its implementation.
Ultimately, the measures outlined do not begin to cover the full extent of the action needed to stop this evil. We need to tackle the underlying ideologies that threaten our national security. It is therefore critical that the Government focus on the ideologies that pose the greatest threat. As I told the House during the statement on antisemitic attacks in April, 75% of MI5’s terrorism caseload relates to Islamist extremism, and 94% of terrorist murders over the past 25 years have been perpetrated by Islamist extremists. However, we have seen a decrease in Prevent referrals relating to Islamist extremism. Only 10% of the current Prevent caseload relates to Islamist extremism. Can the Minister explain what more the Government will do to address that disparity and ensure that we tackle Islamist extremism effectively?
Equally, talking about the threat posed by China is not an abstract matter. There are people in this country who have had bounties placed on them and who face threats because of the Chinese regime. Police officer David Wilson recently published his report into Chinese organised crime links to the Chinese state, including its intelligence services, diplomatic service and the United Front Work Department. The report demonstrates how Chinese intelligence services, and even diplomats, work with organised crime networks to supress dissidents and intimidate British-Chinese communities and students into compliance. I therefore ask the Government, as many of my colleagues have before, to place China in the enhanced tier of the foreign influence registration scheme.
We share the Government’s concerns about the continued threat posed by Russia. Will the Minister join me in condemning the fact that Russia has issued an arrest warrant for our former colleague Ben Wallace? Does he agree that this is totally unacceptable, and will he endeavour to look into the matter?
The increase in the threat level illustrates the risks posed to this country. Many of the measures set out by the Minister will be welcomed, but I believe we need a fundamental shift that reflects the scale of the threats facing the country, and particularly the Jewish community. We must maintain an absolute focus on stamping out the ideologies that fuel hatred and undermine our national security. I believe that is how we pay tribute to those who have been victims of these devastating terrorist attacks.
Dan Jarvis
I am grateful to the shadow Minister for his sensible and reasonable approach this morning. I agree that, wherever possible, we should seek to work on these matters on a cross-party basis, and that is absolutely my approach.
I agree with the shadow Minister about the appalling and abhorrent attacks on the Jewish community that we have seen recently. I hope that he understands that the Government are absolutely committed to dealing with that poisonous hatred. I spelled out in my statement some of the measures that the Government have taken and will continue to take. However, the shadow Minister is right to hold us to account. This is not about warm words; this needs to be about deeds. That is precisely why we have allocated more funding to support that activity than has previously been the case.
We will take every opportunity to ensure that our response, collectively as a nation, is proportionate to the nature of the threat faced by British Jews across the country. It is abhorrent that any British Jew might feel the need to lead a smaller Jewish life, and I hope that there is complete agreement on that across this House. I give the shadow Minister and the House my absolute assurance that we will do everything we can to ensure that our Jewish communities not only are safe, but feel safe.
Entirely reasonably, the shadow Minister raised concerns about hate marches and protest activities that have taken place, and that may seek to take place in the future. Again, I hope that it is a point of consensus to say that the right to protest is fundamental to our democracy. At the same time, however, this cannot cross the line into unlawful or violent behaviour.
The police do have a range of existing powers that enable them to tackle unlawful behaviour, including at marches. It is important to note that new powers will soon be introduced by measures contained in the Crime and Policing Act 2026, which received Royal Assent at the end of April, to further restrict intimidatory protests, particularly around places of worship, with the addition of new offences around face coverings at protests. The Act also places a duty on senior officers to take account of the cumulative impact of protest activity when considering whether to impose conditions on a protest, so the police will be able to force protests that follow the same routes time and again to change the route or time of a protest. As right hon. and hon. Members will be aware, the Home Secretary has asked Lord Macdonald to lead an independent review of public order and hate crime legislation, and we look forward to receiving his recommendations in the near future.
The hon. Gentleman made an entirely reasonable point about the disparity in the Prevent caseload. Although he is right about that, I hope he would acknowledge that that is not a new challenge; it has been faced by both the previous Government and this Government. As he will be aware, we have appointed a new independent Prevent commissioner. I will be meeting him later today, and I categorically guarantee that this matter will be on the agenda for our discussion. We take the hon. Gentleman’s point very seriously, but I know that he will understand that it is not a new challenge for Government.
The hon. Gentleman referred to China. I hope I was clear earlier about my concern over the unique range of threats that China levels against the United Kingdom. I hope that he would accept that there are areas where we need to co-operate closely with China, and that there is always a balance to be struck, but I do give him an absolute assurance that national security will always be our priority.
The hon. Gentleman mentioned FIRS, which I suspect other hon. Members may also take this opportunity to mention. FIRS is still a relatively new tool. I am making sure that we are able to draw the maximum operational benefit from it, and any decisions will be communicated to Parliament in the normal way.
Finally, I want to respond to the hon. Gentleman’s point about Ben Wallace. Let me be crystal clear: the accusations that have been made about Ben Wallace are completely unacceptable. Ben Wallace has served our country. For reasons that the hon. Gentleman will completely understand, I am not going to get into the individual security arrangements for Mr Wallace— I cannot and will not comment on operational or intelligence matters—but I can say that I have met Ben Wallace to discuss the concerns that have understandably been raised. I am in touch with him. I will ensure that we continually assess the nature of the threats to individuals and their safety, and that the Government will absolutely be on the front foot in identifying and investigating such threats and will use all appropriate measures to defend against those threats. Any attempt by any foreign Government to coerce, intimidate, harass or harm their critics in the United Kingdom, including Mr Wallace, will not be tolerated.
Rachel Hopkins (Luton South and South Bedfordshire) (Lab)
I thank the Minister for his statement on national security threats and the swift response to this heightened threat. The horrific recent increase we have seen in antisemitic attacks and acts of anti-Muslim hatred is causing understandable anxiety in diverse communities such as mine in Luton South and South Bedfordshire, despite great partnership working between Luton council, Bedfordshire police and our voluntary and community sector. Will the Minister reassure my constituents that the Government will continue to work with local authorities and police forces to provide the guidance and resources needed to keep communities safe and build social cohesion efforts to support strong and unified communities?
Dan Jarvis
I am grateful to my hon. Friend, who makes an important point. The relationship with local government is absolutely mission critical, and I work very closely with not only local government right across the country and the devolved Administrations, but ministerial colleagues in the Ministry of Housing, Communities and Local Government. She is right to raise the importance of social cohesion. She will know that that Department has led a piece of work recently, but it is very important that that is wired right across Government. The defending democracy taskforce, which I chair, provides a fulcrum point across Government to work closely with the police, local authorities and the security services to ensure that we have the right approach and response to the threats we face. Ensuring social cohesion and tackling the kind of vile online abuse that we have seen in recent times is an absolute priority for this Government.
Mr Will Forster (Woking) (LD)
Week after week, British Jews are being attacked, intimidated and persecuted. We have seen what has happened at Heaton Park synagogue, Kenton United synagogue, Finchley Reform synagogue, and Jewish Futures in Hendon, and to the Hatzola ambulances, and more recently, there have been the Golders Green stabbings.
The independent reviewer of terrorism legislation, Jonathan Hall, is right to call these appalling levels of antisemitism a “national security emergency”. He is also right to say that laws must be properly enforced, especially as the UK’s terror threat was raised to severe last month. Members of the Jewish faith in my constituency attend the North West Surrey synagogue, which is in the constituency of my hon. Friend the Member for Runnymede and Weybridge (Dr Spencer)—I call him my hon. Friend, despite the normal convention, because on this issue, in this House, I hope there is more that unites us than divides us. We must collectively fight antisemitism.
I want a future in which Jewish congregations can gather free of fear and have a Government who support their safety. In this climate, it is absolutely right that the Government take urgent action, but I question whether broadening the scope of Prevent will be enough, given the modern threats that we face. In the Southport and Golders Green attacks, we saw the abject failure of Prevent. It is clear that a full overhaul of Prevent is needed; warning signs must not be missed again. Yesterday’s King’s Speech confirmed the Government’s intention to introduce national security legislation, but this must be a priority. Please can the Minister confirm that the legislation will include an overhaul of Prevent, and set out the timetable for the Bill’s introduction?
Finally, the Liberal Democrats have long called for the Islamic Revolutionary Guard Corps to be proscribed. As Jonathan Hall has made clear, existing powers are already sufficient to proscribe the IRGC. That being the case, why have this Government dragged their feet and delayed action to proscribe the IRGC and keep British Jews safe?
Dan Jarvis
I am grateful to the hon. Member for his questions. I agree with the concerns that he rightly expressed about antisemitic activity in our country. He will have heard the points that I made about protective security, but protective security is only part of our response. It is very important that we tackle the underlying causes. That is why—I hope that he will acknowledge this—there is a lot of activity in different parts of Government to attack antisemitic activity and behaviour wherever it rears its ugly head, whether in our NHS or our schools, colleges and universities. It is a real priority for the Government that we not only provide appropriate protective security but tackle the underlying causes of the abhorrent antisemitism that we have seen in recent weeks.
The hon. Member mentioned Southport. Sir Adrian Fulford recently published his response to phase 1 of the Southport inquiry, and I met him to discuss it. He has already got phase 2 under way. It is a hugely important piece of work that he is undertaking, and he will obviously have the Government’s full support in completing it. We look forward to receiving his recommendations in due course.
The hon. Member referenced Jonathan Hall KC and forthcoming legislation. I made a commitment in my introductory remarks to enacting all the recommendations that Jonathan Hall made in the previous parliamentary Session. I can give an assurance that the state proscription tool that we have committed to introducing will be fast-tracked. That piece of legislation was announced in the King’s Speech, and we will move as quickly as we can to get it on the statute book. I look forward to hopefully having his support, and the support of right hon. and hon. Members from across the House.
David Pinto-Duschinsky (Hendon) (Lab)
I thank the Minister for his statement. As Members of the House will be all too painfully aware, our Jewish community in north-west London, including in my constituency, has been subject to repeated despicable antisemitic attacks in past weeks. Our Iranian community has also been attacked. In my constituency, I also have many members of the Hong Kong community, who live under the shadow of transnational repression.
Given that context, I warmly welcome the Government’s announcement in the King’s Speech of fast-tracked legislation to deal with hostile state threats. Can the Minister share more details of the timetable, so that we can get that welcome and essential piece of legislation on the statute book as quickly as possible?
Dan Jarvis
My hon. Friend has been a diligent representative of his constituency, and I know that he takes these matters incredibly seriously. I hope that he understands this Government’s commitment to tackling antisemitism. He mentioned that in his constituency he has members of the UK Hong Kong community, so let me briefly say a word about them. Any foreign state-directed crime against an individual in the UK will never be tolerated, and the attempt to intimidate and harass members of the Hong Kong community is absolutely unacceptable. Hongkongers play an incredibly important role in our public life. I give him and them an absolute assurance that we will do everything we can to protect them.
My hon. Friend asked specifically about forthcoming legislation. He will understand that we take a range of measures to guard against the threat we face from malign actors and hostile states. It is a priority to introduce this legislation as soon as we are able. I will take it through Parliament, and we intend to fast-track it. I intend to bring it forward in the near future.
Bob Blackman (Harrow East) (Con)
Proscription of the IRGC is long overdue, and I welcome the Government’s commitment to taking the necessary legal action to ensure that happens, but the Minister will be aware that I raised with him a year ago the fact that 13 charities based in this country have been banned in Arab countries. They are directly linked to Tehran: they take their orders from Tehran and get their funding from Tehran. Equally, there are assets across London, in both finance and property, that are directly linked to the IRGC and the theocracy in Iran. All of that is used to undermine the Jewish way of life in this country, so will he now take the necessary action? Why is the ambassador from Tehran still here? Why is the Iranian embassy still open? Why are these charities still operating in open defiance of what is necessary for proper order in this country?
Dan Jarvis
I am grateful to the hon. Gentleman for his points, and for his acknowledgment of our intention to introduce legislation that would allow the UK Government to proscribe state-backed entities. He will know that a range of measures have already been leveraged against the IRGC, which is sanctioned in its entirety. I think it was back in November last year that I announced a range of measures to defend against the threat that we undoubtedly face from Iran.
The hon. Gentleman’s point about charities is entirely reasonable. We work across Government, including with the Department for Culture, Media and Sport and the Charity Commission, to tackle the kinds of behaviours he describes. He makes a reasonable point; I will take it away, and come back to him with a further update on the work we are doing. Good work is under way. I hope that he gets a sense, not just from the statement but from the various interactions and exchanges we have had over many months, of how seriously we take these issues. If he wants to discuss them with me further, I would be happy to.
Dr Scott Arthur (Edinburgh South West) (Lab)
I thank the Minister for his statement and his unequivocal support for the Jewish community. I am proud to have an Iranian community in Edinburgh South West. They are concerned about people in that community who speak out against the Iranian regime, particularly journalists, who they fear may be persecuted in the UK. What are the Minister and the Government doing to protect people who speak out against that awful regime? I echo the point made by the hon. Member for Harrow East (Bob Blackman), who is a fantastic champion for the Jewish community in the UK: if we have any evidence that Iran is behind some of the attacks we have seen on British soil, why do we not simply close its embassy? We do not have to wait for legislation to do that.
Dan Jarvis
My hon. Friend raises an important point, and let me reiterate the Government’s position that the targeting, harassment and coercion of anybody here in the United Kingdom, including, of course, the Iranian community and journalists, is completely unacceptable. On what we are doing to counter the threat from Iran, we have now sanctioned more than 550 Iranian individuals and entities and have placed the whole of the Iranian state, including Iran’s intelligence services, the IRGC and MOIS—the Ministry of Intelligence and Security—on the enhanced tier of the foreign influence registration scheme. Importantly, we have also rolled out new training for all frontline police officers on state threats, so at a localised level—of course, this will be the case in Scotland as well—police forces have the insight and knowledge to identify and investigate the type of activity that he describes. But I give him an assurance of the seriousness with which we treat it, and we will stand firmly against the threat from Iran.
Ben Obese-Jecty (Huntingdon) (Con)
I want to touch on state threats. I appreciate what the Minister said about the enhanced tier of the foreign influence registration scheme as it applies to China. Could he inform the House whether Bill Yuen and Peter Wai were registered on FIRS for their role as Chinese state employees? On Russia, on 5 May the Amur-class repair ship PM-82 was spotted around the Galloper wind farm. What steps is he taking to ensure that our offshore infrastructure is protected from Russian-state threats?
Dan Jarvis
I am grateful to the hon. Member for his continued advocacy of FIRS. It is an important operational tool. It is still relatively new—it will be a year old on 1 June—and it is the Government’s intention to bring forward an annual report to update Parliament on the progress that we are making with it. I cannot get into the specific registration of the two individuals that he has referenced, but I can tell him—I think he will know this, because he knows a lot about FIRS, but I say it for the benefit of other Members—that countries are considered separately, and decisions are made on a robust evidence base. I am not able to get into speculation about what further decisions may be made, but those will be communicated to Parliament in the normal way.
On the hon. Member’s second point about our wider resilience, that relates to my Cabinet Office responsibilities, but I give him an assurance that we are working across Government, including with partners in the Ministry of Defence, to guard robustly against the kind of threats that he describes.
David Burton-Sampson (Southend West and Leigh) (Lab)
I thank my hon. Friend for his statement, and for the work that the Government are doing to protect the Jewish community. My thoughts are with all those who have been victims of these attacks, and of antisemitism and hate crime. In my constituency of Southend West and Leigh, we have quite a significant and diverse Jewish community—Orthodox, Reform and Haredi. They are scared and concerned, and my concern after meeting some of those communities over recent weeks is that some do not know how to access the support available to them. Could my hon. Friend give them some advice?
Dan Jarvis
I am grateful for the points that my hon. Friend has raised, and for his reference to the importance of remembering the victims of terrorism. It is an important part of my responsibility that we ensure that we have appropriate support for those who have been subject to terrorist activity. That is why we are progressing, as a priority, work to deliver a new victims hub, which will offer an enhanced service for those who have been victims and their families, as well as developing a proposal to hold a national day of reflection to properly remember all those who have been the victim of terrorism.
On the points that my hon. Friend makes about British Jews in his constituency, I completely share other hon. Members’ thoughts about the unacceptable nature of the threats that we have seen in recent times. It is the responsibility of all of us to stand against those threats. That is an important priority for the Government, as I am sure it is for local authorities and police forces right around the country. If he has specific points of concern about the way that we are communicating information to members of that community, I would be happy to take that up with him offline.
Seamus Logan (Aberdeenshire North and Moray East) (SNP)
I commend the Minister on his statement, particularly his peroration about how standing up to hatred and intolerance is the shared responsibility of every person in these islands. The Scottish Government have been working closely with Police Scotland and relevant partners to ensure that safety for Jewish communities and their places of worships is protected, and they will continue to do so throughout the new Scottish parliamentary Session. The additional funding of £25 million to protect Jewish communities and deal with the other threats that the Minister described is welcome. Can he confirm that full Barnett consequentials will be made available to help Police Scotland with its work in that area?
Dan Jarvis
I am grateful to the hon. Member and he is right: I believe that this is a shared endeavour across the House and across our country. I was pleased to discuss these matters recently with the First Minister, and I have received positive correspondence from him. I hope the hon. Member will forgive me if I do not respond to him now on the precise point about Barnett consequentials, but I will write to him.
Fred Thomas (Plymouth Moor View) (Lab)
I join colleagues across the House in strongly condemning the ongoing campaign of attacks and intimidation against our British communities, and I thank the Minister for his leadership on those and other security matters. He said that he has initiated a review of the national threat level system, which currently captures only the threat from terrorism. Can he expand on that? Does he mean that, following review, it will now capture the threat from state-based actors and other countries? Can he do that in the light of the fact that one key theme of last year’s strategic defence review was that we need an open, national conversation that is not behind closed doors, in the light of both ongoing delays to the defence investment plan and many colleagues across the House needing to understand better the threat that this country is under, and some of the funding decisions that we need to make to keep our citizens safe?
Dan Jarvis
My hon. and gallant Friend has asked an astute question. He obviously heard my reference to the initiation of an internal piece of work, and a review of the national terrorism threat level. In truth, that has long been on my mind, and I want to satisfy myself that current arrangements are fit for purpose. Those current arrangements have served our country fairly well for a number of years, but I feel as if they have now been overtaken by events. It is therefore appropriate to look carefully at the way the threat level is not only calibrated, but communicated, and I want a system that makes some sense to the public. We will look carefully at that.
I will consider the recommendations over the coming months, and I am obviously happy to discuss the matter further with my hon. Friend and other Members. He made a further important point about the strategic defence review and the need to have an ongoing conversation with the public, and he is right to remind us of that. I discuss such matters not only with colleagues across Government, but also with our European partners who, it is not unreasonable to say, have taken a somewhat more forward-leaning approach than UK Governments going back a number of years. We must ensure that the public understand the nature of the threats we face, and do so in a way that ensures they are alert but not alarmed.
Christine Jardine (Edinburgh West) (LD)
I welcome the statement because the issues that the Minister raises, particularly the antisemitism that we have seen grow exponentially and frighteningly in this country, and issues with the Chinese embassy, which are particularly relevant in my constituency, are concerns that we hear from our constituents all the time. For that reason, will he tell us a little more about the tackling state threats Bill and the national security Bill, as well as measures to tackle antisemitism, which he says must be passed without delay? What sort of timetable are we looking at, and how quickly can we have those measures to reassure the public that everything is being done?
Dan Jarvis
I am grateful to the hon. Lady, as I always am, for the points that she has made. She mentioned the Chinese embassy, so I hope she will forgive me if I seek to provide her with a word of reassurance on that matter, because I know it has been somewhat controversial in this House and elsewhere. Our intelligence agencies have been involved throughout the process, and an extensive range of measures has been developed to manage any risks. Following extensive negotiations, the Chinese Government have agreed to consolidate their current seven sites in London into one site. I hope she will acknowledge that that brings very clear national security advantages.
As for the timeframe, we are seeking to fast-track the legislation through Parliament, and it is a priority. I intend to bring it forward very soon and to do it in a way that I hope will be collegiate, with Members right across the House. We made a commitment that we would introduce this legislation; we need to get on and do it, and that is what I intend to do.
Phil Brickell (Bolton West) (Lab)
I thank the Minister for his careful and considered remarks and for setting out very clearly in his statement that the safety and security of Hongkongers in the UK is paramount. I also thank him for his remarks about new legislation announced in the King’s Speech to tackle hostile state threats and about the two convictions under the National Security Act last week, which regard the activities of two individuals on UK soil who leaked to the Chinese foreign intelligence service.
Hongkongers in my constituency live with the threat of transnational repression day in, day out, and they are petrified of the activities of Beijing and Hong Kong authorities on British soil. What assurances can the Minister give me that the activities of the Hong Kong Economic and Trade Office are being properly monitored and that the UK Government will not allow for that institution to be misused by Chinese or Hong Kong authorities to engage in that form of transnational repression?
Dan Jarvis
My hon. Friend raises a very important point, and I can give him the assurances that he seeks. He will have heard in my introductory remarks that the Chinese ambassador has been summonsed, and he will have heard the determination of the Foreign Secretary to illustrate the completely unacceptable nature of the kind of activities that we have seen in recent times. I have personally been in touch with members of the Hongkonger community just this week to provide reassurances, but I want to work closely with my hon. Friend to ensure that those assurances are not only heard, but felt. If he thinks that we can and should be doing more, I would be very grateful to be able to discuss that with him.
Greg Smith (Mid Buckinghamshire) (Con)
The level of fear felt by British Jews is nothing short of a national emergency and requires the most urgent and rapid action. The last time that the Minister stood at the Dispatch Box, just before the last Session ended, I raised with him the case of the south Buckinghamshire Jewish community. While I welcome his commitment to increased funds, they still find themselves falling between the cracks for grant funding, because they do not have a building of their own and meet in different venues from time to time. I have sent him the details, so may I plead with him to look at that issue very urgently? Will he help me find a way to ensure that all my constituents and British Jews from neighbouring constituencies who are members of the south Buckinghamshire Jewish community can genuinely feel safe and that action comes very rapidly?
Dan Jarvis
I feel that fear, as I think we all do in this place. The hon. Gentleman has assiduously represented the concerns of Jewish communities in his constituency. I knew that he would send a letter, having given a commitment to do so, but I confess that it has not been put in front of me. I give him a guarantee that I will go back to my desk and look at his letter straight away.
Jim Shannon (Strangford) (DUP)
I thank the Minister very much for his determination and the determination of his Government to protect all the citizens of the United Kingdom of Great Britain and Northern Ireland, and I endorse his comments about the police, MI5 and MI6. We have individuals collectively doing the hard work to try to worm out the malcontents.
I have long bemoaned the lack of action against Chinese overreach, which sees spy work carried out against British nationals in this country. Some Hongkongers living in my constituency feel threatened daily by Chinese officials, whether it be from someone spying on them or following them. I have railed against the blatant antisemitism culminating in the stabbings in Golders Green. Along with the hon. Member for Harrow East (Bob Blackman), I stand alongside the Iranian Government in exile and Maryam Rajavi. The Iranians tell us that they feel threatened daily in this country for standing up for liberty and freedom in Iran. I have highlighted the sop to republicans that embraces republican glorification of terrorism, which led to car bombs in Northen Ireland just last month. This nation’s security is tied to our ability to act, so what will the Government do to secure our national interest and the safety of all our citizens in this great democracy of the United Kingdom of Great Britain and Northern Ireland?
Dan Jarvis
I am grateful to the hon. Member, as I always am. He has a very long and proud record of standing against terrorism—he knows a lot about it from his experiences in Northern Ireland—and he is also right to pay tribute to those who serve in our police forces and our intelligence services, who work tirelessly around the clock to keep us safe. We all owe them a huge debt of gratitude.
The hon. Member is right to highlight a number of concerns. I can assure him that we take these matters incredibly seriously; he will have seen the measures that were announced in the King’s Speech yesterday, which will complement our existing legislative framework. However, I give him an assurance that if there is a requirement to do more—to add to our toolkit, to make sure we are best prepared to guard against the nature of the threats we face—we will not hesitate to act.
Lincoln Jopp (Spelthorne) (Con)
I thank the Minister for his statement today, and for the gravity with which he has approached this statement and his job while others in Westminster are being distracted by noises off. I completely agree with him that it is totally unacceptable for a foreign state to be conducting shadow policing operations on UK soil, and I welcome that he said that the Foreign Secretary has called in the Chinese ambassador. However, he will also be aware that, if press reports are to be believed, the Chinese embassy in London issued a statement on Sunday in which it called on the UK Government to
“stop wantonly arresting and convicting Chinese citizens”
on “trumped-up” charges. It is clear that we are miles away from one another, so will the Minister encourage the Foreign Secretary to throw the book at them?
Dan Jarvis
I am grateful to the hon. and gallant Member for his contribution, as I always am. He knows me well enough that I can be quite candid with him in saying that I do not think the Foreign Secretary will need any encouragement from me. She will share the concern of Ministers right across this Government about the recent activity—she will have seen that very clearly when she served as Home Secretary. I agree that the kind of activity he describes is totally unacceptable, and this Government will absolutely stand against it. We are constantly making sure that we have the right legislative framework, toolkit and resources to guard against the nature of the threats we face, including from China. It is completely unacceptable that any nation, whoever they are, think that they can undermine our freedom of speech, our democracy and our sovereignty. It is not going to be allowed to happen.
Tessa Munt (Wells and Mendip Hills) (LD)
I thank the Minister for his statement. He has confirmed the roll-out of new training for police officers and staff to increase their understanding of state threats. Will that training be mandatory for officers in all police forces and all police roles, including police community support officers and special constables as well as back-office staff? How will it be implemented? Will it be in person or online? If it is online, will it be passive or active? Are participants just going to tick a series of boxes when they have read stuff, or are they actually going to be in an interactive session? How long will the first sweep of those staff take? I am very happy for the Minister to write to me about these matters, but the sweep through existing staff might take quite a long time. Has he given any consideration to including in that training people who have a lot of frontline experience, such as staff from the Department for Work and Pensions, health, social services and local authorities?
Dan Jarvis
The hon. Lady makes an important and helpful point. I can give her an assurance that I discuss these matters with policing colleagues regularly. I hope she will understand that it is probably not for me, as the Security Minister, to be delving into the individual arrangements that different police forces have, but I am confident that all police forces understand the benefit and the importance of this training activity in the way that she has described. Let me consider further what she has said, and I will write to her with a more considered response.
Point of Order
(1 day, 4 hours ago)
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David Burton-Sampson (Southend West and Leigh) (Lab)
On a point of order, Madam Deputy Speaker. On 29 April, my hon. Friend the Member for Portsmouth North (Amanda Martin) and the hon. Member for Lewes (James MacCleary) raised a point of order concerning the right hon. Member for Newark (Robert Jenrick) visiting their constituencies without notifying them. In response, Mr Speaker reminded the House of the importance of the courtesy of doing so, but his advice seems to have been ignored. The right hon. Member for Newark shared a post on his social media just last week on a visit to my constituency and did not have the courtesy to notify me either— unlike his boss, the hon. Member for Clacton (Nigel Farage), who visited recently and emailed just as his bus was rolling into the constituency; perhaps he was a little bit lost on his way to Clacton. Madam Deputy Speaker, can you please advise me in relation to this matter concerning the right hon. Member for Newark?
Madam Deputy Speaker (Judith Cummins)
I am grateful to the hon. Gentleman for his point of order, and I note that he has given advance notice of it to the right hon. Member for Newark. As Mr Speaker reminded the House yesterday, all Members should inform others in advance of visits to their constituencies, except where that visit is purely for private purposes. The hon. Gentleman has put his point firmly on the record.
Bills Presented
Debate on the Address
Getting Britain Working Again
(1 day, 4 hours ago)
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The Secretary of State for Work and Pensions (Pat McFadden)
It is a pleasure to open today’s King’s Speech debate on behalf of the Government. As His Majesty said yesterday, we are living in
“an increasingly dangerous and volatile world”.
This debate is about the labour market, so let us start with some facts. We have 332,000 more people in work than a year ago; the third highest employment rate in the G7; unemployment lower than most OECD countries and lower than the EU average; unemployment down in the three months to February; and economic inactivity down by over 350,000 since the election—it is lower today than in 13 of the 14 years of the previous Government. Since the general election, real wages are up by more than in the first 10 years of the last Government, and this morning’s growth figures were up by 0.6% in the first quarter of this year—services up by 0.8% and construction up by 0.4%. That is the fastest GDP per capita growth in four years and the highest GDP growth in the G7 reported this year. That is on top of GDP per capita growth last year, and on top of six interest rate cuts since the general election. Our economic management has put the UK in a stronger position, better placed to weather the storm of global shocks, and better placed to weather the volatility of which His Majesty spoke yesterday.
The leadership task for the country now is to lead the country through the consequences of what is happening in the middle east, because there is no doubt that the shock from the Iran war and the continued closure of the strait of Hormuz is real. It will affect prices, it will affect jobs and it will affect growth. Our Prime Minister took the decision to keep us out of that war, but the UK, like most countries, will be affected by its consequences.
However, none of those consequences were thought about by the Leader of the Opposition or the leader of Reform when they were urging us to get involved. What did the Leader of the Opposition say?
Ben Obese-Jecty (Huntingdon) (Con)
The Secretary of State and many of his Front-Bench colleagues keep reiterating that point. He keeps saying that, but I do not believe it is true. Will he explain exactly what he thinks the Leader of the Opposition wanted to do in those circumstances?
Pat McFadden
Let me read this out for the hon. Gentleman. The Leader of the Opposition said that the Government were
“too scared to make foreign interventions”.
She also said:
“I say to Labour MPs that we are in this war whether they like it or not. What is the Prime Minister waiting for?”—[Official Report, 4 March 2026; Vol. 781, c. 803.]
That is what she said.
As for the leader of Reform, the hon. Member for Clacton (Nigel Farage), he said:
“We should do all we can to support the operation. I make that perfectly, perfectly clear.”
Instead of trying to douse the flames, they sought to pour as much petrol on them as possible. They would have jumped in with both feet, displaying not only a failure of judgment but a total disregard for the price that will be paid by British consumers in higher prices and higher interest rates. That is how much they cared about keeping Britain working when it came to the biggest judgment that this country has had to make for a long time.
The Conservatives’ record when in office was: the lowest business investment in the G7; wages flatlining for their entire period in office; the worst Parliament on record for living standards; and the public finances trashed as debt soared. The reason I point that out is that month after month, and nowhere more than in the arena of welfare, the Conservative party finds things that it is outraged about in the system that it built, it designed and it created.
Before I come to the system itself, let me state something that is obvious but too often left out of these debates: the welfare system is often the end of a process in people’s lives, not the beginning. I will tell the House what contributes to higher welfare bills and to people not working: hollowing out the NHS and leaving one person in seven on waiting lists, with a higher likelihood that they are unfit for work; increasing child poverty by 700,000, making it less likely that children will be ready for work when they leave school; explicitly rejecting the post-covid education recovery plan, and doing nothing about rocketing absenteeism from schools; neglecting our town centres and high streets, leaving too many places without hope or confidence in the future; and presiding over a 40% decline in youth apprenticeship starts, kicking away the first step in the career ladder for those who lose out. You cannot do all that and then stand at the Dispatch Box and credibly express outrage about the rise in benefit bills. It did not come from nowhere, and if we are going to tackle this area, we have to understand that.
Harriet Cross (Gordon and Buchan) (Con)
In that case, can the Secretary of State credibly stand at the Dispatch Box and talk about the impact of the rise in national insurance contributions and of the Employment Rights Act 2025 on employment? The Government are now paying companies to employ young people because of the mess they made.
Pat McFadden
If it was down to those policies, we would not have seen a rise of a quarter of a million in the NEET—not in education, employment or training—numbers in the last three years of the hon. Lady’s party’s time in office. My point is that this did not come from nowhere, and we have to understand that. If we are to have a serious response, education, health treatment, youth apprenticeships and changes to the welfare system itself all have a part to play.
On the health front, I have good news to report: waiting lists today are down by 110,000—the biggest monthly drop since 2008. Elective waiting time targets have been hit, and four-hour waiting time targets have been hit. This is how we get Britain working, whereas simply picking a number for benefit cuts, with nothing behind it, is not an answer; it is a press release. The Conservative party has shown no understanding of how people end up on benefits in the first place.
Steve Darling (Torbay) (LD)
I would like to raise with the Minister the fact that we are looking at around 1,000 redundancies across the NHS in Devon, which is a significant employer. That is cutting the legs off employment in communities such as mine in Torbay.
Pat McFadden
I refer the hon. Gentleman to the figures that I just read out. For the first time in many years, the NHS is heading in the right direction. That is good for people’s health, and it is also good for getting people back to work.
As I said, the Conservatives show no understanding of how people end up on benefits in the first place. They are like a workman who wanders around someone’s house asking, “Who installed that?”, when the answer every time is that they installed it. The Conservatives say that the welfare bill is too high, but it went up by £100 billion when they were in power. They say that they want more face-to-face appointments, but they shut them down almost entirely, and then the right hon. Member for Central Devon (Sir Mel Stride), now the shadow Chancellor, signed off a bunch of contracts that allowed the assessors to work from home. The Conservatives say that there are too many people on health benefits, but they designed the system, they designed the gateways, and they designed the differences in income that have made that happen. We did not just inherit a mess; we inherited their mess.
In fact, the shadow Chancellor personally oversaw the biggest single increase in welfare spending on record during his time as Work and Pensions Secretary. Two weeks ago, the Leader of the Opposition railed against there being 1.5 million more people on universal credit. She was outraged by the figure, as she often is, but there was only one problem: around 80% of the increase was a legacy transfer from old benefits that was decided, organised and begun by the Conservative party. It is no wonder the chair of the UK Statistics Authority wrote to the Leader of the Opposition to correct her. Her letter said of the figures quoted:
“A substantial proportion reflects the ongoing transfer of claimants from legacy benefits to Universal Credit. This process has been a longstanding policy and has been implemented at scale by the Department for Work and Pensions (DWP) since May 2022, predating the current administration.”
When it comes to the Conservatives owning their record, they might as well be giving CV advice to the leader of the Green party.
As the King’s Speech made clear yesterday, reform of the welfare system is under way and will continue. Support must always be there for those who need it, but circling the wagons around the status quo is not the right answer. Nor do I believe that the system can act as a fantasy cashpoint for every cause going; instead, I believe that our task is to recast this system to put work and opportunity at its heart.
Sir Ashley Fox (Bridgwater) (Con)
Twelve months ago, the Secretary of State’s predecessor, the right hon. Member for Leicester West (Liz Kendall), attempted to cut the welfare bill and was sent packing by Labour Back Benchers. In the autumn, the Government had to get rid of the two-child benefit cap because of Labour Back Benchers. Is the truth not that the Secretary of State is incapable of reforming the welfare system because he does not have permission from his Back Benchers?
Pat McFadden
I will outline the changes to the system that we are making. At the heart of it, we have to change the question that the system asks in order to have a system that is suited better to the conditions of today. We should ask people not just what benefit they are entitled to, but how we can help them change their lives, and we have begun that task.
The change to universal credit that came into force last month narrowed the gap between the health element and the standard element. Crucially, it is matched by an increase in employment support. Another change is the provision of £3.8 billion to help people into work over the next few years, ensuring personalised help to maximise people’s chances of moving into a good, secure job. We have to change the old Tory habit of people being signed off and written off, and instead move to a system that more actively helps people into work. Nowhere is that more true than among the young, because the longer young people are left on benefits or out of work, the harder it is to come off and the worse the consequences are. The issue with the system is not just about monthly income; it is about the story of people’s lives and how we change it.
Jim Shannon (Strangford) (DUP)
I thank the Secretary of State for enabling me to ask a question, and for the positivity in his comments so far. Like him, I am incredibly worried about whether young people are getting job opportunities, and many in my constituency unfortunately have not been. May I ask a question about apprenticeships? We need to get people into the building and construction sector, for instance, where there are opportunities because house building is continuing to grow, as is the Government’s commitment. Will he outline some of the good things that have been done for young people in relation to apprenticeships?
Pat McFadden
Apprenticeships are really valuable and important. I visited construction apprentices with the Prime Minister just a couple of days ago, so I heartily endorse what the hon. Gentleman says.
The issue of youth employment is really important to us because of the long-term consequences of young people staying on benefits. Let me illustrate this for the House. A young person under the age of 25 who is on the health element of universal credit is now less likely to get a job than someone over 55 on the same benefit. A 20-year-old on incapacity benefit is more likely to turn 30 and still be claiming it than to have held a steady job for a year. Perhaps worst of all, a young unemployed person is over 70% more likely than their peers to die prematurely. Changing those stories has to be at the heart of what we are doing.
There are practical ways of doing that. We know that many disabled people—young and old—and people with health conditions want to work, but have been held back by the fear of losing their benefits if things do not work out, so just last month we changed the law to bring in the right to try. Keeping people locked on benefits because they lack the confidence to work is in no one’s interests—not the individuals’ and not the state’s. The change means that entering employment will not automatically trigger a benefit reassessment. This is practical welfare reform and this is what getting Britain working looks like.
We also know that disabled people and people with health conditions need localised support to get back into work. There is no greater fan than me of the wonderful work that our elected local mayors are doing, so we are putting £1 billion of funding into local areas to help 300,000 people into employment over the next few years. That is what practical welfare reform looks like.
Today, the Department has published new figures on fraud and error. They show continued progress and a fall since the post-pandemic period, but this is an ongoing effort. There is always more to do because there are unscrupulous individuals who will try to game the system, but whether it is £5,000 or £5 million from an undisclosed source—possibly someone located abroad—people are expected to declare it. There cannot be one rule for some and another rule for everyone else.
In the coming weeks, my right hon. Friend the Minister for Social Security and Disability will set out our plans to deliver our manifesto commitment to tackle the Access to Work backlog. This important scheme provides grants to thousands of disabled people to help them get into and stay in work, through things like specialist equipment, assistive technology and adaptations. Members from across the House have raised with me the issue of backlogs and waiting times that grew under the Conservative Government. Well, under this Government, we are changing that to reduce the backlog and to help more disabled people into work. This is practical welfare reform and this is what getting Britain working looks like.
We are restoring fairness in the system too. We are providing better value for money in the Motability scheme, with a target for half those cars to be made in Britain by 2035, so that this important scheme supports the British car industry too. We are stopping those who have not contributed from getting a British pension on the cheap. The work of reform will continue this year when, in the coming weeks, we receive interim reports from both the Milburn and Timms reviews, before they conclude later in the year. We will bring forward further proposals for reform, with work and opportunity at their heart, when those reviews have reported.
Bob Blackman (Harrow East) (Con)
Reports suggest that unemployed people who are signing on are getting trained for jobs that do not exist, not for the jobs in the sectors where there are opportunities to work. Will the Secretary of State reform the system so that those who are unemployed and seeking a job are trained to do the jobs that are available?
Pat McFadden
That is precisely what we are doing, including by providing apprenticeship courses that are shorter than the usual eight-month minimum, because employers have told us that such short courses are exactly what they need. I am all in favour of more flexibility in the apprenticeship system to suit what employers need.
Getting Britain working is also about the levels of investment in the economy: it is about the roads and railways we build, the capital programmes in education and health, and the year-on-year modernisation of the country. Here too there is a contrast with what we inherited. Compared with the plans that we inherited, there will be £120 billion more public investment over the course of this Parliament. That is what getting Britain working looks like—building and modernising the country. Underpinning all of this are measures in the King’s Speech to raise living standards in every part of the country, to attract investment, to work in partnership with business, to take advantage of new trading opportunities, to reduce the burden of unnecessary regulations, to unlock airport expansion, to build the roads that need to be built and, finally, to deliver a fair deal for the north of England.
At the heart of our reforms should be the young, for the simple and obvious reason that if we do not get the young into work, there can be lifelong effects. We have almost a million young people not in education, training or employment. As I said in response to the hon. Member for Gordon and Buchan (Harriet Cross), in the last three years of the Conservative Government, that figure went up by a quarter of a million. Although the numbers have barely moved since the election, they are still far too high.
Alison Griffiths (Bognor Regis and Littlehampton) (Con)
On that point, will the Secretary of State give way?
Pat McFadden
I will proceed, if the hon. Lady does not mind.
Unlike the Conservatives, who did nothing about the number of young people not in education, training or employment, we are doing something about it, because we will not leave a young generation behind. We will not give up on young people, and that is why our youth guarantee is so important. It will invest £2.5 billion in support for young people and employers over the next few years. From June, there will be hiring bonuses of £3,000 for employers who take on a young person who has been out of work for six months. For small businesses, there will be a hiring bonus of £2,000 to take on a young apprentice, and the Government will pay for all the training courses for young apprentices employed by small and medium-sized enterprises. [Interruption.] Youth hubs across the country will take support out of the jobcentre to where young people are, giving them access to community-based advice, skills training, mental health support, housing advice and careers guidance. In the spirit of generosity, I will give way to the hon. Member for Bognor Regis and Littlehampton (Alison Griffiths).
Alison Griffiths
I thank the Secretary of State for giving way and for his astounding shopping list of action that he is taking, but the Conservatives can make life easy for him: if he had not put 2% on national insurance, increased the national minimum wage and used the Employment Rights Act 2025 to remove the option of zero-hours contracts, businesses in my constituency and across the country would not have been forced to remove jobs focused specifically on young people. It is this Government who are responsible for the increase in youth unemployment.
Pat McFadden
I have to disappoint the hon. Lady. If this Government were responsible, it would not be case that youth employment never in a single year reached the pre-financial crash levels when her party was in power. If this Government were responsible, we would not have seen the number of young people who are not in education, employment or training rise by a quarter of a million.
Beyond the hiring bonuses and the youth hubs, we are offering more work experience or workplace training with a guaranteed interview, designed in partnership with employers. For those who have been out of work for 18 months, we are offering a six-month paid job placement of 25 hours a week at national minimum wage rates. The reason we are doing all this is that we will not stand back and allow young people to graduate from school to a life on benefits. There has been too much of that in recent years, and to do that would be to accept the scarring effect for the rest of their lives and to accept the huge cost to the country and to businesses in lost talent.
Changing this situation should be a cause for us all, and it should certainly be a Labour cause, to give hope to the country’s young people and to show that we believe in them, we back them and we want them to have a better future. This is a generational challenge. Of course it is an issue for young people, but it is also an issue for their parents and grandparents, because they all want a better future for young people, and so do we. There is an urgency about this issue. As the population ages and net migration falls, we need the young people of this country more than ever. They are our greatest resource and our greatest asset, and an investment in them is an investment in the future for all of us.
In the volatile times that His Majesty spoke about, people look for security, and rightly so, but the future is not just about security; the future is about building opportunity too. It is about not accepting so many young people being written off and about giving them a chance to change the story of their lives. That is the message at the heart of the King’s Speech and that is what is at the heart of our youth guarantee. It is at the heart of all the changes in welfare reform that I have listed, and it will be at the heart of the changes to come, and I recommend them to the House.
Helen Whately (Faversham and Mid Kent) (Con)
I respect the Secretary of State. He has talked at some length about what is wrong with the welfare system, but the fact is that there is no welfare Bill in the King’s Speech. I reckon he is stuck between a rock and a hard place: he knows the benefits bill is out of control; he knows that the public are sick of seeing their taxes go on ever higher welfare handouts; he even knows how the savings could be made because I have told him [Laughter.] They are laughing, but they are the problem. The Secretary of State also knows that the MPs behind him will have none of it. With the Prime Minister clinging on by a thread, no wonder there was no welfare Bill in the King’s Speech.
Here is the problem: failure to grip welfare puts the Government dangerously out of touch with people out there—the people he, I and all of us are here to serve. Let me read from an email that I received recently from a constituent; I will call her Sandra. She says:
“I am writing to you with utter frustration. We work so hard and for what? What is the point of working please tell me. To watch everyone else do nothing and get paid more than you! I’ve done the benefit calculation online and I’d be better off quitting my job…I’d be better off getting universal credit…how is that normal or fair?”
My constituent is far from alone. I have heard that feeling expressed time and again since I have been shadow Secretary of State—on the doorsteps, in the pub, in the supermarket, on the train and all over social media. Beyond Westminster, people are despairing. Family breadwinners are losing their jobs, homes are being sold to pay the bills and young people are losing hope. Millions have drifted out of work, and for many, claiming benefits simply makes more sense.
For those who are working, each month they are seeing their earnings disappearing in higher taxes and higher bills, with nothing left over. No wonder they are fed up. People who are doing the right thing are paying for people who have opted out. And what is Labour doing about it? Absolutely nothing. The Government are making a big mistake because the bald fact is that alarm- clock Britain is sick of paying out for “Benefits Street”.
Peter Swallow (Bracknell) (Lab)
The hon. Lady makes a powerful case, but her party was the future once, so why were all the challenges that she identifies not fixed when the Conservatives were in government? They were the ones who set up and built this welfare system.
Helen Whately
I hate to tell the hon. Gentleman, but Labour is in charge now. It has had nearly two years and nothing is changing.
You do not have to take my word for it, Madam Deputy Speaker; here are the numbers. Over 8 million people are claiming universal credit, almost 4 million people are claiming sickness benefits and over 600,000 households are getting over £32,000 a year in benefits. That is more than the take-home pay of the average British worker. Ninety-one thousand households are getting over £50,000, which is enough to put them in the top 10% of our nation’s earners, and 16,000 are getting over £60,000 in benefits every single year. A person who works would have to earn over £70,000 to have that. All that is costing the country £140 billion a year. People know when they are being taken for a ride.
Yesterday, the Prime Minister had a chance—one last chance—to hit reset, reverse those trends, get people off benefits and bring down the welfare bill. But with his back against the wall, it is no surprise that the Prime Minister’s King’s Speech contained none of that. While hundreds of thousands of people struggle to find work, the Prime Minister is only interested in protecting one job: his own. Yes, the Secretary of State can claim that he is doing something—his work experience programmes, his youth schemes, the savings-free Timms review and all that—but we all know that that is just tinkering at the edges.
The Government tried welfare reform last summer and failed. Now, they have given up altogether. They had no plan when they got into office and they still have no plan now, and that matters. For every day of inaction, hard-working taxpayers pay the price. Doing nothing costs money. The welfare bill will reach £170 billion by the end of the decade and that money could be so much better spent on things such as defence or making our streets safer or—think of this—it could be left in people’s pockets for them to spend.
Helen Whately
The hon. Gentleman wants me to give way. Does he have a welfare savings plan? If so, let us hear it.
Sam Rushworth
I certainly do. It is this Labour Government and it is getting people off NHS waiting lists and back into work. However, it is not for me to answer the questions; my intervention was simply to give the hon. Lady another opportunity to answer the question that was put to her by my hon. Friend the Member for Bracknell (Peter Swallow) and which she did not really answer. This broken system that she described as “Benefits Street” is a system that the Conservatives created. Why, in 14 years, did they do nothing about it? It is easy to create political anger, rather than to have dealt with it, and that is why this Government are now dealing with the Conservatives’ mess?
Helen Whately
Oh dear; what a shame. There were no ideas for savings there at all. If the hon. Gentleman thinks that will get him a job under the next Labour leader, I am afraid that he will have to keep trying.
Labour claims to be the party of working people, but the facts do not back that up. Labour always leaves office with unemployment higher than when it arrives, and it is on track to do that again. There are now over 300,000 more people unemployed than when this Government came to power. Their policies—the jobs tax, the Employment Rights Act—have actively killed jobs. Now, as mentioned in yesterday’s King’s Speech, we have the regulating for growth Bill. You couldn’t make it up.
Employers are being asked to swim against the tide with bricks in their pockets, and now the Government are planning to make it worse. Many businesses have stopped hiring; others are letting people go. Businesses tell me that they are getting hundreds of applications for jobs that they might have struggled to fill a couple of years ago. No wonder that there are 700,000 graduates on out-of-work benefits. Youth unemployment is at over 14%. This is a disaster.
Young people want to get their lives going, earn money, pay their own way, save for a car; instead, hundreds of thousands are stuck. The Secretary of State knows that. That is why he has frantically announced a flurry of schemes at the cost of £2.5 billion. Obviously, a work placement is better than nothing, but the young people I speak to want jobs, not Government-funded work experience.
Less than two years ago, the country voted us out and Labour Members in. They have laughed and jeered at us, but they are not laughing now because they have found out that governing is hard. They promised voters change, but the only change that most people have seen is that they are poorer. Who knows what they got up to in opposition? Clearly, it was not working out what they would do if they won the election. The Parliamentary Secretary to the Treasury is chuntering. I know that yesterday he called the Leader of the Opposition “rude” when, actually, she was just telling the truth. He does not like to hear the truth. Maybe he should do a little less talking from the Front Bench and a little more listening.
Being in power is not an end in itself; what matters is what someone does with the power that voters trust them with. I am sure that many of those on the Government Benches care about our country, but caring is not enough. The question is: what are they going to do to fix it? If the King’s Speech that we are debating today tells us anything, it is that they do not know. The only things they can think of will make the situation worse; and on welfare, they have given up.
I believe in learning lessons whenever one can. One lesson that Labour Members should learn is to make good use of time in opposition; work hard, think hard and make a plan. That is what we have been doing, and that is why we have been able to set out an alternative King’s Speech, which has more in it than the actual King’s Speech. Take our plans for welfare—and to be clear, these are just our plans so far. We have a plan to reform welfare and make £23 billion in savings. We will bring back the two-child benefit cap, stop handouts to foreign nationals, stop sickness benefits for anxiety and ADHD, bring back face-to-face assessments, ban “sickfluencers”, reform fit notes and restore the household benefit cap to its original purpose of ensuring work always pays better than benefits. No more gaming the system, no more free cars for tennis elbow or acne—Britain will no longer be a cash machine for the world.
People have had enough. They can see our welfare system is not working. It is not even working for people who are seriously ill or disabled. We are not keeping our plan secret; it is all out there. Other parties are adopting our policies. Reform, for instance, has not been shy about doing so, although it has been confused, and its Members are not here today. The Secretary of State should feel free to do so too, and though the MPs behind him will hate it, we are here to help.
This is the most surreal King’s Speech debate I have ever taken part in. People out there are angry, frustrated and fed up. They can see the country is not working. They want the Government to fix it, but Labour are too busy working out who should be in charge. The saddest thing is that it will not make a difference. They can change their team captain, but they are still the same team. I have heard them cheer on taxes for farmers, family businesses and schools. I have heard them cheer for lifting the two-child cap. I have heard them argue against welfare savings. They think you fix poverty by giving out free breakfasts, paid for by people who are struggling to pay the bills themselves. Labour’s answer is always the same: tax more and spend more of other people’s money, and it is the wrong answer.
Sometimes in life you have to pick a side. We have picked one: we are on the side of people who get up each day and go to work. They are doing the right thing, and we back them. Sometimes things go wrong and people need help. That is why welfare should be a safety net, not a lifestyle choice. Labour have made their choice: it is to carry on as if nothing is wrong. Yesterday’s King’s Speech was a chance to fix things, and they blew it.
Valerie Vaz (Walsall and Bloxwich) (Lab)
It is a pleasure to follow the shadow Secretary of State, the hon. Member for Faversham and Mid Kent (Helen Whately). I will try to address some of the points she made, but I am bound to mention the recent elections. Engaging in the democratic process is important, but not all areas had elections. The turnout across the wards in Walsall and Bloxwich was an average of 38%. I want to put on record my thanks to all the councillors who served their community in Walsall and Bloxwich.
The leader of Reform, the hon. Member for Clacton (Nigel Farage), thought that Walsall council was Labour-controlled, but it was not; it was controlled by the Conservatives—I know it might be slightly difficult to see constituencies from a helicopter. Some of his candidates said that they had to pay to personalise their leaflets. The £5 million gift is quite interesting as he says it is for his personal safety. I know that Mr Speaker and all the Deputy Speakers take the safety of each and every one of us in this Chamber very seriously.
The Representation of the People Bill is a carry-over Bill, so there is still time to ensure that we have compulsory voting and that we prevent cryptocurrency and bitcoin being used for donations to political parties—say, from Thailand—particularly from donors who go under two different names.
I welcome the announcement in the Gracious Speech on improving our cyber-security defences. I do not know whether Members saw this, but there was an investigation by a consortium of journalists from The Guardian, Der Spiegel, Le Monde, The Insider, Delfi and VSquare about a Russian school called “Department 4” that provides special training on hacking and password attacks. A hacker unit known by western Governments as Sandworm is accused of unleashing destructive cyber-attacks targeting, for example, Ukraine’s power grid, the French presidential election in 2017 and the investigation of the Salisbury poisonings. That article was published on 7 May, and it is worth reading. We need to protect our democracy from the constant drip, drip of misinformation and disinformation on online fora.
I welcome the energy independence Bill in the Gracious Speech. We have seen how we have been at the mercy of other countries, but now we are investing in renewables, which will protect our planet, roll out energy efficiency and bring down bills.
Harriet Cross
The energy independence—or dependence, as I think we can probably call it—Bill will make us more reliant on overseas imports of oil and gas. We will use oil and gas for many years because our system needs it. The Bill bans new licences in the North sea, making us more reliant on imports. Does the right hon. Lady really welcome that?
Valerie Vaz
I welcome the energy independence Bill. Let us see what is in the clauses when it is published, but the Secretary of State wants to make this country independent of outside forces. This is the first time a Government have invested so heavily in renewables. All this will get Britain working.
It is outrageous that oil companies have made massive profits and traders have bet on the outcome of war in Iran as petrol prices go up. Someone somewhere is making money, and it is not my constituents. They may not even know who is making the money, yet they blame us.
Jim Shannon
I commend the right hon. Lady for her contribution. It is really important that we look upon renewables as an option, whether we like it or not—that is the way I see it. The Government are pushing their renewables policy for England and Wales, but does she believe that we should be doing this collectively? I think that Northern Ireland, Scotland, Wales and England should be working together on a policy that can take us forward and meet the targets, which are very important not just for us but for our children and our grandchildren.
Valerie Vaz
We are the United Kingdom of Great Britain and Northern Ireland, so it is very important that we all work together. When it comes to climate change policies, we cannot specify a particular area; they are for our whole country, and our whole planet.
Those of us who were around at the time of Brexit—and I am pleased to see an EU Bill in the King’s Speech—will remember that we were allowed to see the impact assessments only if we left our phones behind and went across the road with just a pencil and paper. There we saw the impact assessments for each sector, and how leaving the EU affected every single one; we knew how important it was. The Federation of Small Businesses has warned that post-Brexit red tape and costs are driving smaller companies out of European markets. In a survey of 645 businesses, 30% indicated that they might reduce or cease trading in the EU without eased regulations. Many small businesses—64%—reported issues with customs documentation, 21% reported issues with physical inspections and 17% reported issues with product marking. To get Britain working, we need a closer relationship with our nearest market. If these small businesses close, working people and all of us lose out.
I believe in the dignity of work. The hon. Member for Faversham and Mid Kent mentioned that there is no welfare Bill in the Gracious Speech, but measures have already been taken to increase the national minimum wage, rights at work and safety at work. We will get Britain working with the new work coaches and the right to try.
I do not know whether Members have seen the television programme “The Pitt”, but in season two, a construction worker has to be taken to A&E and cannot afford his medical care, which is about $20,000. Watching that, we all know how lucky and blessed we are that we have our NHS, free at the point of need. We give people dignity when they fall ill. We take it for granted that our doctors and nurses are trained to the highest level. The NHS modernisation Bill will bring back the Department of Health and Social Care as one Department with accountability to the Secretary of State. There will not be the extra cost of NHS England; instead, there will be more money for the frontline.
I have found some money down the back of the sofa, so I hope the Chancellor is listening. Fifty million pounds has been allocated for a free school in my constituency that, on the evidence, is not needed. The National Audit Office has reported falling rolls in primary schools, and that fall in numbers will feed into secondary schools. I was told that the decision about the school was made in 2017. There was a Walsall priority education investment area programme, and the Windsor Academy Trust just so happened to have a member on the programme’s board. Surprise, surprise—it got the contract for the free school. It is like insider trading with public money. A review was undertaken, but Ministers are pressing ahead with the decision. I am not sure why, when schools like Joseph Leckie, Blue Coat academy and All Saints academy require support for their buildings, as do many other schools. Despite what the evidence shows, there will be building on Reedswood Park, which is not what local people want. It is the same with the Walsall Leather Museum, a beloved local cultural and heritage icon; the deal with the then Conservative-controlled council was a novel and contentious transaction, made against the wishes of visitors, constituents and Government policy on promoting arts and culture. The museum must be retained in its current position.
I believe in the dignity of education, which is why I welcome the Bill to raise education standards for all. We already have Best Start hubs in train—we know what a difference Sure Start made—and breakfast clubs. Anyone who has visited breakfast clubs knows that there is a glorious cacophony of excited children who have had a good meal. There are also quiet places, and I am pleased that some are taking part in the year of reading. Children are set up for the day. We cannot measure the results of a good education tomorrow; we have to see the benefits over a lifetime. I believe in the dignity of opportunity, and that is what this Government are giving people. We give people the tools to find and exploit their talents. Many do not know what their talents are when they start off in life, and they want to discover them over the years. That is how we get Britain working.
We live in a society where, if we see something we want, we can buy it, and it is with us the next day, but Governments do not operate in that way. I want to end with a story about three workers constructing a road. When they were asked what they were doing, the first one said he was breaking stones; the second one said that he was constructing a road; and the third one said that he was constructing a road that would take children to their school, or the sick to hospital. We have to show people the significance of the actions that the Government are undertaking, so that they are like the third worker. Equality, opportunity, skills, justice and tolerance take time, patience and perseverance. We need to explain to people that our Government are standing up against vested interests and for all our citizens, and that is why I support the measures in our sovereign’s Gracious Speech.
Madam Deputy Speaker (Judith Cummins)
I call the Liberal Democrat spokesperson.
Steve Darling (Torbay) (LD)
It is a pleasure to follow the right hon. Member for Walsall and Bloxwich (Valerie Vaz). One would normally imagine that the King’s Speech was an opportunity to press the reset button, but I fear that Labour Members are searching for another reset button at this time. We Liberal Democrats fear that the King’s Speech is somewhat timid in its ambition, and does not drive the change that many of our communities have a thirst for.
I will focus on youth unemployment and our NEETs—those not in education, employment or training. This is a massive challenge for our society. People are three times more likely to be unemployed if they are under the age of 25. To be fair to the Government, the issue was not created on their watch, but during their watch, they built on what happened under the Conservatives, due to the pressures on the system. When I meet young people, I know that they have faced a lethal cocktail, when it comes to being work-ready. There was the covid crisis through much of their educational life; there is the pressure cooker of social media, which eats into their confidence; and finally, there is the cost of living crisis, which young people are not immune from. It may mean not only that they have less opportunity, but that mum or dad face real pressures, so there are some real challenges.
I pay tribute to organisations in the Torquay and Paignton area of Torbay that support young people, such as Eat That Frog, Sound Communities, Doorstep Arts and the South Devon college, which have all benefited from the shared prosperity fund. That ended without a replacement, and the world is therefore a poorer place, particularly for youngsters who had adverse childhood experiences and are on the margins of employment.
As we have seen, the tax on work—the national insurance hike—has really hit opportunities for employment hard. Employment in the hospitality sector has shrivelled, with the loss of more than 100,000 jobs. It is a cold hand on the heart of the west country and our hospitality industry. When I speak to organisations such as Splashdown, a water park in Paignton, they say that they have money to invest, but fear a further economic shock. Sadly, Wild Planet Trust, which managed Paignton zoo for many years, had to pass the zoo over to a Dutch company, because the national insurance hike had a massive impact on its ability to make the figures work. Other businesses across Torbay, whether it is the Livermead House hotel or the outstanding Rock Garden pub and restaurant, tell me that they face real challenges and have had to shrink the number of youngsters they take on just to meet their budgets, partly due to inflation, but also because of the national insurance hikes, so we face some real challenges there.
I say to the Government that we need to think about driving positive changes, because at the moment, it appears that they are papering over the cracks, rather than getting to the root causes of problems in our economy and helping to grow the opportunities for young people across the United Kingdom. I was pleased that the Secretary of State talked about Access to Work, and the Disability Minister often refers to Access to Work as the best kept secret, but the reality is that the system is broken. We are looking at 37 weeks for decisions on Access to Work applications, and people are losing job offers. The No Limits café in Newton Abbot, which served my constituents from Torbay, closed after a lack of liquidity in its finances because of delays in payments. We need to ensure that there are no behind-the-scene cuts to Access to Work through the Government failing to make inflationary increases to what people can claim, as was highlighted by the Disability News Service only last week.
The Liberal Democrats fought the last general election on a pledge to clean up our waters, be they seas or rivers; the cost of living crisis; and the NHS. In Torbay and across the whole of Devon, we are looking at hundreds of redundancies in that service. The argument we regularly hear from the Government is that they have put up national insurance rates in order to invest, but we have had hundreds of millions of pounds of cuts to our services in Devon. That means fewer job opportunities for our people in Devon, which is hitting some of our most deprived communities.
In conclusion, we need to back our communities. We Liberal Democrats believe that nobody should be enslaved by poverty, ignorance and conformity, and we need to set the foundations for supporting communities. However, the communities we really need to work with much more closely are our friends on the other side of the channel; we need to build stronger working relationships with our European partners to grow our economy.
Andrew Pakes (Peterborough) (Lab/Co-op)
It is a pleasure to follow the hon. Member for Torbay (Steve Darling), and to speak in a debate on work in support of my right hon. Friend the Secretary of State for Work and Pensions. There are few Secretaries of State who have a work ethic as strong as his, and I thank him for that.
I welcome the opportunity to speak in this debate on the Loyal Address. The phrase “Get Britain working” goes to the heart of the challenges facing both this Government and the country, and I will start by welcoming today’s growth figures.
Debates such as this and the programmes of any Government will make no difference without stability as a foundation. I say kindly to colleagues on all sides of the House that economic stability matters. After the revolving door of Ministers and policies in the past decade, stability is not just a nice-to-have, but a must-have. From economic stability we can create the opportunities, fix our public services and share prosperity across our country.
Nothing goes to the heart of Labour’s mission to grow our economy more than the dignity of work. Nothing will propel that growth more quickly, more justly and more sustainably than creating the jobs and opportunities to sit squarely behind the programme of this Government and the policies put forward in the Loyal Address. But equally, nothing says more about the challenge the Government face and the opportunities the Government need to pick up than the 70% drop in apprenticeships we inherited after the past decade of Conservative rule.
These are challenges writ large in my constituency of Peterborough. In 2023-24 apprenticeship figures hit the lowest level in the six years for which data is available, with a fall in achievements across all apprenticeship levels. That not just an economic failure, but a moral failure that we inherited from the previous Government. Therefore, I welcome the focus in the King’s Speech on creating jobs, support and opportunities for young people to succeed. This is an agenda that builds on the existing achievements around apprenticeships and youth employment.
Over the past couple of years I have spent as a Member of this House, I have met businesses, education providers and young people who have been shut out of opportunities for too long because of the bureaucratic nature of our skills system and the apprenticeship levy. It is this Government who have the opportunity to change that. The DWP has itself described Peterborough as a national youth unemployment hotspot, so the Government’s moves in the King’s Speech are welcome. I am pleased to put on record that Peterborough and Cambridgeshire were chosen for one of the first pilots for the youth guarantee, with up to £10 million over two years to support young people into education, employment and training. We get the welfare bill down by increasing opportunities and backing the next generation of taxpayers, something that this Government are focused on.
Within the city I represent, we have the appetite to meet the Government’s ambition to address those issues. Peterborough College’s JobSmart provision is a great example of working with stakeholders—the DWP, Peterborough Council for Voluntary Service and the combined authority—to get more people into work. The youth employment hub, opened recently at Peterborough United, funded by the Government’s youth guarantee and opened by our Secretary of State and mayor, is a physical example of the bricks and mortar investment in our young people, as is the new Green Technology Centre opened at Peterborough College last year. This takes traditional apprenticeships and training opportunities, and updates them for new green skills such as EV mechanics, heat pump installation and sustainable construction skills.
I welcome the expansion of the youth guarantee and the focus on expanding work experience and guaranteed employment for young people; the jobs guarantee, our promise of a work placement for all, with costs paid for by the Government; the youth jobs grant, a £3,000 grant for businesses that hire a young person who has been on universal credit for six months; and a £2,000 grant for small businesses that take on an apprentice. For cities like mine it could be transformative, creating opportunities and getting more people into work.
I look forward to the legislative programme that will follow changes recommended in the Timms and Milburn reviews. It cannot be right that we write off so many young people as unfit to work, with a life on benefits. It also addresses something bigger: a greater inequality for too long between vocational and university education. This is not just about policy; it is cultural. For too long, we have made apprenticeships a second-class option. We have created a bias in our schools that favours university over apprenticeships. That, in turn, has been compounded by the destruction, under the previous Government, of careers advice and work experience for young people in cities such as mine. For a working city such as Peterborough, that legacy has been a disaster for people and for economic growth.
I welcome our new university in the city, Anglia Ruskin University Peterborough, which does things differently. It has a focus on local students, business relationships and degree apprenticeships, growing our talent in the city, so that the talent of our city can grow the economy for this country as a whole.
I also want to talk about jobs for the future and how we build jobs for the next generation of young people coming through. One third of people working in Cambridgeshire and Peterborough are employed in occupations that will be directly affected by the transition to the green economy. Major local companies such as National Gas and Caterpillar are already driving innovation in sustainable industries. Peterborough sits at the heart of the national gas transition and hydrogen networks. We could truly be the King’s Cross of the green industrial revolution for hydrogen. This transition from blue collar to green collar jobs and skills is one of the hallmarks of this Government’s achievements so far. I welcome the £800 million private sector investment that National Gas recently put into Peterborough and my region, and its choice of Peterborough as its new regional headquarters. We have the talent in our city which allows those jobs for the future to be grown, with Government support.
I will say one more thing—a friendly piece of support, but I would like to stretch my elbows a bit—which is that what I know perfectly about my city is the potential of the young people who live in it. I also know the struggles that Peterborough college and further education have had to put up with. I welcome the investment the Government have put into further education, but I also know that my colleges could support many more small businesses and many more young people if they had the physical resources to do so. We are on the journey and we are making the investment to change that, but if we could do it faster, we in our city could deliver more for young people, but also for the Government’s ambitions.
The appetite is there from learners, providers and businesses. The drive exists to meet Labour’s ambitions for new homes, clean energy and infrastructure, but we need the means to deliver it. It is a privilege to speak in support of the Loyal Address. We can get the job done with the Government’s support and with the Prime Minister’s support.
Alison Griffiths (Bognor Regis and Littlehampton) (Con)
Businesses in my constituency are not asking for special treatment; they are asking for a Government who stop making it harder to employ people, harder to grow and harder to invest. Right now, too many feel that Labour is taking the country in the wrong direction. Through my business club and regular conversations with employers across Bognor Regis and Littlehampton, I keep hearing the same thing: costs are rising, confidence is falling and businesses are becoming more cautious about taking people on. In a coastal constituency, that really matters. Our local economy depends on innovation powered by fantastic small and medium-sized enterprises and on the entrepreneurs who pour everything into growing them. These are not massive corporations with endless room to absorb new costs. They are businesses working hard to keep people employed, keep high streets going and keep our communities alive outside the summer season.
James and Marcus Fenton, who run Meridian Medical in Littlehampton, employ around 130 people locally in skilled manufacturing jobs. It is a family-run business and a living wage employer. It should be exactly the kind of business the Government are backing. Meridian is a British success story, exporting highly specialised medical devices around the world, but it is now becoming one of the businesses that tells me the UK is becoming a harder place in which to invest and grow.
I also heard recently from Mark and Liz Warom, the founders of TEMPLESPA, a science-led, Mediterranean-inspired premium skincare brand run by my constituents, whose products I highly recommend. Their clear view is that firms are becoming
“more cautious on hiring and investment due to rising costs.”
They are worried about rising employment costs, higher borrowing costs, growing compliance burdens and energy prices that remain far too high. That is the real-word impact of the Government’s decisions. When businesses stop hiring, young people pay the price first. The first job in a café, the apprenticeship, or the hospitality role in a pub or hotel all give young people the chance to get on the ladder and earn their own money.
The Government talk constantly about growth, but businesses in constituencies such as mine are asking a very simple question: when will this Government stop making growth harder? If we really want to get Britain working again, we need to start backing the businesses that actually create the jobs.
Adam Thompson (Erewash) (Lab)
On behalf of the people of Erewash, I give thanks to His Majesty the King for his Gracious Speech to the entire nation yesterday. This King’s Speech recognises the simple fact that Britain cannot afford to leave its future at the mercy of global markets, hostile states or instability abroad.
For too long, Governments assumed that the hand of the free market would always act in Britain’s interests. For too long, we outsourced vital industries without considering the long-term consequences and underrated the ability of our businesses to export physical goods to the world. We have been globally pigeonholed strictly as a post-industrial service economy. When dictators spark conflict abroad, British families feel the impact through rising bills and a falling standard of living. Working people in Erewash know that all too well. Britain has been left exposed because we failed to build our own energy resilience.
Ilkeston in Erewash is proud of its iron manufacturing heritage, yet we have watched industries like iron and steel decline as production has moved overseas in search of cheaper labour and lower standards. Steel is not just another commodity; its manufacture is strategic infrastructure, in and of itself—infrastructure that underpins our national defence capabilities. That is why it is unacceptable that British Steel has been let down by overseas owners who do not act in Britain’s best interests. We cannot outsource our national security any longer.
Harriet Cross
I completely agree that we must protect British industries such as steel and oil and gas refining—they are all vital. The carbon tax is a reason why these industries are declining and moving overseas. From what the hon. Member is saying, it feels like he agrees that we should get rid of the carbon tax. Is that correct?
Adam Thompson
I am not sure the hon. Member and I are necessarily on the same page. I was focusing purely on the renationalisation of the steel industry, which is an important part of the King’s Speech. Indeed, in this King’s Speech, the Government have recognised that markets alone cannot protect the national interest. Sometimes the state must step in to safeguard jobs and to keep Britain safe. Nationalising British Steel means protecting almost 100,000 jobs from unfair foreign competition. I am proud that this Government are going to bring British Steel fully back into public ownership.
I have spoken to many businesses and business owners in Erewash, and they report that they have struggled since we left the European single market. They have faced mountains of paperwork and massive delays at our borders. These hurdles do not just frustrate exporters; they directly impact their ability to turn a profit. I am glad that in the European partnership Bill we seek to solve that problem, by streamlining trade and making it quicker, cheaper and simpler to do business with Europe.
Matt Rodda (Reading Central) (Lab)
My hon. Friend is making an excellent speech. Would he agree that the European partnership Bill is particularly important to many small businesses in vital supply chains in the automotive sector and other key areas of our economy, which will benefit directly from that well thought-through measure?
Adam Thompson
I completely agree with my hon. Friend. Indeed, I am going to talk momentarily about one of the businesses in my constituency. When I discuss this topic, I particularly think of Cluny Lace in Ilkeston—not in the automotive sector, but a brilliant high-end lace manufacturer. It was workers from Ilkeston who produced Princess Kate’s wedding dress and Queen Anne’s tablecloth. Cluny Lace is an internationally renowned producer and exporter of high-quality British goods, supplying the European high-end garment manufacturing industry, in particular.
Wera Hobhouse (Bath) (LD)
The hon. Member mentioned small businesses and delays at the border. Is it not true that the problem of double tariffs for small businesses when importing from third countries and then into the European Union will only be solved by us rejoining the customs union?
Adam Thompson
The hon. Member raises a point that I was about to touch on. When I met Charles Mason, the managing director of Cluny Lace, he told me at length about how post-Brexit export and import difficulties have caused him immeasurable pain, because the lace that we make in Ilkeston can only be dyed in France, where they have professionals with the appropriate expertise. Moving the lace to France for that part of the process, then back to England for further processing before sale, and then often back into Europe, has become all but impossible for his company. What was once a frictionless part of Cluny’s manufacturing process and sales chain, is now a crippling quagmire of tariffs and business model-breaking roadblocks.
For businesses across Erewash, whether they are producers, suppliers or distributors, a closer trading relationship with Europe means less time navigating bureaucracy and more time growing their businesses. Businesses in Erewash have also suffered from increased energy costs. If we want lower bills for working people, we must break our dependence on volatile global gas prices. British families will not see meaningful long-term reductions in energy costs until we produce more clean, affordable energy, here at home.
In Erewash, such a transition is not theoretical; it is obviously visible on our local skyline. Sawley, in my constituency, on the banks of the River Trent, lies adjacent to the former Ratcliffe-on-Soar power station in the constituency of my hon. Friend the Member for Rushcliffe (James Naish). Ratcliffe was the UK’s last coal-fired power station; it closed its doors for the final time in September 2024.
As we move forward, my task as the MP for Erewash is not simply to help the country move on from coal, but to ensure that Erewash is at the heart of what comes next, and that my constituents benefit from the new investment, the new jobs, and the cleaner, more secure energy future that this Government are delivering through this King’s Speech. That is why I am excited about the Government’s energy independence Bill, which will shield our economy from the fossil-fuel price shocks that have caused half of the UK’s recessions since the 1970s.
This Government are bringing industry back to Britain, with well-paid engineers working in clean energy, powering steel production in the east midlands and across the country. On the ground, that means that families in my constituency—and the constituencies of hon. Members across the House—will no longer wonder how events thousands of miles away affect their bills or their ability to book a holiday.
Families in Erewash voted for change in 2024. They are tired of limited opportunities and of feeling vulnerable every time the world becomes more unstable. They want more control over their lives. With this King’s Speech, we are bringing industry home, investing in British jobs, and putting control of our future back into the hands of working people.
Wera Hobhouse (Bath) (LD)
It is an honour and a pleasure to take part in this King’s Speech debate. I am a member of the Energy Security and Net Zero Committee, and I look to grow our economy and get Britain working, with a special focus on the green economy and its many opportunities and challenges.
The regulating for growth Bill promises a framework that supports innovation, yet current proposals from the Department for Energy Security and Net Zero risk doing the opposite. Under the plans for the new home energy model, any technology other than a heat pump or heat battery could automatically receive an energy performance certificate rating of D. In practice, that means that innovative zero-emissions systems would be treated the same as fossil-fuel heating. That would make many new technologies commercially unviable and leave consumers without practical alternatives where heat pumps are not suitable. The plans are already affecting innovative businesses in Bath, including Luthmore, which has developed a pioneering, zero-emission alternative to the gas combi boiler. Combined with exclusion from support schemes, VAT barriers and delays in the assessment process, such policies risk pushing Britain’s clean tech innovators overseas instead of backing them at home.
I am encouraged by the announcement of an energy independence Bill in the King’s Speech. Russia’s invasion of Ukraine and now the war in the middle east have laid bare the need to go much further and faster to secure our energy supply, which means getting off the rollercoaster of global prices. In the midst of an energy price crisis, cheap, home-produced energy has never been more vital. There is huge nationwide potential for growth in small-scale renewable energy generation, especially by community groups that can distribute the benefits locally. Nobody in the House will be surprised to hear me say that we Liberal Democrats are the greatest champions of community energy.
Community energy puts people at the heart of their energy future by allowing them to generate, manage and own their own local renewable energy projects. These are projects run by the community, for the community. One of many pioneering projects is Bath and West Community Energy in my constituency, which, because of surplus income from renewable energy projects, has been able to donate to more than 100 community projects across Bath in the past decade.
What really worries me, when hearing in the ESNZ Committee about proposals for community energy and the way the Government look at that, is that it is only about an ownership model, rather than a beneficiary model. Community energy should also benefit consumers of energy, not just the energy producers. I get it—it is about both. It is not one or the other, but we must focus on ensuring that the community benefits from community-generated energy.
Community energy projects also strengthen energy security by diversifying sources of energy, reducing reliance on imported fossil fuels. In 2025, community energy groups saved people almost £2 million on their fuel bills due to energy efficiency upgrades. However, community energy schemes currently generate less than 0.5% of the UK’s electricity. With the right support, that could increase by 20 times, powering more than 2 million homes and saving more than 2 million tonnes of CO2 emissions per year.
However, there are two main blockers to the rapid expansion of community energy projects. The first major barrier is a shortfall in Government funding to scale up energy generation projects. While the £15 million Great British community energy fund is welcome, it has led to minimal growth. I hope that through the energy independence Bill more funding will be allocated to these projects so that their potential can be realised.
Another major barrier facing community energy projects is the prohibitive cost of accessing energy markets to sell the electricity that they generate. This is what I mean: there are now more than 600 community energy groups operating across the UK, yet not a single one is able to sell power directly to local customers. Although it is legally possible, the various regulatory burdens and obligations associated with energy licensing rules make the cost of selling power to local people impossibly high.
In the 2022-23 Session, legislation was brought forward to unlock the potential of community energy and selling directly to local people. The proposal was supported by the current Secretary of State and more than 320 MPs across the House. We have a Secretary of State for Energy who supports reform of local energy supply, but we are still waiting for the legislation to make that reform a reality.
We Liberal Democrats welcome the regulatory changes promised in the local power plan, in particular the commitments from the Department for Energy Security and Net Zero to establish a route to market for unlocking a smart local energy system. However, if community energy initiatives want to plan ahead with confidence, the Government must provide clear detail on how and when these reforms will be implemented. One option is to untangle completely the licensed supplier model that we currently have and to ask Ofgem to establish a local supply licence. The proportioned costs could create the ability for community schemes to sell to local customers if they wish and make a viable business model. The other option is to have current licensed suppliers offering contracts for the export of community energy to local residents.
Whichever route the Government choose, we need to see action. We must see the necessary regulatory changes in the energy independence Bill to establish a workable model for local energy supply so that community energy products can scale up, become commercially viable and play their full part in delivering a cleaner and more resilient energy system.
David Smith (North Northumberland) (Lab)
It is a pleasure to follow the hon. Member for Bath (Wera Hobhouse), whose comments on community energy I will come to in a moment.
It is a real honour to speak in this debate on the Loyal Address on behalf of my constituents in North Northumberland, where the electricity grid is owned by Warren Buffett, the water system is overseen from Hong Kong and most of the buses are run out of Miami. Across many decades and multiple Governments, we have made ourselves a society where everything can be bought and sold for the right price, but the things that matter are often slipping away.
We heard renewed commitments in the King’s Speech from the Government to improve our economic security, whether by ensuring a fair deal for working people, responding to the Timms and Milburn reviews on welfare or delivering an energy independence Bill. I welcome those commitments. According to the pollster More in Common, seven in 10 Britons feel that our country is “on the wrong track”, and
“many are starting to conclude that the problems…lie…with the system itself.”
This is a long-term trend. The job of the Government must therefore be to cast a vision of the future that transforms the status quo and then implements it. But what does that future look like, and how does it relate to the economic issues of work, welfare and energy?
The late Lord Rabbi Jonathan Sacks said:
“We are each a letter in God’s book. Like a letter, we have no meaning on our own, but joined together in families, communities and nations, we form sentences and paragraphs and become part of God’s story.”
Even if we do not share his religious views, Sacks’s message is clear: life must be lived together. Sacks called this a covenant. We are used to talking in terms of a social contract—a phrase we hear a lot—but the social contract asks, “What am I getting out of this?”, while the social covenant asks, “What do we owe each other?”. We therefore need to legislate for a society that helps us to think about what we owe each other.
Work remains central to the task of transforming the country. This is one of the Government’s top priorities—we are, after all, the Labour party. Work is also the main way that we contribute to our shared national life. However, our national relationship with work is threatened. One million young people are not in education, employment or training, and AI is threatening a period of disruption that we have not seen since the days of the spinning jenny. We have done many worthwhile things already to improve work; the Employment Rights Act 2025 was a landmark piece of legislation. However, we need to go further to restore the way that we see and do work.
The UK is below average among major nations for in-work training, so we should require employers to invest in their employees’ skills with training opportunities. We should also incentivise a stakeholder economy in which more staff share in the value that they help to create, and replicate the European model of giving ordinary workers seats on company boards. In short, the success of the company should be linked to the thriving of its employees. The steel industry nationalisation Bill creates the perfect opportunity for us to model that for the rest of the economy. Working together in a covenantal Britain, we can see that change.
Covenant also speaks to our social security system. According to the last data available, 24 million people in the UK are receiving some form of benefits, including pensions. The total cost of our welfare system is greater than our income tax take, and that strain is weakening our togetherness and the idea of fairness on which the system relies. We need a new Beveridge report for the 21st century. The original report identified—in anachronistic language—the five giants as want, disease, ignorance, squalor and idleness. I suggest that the giants of 2026 are: poverty, worklessness, isolation and hopelessness.
I welcome the Government’s upcoming response to the Milburn and Timms reviews. We are a party that will always support the most vulnerable in our society, and it is right and just to support those who cannot work or who need help to work. We need a welfare system that is based on contribution and in which people are delighted to say, “Yes, I am my brother’s keeper.”
Finally, I welcome the Government’s commitment to energy security and the energy independence Bill in the King’s Speech, but without a covenantal relationship between Government and community, we will lose support for the green transition. King’s College London has found that the share of those who support net zero sooner than 2050 has halved since 2021. Meanwhile, energy price rises are already affecting parts of our country and our economy, as we all know. When the first American missile was launched into Iran, some of my constituents’ heating and hot water prices doubled. A covenantal response to that is to say, “Let’s work with local communities to meet their needs now instead of pressing on towards jam tomorrow,” so if a wind farm is created in the vicinity of a community with the consent or ownership of that community, the community should benefit financially.
We must also acknowledge that many of our constituents will be reliant on oil and gas for decades to come. In my constituency of North Northumberland, for example, 14,000 properties are not on the gas grid. Let us rebuild our energy security and supply using a realistic mix of options, and let us leave everything on the table so that it serves everyone.
In conclusion, the dead end of unfettered market capitalism has been broken by its own failure to deliver decent jobs and affordable energy. We all now need our future to be built on something that brings both economic security and restored social relationships. In short, we need covenant. The Labour mission was never simply to get on in life, but for all of us to share in prosperity and common endeavour. Nye Bevan once said:
“We have to build a party that is capable of expressing the desires of the people who sent us here—not just their immediate desires, but their deeper longings for a just and generous society.”
The task is to build on this King’s Speech and create both a story and programme that speaks to these longings in work, welfare and energy. To do this, all of us —Government, party and country—need to commit to a new social covenant.
Mr Peter Bedford (Mid Leicestershire) (Con)
They say that a week is a long time in politics, yet during this short debate we have seen the Health Secretary leave the Government. Amid the open revolt and factional infighting, one thing remains abundantly clear: whoever will be steering the ship, this Labour Government lack both the courage and the political capital to confront the spiralling cost of welfare. We hear endlessly about the soft left, the hard left and the moderate left, but the story time and again with every Labour Government is that they eventually run out of everyone else’s money.
The numbers are stark. We have a welfare bill projected to rise to over £103 billion by the end of the decade—a figure that continues to surpass the revenues that the Government receive in income tax—and more than 4 million people are now claiming personal independence payment. Meanwhile, unemployment continues to rise, and nearly a million young people are not in education, employment or training. This is simply unsustainable. The Conservatives firmly believe in a safety net for those who genuinely need support, but what we have today is no longer a safety net; it is a fishing net that traps people rather than encourages them to stand on their own two feet.
I have seen the value of this support at first hand. I grew up in a single-parent household with my two younger brothers. My mother could not read or write. I can remember us turning the sofa upside down at the end of the week to get loose change to put in the electricity meter. Labour Members often think that we on the Conservative Benches are far too privileged to understand real poverty, but that is simply not the case. Many of us on these Benches have experienced poverty in our own upbringings, and because of this lived experience we know where support is needed and where it is being abused.
Sadly, we face a culture today in which some treat dependency as a way of life—a badge of honour, even—and in which, for generation after generation, families are boarding the benefits gravy train. We have all heard stories—perhaps in conversations on doorsteps during the recent local elections—of people claiming every benefit going, while ordering a Deliveroo every night and purchasing the latest 60-inch television. Those are luxuries that millions of hard-working constituents have to think twice about before buying.
In our alternative King’s Speech, we have set out sweeping reforms that would end this welfare madness. Our welfare reform Bill would restore fairness, ensure that support goes to those who truly need it and ensure value for taxpayers’ money. We believe in the dignity of work and personal responsibility. We will ensure that benefits are restricted to British citizens, so that people coming to this country cannot simply ride on the coat-tails of British taxpayers. We will ensure that PIP is not awarded on the basis of lower-level health conditions that—let me put this bluntly—are just some of the normal challenges of everyday life that we all have to contend with.
We will ensure that the people of 6 am Britain—the families who have to tighten their belts because of the spiralling cost of living—do not simply have to pay for the children of those who choose not to work. We will ensure, through the introduction of a household benefit cap, that people are always better off in work than out of work. These reforms are essential if we want a fair society and economic prosperity for our country.
However, welfare reform must go hand in hand with reforms that encourage businesses to get people back into work. That is why I am proud that the Conservative party has set out exactly what we will do to get Britain working again, and our approach is a direct contrast to the actions of the current Government. From the hiking of jobs-destroying national insurance to the burdensome regulations introduced in the Employment Rights Act, these rising costs are forcing businesses to think twice before hiring extra staff. This Government have become a barrier to economic growth. Labour is no longer the party that its name suggests; it has become the welfare party.
As our alternative King’s Speech makes clear, we would repeal damaging aspects of the Employment Rights Act, from the hospitality “banter ban” to the absurd qualifying periods, in order to give businesses the confidence to hire once again. We would back our private sector—the actual wealth creators—and we would not bow to trade union demands.
Most importantly, our plan would tackle youth unemployment. It is shameful that one third of graduates are not in graduate-level jobs and youth unemployment stands at a staggering 18%, and that this Government seem utterly uninterested in doing anything about it. A future Conservative Government, on the other hand, would back our young people by expanding the number of high-quality apprenticeships under our apprenticeship guarantee and by showing young people that there are multiple training routes—not just through a degree—to build a successful career and life.
This Government have no plan for welfare reform, no plan for jobs, and no plan for growth, but the Conservatives do. Our alternative King’s Speech shows that we are serious about governing, restoring fairness and rewarding hard work, and about getting Britain working again.
Andy MacNae (Rossendale and Darwen) (Lab)
His Majesty’s Gracious Speech announced a wide range of economic measures and fully recognised the vital importance of economic security, but I think we all understand that for that security to be meaningful, it must reach into every part of our country and every community. With that in mind, I make my comments from the perspective of Rossendale and Darwen, recognising that we have much in common with many other post-industrial towns and rural areas—places characterised by small towns and villages with close-knit communities, which have too often felt ignored and left behind.
This Government have consistently put growth at the heart of their agenda and have rightly identified many of the actions that we need to see. We have heard announcements on Green Book reform, £113 billion of infrastructure investment pipelines, youth job guarantees, Pathways to Work, the industrial strategy, pothole funds, Pride in Place, and many more measures, yet when I knock on doors in Rossendale and Darwen, people are still asking, “Where is the change that we were promised?”
When writing this speech, I looked back at others I have made over the last two years on this subject. In those speeches, I called for more to be done to address issues that are specific to small towns like mine: a move away from the orthodoxy that favours cities and mayoral authorities, where growth is easiest to define; a procurement strategy that insists on buying British; an industrial strategy that understands small and medium-sized businesses; and policies that reward grafters, entrepreneurs and risk takers. Frankly, I could have used the same text today, because the issues remain. We have not moved nearly far enough or fast enough to meet the needs of communities like mine. Last week’s local election results show us that starkly.
There has been much talk about the changes that this Government need to make. We must grasp this moment to fundamentally rethink our approach to growth strategy; incremental will just not cut it, nor will being city-centric. We cannot justify Government investment flowing into the likes of Manchester while the towns of Lancashire do not even appear in the picture. We need to learn the lessons of the last two years and do better. If we are going to deliver growth and jobs for places like Rossendale and Darwen with the urgency our electorate demands, we must commit to a scale of action that matches the challenge. That means being willing to take risks, to demand joined-up action across Government and to do the hard things on a scale that impacts every community.
What does that mean in practical terms? First, on infrastructure, we have to recognise that on its own, a city-centric approach will do little for communities like mine. Consider Northern Powerhouse Rail. It is a great project that will transform connectivity between cities and major towns across the region, and it is being presented in some quarters as a transformational project for the whole north-west, but when I ask the question, “What will this do for Rossendale and Darwen or any small towns along the route?”, the answer is, “Not much.” Rossendale will remain the only local authority area in the north with no commuter rail link, despite being only 15 miles from Manchester. Darwen will continue to have a patchy and unreliable occasional service. That is why we need to change the way in which we think about such projects, and be far more ambitious in our goals—for instance by thinking in terms of growth corridors, with the requirement that these big projects bring a positive impact to every community. That would include physical infrastructure and connections for small towns as an integral part of the projects, as well as an insistence on buying locally.
We need a similar approach to industrial strategy. In Rossendale and Darwen, we have many great businesses, including creative and innovative manufacturers, but none employs more than 500 people and few fall into what have been identified as national priority sectors. That is entirely typical of many places across our country, where such businesses employ the bulk of the local workforce. We need to get behind those businesses, and have a much more comprehensive and urgent industrial strategy that truly understands their challenges and opportunities. First and foremost, the strategy must embed “buy British” at its heart, using the full power of Government procurement to support our businesses. Frankly, the lack of a procurement Bill in the King’s Speech is a concern that I hope we can address.
We need to bring down business costs, particularly energy, and open up access to risk-tolerant finance, and we need a tax and regulatory system that encourages employment, enterprise, risk and productivity. Alongside that, we need to restore our town centres and community spaces. Pride in Place is a great programme, and I am proud to have brought this investment to Rossendale, Rawtenstall and Darwen. That £20 million over 10 years will enable us to make significant changes, but for every town that has this support, there are many others that do not. Surely the case for investment in Bacup, Stacksteads and Whitworth is just as strong. In any case, we will enjoy the full value of this investment only if it is aligned with improvements in transport, skills and infrastructure that address the underlying constraints on our local economies. We should build on what works, and go bigger and wider with Pride in Place. We should front-load investment to increase the speed and scale of change, while ensuring that we are delivering the infrastructure that can release the full potential of places such as Rossendale and Darwen.
I could list lots of other areas for action, but fundamentally, we need a change in mindset. For too long, geography has meant destiny. Small towns such as Bacup, Whitworth, Rawtenstall and Darwen have been at the back of the queue, left behind as big towns and cities shout louder and offer seemingly easy solutions. We need to break that cycle and ask, “What does this do for our towns?” That question should be embedded in every investment strategy and decision process.
We must be willing to commit to strategies that insist on doing the hard things while providing the procurement policy, fiscal flexibility, regulatory framework and sustained leadership to drive delivery. We must learn the lessons of the past, and not allow established orthodoxies and a desire for easy wins to stand in the way. We simply cannot afford to fail the communities that need us most.
Dr Danny Chambers (Winchester) (LD)
One of the main barriers to people getting back into work is poor mental health. We have very long mental health waiting lists, with a million people on them. Many of those people would rather be in work, and it is also good for their mental health to be in work.
I want to highlight a initiative in Winchester that I have brought up before. It has won awards, including NHS awards. It involves Winchester citizens advice providing a person for two days a week in the local mental health unit, which is called Melbury Lodge, to help in-patients with all their life admin. People who are suffering from mental health issues, especially in-patients, are more likely than average to have debt, housing issues and other life admin problems such that, when they get discharged, they are back in the same situation as when they were admitted in the first place, and their mental health can deteriorate.
The initiative is fantastic. It has been proven, through published peer-reviewed papers, that the people involved have a shorter duration of stay, are less likely to be readmitted and are more likely to engage with social services once they are discharged. Ministers will find it particularly interesting that every £1 spent on the project saves the NHS £14.08 through cost avoidance. I have met the team several times. Rolling it out in every mental health unit in the country seems like an absolute no-brainer. Given that it saves so much money and that the saving is so quick, there is no question that it cannot be afforded. This is not an investment that takes five, six or seven years to pay off; the savings are seen within months.
I urge the Government to look at the project. I would be keen to have a meeting with the relevant Minister—whoever the relevant Minister turns out to be—and the team who are running this project, Winchester citizens advice and the Melbury Lodge unit. It could be hugely impactful in helping many thousands of people to get back into work. That is good for the staff, the patients and the taxpayer.
We were heartened that the previous King’s Speech specifically stated that mental health would be treated as seriously as physical health. We were disappointed there was not a specific mention of mental health in this year’s King’s Speech. We urge the Government to remember to put the issue at the forefront of their efforts to try to get people back into work.
Kate Osborne (Jarrow and Gateshead East) (Lab)
I thank my hon. Friend the Member for Bradford West (Naz Shah) for her brilliant opening contribution to the debate on the Gracious Speech.
I acknowledge that this Government have delivered—from renters’ rights and ending no-fault evictions to the new deal for workers, education, Great British Railways, bringing NHS waiting lists down, lifting children out of poverty, and work on violence against women and girls. All that good work deserves to be talked about and celebrated, but it must also be acknowledged that people need more. They are desperate for change following decades of neglect. Unfortunately, the measures in the King’s Speech, although they are in the main welcome, are not the bold moves that we need. We need a Government who will tackle extreme wealth inequality in the UK and deliver for communities, and we need to go back to giving people hope.
We need to ensure that our Government have received the message from the local elections last week: people are unhappy with the direction we have taken and, as it stands, we do not have the trust of our communities. It was devastating to see the two councils from my constituency, South Tyneside council and Gateshead council, which Labour have held for 50 years, fall to Reform. We let those communities down, and we need to deal with that.
We must build on the things that we have delivered, such as the new deal for workers, instead of focusing on divisive commitments such as the digital ID scheme and the removal of jury trials—two things I remain opposed to. When we move away from our Labour values, we let the country down, let our communities down and, scarily, leave a gap for the far right to move into and exploit people’s fears, desperations and legitimate need for jobs, housing and security.
Housing, security and jobs are particularly needed in the north-east. My constituency of Jarrow and Gateshead East is commemorating the 90th anniversary of the Jarrow crusade—the march for jobs—yet my residents are facing the same problems as those marchers. For decades, successive Governments have neglected the north-east, and the north-east made its feelings clear last week.
We need a Government who take action to improve our communities. The Labour party is the party of the people and the party of workers, and that is the Government we need to see now—a Government who deliver for people and who deliver change that communities can see. We need actions, not words. We need to drastically redistribute the wealth, so that it is invested in communities. We need to rebuild trust locally and nationally, with bold and ambitious policies and action.
There are some highlights in the Gracious Speech, including the Leasehold and Commonhold Reform Bill, the Hillsborough law, legislation to clean up the water industry, the nationalisation of steel, the £45 billion to deliver Northern Powerhouse Rail, the legislation to support small businesses and stop late payments, and the licensing for private hires—all subjects that I have spoken about many times in this place and at events in Parliament. But we need to do much more than this tinkering at the edges. We need to legislate to bring water back into public ownership. We need to stop the scandal of water company bonuses. It is an absolute disgrace that they are profiting from the pollution they are dumping into our waters.
It is also welcome to see proposals around education for all, but we must ensure that any reforms to special educational needs and disabilities do not push children into a one-size-fits-all approach. The SEND consultation ends next week, and we must listen to the views that are submitted. The consultation responses need to be read thoroughly, not filtered by AI. We must have a genuine consultation and ensure that the reforms do not harm SEND children with the most complex needs.
Around 1.7 million children are now identified as having special educational needs. I know that MPs are all being inundated with correspondence from constituents, and many of us have held our own consultation meetings. In my constituency, I have 5% more children with SEND than the national average, and the same issues have been raised in every one of my local consultations. My constituents are worried about their loss of legal rights and their children being forced into mainstream schooling.
Sense, the national disability charity, has said that while inclusive mainstream education should be strengthened, that must not come at the expense of specialist provision. Disabled children with complex needs must continue to have access to specialist settings where those are the most appropriate environments for them to thrive. I completely agree with Sense, and it is evident that many families are struggling to find adequate provision. I have held drop-ins in Parliament with people from across the political spectrum, and I want to thank Rory Bremner and Nick Ferrari for coming into Parliament to meet young people and their families and to listen to their stories.
The last Government described the SEND system as broken, and of course they did a lot of the breaking with their destruction of local government budgets, but the system has been neglected for decades. It is in desperate need of reform and investment. We can and must get this right to ensure that the most vulnerable are protected.
To that end, while I welcome the Gracious Speech, I will be bringing forward a simple amendment highlighting the difference that the right placement makes to a child with complex needs and the costs to families, life outcomes and the state when we get that placement wrong. We must ensure that those children with the most complex needs who cannot be placed into mainstream schools do not lose out with these reforms. I have written to the Secretary of State on this issue and would be happy to meet at any time to discuss it.
I have an autism diagnosis, as do some of my family. It is something those close to me are aware of, but is something I have not spoken about publicly before. I know the impact it has when you are failed in school. This matters personally and politically to me and is something I care deeply about.
I am hugely pleased to see in the Gracious Speech a commitment to bring forward a draft Bill banning abusive conversion practices. While it has appeared in many a Gracious Speech, I firmly believe that the Minister will bring forward a fully trans-inclusive ban on conversion practices as soon as possible.
Wera Hobhouse
Along with the hon. Member and other colleagues, I have been campaigning on bringing in a trans-inclusive conversion therapy Bill to ban that awful practice. Will she support me in asking for a proper timeline for when the legislation will be introduced?
Kate Osborne
Yes, setting out a timeline would be most helpful. I recognise the work of the Minister for Equalities, my hon. Friend the Member for Reading West and Mid Berkshire (Olivia Bailey), and the time she has taken to speak to me over the last few months and even this morning, and she has committed to setting out a clear timeline as soon as possible.
In every meeting I have had with the Minister on this issue, I have been impressed by her determination to finally deliver this legislation and by her understanding of the harm caused by continued delay. My one concern on the delay, which I have already raised, is that this is the only legislation in the King’s Speech where the promise is for a draft Bill rather than a Bill. We absolutely need to get this right, but we must not give people an excuse to delay and frustrate this vitally needed legislation.
Earlier this year, I was proud to deliver a report at the Council of Europe calling on member states to ban conversion practices. I will continue to work with the Minister to take both the spirit and framework details of that report into consideration as the legislation is developed. Although I am happy with that particular commitment, we need bold, new, ambitious policies that people will feel in their pockets. People need to see change in their communities. People need action, not another year of delays and U-turns. Labour needs to do what it was elected to do: govern in the interests of workers and our communities and deal with the obscene levels of wealth inequality in the UK.
Seamus Logan (Aberdeenshire North and Moray East) (SNP)
I rise to address the issue of getting Britain working again, but also to make some observations on this Government’s chaotic performance since July 2024. The focus of today’s debate is on employment, and I will come to that, but so many Labour Members seem utterly preoccupied with the employment of one person: the Prime Minister. No vacancy exists, apparently, but at least one, maybe two, possibly three candidates may apply for said position. I am happy to provide a reference, but it will not be a good one.
This shambolic and unstable Government are in stark contrast to the political stability that we have enjoyed in Scotland since 2007. We will continue to enjoy that stability for another five years following our landslide victory in the Scottish parliamentary election on 8 June —a landslide victory bigger than Labour’s in July 2024, with 58 of our successful applicants being sworn in today in Edinburgh.
Prior to the election and over the last six months in particular, so many Labour MPs from Scotland used their valuable question time in this Chamber to attack the SNP. So many of them told us that the people of Scotland would reject the SNP, but last Thursday, the people of Scotland rejected the Labour party, rejected the Reform party and, indeed, rejected the notion that this is a United Kingdom.
Peter Swallow
The hon. Member said that the victory secured by the SNP at the elections earlier this month was bigger than the victory secured by this Government in 2024. Could he clarify whether the SNP won more or less seats at that election than it previously held? Has the SNP’s majority increased or decreased?
Seamus Logan
The plain fact of the matter, if we look at the percentages, is that it was a bigger landslide. Labour Members would also do well to take consideration of the now 73 MSPs in favour of independence for Scotland.
This Union has now been served with its redundancy notice, like so many workers in Scotland these last two years—like the workers in Grangemouth, who should have been treated in the same way as the steelworkers in Scunthorpe, the 1,500 jobs that could have been created at Ardersier, or the derisory coastal growth fund allocation to our precious fishing industry. Now this chaotic Government have turned on their leader, scapegoating him for their collective failures. The wonder of it all is that the branch manager of the Labour party in Scotland has not resigned, for he carries responsibility for this abject failure of the Labour party in Scotland.
We have not abandoned our pensioners, the vulnerable, the disabled, our young people, our students, our apprentices or our children. Unemployment is lower in Scotland than in the rest of these islands. Most of all, we have not demonised the many thousands of people who come from abroad to work in our essential services, or those who seek sanctuary from war, famine or persecution. They are not taking away our jobs, houses or GP appointments, as some populist politicians would have us believe. Years of austerity managed that and, sadly, Labour is continuing in that vein with its planned assault on the welfare system.
Is the former Health Secretary now ensuring that the King’s Speech included a relentless focus on the health service, on labour shortages in social care, on an end to the privatisation of our health service, on the availability of lifesaving drugs, and on reassuring this House about the hidden costs of the US-UK pharma deal by publishing his Department’s impact assessment? No. He focuses on his own personal ambitions to enter No. 10 Downing Street. He should not have been allowed to resign; he should have been sacked.
Finally, I wish to highlight the Palantir contract, which was discussed recently in Westminster Hall. Many Members from across the House spoke about it, and only yesterday I learned that NHS England has allowed staff from the US tech firm and other contractors to access patient data before it has been pseudonymised, despite internal fears of a
“risk of loss of public confidence”.
An internal NHS briefing has said that it would allow
“unlimited access to non-NHS staff”
to part of the NHS’s federated data platform, which holds identifiable patient information. That should concern everyone in the House, no matter their political persuasion. Indeed, it should concern everybody in the country. Members across the House have called for the Palantir project to be reviewed next year, and I urge whoever replaces the erstwhile Minister for Health Innovation and Safety to act on that misuse of our NHS data.
In conclusion, the Scottish National party will continue to have a relentless focus on matters relating to health and social care that are reserved to this Parliament during this Session, and on matters that adversely affect our small businesses. But the real solution to these issues is to give the people who live in Scotland the democratic right to bring this Union to an end, and allow Scotland to become an independent nation if it so chooses. The concept of Britain just is not working any more.
Jayne Kirkham (Truro and Falmouth) (Lab/Co-op)
A big part of why I became an MP was for the young people in my constituency. I have a 20-year-old Cornish son, and I want young people to have the choice to stay and work in Cornwall, and not be forced to go elsewhere and not come back. There are genuinely exciting opportunities for good, well-paid green jobs in the renewable energy sector in Cornwall, for example floating offshore wind. We also have a new Government critical mineral strategy, and an awful lot of lithium and other critical minerals under our feet—enough, apparently, for 20% of the needs of the whole of Europe. We also have digital, creative arts and our amazing hospitality sector.
I was a teaching assistant in a secondary school for seven years, and I saw the impact that successive covid lockdowns had on a generation of young people who missed out on the in-person, social interaction and developmental milestones. I know how much they suffered from a broken SEND system for a decade, and I realise how difficult it is to re-enter education after time away, or enter the workforce for the first time under those circumstances. We inherited nearly 1 million young people not in work or education across the country, and Cornwall is particularly highly represented in that. It is so important that we give those young people the skills and confidence they need to move forward with their lives. That is why the Government commissioned the Milburn review, to identify the root causes of youth unemployment and to make recommendations for how we can improve opportunities for our young people.
We have introduced some of those policies to support young people into work, backed up by funding. For example, the jobs guarantee will lead to the creation of 90,000 extra subsidised jobs over the next three years for those aged 18 to 24. New foundation apprenticeships, including in hospitality and retail, will help my area and provide employers with up to £2,000 to support 16 to 21-year-olds into work. The apprenticeship initiative will give SMEs £2,000 for each new employee aged 16 to 24, and the youth jobs grants provides £3,000 for a business that hires someone on universal credit for six months.
I am hopeful that those policies will complement and add to some of the brilliant work that Cornish employers are doing, particularly on apprenticeships. Cornwall Marine Network in my constituency plays a vital role in supporting SMEs in the marine sector to take on apprentices, and it delivers high-quality training, as does Truro and Penwith college in my constituency. Firms such as A&P, Pendennis and Cockwells provide fantastic apprenticeship schemes in the marine industries, and the Cornish Fish Producers’ Organisation has developed an 18-month level 2 fisher apprenticeship to equip young people with the skills and knowledge that they need for a career in fishing. I welcome the fishing and coastal growth fund, which will invest in skills and workforce development in the sector.
Furthermore, leaders of the world-class hospitality industry in Cornwall are keen to train more young people. For many Cornish young people, a job in a pub, café or restaurant provides a valuable introduction to the world of work, but it can also lead to a good career in hospitality. Cornwall is perfect for a pilot of the new foundation apprenticeship. I am pleased that the Government are transforming the apprenticeship levy into a new growth and skills levy. Some of that money could perhaps be used flexibly as training for employers in the hospitality sector and others who support apprentices, or by funding some of the skills courses at FE providers such as Truro and Penwith college in my constituency, or by looking at the way some of those apprenticeships are funded.
This is not only about supporting young people in their teens and their twenties, because we must also take steps to improve the lives of children from their earliest years, ensuring that a child’s background does not dictate their chances or leave them struggling to catch up. I am proud that this Government have introduced free breakfast clubs, state nurseries, 30 hours of funded childcare from the age of nine months, free school meals and Best Start family hubs. Those are a start to replacing Sure Start, which was a transformative thing for our families. A number of times I knocked on doors in my constituency and met women about my age who were accountants or who had a variety of jobs. They said that without Sure Start they could never have retrained or got that help—it was fundamental.
Matt Rodda
Is my hon. Friend aware of the good research which shows that £1 invested in early years education is worth £16 invested later in a child’s life? Does she agree that that wise investment by our Government is both taking the economy forward and supporting families in a meaningful way?
Jayne Kirkham
That makes perfect sense. Early years and education are pretty much the most important things that any Government can focus on, and I am so proud that that is what we are doing. The King’s Speech includes legislation to enable the delivery of this Government’s much needed SEND reforms. Parents of children with SEND in my constituency have made clear that the current system is not fit for purpose. I have shared their experiences and concerns as part of the consultation, and I will continue to do so. If young people cannot access education because their needs are not met, it can become harder and harder to get into work and back into society later on.
I recognise that for some people the barriers to employment, education and training can feel insurmountable right now. The Government are trying to take meaningful steps to remove those barriers and invest in those jobs, skills, apprenticeships, to reform and prioritise early years provision, and to address some of the failures in SEND provision. Taken together as a whole, moving forward, those measures represent a real commitment to our next generation, which I am hopeful will benefit young people in Truro and Falmouth, in Cornwall, and across the country.
Marie Goldman (Chelmsford) (LD)
As Member of Parliament for Chelmsford, I am proud to represent a city with a breadth of businesses, industries and educational institutions that do so much to support people from all backgrounds into employment. On today’s theme of getting Britain working again, over recent months I have held several roundtables with local small businesses, from independent restaurants that serve as important community spaces to local shops that provide high-quality, high street based alternatives to major multinationals. Those businesses face many challenges, but I am concerned that the Government’s proposed solutions outlined in the King’s Speech fall far short of where we need to be.
At the end of last month, I hosted a roundtable with Chelmsford businesses in the construction industry. I must declare an interest here, because I have for many years run small businesses in construction, working as a specialist subcontractor. We have been through good times and bad times. I know that the often incredibly tight margins are difficult for the industry to work with, and I know the huge temptation for main contractors, desperate to win work, to overpromise and underdeliver.
Some of the most unscrupulous contractors rely on putting their subcontractors out of business at the end of a contract through non-payment, delayed payment or ridiculously long retention clauses, hoping that avoiding paying a subbie will keep the main contractor afloat. I welcome the proposed introduction of legislation to tackle late payments and hope that, in so doing, the Government will listen to all those across the industry, at all levels, to understand the imperatives and the complexities of this matter.
The construction industry is essential to our economy and our lives. The sector creates, sustains and draws on an enormous range of trades and skills. Far from being just about getting muddy and cold on a building site, the industry requires highly skilled engineers, surveyors, planners and logistics experts. It needs administrators and accountants alongside plumbers, brickies and sparkies. The industry is critical to the functioning of our country, from ensuring that we build enough homes to maintaining and expanding critical transport infrastructure. However, owners and representatives from the companies that I met highlighted the significant decrease in young people entering the construction workforce, as well as the overall proportion of women in the sector being extremely low, at around 16%. The industry is already working hard to tackle that, but businesses cannot do it alone.
Let me highlight one specific example raised with me, which goes to the very heart of the theme of “getting Britain working again”: getting young people to site. If we want young people to take up careers in construction—and we surely do—we need them to not just learn the skills and gain essential knowledge through further education courses, but get hands-on, practical experience on building sites. I know that that is more of a challenge, but the industry wants and needs that. Time and again, I have heard businesses tell me that there is simply no substitute for a young person learning alongside a master craftsman or craftswoman and learning the tricks of the trade that allow them to adapt to the unpredictability of the myriad issues that come up on real sites, rather than in the theoretical world of a classroom. The problem is that these young people cannot get there.
Building sites tend not to be conveniently located along a bus route or next to a train station. Indeed, by definition a “new site” is often in an entirely new, undeveloped area. The work is creating the infrastructure that will be used in the future, but in the meantime how do we get young people to the sites? Many of them are too young to even hold a driving licence. If they do not drive, they are reliant on getting a lift, but it is very difficult for businesses to provide that lift, due to safeguarding rules for under-18s. That inevitably generates inequality, as only those who can afford to take taxis or have a parent available to take them can do so, with others being left behind. I am in no way saying that we should scrap safeguarding, but this is the kind of practical issue that businesses tell me directly they need help with—perhaps in the form of grant funding for transport for young apprentices or those on work experience.
We also need to start earlier in inspiring young people to consider a career in the construction industry, and this is where education must play a key role. How can children choose a career if they do not have a wide view of what is available to them? At this point, I will highlight the fabulous work done in my constituency by Chelmsford city council, which for many years—under Liberal Democrat leadership—has been running a skills festival every summer for pupils in year 8. It is called a festival, because that is exactly what it looks and feels like, but instead of the marquees and tents being filled with musicians or stalls selling merchandise and pop culture paraphernalia, they are packed with interactive stands from local businesses and other organisations based in Chelmsford and Essex. They usually have hands-on activities for 12 and 13 year-olds and hopefully encourage them to consider choosing GCSEs in the coming months that fit well with what they see in front of them—in year 8 they will not yet have chosen their GCSEs.
However, this is about not just broadening the horizons of children, but strengthening and deepening the knowledge of their teachers and schools about what is out there, so that they can support the children going forward. The feedback from Chelmsford’s “Skills Fest”, as it is known, is fabulous, with many parents commenting afterwards that they have never seen their child so “brimming with enthusiasm” for something. That is a direct quote from a parent; their child was so enthusiastic about town planning, which they had never considered before. It is pretty inspirational to hear that.
This kind of inspirational, collaborative and innovative activity is the sort of thing that I would like to see and suggest that we need to see right across the country, learning from Chelmsford’s example and experience. In short, if we want to get Britain working again, it can never start too early, and it must start with supporting children. Indeed, it is these practical solutions that would offer young people from diverse backgrounds the opportunities to experience and begin successful, challenging and meaningful careers in crucial sectors such as construction.
Let me turn quickly to the issue of health. It is clear that we cannot get Britain working again if we cannot get Britain healthy again. On that subject, I am afraid that I continue to be dismayed by the state of Broomfield hospital, which is just outside my constituency but serves as Chelmsford’s main healthcare facility. I have held numerous roundtables and surgeries with staff and patients alike to hear from them directly about the challenges facing the Mid and South Essex NHS foundation trust, of which the hospital forms a part. That is easily one of the most concerning issues to local residents, myself included.
Like everyone else, I want to ensure that my friends and family know that they can trust the trust if the worst happens. That is why I was genuinely pleased in March, when the Health Secretary announced that our trust was being placed into an intensive recovery programme to ensure that swift action was taken to address its many challenges. However, almost two months on, I received word yesterday that the trust is yet to receive any details on what the recovery programme even entails.
It is almost unbelievable that a programme labelled “intensive” and announced in March to begin last month has given precisely zero details about what it means, even to the management of one of the five trusts singled out as desperately in need of support. Unfortunately, that is entirely symptomatic of a Government approach that has led to the rather precarious position that the Prime Minister finds himself in today—or possibly even worse. There are promises of swift delivery, meaningful change and competent leadership, then a failure to do any of those things.
Healthcare is essential to every one of us. Staff in the NHS do exhausting, incredible work and are definitely to be commended, but they cannot be expected to turn failing trusts around if the Government cannot begin to describe to them how they want to help them, what they want them to do or how they will be supported in doing so. Our NHS and my constituents deserve and need far better. I ask the Health Secretary—whoever that turns out to be in the weeks and months ahead—to communicate urgently the programme’s details with the relevant trusts, such as Mid and South Essex, so that work can begin right now.
Let me turn briefly to other matters. The previous King’s Speech promised a draft Bill to ban conversion therapy, but that did not happen. Here we are again, with a promise in yesterday’s King’s Speech, as has been mentioned by other hon. Members across the House, for
“a draft Bill to ban abusive conversion practices.”—[Official Report, House of Lords, 13 May 2026; Vol. 856, c. 3.]
As a slight aside, I know that I have spent quite a bit of time talking about the construction industry and I am now talking about conversion practices, but I want to be very clear that these two issues are very different. It was a bit strange to hear cladding remediation and conversion practices lumped into the same sentence in the King’s Speech. I wonder whether there was a bit of confusion in the Government about how wildly different those two issues are—we are not talking about converting buildings. Then again, perhaps that highlights the scale of the challenge and why the Government have not prioritised this matter; perhaps they truly do not understand the issue.
I must remind the Government that we have heard time and again of the impact that abusive conversion practices have on the LGBT+ community. Indeed, it was Theresa May’s Government in 2018 who first proposed such a Bill, yet here we are, almost a decade later, without even a draft in front of us. As other hon. Members have done, I ask the Government what assurances they can give that such a Bill will finally come forward, given that it has been promised before but did not happen. The LGBT+ community must not again be told to wait until the end of this Session only to see another promise broken. The Government must publish a trans-inclusive Bill to ban conversion practices as a matter of urgency.
The Government recognise a lot of the challenges that face our country, and I do not doubt their desire to improve people’s lives, but they either refuse to carry out the appropriate solutions or are too timid to make an argument for the bold change that our country has been crying out for, even if it is sometimes controversial. We are fortunate to live in an amazing country. We have wonderful people, world-class skills and expertise, globally admired institutions and businesses, a deep history built on the principles of fairness, tolerance and inclusivity, and enormous potential to lead the world in so many ways—politically, economically and morally. However, we need to do more than just recognise that it is not currently working for everyone; we need real, workable, practical and pragmatic ideas that can and must be implemented at pace.
We on the Liberal Democrat Benches want this Government to make positive changes. It matters for us and our constituents that they do that, so I encourage them to listen to the calls of Liberal Democrat Members, who are willing to work together to achieve the positive changes that we need to reduce inequality, increase economic security, and ultimately see off the politics of hatred and grievance.
Peter Swallow (Bracknell) (Lab)
I start by declaring that I am the chair of the all-party parliamentary group for schools, learning and assessment, of the all-party parliamentary group on social mobility, and of the all- party parliamentary group for classics.
I welcome the ambitious agenda set out yesterday in a King’s Speech that places working people at its heart—an agenda that builds on our promises to deliver a safer, stronger and more prosperous country. It is an agenda that will get Britain working and break down the barriers to opportunity, both for our country on the global stage and for every young person in it.
Opening up new opportunities for growth and trade is a vital part of this Government’s commitment to working families, because it is crucial that my constituents not only hear about the change we are delivering, but feel it in their pockets. As such, the Prime Minister is right when he says that a stronger relationship with Europe is in all of our best interests. Our European neighbours are our closest friends and allies, and greater opportunities on the continent for our businesses and our young people can only mean a more prosperous country with more opportunities for all. [Interruption.] It does not make sense to be so fixated on an ideology that we act against the interests of our nation and reject the opportunities that are on our doorstep—we are hearing some of that in the chuntering from Conservative Front Benchers. I remind those lining up to cry “Brexit betrayal” that the Leave campaign never promised that we would be completely isolated from our closest economic and defensive allies. In fact, it promised quite the opposite. A closer relationship with Europe means a safer, stronger, more prosperous Britain at a time when that has never been more important, and youth mobility offers brighter futures for our young people. I am proud to support the Government’s clear leadership in this area.
I also welcome the Government’s commitment to supporting British businesses and jobs through tackling unnecessary regulation and supporting businesses to introduce 50,000 more apprenticeships. I was delighted to see this in action in my constituency with the recent opening of a new youth employment hub in Bracknell, which will support hundreds of young people to enter the workplace and develop their skills and futures. I extend a huge thank you to the local businesses across Bracknell Forest that are supporting this initiative, because I and this Government recognise that youth unemployment is not just a problem that lies with individuals. It will take a whole-of-society approach to reach the one in eight young people who are not in education, work or training, and give them hope again.
We also know that for many young people the barriers to opportunity begin far before they even think of entering the workplace. Of all the issues that constituents have raised with me since I became Bracknell’s MP, none has been as complex, pervasive, emotional or deeply personal as those I have heard from parents and children experiencing our broken SEND system. As such, I could not welcome more strongly the commitment this Government have made to face the problem head-on and reform our broken system.
This Government’s determination to deliver for SEND young people is already making a big difference in my constituency, where funding has been confirmed for a new SEND school at Buckler’s Park in Crowthorne. Under the previous Conservative Government, that school was promised, but never funded. This Government are ending the years of empty promises, and are not only investing in the services that families so badly need, but getting on with the work we were elected to do and rebuilding those services so that they actually function. My only ask—the SEND Minister, my hon. Friend the Member for Queen’s Park and Maida Vale (Georgia Gould), who is in her place and always listens very attentively on this issue, knows what I am going to say—is that we build that school as quickly as possible. Having visited my constituency, she knows all too well that in Bracknell, and across the country, there are very many young people who need us to act as quickly as we can to get them the places in mainstream education and specialist provision that they so badly need.
On that note, it is also hugely welcome to see the Government delivering an initial £1 million in funding to Bracknell Forest council to establish our new Experts at Hand service, which will improve the availability of occupational therapists, speech and language therapists and educational psychologists to our local schools. I was delighted to get an update on that new programme earlier this week. Many parent carers are concerned about the need to train more practitioners. I know that my hon. Friend the Minister also recognises those challenges, so I hope we can set out an ambitious but deliverable workforce plan as soon as possible, to make sure that the new service can make the difference it is intended to make.
Recently, I hosted a meeting with parents in my constituency to discuss the SEND proposals. There was no doubt among those who attended that the system is badly in need of change, but parent carers raised concerns about individual support plans containing the right safeguards to ensure that every young person gets the support they need. I know that Ministers take that task extremely seriously, and I welcome their resolve to listen to families and educators and to make sustained, meaningful change. Accountability is important, so I simply ask Ministers to focus on that issue as they respond to the consultation. I look forward to the Government setting out all of their proposals in the education for all Bill, to rebuild a system that will give every child the education and opportunities they deserve.
Reform to our education system is about high standards for all, but it is also about preparing our young people to be active, informed and ambitious for their futures. As a former teacher, I know that young people have much to contribute to our political and civic life, and I wholeheartedly welcome the plans set out by this Government to extend the right to vote to 16 and 17-year-olds. As chair of the APPG for schools, learning and assessment, I have been leading an inquiry into votes at 16 and how we can ensure schools are supporting young people to engage in our democracy. I thank the democracy Minister, my hon. Friend the Member for Chester North and Neston (Samantha Dixon), for attending one of our evidence sessions.
We have heard from a wide range of young people, educators and civic organisations, and the message has been clear. This is the moment for a wider reflection on our education system and how it serves all of us in areas of civic life—not just in the classroom, but across society. The success of votes at 16 will be reflected, not just in how many young people vote, but in how they feel about their experience of voting and the tools that are available to support them to exercise their right to vote. I welcome the work that is already being undertaken in this area, including the curriculum and assessment review and the schools White Paper. I urge Ministers to grasp the opportunity to embrace a fully cross-departmental approach to delivering this policy, so that our young people develop the skills that employers are crying out for, the skills that will empower them in every area of their life, and have a sense of belonging. It is so important for everyone to feel that they belong to, contribute to, and are part of this United Kingdom.
This Government are fixing the foundations of this country. A quality education and secure employment are the gateways to opportunity, but so too is having a safe and decent home to live in. Too many people are denied that—stuck in insecure, impermanent accommodation and on long waiting lists for social housing simply to find somewhere suitable to live. We have already done a huge amount to tackle those injustices through our Renters’ Rights Act 2025. I am proud that Bracknell’s history as a post-war new town shows what ambition a Labour Government can have when staring a housing crisis in the face, a point that was made eloquently yesterday by my hon. Friend the Member for Harlow (Chris Vince) when seconding the Humble Address. Let me quickly put on record that I am as proud of Bracknell as he is of Harlow. As everyone in this House will know, that is quite a big boast, given how supportive he is of Harlow.
I welcome the announcement of a social housing renewal Bill, including measures to protect our vital social housing stock and to introduce greater protections for tenants in instances of domestic abuse. I am pleased that the Government are proposing reforms to tackle disposals, but I would like us to go even further in this area so that local authorities are not just informed of any disposal of valuable housing stock, but must approve of it. Given that we have so many families on our waiting lists, I think that is very important. The social housing renewal Bill will ensure the investment and reform needed so that the great legacy that made Bracknell and other new towns what they are today can belong not just to Labour Governments past, but equally to this Government.
Finally, I will touch on something a bit more personal, but no less important. There is no place in the Britain I know and love for abusive conversion practices to continue. The promise we made to ban them is one we must keep, and I offer my full support to the Government’s plans to bring forward draft legislation to do so in this Session. It is right that that ban will be fully trans-inclusive.
The British people elected this Labour Government to deliver change. In my maiden speech, I emphasised that that would not be easy and would not necessarily always happen as quickly as we would like. Transparently, this week has demonstrated the truth of those words far more than I would have liked, so let me simply finish with this promise to the constituents who put their faith in me and sent me to this place to represent them. Whatever the slings and arrows of outrageous fortune care to throw at me, I will remain focused on the one and only thing I was sent here to do: delivering change for my constituents.
Caroline Voaden (South Devon) (LD)
It is a real pleasure to speak in this King’s Speech debate, which is my first in this Chamber. Last time around, I was sat on my own in a hotel room on the south bank with covid, warmly shared as a welcome gift by a lovely new colleague just after I entered this place.
After the local election results last week, it is clear that the country has spoken. People right across this great nation are deeply, viscerally disappointed in the performance of this Government since the general election two years ago. This Government came in with such promise and such a huge majority that they could have done anything they wanted. They could have swung into action on day one, giving people real hope, with a real commitment to turbocharge the economy, to clean up our dying and degraded natural environment and to provide truly affordable and social homes, rather than more million-pound new builds like those we see carpeting South Devon. Instead, two years on, people are struggling to pay their bills, young people are failing to find their first job, parents are still fighting with local authorities to secure a decent education for their child, and thousands upon thousands of people simply cannot afford a secure roof over their head.
Peter Swallow
The hon. Member knows how fond I am of her, but how can she possibly in one voice condemn building new homes and in the next sentence suggest that we do not have enough homes for young people to live in? She simply cannot have her cake and eat it.
Caroline Voaden
What I said is absolutely correct. In my constituency of South Devon, new build homes in developer-led housing estates are selling for £950,000. We are not providing the homes we need—the social homes and the truly affordable homes that young people, young couples, young families and people who want to move out from their parents’ home need. We are providing the wrong sort of homes. Having a system led by housing developers that are driven by profit will never provide the homes that we need.
Is it any wonder that voters across the country have turned to the extreme ends of our political spectrum to stick two fingers up at what they see as an ineffective political class that has completely ignored them? “Blame the immigrants” or “blame the billionaires” seem to be the two easy answers thrown out by these parties to the difficult, thorny, complicated questions that this country faces. The sad truth is that neither of those two propositions will be enough to make the changes we need to see to reform the structures of our economy and public services and to improve the lives of those who need it most.
Ten years ago, we saw a referendum that cut our country in two, like a chainsaw through the trunk of a mighty oak tree, and that division has not healed. The arguments still rage, the communities still feel left behind, and the false promise offered in that awful referendum has turned out to be nothing but smoke and mirrors. People are still angry on both sides of that debate. The House will not be surprised to hear that as a Liberal Democrat, I welcome the Government’s promise to strengthen ties with our nearest neighbours in Europe. The House will probably not be surprised to hear me also say that that promise does not go far enough, especially if we are to get Britain working again.
The upcoming EU reset Bill is just the latest example of the Government’s lack of ambition when it comes to rebuilding our trading links with Europe. When we talk of Brexit red tape, nowhere is that more limiting than in the red lines that Labour tied around itself in its 2024 manifesto. It said on coming into office that the previous Conservative Government had left a £22 billion black hole in the UK’s public finances, yet the botched Brexit deal has left a £90 billion hole, similar in scale to the damage wreaked by the 2008 financial crash.
Businesses in South Devon regularly talk to me about the nightmare of trying to do business with Europe. Many have just given up on it altogether. Others are hanging on, desperately hoping that trading restrictions will be eased and customers will come back. I welcome the promise of a sanitary and phytosanitary deal, which cannot come fast enough for my food and farming businesses. We want to hear the Government talk about a customs union with the EU to slash the red tape that is holding us back, because economic growth has stagnated in this country for far too long. We also want to see the UK at the heart of European defence co-operation, not only for the benefits it would bring to national security, but for the investment opportunities it would provide for the supply chain. We must be front and centre of those negotiations. Europe would welcome our involvement, and we must be confident about shaping and leading that discussion.
There is so much to cover in the King’s Speech, but I will just touch on a couple of other areas. I have talked about people feeling ignored and forgotten. Nowhere is the visible representation of that starker than in our high streets, with boarded-up shops, endless vape shops, cafés and pubs struggling to survive, and exorbitant rents making it impossible to get a new business off the ground. The Government have pledged to nationalise British Steel to protect fewer than 3,000 jobs. I have no doubt that the wider economy in and around Scunthorpe will truly benefit from that decision, but why is there nothing in this speech to protect our once vibrant and precious hospitality industry, which has lost nearly 100,000 jobs in the past year? Those jobs are less visible than the closure of a steelworks or a car plant, because it is 10 jobs here and 20 jobs there, but the effect of the national insurance rise has been devastating up and down the country. Businesses have been calling last orders once and for all or simply shrinking their offer.
In my constituency, Rockfish, the California Inn, the Maltsters Arms and the Berry Head hotel—I could go on and on, because hospitality is the backbone of our economy—are cutting staff hours, choosing not to employ extra staff or closing two days a week so that they can manage on one exhausted chef, rather than employing a second, with the owner of the pub having to step into the kitchen when the chef has a few precious days off. This death by a thousand cuts is having a devastating impact on youth employment and part-time jobs. Those are the jobs that so many people rely on to combine with parenting, caring or studying. Let us not forget that every teenager who gets a job washing pots or waiting tables is learning valuable skills that will take them forward in the job market for years to come.
As the Secretary of State said earlier today, this is about the story of their lives, and I was pleased to hear his passion for supporting young people into work, but youth unemployment now stands at around 20%. That is utterly shameful. One in five of our young people is unable to even get a start in the workforce. The new small business protections Bill is laudable, but it falls far short of a proper plan to protect small businesses. We are disappointed that the Government have not listened to our plan to scrap the national insurance rise, reform business rates and prioritise a high street revival.
As a south-west MP, there is a list of Bills that I would have loved to see in the King’s Speech but are sadly missing. Yet again, the rural south-west seems to have been ignored. We have £45 billion for Northern Powerhouse Rail, but not a word about boosting vital bus services across the villages of the south-west. If we are to get people working again, we have to get them to work. If there are no buses, they cannot get there. There was nothing on boosting digital connectivity for hard-to-reach areas.
Sam Rushworth
I hear what the hon. Lady is saying—we have exactly the same challenges in my rural community, where people cannot get to job interviews or to jobs—but we passed the Bus Services Act 2025 in the last Session.
Caroline Voaden
I thank the hon. Member for his intervention. We do not have a mayor in Devon, so we miss out on a lot of that legislation’s benefits. I have loads of villages that do not even have a bus, so talk of bus fares is completely irrelevant when there is literally no service. How are young people supposed to get to college or work or seek opportunities if they cannot get out of their village?
There was no legislation to require banks to offer a minimum service guarantee to their customers. Lloyds bank made nearly £7 billion in profit in 2025, yet it closed branches with impunity, and the Government’s promises to address the lack of banking services have led to nothing so far.
There are some things in the King’s Speech that I would like to welcome. I am pleased to see the Government pledge finally to break the link between gas and electricity prices, which is vital in a country that depends more heavily on gas than many of our neighbours. Investment in home-grown renewable power is also welcome, but we want to see the focus of solar on warehouses and car parks, not on prime farmland. We also want to see stronger community benefits from new renewable infrastructure, empowering communities with the right to buy and sell community energy locally.
Talk of farmland leads me to a devastating omission from the King’s Speech: not once was the word “nature” mentioned. As my hon. Friend the Member for South Cotswolds (Dr Savage) so beautifully laid out in her speech last night, that was probably something that the King himself was disappointed to see. Where is the desire to protect our green spaces, to prompt a revival in nature, to restore our ancient forests and our peatlands, and to clean up our dirty rivers and waterways once and for all? We live in one of the most nature depleted countries in the world, yet nature is not a priority for the Government, despite all the benefits that it brings to people’s health and wellbeing. If we truly want to cut the NHS bill, that would be a really good place to start.
The new water Bill is welcome. The Liberal Democrats have long called for Ofwat to be replaced by a regulator that actually has some teeth, but until the Government address the elephant in the room and look at the ownership of the water industry, nothing will really change. No one should be making a profit from water: something that is so vital not only to us as humans, but to the health of all our planet’s ecosystems. The Liberal Democrats have long led the campaign in Parliament against the sewage scandal, tabling 44 amendments to the Water (Special Measures) Bill, none of which the Government or the Conservatives accepted. They must do more.
Lastly, I will mention the education for all Bill. We all know that support for children with special educational needs is broken, so I welcome the Government’s commitment to tackling it; we urgently need this reform. As my party’s schools spokesperson, I will scrutinise every line of the legislation when it comes before the House, so I will no doubt have time to say far more about it, but let me say this. We must build a system designed around the potential that every child has and that works to their strengths, noticing their gifts and talents and what they can achieve given the right support. We must stop judging them by their limitations, ostracising them, separating them from their peers and causing lifelong damage to their mental health and confidence.
Reform to SEND must be done with children and parents at its heart, with open, honest consultation with families, and with a serious commitment to invest the money needed in our educators and our schools so that they can rise to the challenge and truly build a more inclusive system that works for every child, from those facing the hardest of challenges to the lucky and blessed high achievers among them.
It is a strange thing to deliver this speech opposite Government Benches that are so clearly riven by intrigue, and not knowing who will be leading this legislation through Parliament. It is my hope that whatever path our Government colleagues decide to go down today—or over the next few days and weeks—they will commit to going further in the areas that I have set out, remember the challenges and higher costs faced by rural areas in service delivery and communications, and prioritise nature in every single major decision they make about infrastructure and new building programmes. Think bigger, think bolder, think greener for the benefit of everyone.
Madam Deputy Speaker (Caroline Nokes)
Order. Before I call the next speaker, may I please gently remind Members that we must not make reference to the monarch having particular views?
Sojan Joseph (Ashford) (Lab)
It is a pleasure to be called to speak in the debate. I had the privilege of making my maiden speech during the last King’s Speech debate. Since then, I am proud to have supported 50 pieces of legislation that are helping to build a better Britain, deliver positive change for working people and, crucially, giving my constituents hope for the future. I will not list all 50 today, but I do want to reflect on some of the changes that I believe demonstrate the positive direction of travel that the Labour Government have set that have helped get Britain working again.
In the last 22 months, we have delivered the biggest upgrade in workers’ rights in a generation, giving people greater security, fairness and dignity at work. We have taken decisive steps to strengthen protections for private renters so that families can feel more secure in their homes, and through the removal of the two-child benefit cap over 2,500 children in my constituency—almost half a million more across the country—will be lifted out of poverty.
As a former NHS mental health worker for 22 years, I am particularly proud that this Labour Government chose to prioritise the long overdue modernisation of the Mental Health Act. This reform will strengthen patient choice, autonomy and legal protections and help ensure that people experiencing mental ill health are treated with the dignity, respect and compassion they deserve.
I also welcome the progress made in my local NHS. I previously raised the case of a coffee shop at the William Harvey hospital in Ashford being converted into an emergency ward to treat accident and emergency patients. Steps have been taken to address corridor care at the hospital, including a share of the £29 million investment that East Kent hospitals NHS trust received to expand the same-day emergency care unit at the hospital.
I equally welcome the recent announcement by the Department of Health and Social Care about the new intensive recovery programme. My fellow Labour colleagues and I have been pushing for an intensive strategy to provide help for hospitals in east Kent since we were elected. This is an opportunity for East Kent hospitals to receive the long awaited help they have been asking for and make improvements across the board. I thank the local hard-working frontline NHS staff.
As we look to build on the many achievements of the last Session, it is important that the Government are bolder and faster in delivering the change that the people of Ashford, Hawkinge and the villages voted for at the last general election. Against that backdrop, I was pleased that in the King’s Speech the Government set out welcome measures to unblock the barriers to growth, protect households from the pressures of the cost of living and rebuild our public services.
Through the King’s Speech, the Government continued to recognise the financial pressures that families are facing and reflected their determination to ensure that economic growth is felt in people’s day-to-day lives, not just in headline statistics. I am pleased to see the Government’s determination about how every child deserves the chance to succeed to the best of their ability and should not be held back by poverty or special educational needs.
I also welcome what the King’s Speech said about further rebuilding our relationship with the European Union. In an increasingly unstable world, our long-term national interest is best served by closer co-operation with our European partners on defence, on trade and on strengthening our economy. In my constituency in particular, our trading relationship with Europe is critical to local prosperity. We must do everything we can to help businesses across Kent sell their goods and services to our largest and closest trading partners.
That brings me to the vital issue of international rail connectivity and the future of Ashford International. Following the Office of Rail and Road’s decision late last year to grant Virgin Rail access to the international depot in east London, I welcome Virgin’s public commitment that its cross-channel services will stop at Ashford International, provided that the station is reopened. Two other operators, FS Trenitalia and Gemini Trains, are also developing proposals to introduce international services between the UK and mainland Europe to provide greater competition on the line, and both have previously expressed a willingness to include Ashford International as a stop.
The return of international services to Ashford would be transformative, because it would deliver a major boost to economic growth locally and across the wider south-east. It would make it quicker and more efficient for local businesses to trade with mainland Europe, and it would encourage inward investment by improving connectivity. It would also open up Kent, Sussex and the south-east to even more tourists. The Good Growth Foundation estimated last year that the return of international services could inject £2.7 billion into the UK economy over five years—a prize well worth pursuing. I therefore urge the Government to work actively with private operators, regulators and other stakeholders to ensure that Ashford International can be reopened in time for new cross-channel services to stop there.
As a Kent MP, I warmly welcome the announcement in the King’s Speech that the Lower Thames crossing will be built at pace. I know that work has already started on this highly significant road-building scheme, which will provide a boost to the economy locally and across the rest of the country. It will strengthen connectivity to major ports, including Dover, and will improve resilience and reliability for road users.
As we strive to enhance the reliability and resilience of that part of the road network, I hope that we can find a long-term solution to the repeated use of Operation Brock on the M20. Every time it is put in place, it causes disruption and delays for residents, local businesses and haulage firms. Decisions on its deployment rest with the Kent and Medway Resilience Forum, and I once again urge the forum to ensure that it is used only as an emergency measure. I also ask the Government to continue pressing for improved resilience and smarter traffic management on the M20, to avoid Operation Brock being regularly deployed during school holidays and other busy periods.
To conclude, I want to mention one final piece of legislation that I am pleased to see return in the King’s Speech. Having recently served on its Bill Committee, I look forward to the Representation of the People Bill completing its passage through Parliament. The Bill will extend the franchise to 16 and 17-year-olds, strengthen the rules on political donations, and implement the Rycroft review’s recommendations to better protect our democracy from foreign interference. Its passage will not only fulfil a clear Labour party manifesto commitment but, more importantly, help to safeguard our democratic system by making it more robust, transparent and accountable at a time of growing global instability. That is an objective that I hope Members across the House can support.
Phil Brickell (Bolton West) (Lab)
Yesterday’s King’s Speech showed that, despite all the noise from Opposition Members, this Government are determined to get their heads down and get on with the job that the British people sent us to Westminster to do. After years of drift, decline and short-termism under the Conservative party, this Labour Government are choosing a different path—one that restores hope to towns like Westhoughton, Horwich, Blackrod and Bolton in my constituency. As the electorate told us last week, and as the Prime Minister has acknowledged, the challenges we face need to be met with substantial systematic reforms.
Families in my constituency are feeling the pressure of rising bills, stretched public services and insecure work, which is why I was proud that in the previous parliamentary Session, this Government passed landmark legislation on workers’ rights, protections for private sector renters, bringing rail back into public ownership, rolling out clean energy and achieving much-needed reforms to our policing system. This Session’s programme shows that the Government are prepared to act with urgency and purpose in order to build on the good work that has already been done. One of the most important priorities set out yesterday is ending the opportunity crisis facing so many young people and families across our country. I will focus most of the rest of my remarks on that topic.
For years, families navigating the special educational needs and disabilities system have felt exhausted and ignored. At a roundtable that I held recently with concerned parents, I was told about the endless battles to secure assessments, support and specialist provision for children. Frankly, teachers and schools have been asked to do more with less, and children with enormous talent and potential have too often been denied the support they deserve. That is not acceptable, and it is not sustainable for this country.
The education for all Bill represents an important step towards the meaningful SEND reform that is vital because, as Labour Members believe, every child deserves the opportunity to go as far as their talent and effort can take them. We all know, deep in our hearts, that it should not matter where children are from or how wealthy their families are, yet all too often the current system bakes in inequalities at a young age that stay with children for the rest of their lives.
Alongside that reform, another vital commitment featured in the King’s Speech yesterday: our offer to young people, including this Government’s youth guarantee. For too long, too many young people have been locked out of work, training or opportunity, which is why the Government’s industrial strategy and apprenticeships plan matter so much. It is this Labour Government who are removing the barriers to economic growth that stifled innovation and creativity, and it is this Labour Government who are creating the much needed pathways into secure, highly paid jobs for the next generation of Boltonians.
David Reed (Exmouth and Exeter East) (Con)
The hon. Gentleman is making an impassioned speech. One of my big concerns, about which we need to be talking far more, is that jobs for young people in the 18 to 24 category are being replaced by automation and artificial intelligence. That is especially true for young people who are in the age category coming out of university: they are shackled with tens of thousands of pounds of debt and the graduate jobs that they had hoped to get are now being automated. What does he think that the Government can do to ensure that the cohort coming out of university and coming into the workplace have good career pathways in front of them?
Phil Brickell
The hon. Member makes a valid point about artificial intelligence and the world of work, which is increasingly changing and facing threats but also facing opportunities. I would like the Government to continue to work strongly with our further and higher education sector, to think proactively about what opportunities are coming down the line for work in the sectors that he is talking about, five or 10 years in the future. We have to be creative in thinking about what those opportunities look like, although artificial intelligence is not just about threats.
Tom Hayes (Bournemouth East) (Lab)
On the topic of giving younger people access to AI and digital skills, Charminster library in my constituency of Bournemouth East has been closed indefinitely by the Liberal Democrat-led council, which does not have a plan to repair or rescue the library. That library could provide a space for younger people to acquire those critical AI and digital skills, so does my hon. Friend agree that our community is only as strong as the space that we have and that we need libraries, like the one in Charminster, to be reopened, so that younger people can have access to such skills?
Phil Brickell
My hon. Friend makes an extremely valid point about Charminster library. I know that he is a terrific campaigner for his local community assets and I wish him all the best for success in that campaign.
As a former Erasmus student, may I put on the record my heartfelt support for our re-entry to that programme? My time on the Erasmus programme in Hanover opened up a world of possibilities that were unimaginable to a young lad growing up in Bolton, expanding my horizons, teaching me new skills, preparing me for the world of work and giving me the confidence to go out and get full-time employment after I graduated. It is only right that the kids of today have the same access to the opportunities I had when I was growing up.
The King’s Speech recognises a simple, inescapable reality: Britain is stronger when we work closely with our European partners. Businesses across Bolton and the north-west know the importance of strong European ties. Manufacturers, exporters and local employers all benefit when Britain has stable, constructive relationships with our nearest neighbours. The Conservative party wrecked our ties with Europe, damaged trade flows, hindered growth and frustrated co-operation. Businesses faced unnecessary barriers, opportunities were lost and relationships that took decades to build were neglected.
Take the trailer supplier Indespension, located in my patch, a pioneering company snared up by Brexit-related red tape. I have been working with the Minister for Trade, my hon. Friend the Member for Rhondda and Ogmore (Chris Bryant), to cut through some of that duplicative bureaucracy, but the European partnership Bill should be the vehicle to clear away the very burdens imposed by the Conservatives, aided and abetted by their colleagues in Reform UK. What we saw under previous successive Conservative Governments, whether they were supported by the UK Independence party or the Brexit party at the time, was common sense sacrificed on the altar of ideological purity by a Government then more focused on pithy three-word slogans than on doing the hard yards to negotiate the best deal for Britain. My constituents know it, the members of my party know it and my colleagues on these Benches know it too. That is why this Government’s EU reset is about acting pragmatically in Britain’s national interest to secure the very best for our country.
Taken together, this Government’s programme will build national resilience, spread opportunity and restore confidence that the future can be better for working people and their families: a Britain with stronger public services; a Britain where children in Bolton West with SEND receive the support they deserve; a Britain where young people in Westhoughton, Horwich, Bolton and Blackrod all have the chance to succeed; a Britain with clean, home-grown energy and stronger economic security; and a Britain that rebuilds its place in the world with confidence and purpose.
There are no silver bullets after 14 years of decline. We must be honest about the trade-offs and investments required to rebuild our country. I am proud to support a King’s Speech that shows that Labour is getting on with the job for my constituents across Bolton West.
John Slinger (Rugby) (Lab)
I do not know if colleagues noticed, but a lot of rhetoric and rumours have been flying around Westminster recently. MPs have been huddled in the Tea Room and the corridors, whispering feverishly—tensions are high. After all the anticipation and the angst, today was the day. Rumour became reality.
Members will have guessed it: today it was announced that, for the start of 2026, we had the fastest GDP per capita growth in four years. In Q1, the UK’s growth was the fastest of six G7 nations for which we have data. Reports of the economy being in demise under the stewardship of my right hon. Friend the Chancellor of the Exchequer have been greatly exaggerated, as have reports of the political demise of my right hon. Friend the Prime Minister. Today’s good economic news matters for my constituents in Rugby. Economic growth matters for jobs and public services, for tackling the cost of living and much more.
The Labour party is aptly named: labour, work. It is a party founded to represent working people in this House of Commons. We want people to work, and we are doing much to help people find work, to help people who face challenges of all kinds to get into work, to ensure that all have dignity when they are in work, to help them navigate a rapidly changing world of work and to ensure compassion and support for those who cannot work but who can still contribute and lead fulfilling lives. Because we are Labour we believe in an active state, not in the laissez-faire approach of the Conservatives or the money-from-who-knows-where approach of Reform UK. We believe in work.
It is easy for people in here and for people outside to assume things about someone’s professional and work background. Even I have made that mistake. After reading the Reform UK leaflets that came through my door about the local elections, emblazoned with the face of the hon. Member for Clacton (Nigel Farage), I made the schoolboy error of thinking that, given his mythical status as a man of the people, his work background was varied, perhaps even working class. It turns out that this tribune of the people was a commodities trader in the City of London—nothing wrong with that.
I would not want hon. Members to assume anything about my professional background. To misquote President Reagen in 1984, I am not going to exploit, for political purposes, my opponents’ inexperience in blue collar jobs. My career has been varied. I did a paper round, I have been a gardener, I have done farmwork, I worked in a cinema, and I share with the Leader of the Opposition the fact that I worked in a McDonald’s restaurant for several years, although not the same one as her. I have been a waiter and a bartender, I was a hospital porter for two years, and I even worked here 20 years ago for Labour MPs. However, I have spent most of my career in the private sector in strategic communications consultancy.
I say that because all jobs are important. All add value—public or private, blue or white collar, full time or part time. From our teenage years, they teach us that our labour is valuable and that we can benefit not only ourselves but the wider community. Members across the House will know that I have spoken many times about engaging young people and ensuring they have the best start in life. That has been a core tenet of my philosophy as an MP, and I am pleased to see it reflected in the King’s Speech, with policies that give young people more freedom, more opportunity and more hope, because building the foundations of a young life through work helps us strengthen the foundations of our country.
In the Prime Minister’s much analysed speech on Monday, he described a vision to relentlessly pursue opportunities for our young people, promising a closer relationship with Europe, where young people can benefit from the Erasmus+ scheme and a new youth experience programme, which I strongly commend. He placed an even greater emphasis on young people: we will invest in apprenticeships, technical excellence colleges and a guaranteed offer of a job, training or work placement for every young person. Those measures will be brought forward in Bills announced in the King’s Speech.
I welcome this Government’s laser focus on getting Britain working because, sadly, the latest official statistics make for depressing reading. They show that nearly 1 million 16 to 24-year-olds are not in education, employment or training. I want to see that figure come down, as I am sure all Members do. Not only does this situation rob young people of opportunity; it also risks condemning them to a life of inactivity, reliant on the state for their needs. That is unfair both to them and to the rest of the tax-paying population. The costs are borne by the individual, too. Analysis suggests that someone who is long-term unemployed loses around £1 million in lifetime earnings, which is absolutely shocking.
Make no mistake, Madam Deputy Speaker: the scale of the problem is a direct consequence of 14 years of Tory rule. Under their watch, the number of 16 to 24-year-olds who are not in education, employment or training rose from 673,000 to 921,000. Shamefully, young people were written off, while the enormous benefits bill continued to grow. The Green party attracts those who are disillusioned with the status quo, but it offers no concrete pathways into work or training. I cannot see Reform offering anything substantial either, apart from Orwellian, un-British slogans about “remoralising” our youth. Young people do not need their morals recalibrated by that party or any other.
Young people already have the initiative and the talent; they just need to be encouraged and helped. The Bills and measures announced in the King’s Speech will do just that and go beyond what this Government have already achieved to tackle the national scandal of young people being written off: the youth guarantee, backed by £820 million of new funding; hundreds of thousands of new training and work experience placements; and a new jobs guarantee that fully subsidises six months of paid employment for 18 to 21-year-olds who are long-term unemployed and on universal credit. Alan Milburn’s review seeks to dig deeper into this issue, and I have been in touch with him to contribute to the much-needed work he is conducting with the Secretary of State.
I have previously spoken in Parliament about driving job creation for young people. I have visited Rugby College in my constituency and met with Intec Business Colleges, and I am campaigning for a youth hub that will offer employment advice and wellbeing support. I recently supported Jobcentre Plus and the DWP in organising a well-attended jobs fair in Rugby. I want to do all I can to help everyone right across my constituency into work.
However, young people need more attention, resources and empowerment. They and their needs must be elevated in the decision-making process and the lawmaking process, as we govern more widely, and among other stakeholders in society. To co-ordinate that, I hope the Government will consider going further by appointing a youth commissioner, or even better, a dedicated Cabinet Minister for young people and the future generations. Such a role would scrutinise the work of Government, so that the benefits and trade-offs are assessed against the needs of young people and the future generations, ensuring that every decision takes their future into account. Their demographic is too often overlooked, but the legislation set out in the King’s Speech offers the Government an opportunity to give young people a genuine voice.
Since January last year, I have been making the case for what I call a youth triple lock—a commitment to protecting and expanding the opportunities for young people in the same way that we protect pensioners. That idea is also supported by my hon. Friend the Member for York Outer (Mr Charters). It could include free bus travel, increasing maintenance loans above inflation or a voucher scheme for constructive activities—answers on a postcard.
Before I draw my remarks to a conclusion, I want to pay tribute to my hon. Friend the Member for Jarrow and Gateshead East (Kate Osborne) for her moving words about her autism diagnosis. I am sure it is a difficult thing to speak publicly about.
The Government should take this moment, and be bold in their approach. The Prime Minister set out on Monday that we can no longer continue with the status quo, or go back to the status quo ante, and that we must bring urgency to everything we do. I am glad we have a Chancellor, a Prime Minister, a Government and a parliamentary Labour party committed to ensuring that young people are empowered to become the architects and owners of the future, not merely tenants of one built by others. This is work in progress. This King’s Speech shows that Labour is the party of work, and we are making progress.
Sam Rushworth (Bishop Auckland) (Lab)
I draw attention to my entry in the Register of Members’ Financial Interests in that I am the chair of the all-party parliamentary group for T-levels. I thank Harrison Willmott, a sixth-form student and work experience student, who helped research some of the figures for my speech today. He is sitting in the Gallery. I also welcome today’s positive growth figures—the highest quarterly growth in the G7 and the highest real-terms growth in over four years, as well as falling unemployment.
However, there are moments in a nation when a challenge becomes so large and so deeply rooted that it ceases to be merely a policy problem and becomes a test of national purpose. I believe that is where Britain now stands on work, skills and opportunity, because across our country, but particularly in communities such as mine in Bishop Auckland, a generation of young people are growing up under pressures that no previous generation quite faced in the same combination. Those young people have lived through covid and a youth mental health crisis, and they face rising housing insecurity, economic anxiety and a labour market that is changing faster than institutions have adapted. One in seven 16 to 24-year-olds in Bishop Auckland are not in education, employment or training.
I recently visited Dene Valley and Shildon, a deprived part of my constituency that has the highest child poverty rate in County Durham. I met locals to listen to their views about regeneration, and senior citizens with long memories told me stories about a time when these villages were buzzing, with their own swimming baths and the best sprung dance floor in the area. It was a time when people could leave school, and go straight into apprenticeships in the mines, railways or brickworks. It was hard graft, but there was secure work and dignity. The closure of the pits, the wagon works and other industries left deep scars on our community and, in some cases, intergenerational poverty.
I know the effect on a community of seeing thousands of jobs disappear, which is why I welcome this Government’s commitment to British Steel in the King’s Speech. I thank the Government for the work done to save 700 jobs at Hitachi in nearby Newton Aycliffe, and I also thank my hon. Friend and parliamentary neighbour the Member for Newton Aycliffe and Spennymoor (Alan Strickland) for leading that campaign.
Britain’s NEET rate is significantly higher than in many comparable economies, and the consequences are not temporary. Research has shown that prolonged youth unemployment scars earnings, confidence and opportunities for decades. A young person disconnected from work at 19 can still feel the effects in middle age. This is not simply an economic failure; it is a moral failure. If we do not act now, we risk writing off the potential of an entire generation precisely at the moment that Britain needs their talents the most. When they were in government, the Conservatives hollowed out the very systems that help young people find their place, and they talked endlessly about opportunity while cutting away at the ladders that create it.
Ensuring good jobs for our people is a fundamental duty for everyone in this place, so I welcome the ambition set out in the King’s Speech that will help to sustain and create new industries in the north-east, strengthening Britain’s energy security, expanding infrastructure, supporting the defence industries, accelerating the building of social and affordable homes, and creating opportunities through growth.
When I look across the area that I am so privileged to represent, I see real opportunities: new industry around lithium in Weardale; geothermal energy and other types of renewable power to get us off the fossil fuels rollercoaster, creating energy that we build and keep, and creating local jobs; the potential for house building and regeneration in the Dene Valley area; defence jobs, with fantastic employers such as Cook Defence Systems in Stanhope, PGP and Teescraft already in the area, so we can become an eco-centre for the defence industry; new jobs in healthcare; and jobs for a generation of trained counsellors, educational psychologists, and speech and language therapists who will be in our schools thanks to this Government’s commitment to special educational needs.
The King’s Speech also contained plans to strengthen our relationship with Europe. That matters, because it is not all good news. We have lost jobs in my community in Barnard Castle. Pharmaceutical jobs moved to Austria, on the other side of the boundary.
We need to be honest: too many businesses I speak to tell me they struggle to find the skills they need in the workforce. We cannot deliver the defence manufacturing jobs without technicians, fabricators, engineers and advanced manufacturing apprenticeships. We cannot deliver clean power and energy resilience without electricians, retrofit specialists, geothermal engineers, heat network installers and construction workers. We cannot build the homes this country needs without skilled tradespeople. We cannot compete in a world transformed by AI and advanced technology if millions of young Britons are left without the skills or confidence to participate in the future economy. The great challenge of this decade is not whether good, honest work will exist; it is whether Britain will equip its people to do it. That requires us to rebuild the skills pipeline in Britain that has been neglected for too long. The answer is strengthening partnerships between FE colleges and local businesses.
Munira Wilson (Twickenham) (LD)
I thank the hon. Gentleman for giving way. I agree with a lot of what he has said, but on FE colleges, I happened to visit Richmond upon Thames College in my constituency earlier this week, and the chief executive of the group told me that this year it has had only 0.55% per student uplift in funding, despite the White Paper published by the Government last year promising a real-terms increase year on year. That means it will not be able to create the places that young people need or to pay its lecturers enough. Does he agree that that is sorely disappointing from his Front Bench?
Sam Rushworth
I am coming on to talk about the importance of FE funding, while understanding the challenges the Government face. There is enormous demand to spend money everywhere, but I want to make the case for why we really need to resource FE.
FE colleges endured years of under-investment. Funding per student fell by 11% over 14 years of Conservative government. Vocational education was too often treated as second class, and apprenticeship opportunities declined precisely at the moment we needed them most. Between 2017 and 2024, apprenticeship starts for under-19s fell sharply, while too much of the apprenticeship levy drifted away from creating genuine opportunities for young people to enter the labour market. At the very moment that Britain needed a skills revolution, we got drift.
I spent some time as an FE college teacher during that period. It was a job that I loved. I think I loved it even more than this job because of the opportunity, teaching access to higher education courses, to work with school leavers who had struggled and with young adults who needed a second chance. I left because I was not really earning the minimum wage. That is how it is in our colleges.
I want to take a moment to pay tribute to the fantastic staff at Bishop Auckland College for the vital work they do as teachers, mentors and carers to people in their late teens and young adult years, and to the work they also do to tackle poverty. I regularly meet Principal Shaun Hope, because I regard Bishop Auckland college as a key partner in everything I would like to achieve in the place I represent. He recently told me that they have a closet of clothes that they give away, and that because of the poverty of the students going to the college, he has had to add extra budget to ensure that everyone can get a breakfast and lunch.
The decision to cut the education maintenance allowance and not replace it was one of the worst pieces of vandalism by the previous Government. That is why I welcome the lowering of the voting age in the Representation of the People Bill, giving young people a stake and the power to use their vote to demand better. I also welcome new protections from foreign interference, because I somehow doubt that a Thailand-based crypto billionaire had the interests of young people in Bishop Auckland at heart when he chose to give £5 million—and more—to Reform UK.
I welcome the measures and ambitions outlined in the King’s Speech. I welcome the emphasis on growth and opportunity, the focus on rebuilding Britain’s industrial capacity, and the Government’s commitment to reforming skills provision and strengthening pathways into work. For too long Britain has operated with an outdated hierarchy of success—one that implied that the only prestigious route was academic. That thinking has held our country back. There should be no hierarchy of esteem between academic and vocational education, and a young person training to become an engineer, a care worker, a builder, a digital technician or a heat-pump installer contributes every bit as much to Britain’s future as someone sitting in a university lecture hall.
Apprenticeships done properly remain one of the greatest engines of social mobility that the country has ever created. They provide not just qualifications but wages, confidence, structure, dignity and purpose. I welcome the move towards a more flexible growth and skills levy, new foundation apprenticeships, and the Government’s efforts to make it easier for small businesses to take on young apprentices again.
The Association of Colleges, however, has rightly warned that, while additional in-year growth funding is welcome, colleges remain under intense financial pressure after years of rising student numbers, inflationary costs and workforce shortages. Colleges are being asked to deliver more students with more technical pathways, more specialist provision and more support for vulnerable learners, often without the long-term funding that they need to plan sustainably. If we ask FE colleges to become the backbone of Britain’s growth strategy, we must give them the resources to deliver.
FE colleges are not merely peripheral institutions; they are core economic infrastructure. They train the people who will deliver the ambitions that we set out in the King’s Speech. In places such as Bishop Auckland, they are institutions of hope, aspiration and opportunity.
Mark Sewards (Leeds South West and Morley) (Lab)
I rise as a former teacher and someone who loves my current job more than that one—although I did love teaching. Does my hon. Friend agree with the Education Committee that FE colleges that are currently not exempt from claiming back VAT are at a disadvantage compared with sixth-form colleges attached to schools that can claim it back, and that there is an argument that FE colleges should also get that advantage?
Sam Rushworth
I fully agree with my hon. Friend. It would be remiss of me if I did not mention my absolute delight at the education for all Bill included in the King’s Speech. I intend to speak in the debate on that Bill when the time comes. I also thank the Minister for School Standards and the Secretary of State for what I thought was a model of how to engage with charities and parents, as well as with Back-Bench MPs, on that difficult but important piece of legislation. I think everybody across the House will welcome that Bill as they see the battleground over education, health and care plans coming to an end, and the proper resources that children need to thrive entering those schools.
I will finish where I started, by saying that it is not a question of whether we can afford to create opportunity; the fact is that we cannot afford not to do so. The future of our country depends on it.
Oliver Ryan (Burnley) (Lab/Co-op)
It is a great pleasure to welcome this King’s Speech after the bumper legislative year we have just had. Acts such as the Renters’ Rights Act 2025 and the Employment Rights Act 2025 are already making a difference to my constituents, and there are more than 5,000 children in my area with better supported parents because of the lifting of the two-child benefit cap.
When I talk to my constituents in Burnley, Padiham and Brierfield about their priorities, they talk to me about jobs and wages; about bills and rents; about our towns; about why, for a long time, Britain has not felt like it works for them; about why young people feel written off; and about how we grow and feel the heat of growth in the chilly hills of east Lancashire. They ask whether their kids will have to move away to get a decent job, whether their NHS will get back to working properly and why the old, derelict industrial sites have been left sitting empty for years, blighting our communities. They ask me whether they should have hope for the future; they ask whether they should be able only to look back with fondness, instead of forward with confidence. Now they are being sold a story of grievance, anger and easy answers by the poisonous bubble-gum politics of parties such as Reform.
That is why today’s debate matters. To get Britain working is to get Burnley, Padiham and Brierfield working, too. It is to get our economy working for places like ours again after 14 years of austerity and decline. It is to get our NHS working again and to give people the hope of decent jobs, pay and financial security again. This work is not done with slogans or easy answers, but built considerately, constantly and carefully, after being so quickly dismantled over the years.
Tom Hayes
Beaufort community centre in my constituency has had its doors closed. Employees have been made redundant. For them, it was more than just a job. It was a team; it was a dedication to their community. Children have lost out on their early years and childcare support, and families are having to look around to find alternative provision. Does my hon. Friend agree that our community is only as strong as our spaces, and that as a consequence, the Liberal Democrats should take control of that site, reopen the doors and provide what the community needs?
Oliver Ryan
I absolutely agree. My hon. Friend is an ardent campaigner for community spaces like the one he mentions, and I am sure he is taking that fight to his local council on behalf of his residents and the users of that facility. I am completely onside with him. I am not sure how much work my endorsement does, but I wish him all the best in his campaign.
Getting Britain working has to mean something real in places such as Burnley, Padiham and Brierfield; it has to mean decent work, proper wages, real skills and investment in our towns to give a decent future and hope to our kids and grandkids. I am proud to say that this Labour Government are delivering on all those metrics, not in an overnight big bang, but through considered and substantial progress.
In my constituency, wages are up, employment is up, public and private investment is up and funding for our schools, colleges and local councils is up, while our local NHS waiting lists are down and access to care is going up. As a point of fact, one in seven people were on NHS waiting lists when we took office in 2024, including in my constituency. That is not Britain working. I am glad to say that the lists are coming down at a historically fast pace.
For too long, over the 14 years of the Tories, through austerity and cuts, too many constituents felt written off. Indeed, the numbers support that analysis. A big part of that came from a welfare system that the Tories built, which I believe was broken by design, with people signed off and written off, and young people and graduates left on the scrapheap. Under the Tories, the benefits bill ballooned by billions. They have no credibility on welfare reform. They talk tough, but it is this Government who are fixing the mess.
The previous Government built a system that classified 2.8 million people as unfit for work and left them there. They built universal credit in a way that actively penalised people for trying—where taking on a few extra shifts could leave someone worse off than before. They left disabled people and people with long-term health conditions in an impossible position, wanting to work and contribute, but terrified that if they tried to do so and it did not work out, they would lose the support that kept them afloat. That was not a welfare system; it was a trap and a cycle of insecurity, worklessness and despair that the Tories perpetuated, while at the same time demonising these people. They talked tough while their system was doing the exact opposite.
I welcome what this Government are doing to change that. The right to try is exactly the right approach: it gives disabled people the legal right to try work without the immediate fear of losing their benefits if things do not go perfectly. That might sound straightforward, but for constituents I have spoken to in Burnley—people who want to test for themselves part-time work and gradual return in order to rebuild their confidence—it could be transformative. The fear was real.
Disabled people are not a problem to be solved or written off. They are people with expertise in their own lives, people with needs and ambitions. The principle of “nothing about us without us” has to run through the design and implementation of this policy, and I will be considering this through my work as chair of the all-party parliamentary group for multiple sclerosis. Genuine consultation and involvement backed up with an extra £3.5 billion to support disabled people and those with long-term health conditions into employment represents serious money and a serious commitment.
Good welfare policy has to do two things. It has to protect people who cannot work and who need support—the safety net—and it has to genuinely support people who can work back into employment and independence. It must not label them, park them or give up on them, but give them a hand up to get back on the horse. I am glad to see that this Government are committed to getting the balance right.
The issues facing young people are one of the sharpest challenges in towns like mine. In 2024, we inherited nothing short of a national disgrace: nearly a million young people—under-25s—were not in employment, education or training, and we had just had the worst Parliament on record for falling living standards. The number of NEET young people went up by a quarter of a million in the final years before the 2024 election, and youth unemployment was at a record high.
Once someone does not get their first leg up, the drift sets in and it becomes harder and harder to reverse. The human cost of that—the lost confidence, lost years and lost social impact—is real and lasting, especially in towns like mine. I have talked before in this Chamber about the great social ill of generational worklessness and how communities like mine, scarred from the closures of the mills and the mines, have never been given the chance nor the foundational support to properly recover.
Some young people have no parent who can tell them how to do a CV or an interview, so when they leave school they feel abandoned in a scary and increasingly expensive world where there are no opportunities for them. In the short term, a young person may turn to the benefit system, because their mate has. Next thing they know, they are in debt. Then they might have a family and get responsibilities—and change looks scary. They are still looking for work, but know in their heart that they do not have the confidence or the knowledge to get into the jobs market, and feel that they missed their window to do so. That is how people get left behind, how their children get left behind. It damages the social fabric of our country.
It is a disgrace that unemployment numbers shot up so high under the previous Government, because it was young people in towns like mine who suffered. Generationally, it is towns like mine that have always suffered—people have no hand up and no help; they are signed off, written off and politically demonised by the people who built the system that is trapping them there. I do not take a soft approach to welfare—of course, if someone can work, they absolutely should—but what has happened is not right.
Our youth guarantee is part of the answer, but I hope that the Secretary of State is looking to go further and faster in supporting young people. He is welcome to come to Burnley any time he likes so that I can show him what we can do for young people in our towns if we give them just a little support. At this point, I want to give a shout-out to Burnley jobcentre and all the staff there, with whom I was proud to host a jobs fair in Padiham earlier this year. I hope to host another in Burnley later this year.
The youth guarantee that the Secretary of State has set out is excellent: a work placement for young people aged 18 to 24 who have been seeking work for 18 months, with employment costs covered by Government. That is not a pilot scheme but an actual placement with real employment behind it. Businesses that take on a young person who has been on universal credit for more than six months will get a £3,000 youth jobs grant. For the small and medium-sized manufacturers, engineering firms, construction companies and family businesses that make up most of Burnley’s economy, that kind of support genuinely means the difference between making a hire and not being able to afford to do so.
I care deeply about apprenticeships. We are backing 50,000 new starts, after apprenticeships collapsed under the last Government, as the Secretary of State said earlier. We are introducing a £2,000 grant for small businesses that take on an apprentice. That rises to £5,000 if the apprentice has been out of work for six months. For a small business on a tight margin in Burnley town centre, that is not a minor detail; it is the difference between offering a young person a future and turning them away. Not every young person wants to go to university and not every young person should feel like they have somehow failed if they choose a different path. There should be real dignity and real ambition attached to practical skills, construction and practical trades in technical work.
Burnley has a proud industrial history. We have skilled people and businesses with genuine potential; what we have lacked for too long are the investment and infrastructure to match that potential. Under this Government, that investment is finally coming, and Burnley, Padiham and Brierfield are ready for it.
Infrastructure matters. Transport links across east Lancashire still hold us back. Businesses need reliable connections to Manchester and across the north to expand and create jobs locally. Northern Powerhouse Rail and stronger rail connectivity are not luxuries for constituencies such as mine; they are economic necessities. I will always be here asking for more, particularly on buses and rail connections to Manchester, Leeds and Preston.
While I am on the topic of small businesses, let me say something about minimum wage increases, which seem to spur a bit of political conversation. In towns like Burnley, we either accept that we are in a race to the bottom and that only low wages will allow businesses to grow—a very Victorian take—or we follow the facts and figures and accept that in such places, where earnings are spent locally, a rising tide lifts all boats. Although paying bar or shop staff might be more expensive for a business this year, the cumulative effect of an increased minimum wage across the constituency strengthens both consumer and retail spending, building a stronger economy in the medium term.
Marie Goldman
Nobody, and certainly nobody in my party, would argue that we should not pay the lowest-paid more, but businesses in my Chelmsford constituency tell me—I am pretty sure this happens across the country—that the issue is the knock-on effect on the differential. When businesses pay the lowest-paid more, they have to pay some of the people higher up the ladder a bit more as well, to keep the differential. The cumulative effect of that—plus other things, such as national insurance contribution increases—is what has created difficulties. I am not having a go, but does the hon. Gentleman agree that we need to try to find solutions that support businesses to pay their staff more while increasing their business?
Oliver Ryan
I am coming on to say, in fact, that of course the increase has its limits and should not be a shock to business. I have heard, if not similar stories, then certainly experiences in the same vein. We had the debate on the national insurance increase in this place, but a good chunk of that increase, if not all of it, was allocated to NHS spend, which had a historic record increase under this Government, with £28 billion or £29 billion committed in the last financial year. A good chunk of that came from NI on employers. When we are looking at strengthening the national health service, asking employers to make a slightly bigger contribution to their employees’ healthcare is probably preferable to increasing the general tax take, which this Government pledged not to do in the election and have not done since.
As I say, the increase has its limits and should not be a shock to business, but a downward drive on wages in towns like Burnley hits the whole economy, even if businesses initially want it. That is why real wages have grown more in the past 18 months of this Government than in the last 10 years of the Tory Government. Our economy is stronger because of the decisions we have made and defended.
I hear regularly from local businesses about the practical difficulties of trading with European markets since Britain lost unfettered access to those markets. They want fewer delays, lower costs and less uncertainty. They want to get on with it. The European partnership Bill needs to deliver practical answers for businesses like theirs. I am yet to meet a large exporting business in Burnley, Padiham or Brierfield that has been better off since Brexit. In fact, they report to me that they are losing business to European competitors every week.
None of that can be separated from what people in Burnley are dealing with financially right now: energy bills, food bills, fuel costs and rent. That comes up in almost every conversation I have. People want to work— they do work—but they want that work to pay enough to build a life. Cutting energy bills by up to 25% for manufacturers, driving forward on clean, home-grown energy, and investing in warmer homes and lower bills are not abstract policy objectives; they make the difference between a family building something and a family just about holding it together. What people in Burnley, Padiham and Brierfield want is not unrealistic. They want decent jobs and opportunities for young people; they want a welfare system that opens doors, rather than closes them; they want wages that stretch far enough to actually build something; and they want investment in the towns that have waited long enough to feel confident about the future again.
I think of all that derelict land in Burnley that I started this speech by mentioning—the old sites behind fencing and weeds that have been sat there for the best part of 20 years while people walk past and wonder if anybody in power has noticed. Those sites would be a good place to get Burnley working, to get Britain working, and I look forward to progressing my campaign with the Minister on these issues.
Regeneration is not just about buildings; it is about whether people believe their town is moving forward. It is about whether a young person growing up in Burnley can look around and see the future there for themselves—right there, close to home, without having to pack up and leave to find it. For too long, people have felt like leaving is the only option. This Government’s job is to change that. This King’s Speech points in that direction with real intent and real investment behind it. After years of towns like mine feeling overlooked, I am proud to stand here trying to change that, because if we get this right, the people I represent will feel it, and they deserve to.
Apsana Begum (Poplar and Limehouse) (Lab)
In 2024, the British people, including so many of my constituents, voted for change. After a decade of brutal austerity, they desperately needed a drastic and material improvement in their living standards. The last King’s Speech championed measures that have the potential to radically change the situation for people, from renters’ rights to employment rights and more. I am pleased that this King’s Speech brings forward the Government’s commitments to end conversion practices and to give the vote to 16 and 17-year-olds.
Yet we are not seeing the transformative agenda that the country has been crying out for and that people who have always supported Labour want. We have seen policy U-turns, from winter fuel allowance to the lifting of the two-child limit, following significant political and public pressure. We have seen policies that the British public rejected just last week, such as the changes to indefinite leave to remain and, of course, the continued failure to take meaningful action against the genocide in Gaza. We have also seen the targeting of refugees and migrants, and the provisions of the immigration and asylum Bill are incredibly alarming. The direction of travel in policy means that the Government are now left facing existential questions about what the Labour party stands for, who it stands for and why.
The Government said in response to their losses last week that there needs to be a faster and quicker shift, but in the same direction. I want to be clear that this is not what my constituents want. My constituents and I refuse to accept that poverty and inequality have to be a normal part of our society and that nothing can be done about it. That is not why I came into politics.
It is true that the stark disregard for human suffering displayed by the Conservative Government will never, ever be forgotten. They drove people into poverty then punished them for being poor. They pursued the vulnerable and persecuted the disabled. That is why people have been desperate for real change. It is also true, however, that the United Kingdom is the sixth largest economy in the world and London is the fifth wealthiest city in the world. The richest 1% of Britons hold more wealth than 70% of the population, and the UK’s 50 richest families now hold more wealth than 50% of our population. In that context, people simply do not believe that they must continue to endure more hardship for any longer.
I have said before that everything has to be costed and nothing is free in the purest sense, but the fact is that we are a relatively wealthy country and the resources are there in some form. They could be raised, for example, by ensuring that big business and the wealthy pay their fair share. If the wealthiest 1% in this country were taxed just a modest 1% more, it would raise £25 billion and leave more after. It is a question of priorities, political choices and in whose interests decisions are made.
I find myself asking again and again, “If there is not enough money, what is the plan to make sure that there is?” Why does austerity still have to be the political choice? That is why I call for the overall benefit cap to be lifted in full; the lifting of the two-child limit alone still leaves thousands of families excluded and trapped in poverty.
I appeal to the Government to ensure that there are no further attacks on the rights of disabled people in the UK. The Timms review is due to report in autumn, and I am obliged to make it clear for my constituents, many of whom are already impacted by cuts to the health component of universal credit, that any further attempts to restrict or cut personal independence payments would be disastrous and have to be dropped. If they are not dropped, at bare minimum there must be a full parliamentary vote.
Surely the greatest duty of any Government must be to protect and empower the most vulnerable people in our society and deliver social good, not social harm. I am clear about what my role must be, who elected me, and who I am here to represent, and I cannot in my conscience allow the poor, the sick, the elderly and the disabled to be exposed to any further brutality. If there is no money for disabled people not to be further punished through the welfare system, then the money must be found. If the way our economy is run means that large scale human suffering and wasted potential is unavoidable, it is up to the Government to change the way the economy is run.
The King’s Speech proposed a step forward towards the nationalisation of British Steel. I welcome that intention, just as I welcomed the first steps towards the nationalisation of railways in the last Session. However, it presents nationalisation almost as a move of last resort, after private interests have extracted all the profits they can from privatised industries. Why can we not have a conversation about nationalisation in the public good? When we are seeing the dire, shameful way that the private water industry is being mismanaged, a new water ombudsman in the clean water Bill is not enough to meet the scale of the problem. If they have the political will, the Government can meet the public support and demand for public ownership for mail, rail, water and gas, and end the disastrous experiments with privatisation.
I reaffirm my commitment to a publicly owned and run NHS that provides free and funded healthcare for all. That principle was an ironclad manifesto commitment, yet we have seen a return to private finance initiatives in the NHS—the same initiatives that have had disastrous consequences in constituencies such as mine in east London. Doctors themselves are resisting controversial Government decisions to sign partnerships with Palantir, and along with that, the agreement last year to appease Donald Trump will strip away National Institute for Health and Care Excellence medicine price controls, and lock in higher drug prices, doubling NHS spend on new medicines, and diverting funds from other vital NHS functions. That will only serve to benefit American big pharma. Private interests should never line their pockets at the expense of our society’s health, not least under a Labour Government.
The economy must also work to resolve the housing crisis. I have been looking closely at the social housing Bill, and I welcome its provisions and measures to protect tenants who are victims and survivors of domestic abuse—something the sector has long been campaigning for. However, we will be looking at such measures closely because they need to work in practice, and I remain concerned about the Bill more widely. Can it truly provide the solutions needed to solve the housing crisis without ensuring a commitment to a mass social housing building programme and rent controls?
My east London constituency has one of the highest rates of child poverty in the entire country. We have people living in uninhabitable and overcrowded homes that are also not affordable. That is set against a backdrop of rising wealth in the financial sector and the encroaching City of London in the west, and the ever-expanding Canary Wharf real estate. It is why many of my constituents are concerned about what the legacy and future of the Billingsgate market site in my constituency could be. Could it provide genuinely affordable homes, or could it lead to more luxury flats being built that will drive local people, including families, out of our area? Likewise, many of my constituents who are struggling in the cost of living crisis are interested to know what the Government’s discussions with the financial giant J.P. Morgan will end up meaning for our area and whether decisions are being driven in the interests of local people and for the longevity of our area.
The Prime Minister claimed yesterday that the King’s Speech
“will tear down the status quo”.—[Official Report, 13 May 2026; Vol. 786, c. 22.]
The risk here is that disillusionment has begun to settle in. I believe there needs to be less talk of delivery and missions and more talk about how the Government will truly rebalance power and address inequality in the interests of workers and working-class people in this country. The Government must be louder and bolder, but in a vastly different political direction. That must mean showing up as a Government who take people’s material concerns seriously and addressing those concerns in line with the Labour values that they were founded on. More incrementalism sends a message to the British people that the Government do not understand what has gone wrong, because this country and its economy are not working for millions of people, and that demands transformative action.
Saqib Bhatti (Meriden and Solihull East) (Con)
It is a privilege to close this debate on behalf of His Majesty’s official Opposition. I praise all Members for their contributions; while I did not agree with all of them, I recognise the passion with which they were delivered on topics that Members care about. In particular, I praise my hon. Friends the Members for Mid Leicestershire (Mr Bedford) and for Bognor Regis and Littlehampton (Alison Griffiths).
I agree with my hon. Friend the Member for Bognor Regis and Littlehampton that Labour is taking this country in the wrong direction, which is a sentiment agreed with by the newly former Health Secretary, who said in his resignation letter that
“where we need vision, we have a vacuum. Where we need direction, we have drift.”
That is a damning indictment of a Government who are saying that they want to get Britain working again.
The Conservatives are absolutely committed to getting Britain working again. We got a record 4 million more people in work between 2010 and 2024, which allowed millions more people to have the security of their own income, empowering them to own their own home and look after their families. [Interruption.] The Minister chunters from a sedentary position, but we created 800 new jobs a day in those 14 years.
The situation has taken a dire turn since the change of Government. Since Labour took office, unemployment has risen to 5.2% and payroll jobs have reduced by 110,000. The Office for Budget Responsibility has even raised the unemployment rate forecast for 2026, 2027 and 2028. There is only one conclusion: Labour is letting people down and consigning more people on to welfare instead of good, honest work.
I will focus particularly on young people and their prospects, where unfortunately an even bleaker picture is being painted. I agree with my hon. Friend the Member for Mid Leicestershire, who said that this Government are failing young people. I have heard a lot of Members talk about getting young people back into work, but the youth unemployment rate is 15.9%—up by 2.7% since the Labour party took office. It has been in power for two years, and that has been the consequence. One in six young people are now unable to find a job.
This Government are pushing more young people on to benefits, which has deeper long-term consequences. There are now nearly 1 million 18 to 24-year-olds not in education, employment or training. Among graduates, the Centre for Social Justice estimates that around 700,000 people are out of work and claiming benefits, and the impacts of that cannot be overstated. Every month spent out of work means that people take more than they give to the state.
I have been campaigning in local elections across Meriden and Solihull East, and I can tell hon. Members that young people want to work, because there is dignity and hope in work. Every month that a young person spends out of a job makes it harder for them to get back into employment. While their peers are developing critical skills in the workplace, those out of work fall behind. It also weakens their ability to save and put money away for the future, making it harder—for example—to save for their first home, for their family or for their retirement.
The number of young people out of work is a calamity, and the Government must do much more to address it, but nothing they have set out has reassured me that they understand that. The Employment Rights Act, passed in the previous parliamentary Session, has already started to have a catastrophic impact on the jobs market. That disastrous piece of legislation has increased costs for businesses and discouraged hiring, especially of young people. Having listened to the previous speech, I say to Labour Members that business owners are not just there to be squeezed until their pips squeak—they are the ones who take the risk, invest and create the jobs.
I will, of course, also challenge the Government in the educational space, because I believe they have been completely ineffective. Just this week, the Prime Minister has made new pledges on apprenticeships and skills in an effort to turn his failing premiership around. Perhaps he recognises what I do, because from the data on apprenticeships, the picture is mixed at best. The Department responsible for work should be a shining example of the Government’s commitment to more apprenticeships, but regrettably, it is far from it—the number of apprenticeship starts at the DWP has actually fallen. The Government’s broken promises on apprenticeships are best shown in relation to level 7 qualifications, which are high-quality pathways—[Interruption.] I am talking about level 7 qualifications; the Secretary of State may want to pay attention.
Those high-quality pathways allow people to get into professions such as accountancy, engineering and architecture without accumulating the same debt as graduates. However, the Government continue to restrict level 7 funding for those over 22, meaning that they are missing out on those opportunities and also putting level 6 apprenticeships at risk. [Interruption.] The Secretary of State is very audible. In opposition, when she was shadow Education Secretary, she promised graduates that they would pay less under Labour. That has turned out to be nothing but another broken promise, because not only is it now harder for graduates to get into work, tuition fees have gone up twice. Those who are paying those fees are now doing so with no promise of valued work at the end of it all.
I also want to address the SEND Bill—the education for all Bill—proposed in the King’s Speech. Given the time I have today, I do not have the luxury of asking all the questions that parents have wanted me to pose to the Government, but there are a couple of questions that I do want to ask. [Interruption.] I am happy to take an intervention from the Secretary of State.
Saqib Bhatti
The Government have claimed that the Bill will make generational reforms to the SEND system. The outlines of those proposals have been included in the White Paper, but parents are none the wiser. I have met a lot of parents, and despite the Government’s rhetoric, I see parents with more anxiety, not less. Just this Monday, I met a number of SEND parents from my constituency. All they want is for their children to have a chance at life, so I will ask the Minister a question that has been put to me by parents—perhaps she will address it when she responds. The consultation does not sufficiently address what will be done to help those 16 to 19-year-olds who can work to get into work. With all that is going on outside of the Chamber and in No. 10, if the Government are consumed by leadership contests and machinations, when will the legislation come before the House? This chaos will only further exacerbate the anxiety and anguish of parents and their children. I was told yesterday that the Government have actually been distributing briefing documents to their MPs to get supportive responses to their consultation. If the Government’s proposals for reform are so good, why are they trying to stack their own consultation?
Phil Brickell
I thank the shadow Minister for giving way, but he seems a little confused in his remarks. In the same breath, he is urging the Government to bring the Bill to tackle the broken SEND system before the House as soon as possible, and saying that the consultation has not run its full course and has not brought enough people in. Which is it? It cannot be both at the same time.
Saqib Bhatti
I do not think the hon. Member was paying attention. What I said was that I worry that the consultation is being stacked, but parents want to see the legislation, because there is not enough clarity in the consultation and they do not have the answers to the questions they are asking. I certainly hope that the parents the hon. Member meets make that clear to him.
With little indication that the Government will set out comprehensive plans to support young people, the Opposition have been busy drawing up their own proposals for an alternative King’s Speech. We have laid out comprehensive plans to help recruit thousands of new apprentices. Our apprenticeship guarantee will remove the funding cap for apprenticeships for 18 to 21-year-olds. This will ensure that employers have fully funded access to training, helping 100,000 extra young people into work every year.
In addition, we would encourage more employers to take on 18 to 21-year-olds by introducing a business rebate for investment in training and skills, or BRITS scheme. It would provide a new incentive of up to £5,000 for businesses to take on 18 to 21-year-old apprentices.
In the higher education space, the Conservatives have clear plans to rebalance the system. We have a proud record of expanding higher education, but we also recognise that more needs to be done to address the growth of low-value courses. Some degrees have ended up becoming a poor deal for both taxpayers and graduates. They do not help young people into work and the bill ends up being footed by taxpayers, some of whom have not benefited from a university education. That is why our alternative King’s Speech lays out plans to get more people into apprenticeships using money saved from cutting low value, low outcome degrees.
Andrew Pakes
I want to make a point to help the shadow Minister, because I think he has missed a page of his speech or dropped it on the floor in getting ready for the debate. I have heard nothing in his comments about the 40% drop in young people doing apprenticeships when his Government were in power, or the devastating impact on Peterborough from fewer young people doing apprenticeships because of his Government’s policies. If he has dropped that piece of paper and forgot to mention it, I am happy to supply him with the facts.
Saqib Bhatti
We created more than 5 million apprentices. If we want young people to be hired, we need an economy that works for the businesses that hire them. I am sure that the Mayor of Cambridgeshire and Peterborough, Paul Bristow, will be doing an excellent job in making sure that there is more investment in education and in young people.
Alongside rebalancing the system, we are also looking to abolish real interest on plan 2 student loans, ending the unfair cycle whereby higher interest rates mean graduate debt rises faster than graduates can pay it off. Our proposals are much more comprehensive than those laid out by the Government. Labour’s plans to cap student loan repayments at 6% will leave graduates ripped off, paying interest above inflation. It shows that the Government do not have a plan for young people and will continue to tinker around the edges rather than make genuine, bold change.
I will finish where I started, because the constant speculation about the Prime Minister’s future means that his Ministers will not be spending time looking at how to make a better deal for young people, whether that is boosting home ownership, reducing youth unemployment or getting the economy growing. In fact, just yesterday, I read reports of the Minister for Children and Families, the hon. Member for Whitehaven and Workington (Josh MacAlister), asking the Prime Minister to set out a timetable for his departure. Now that the Health Secretary has resigned, I ask this Minister: does she support the Prime Minister?
The Minister for School Standards (Georgia Gould)
It is an honour to close today’s King’s Speech debate on behalf of His Majesty’s Government. I thank everyone from all parts of the Chamber for their thoughtful and wide-ranging contributions. I will come to some of their comments in detail, but I start by saying that it is a shame the shadow Minister did not ask for the help of the work experience student who supported the hon. Member for Bishop Auckland (Sam Rushworth) in developing his statistics today. The shadow Minister might have been a bit more accurate if he had. As we have already heard, under his Government, apprenticeship starts for young people went down by 40%. Under this Government they have gone up. This year, we have seen more than 300,000 people get into work. Just this morning, we saw the UK have the fastest growth of the six G7 countries that have declared. We are taking action on employment, on apprenticeships and on growth, but I will come to those detailed questions later.
First, I will talk about some of the issues that have been raised in the Chamber today. Members have shown the importance of growth and opportunity in every single community. We heard a powerful speech by my hon. Friend the Member for Rossendale and Darwen (Andy MacNae), who talked about the importance of investment in towns. We heard from the hon. Member for Bognor Regis and Littlehampton (Alison Griffiths) about the importance of coastal communities, and from the hon. Member for South Devon (Caroline Voaden) about the importance of rural communities. It has been so powerful to hear MPs bringing the voices of those different communities into this Chamber.
I also thank those who raised the critical issue of support for children with special educational needs and disabilities. I assure the shadow Minister that that is the purpose that the Secretary of State and I are focused on every day. I spent this morning speaking to special schools. Yesterday, I was speaking to families. We are listening to the voices of children and young people. We have a generational opportunity to get this right, and we will continue that work, led by the Prime Minister. It is a critical issue; we heard from a number of hon. Members how important it is for their constituents.
I agree with the call from my hon. Friend the Member for Jarrow and Gateshead East (Kate Osborne) that we must ensure that we really hear families’ voices. The Secretary of State and I and other Ministers have been travelling around the country talking to families. We have heard that too often they have to fight for the support their children need. The system that we have—a system that we inherited—is failing too many families; it needs to change. Support needs to go in earlier, and we need to ensure that we are supporting every child to develop their opportunities to the best of their ability.
I thank my hon. Friend for sharing her diagnosis. Everyone across the House will agree that she is an important role model for people with neurodivergence. She shows how important it is that people with autism take up roles across our society and provide that leadership. I will commit to meeting her to discuss the issues she raised.
I thank my hon. Friend the Member for Truro and Falmouth (Jayne Kirkham) for her contribution on early intervention, the importance of Best Start hubs, support for breakfast clubs, and how critical it is to support families with children with special educational needs and disabilities at the earliest possible point. My hon. Friend the Member for Bracknell (Peter Swallow) made important points about accountability. Again, we are talking about those issues with families.
I welcome the promise of partnership and scrutiny from the hon. Member for South Devon. This is such an important issue, and our commitment is to work cross-party to ensure that we are getting it right.
Peter Swallow
I am grateful to the Minister for giving way; I tried to intervene on the shadow Minister but was not successful. On that cross-party consensus, was she as surprised as I was to see no commitment at all on special educational needs in the Conservative party’s so-called alternative King’s speech? Does she share my concern that that demonstrates its complete lack of seriousness on that really important issue?
Georgia Gould
The Opposition have been remarkably silent for a long time about the failures in the system. They have been quick to ask us to take action, but less quick to set out what they would do differently. This is an issue that they failed to grip for years. We are tackling it head on, introducing legislation and putting investment right now into our communities. We had mention of the Experts at Hand service and the investment in new special schools that is making a difference today.
Almost every single hon. Member talked about youth unemployment and how important it is to get behind our young people and support them into work. My hon. Friend the Member for Bishop Auckland talked about the scarring impact of youth unemployment and my hon. Friend the Member for Peterborough (Andrew Pakes) talked about the impact in his community. This is absolutely at the heart of the Government’s agenda. It is why we have introduced the youth guarantee, and it is why we are investing billions of pounds to support that.
At the heart of the debate is how we restore opportunity to the British people after decades of that being denied to them. As we heard from so many hon. Members, a job is about more than just a salary; it brings choice, control, agency and freedom over our lives. That is what is at stake here. We want to build a country in which opportunity is open to all. Rather than a privilege of birth or background or the product of luck or circumstances, opportunity should be the right of anyone and everyone willing to work hard and grab it with both hands.
That is what getting Britain working again means to me and to this Government, with the opportunities created by our modern industrial strategy open to everyone. That is the story we tell ourselves in Britain: if you work hard, you can get on, no matter who you are. Aspiration should be for all. It is a privilege to serve as Minister for School Standards in a Department driving that forward every day, led by my right hon. Friend the Secretary of State. It is in education that we can make that a reality, restoring opportunity to people of all ages in every village, town and city and building the economy and society of tomorrow. That is what this Government are doing, and it means reaching young people who are not working or in training. As we have heard today, there are almost a million of them—a million reasons why this Government’s youth guarantee is so important.
I have been travelling around the country to speak to families and young people about SEND. I spoke to an 18-year-old who loved computing, who had been out of school and who had applied for hundreds of jobs, but they had been turned down for every single one of them. My hon. Friend the Member for North Northumberland (David Smith) talked about that feeling of hopelessness. [Interruption.] Sorry, I just need to take a second.
Saqib Bhatti
On a point of order, Madam Deputy Speaker. I want to recognise the wonderful work that the Doorkeepers do around this House. I do not think they get enough credit, and I would like to ask for your wisdom on how I can put that on the record.
Madam Deputy Speaker (Ms Nusrat Ghani)
Thank you for bringing to our attention the fantastic work that the Doorkeepers do. I would personally like to put that on the record, mostly because I would not be able to do my job unless I acknowledge the work that they do. That is absolutely the right thing to do.
Has the Minister finished her speech?
Georgia Gould
I will finish. I am really sorry—I have a two-and-a-half-year-old who kept me up all night, and I was feeling a bit faint.
I want to conclude by setting out how important it is for this Government to support the next generation and to support young people. As we bring forward our Bill, we will have young people in our minds, particularly those with special educational needs and disabilities and those who have been let down. We will do everything in our power to support them.
Ordered, That the debate be now adjourned.—(Claire Hughes.)
Debate to be resumed on Monday 18 May.
Heathrow Airport: Third Runway
(1 day, 4 hours ago)
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Sarah Olney (Richmond Park) (LD)
The debate surrounding a third runway at Heathrow has stretched over the past three decades. The Liberal Democrats have long stood by communities who oppose a third runway, arguing that the economic benefits are overstated and the environmental consequences are unavoidable. Although I have always opposed a third runway at Heathrow, the current proposal could not have come at a worse time. The cost of expansion has doubled over the past 10 years, and the addition of nearly 300,000 more flights, which expansion implies, will make our net zero targets almost unachievable.
It is widely rumoured that even Heathrow Airport Ltd did not believe the timing of expansion to be practical. Despite that, on 29 January 2025, the Chancellor announced her support for a third runway to be built at Heathrow airport. This endorsement was the landmark announcement during her speech on growth; as such, it has a significant amount of political weight behind it. My plea to the Minister is that any decision taken on a third runway at Heathrow should be based on merit and unbiased data, not politics. The decision has an enormous impact on millions of lives, and it must be more than just a signal to investors to compensate for the Government’s economic mismanagement.
The Chancellor believes that expansion at Heathrow will produce economic growth. Nearly 18 months later, however, the Government have yet to produce their economic analysis to support that assertion, and the figures raised in the Chancellor’s speech on growth were drawn directly from an internal business case prepared for Heathrow airport and have not been independently verified.
The Department for Transport’s own updated appraisal report from 2017 shows that the net present value of a third runway ranges from just £3.3 billion to minus £2.2 billion. Now it has been admitted that even that figure is a generous estimate, as the DFT’s guidance suggests that international transfer passengers, who are estimated to make up 75% of a projected third runway’s capacity, do not contribute to the UK’s economy. When discounting those passengers, it is estimated that the net present value could be reduced by as much as a further £5.5 billion.
In addition, the New Economics Foundation asserts that twice as many people fly out of the UK than fly in, thus exporting more money out of our economy. An assessment of the impacts of inbound and outbound tourism flows is currently missing from the economic analysis of aviation’s contribution to the economy. Will the Minister provide reassurance that that research will be conducted and published with the airports national policy statement?
Heathrow Airport Ltd has cited that the cost of building a third runway will be an eyewatering £49 billion, before factoring in an estimated £100 billion in carbon abatement costs and at least £15 billion of investment on surface access upgrade improvements. Without that upgrade, there will be no way to deliver sufficient passengers to Heathrow to utilise the additional capacity and deliver the supposed economic benefits.
The Government have said that funding for a third runway at Heathrow will be privately financed. With Heathrow already drowning in over £15 billion-worth of debt, I am not convinced. I would therefore like to ask again, will the Minister provide reassurances that none of the costs associated with building a third runway at Heathrow will be pushed on to the taxpayer?
Danny Beales (Uxbridge and South Ruislip) (Lab)
I thank the hon. Member for securing this important debate on an issue that matters to my constituents in Hillingdon, to her constituents and to many constituents across the west London area. As she rightly points out, there have been discussions about the third runway being privately financed, but as she has touched on, there are public sector burdens and costs too, including from the extra pressure on the Elizabeth line, because of the capacity that will be needed, and on the local road network. Does she agree that it is vital when looking at the economic case that possible public sector pressures are fully accounted for in the decision-making process? Does she agree that the Government’s four tests are absolutely vital, and that we need transparency about how those tests will be measured and assessed?
Sarah Olney
The hon. Gentleman is absolutely right that we need to see the economic case and to look at it in the round—not just the specific costs associated with building the runway, but all the additional costs associated with operating it at capacity and all the impacts that that will have on Heathrow, along with the whole of London and the south-east.
The economic argument simply does not stand up to scrutiny, while the social and environmental consequences of a third runway are unavoidable. Communities would be severely impacted by the additional flights that a third runway would bring. It is expected that nearly 325,000 more people will fall within the Department for Transport’s “significantly affected” decibel level measurement. That does not even reference the increased bombardment of noise that houses already impacted by Heathrow’s flights are likely to experience. Not only would that noise disturbance affect people’s everyday lives, whether their sleeping pattern or their ability to work from home, it would have serious physical and mental health repercussions for local residents.
People living in communities surrounding Heathrow have a 24% higher chance of stroke, a 21% higher chance of heart disease and a 14% higher chance of cardiovascular disease compared with people exposed to low levels of aircraft noise. Will the Minister confirm how many people will be exposed to noise at 45 decibels, the level that the World Health Organisation estimates that health impacts begin? Will the Government commit to setting a minimum acceptable level of noise by which any expansion proposal can be judged? Will the Government also commit to ensuring that there is no increase in night flights? People deserve a full night of undisrupted sleep, and I would be grateful if the Minister could confirm that the Government do not plan to approve anything that would mean more planes fly over households during night hours.
Yesterday, the Government outlined their plan to introduce the civil aviation Bill in this parliamentary Session. Will the Minister outline a timeline for the introduction of that Bill, and will he explain how the Government can provide communities with reassurances that a third runway will not bring new or extended disruptions when airspace changes are yet even to be drawn up?
On the environmental argument, it should almost go without saying that adding nearly 300,000 extra flights to our skies each year will have a profound impact on air pollution and climate change. This Government have used wishful thinking in their assertions that sustainable aviation fuel will mitigate the additional pollution from Heathrow expansion. They are yet to provide any evidence that shows how Heathrow can expand while complying with their legal air pollution limits.
International uncertainty over China’s introduction of their SAF mandate, which accounts for more than 90% of our imported SAF, and challenges to UK-US trade have meant that the UK’s SAF targets, which in themselves would not mitigate pollution from Heathrow expansion, are even more difficult to deliver. The challenges to the UK’s ability to produce and import SAF were underscored by the Climate Change Committee’s report last year, which estimated that only 17% of the UK’s aviation industry will use SAF by 2040. That is 5% lower than the Government’s mandated targets and 8% below the EU’s target. The estimate does not even take into account the additional flights that would come in and out of the UK as a result of the proposed airport expansion.
Heathrow is already the single biggest source of carbon emissions in the UK, and expansion will add an extra 8 megatonnes to 9 megatonnes of CO2 every year. The Climate Change Committee’s balanced pathway to net zero estimates that aviation will contribute 23 megatonnes of CO2 by 2050. A third runway at Heathrow would increase emissions at the airport alone to 20 megatonnes. Does the Minister still believe that the UK can be compliant with our net zero targets with the expansion of Heathrow airport?
This Government have repeated that they will honour and respect the Labour party’s four tests, as highlighted by the hon. Member for Uxbridge and South Ruislip (Danny Beales). They are: growth across the country, noise issues to be addressed, air quality to be protected and our climate change objectives to be met. They must be passed before expansion can be approved. As I have just laid out, I do not believe that any of those tests can be passed, let alone all four, but I ask that the Government honour the principle of the tests and do not attempt to circumvent them by using biased data.
I hope I have underlined the importance of this decision for our economy, environment and local communities. Moreover, I hope that this speech has impressed on the Government that this decision cannot move ahead solely on the basis of political expediency.
Madam Deputy Speaker (Ms Nusrat Ghani)
Has the hon. Member sought all the appropriate permissions?
Munira Wilson (Twickenham) (LD)
I thank my hon. Friend the Member for Richmond Park (Sarah Olney), who is my constituency neighbour, and congratulate her on securing this important debate, on her excellent speech and on giving me permission to make a speech. I also thank the Minister for allowing me to speak today.
My hon. Friend has clearly laid out the key questions that Ministers need to address in approving a third runway at Heathrow, which we have heard publicly today. I am also grateful to the Minister for having previously met my hon. Friend and I when we set out a number of those questions privately to him.
As my hon. Friend has already said, in the King’s Speech yesterday the Government set out that
“Legislation will be introduced to unlock the benefits of airport expansion”.
I and many people, not least my constituents, are asking, “What benefits?” The truth is, as my hon. Friend has eloquently set out, the Government have provided precious little evidence to support their far-reaching claims of the economic benefits of a third runway at Heathrow. Many of us can only see costs, be they financial, environmental or to health.
It is obvious that the Government’s expansion of Heathrow—not just Heathrow, but London City, Stansted, Gatwick and Luton—will have a significant impact on this country’s climate commitments. When I and other hon. Members have raised such concerns in the House, Ministers’ answers revert to sustainable aviation fuel every time. However, the reality is that SAF is not a silver bullet. As my hon. Friend has suggested, the Government’s expectation is for SAF to meet 22% of aviation fuel demand by 2040, while the Climate Change Committee’s prediction is just 17%. That will not be enough to make up for the 8 megatonnes to 9 megatonnes of carbon emissions as a result of expansion. The Environmental Audit Committee has warned that by putting all our eggs in this basket, the Government’s delivery on carbon budgets and net zero is “in serious jeopardy”.
We must not lose sight of the human cost at the heart of this debate. Some 2.2 million people would suffer from an increase in noise pollution by 2050. Working people will see air pollution increase from congestion on the roads as the M25 is diverted for years—not to mention the permanent increase in traffic to the airport—and from thousands more flights over a very densely populated area, all pumping noxious fumes into our environment. My hon. Friend the Member for Richmond Park has set out clearly the resulting health impacts.
Over the past 15 months, I, like my hon. Friend and a number of others, have asked this Minister, his predecessor, the Chancellor, the Chief Secretary to the Treasury and the Transport Secretary about the funding behind expansion. They all insist that taxpayers’ money will not be used to fund expansion of Heathrow, but frankly, that is hard to believe, given the unsustainable financial circumstances of Heathrow airport and the eye-watering, ever rising costs of a third runway. As we have heard, Heathrow itself has suggested that its expansion will cost £49 billion, but other estimates are much higher, and this country’s track record of delivering infrastructure on time and on budget is not exactly promising.
At the same time, Heathrow is beginning to resemble another financial omnishambles: Thames Water. Both have significant debt and are spending massive amounts of money on infrastructure while jacking up prices for bill payers—or, in this case, those taking flights—knowing that the Government are ultimately there to bail them out if it all goes wrong. Let us make no mistake: taxpayers will be expected to foot part of the bill, and hard-pressed families and businesses will be forced to pay more for holidays and business trips through higher fares to fund the higher landing charges, as even airlines have warned.
We deserve transparency and accountability from this Government, but at the moment we are getting neither. This Government are delaying publication of vital evidence, such as the aviation night noise effects and aviation noise attitude studies, when we know they have been sitting on the Minister’s desk for months. The Minister has been far from clear on whether this House will have the chance to scrutinise the ANPS properly, which means a debate and a vote. I very much hope he will address those questions head-on today.
Back in January 2025, the Chancellor staked her “growth credentials” on this huge project. This kind of infrastructure project needs both economic credibility and economic and political stability. We cannot have another HS2, where half the project gets cancelled a decade down the line—too much is at risk. With the week we have just had, I cannot see how this Chancellor and this Government can seriously be trusted to see through a project that could take a decade or more to build. The Minister must follow the evidence and put a stop to this expansion before it is too late, for the sake of taxpayers, for the sake of our local communities and for the sake of our environment.
The Parliamentary Under-Secretary of State for Transport (Keir Mather)
I am grateful for the opportunity to respond to this incredibly important debate, and I thank the Members in attendance, in particular the hon. Member for Richmond Park (Sarah Olney) for securing the debate. We have engaged on this topic before, and I would welcome any further engagement in the build-up to and following the publication of the draft amended ANPS.
Dr Ben Spencer (Runnymede and Weybridge) (Con)
I am very grateful for the Minister’s commitment to engagement. Right now, there is traffic chaos in the Egham and Pooley Green area. I am opposed to the third runway. It will make the transport situation in the north of my constituency worse, and it will cause problems of increased noise and air pollution. Will he engage with our local communities, so that he can hear from them how much we do not want it?
Keir Mather
I would be very pleased to engage with the hon. Member and, perhaps through him, with the community groups that he points to. It is important to say that the ANPS review will consider the elements of the existing ANPS that relate to surface access proposals. That includes mode share targets and measures to minimise and mitigate the effects of expansion on existing surface access arrangements. I would be happy to speak about that with him and his constituents.
Peter Swallow (Bracknell) (Lab)
The Minister is making a really important point about the importance of surface access. He will know, because I have pressed him on this before, how important I think it is that we get better rail access to Heathrow, regardless of whether there is a third runway. Heathrow has committed to looking at both a western rail link and, importantly for my constituents in Bracknell, a southern rail link. Would he like to see those plans go ahead? Will he press Heathrow to make sure that they are part of any proposals, and will he do everything he can to deliver better rail access for my constituents?
Keir Mather
As part of the ANPS process, we are going to consider the Government’s strategic objectives for surface access, including public transport mode share targets. Any expansion at Heathrow will be tested against the public transport mode share targets set out in the ANPS, and rail will form an important part of those considerations. I would be happy to have further conversations with my hon. Friend about how his constituents may be affected by any expansion and mitigations in that space, although I do not wish to pre-empt any of the outcomes of the ANPS review.
Heathrow expansion and, in turn, a third runway at Heathrow airport would have a transformative impact. It is essential, as hon. Members have outlined, that the Government get this process right, taking full account of all views and ensuring adequate and full scrutiny. The Government recognise that air connectivity plays a vital role in supporting economic growth across the country, with the air transport and aerospace sectors contributing £23 billion to our GDP and 240,000 jobs across the United Kingdom in 2023.
Dr Spencer
Notwithstanding my points about the third runway, the success of Heathrow is incredibly important to my constituents in providing jobs and economic activity locally. Will the Minister update us on the Government’s response to the concerns about kerosene supply, which impacts Heathrow and our economy?
Madam Deputy Speaker (Ms Nusrat Ghani)
I hesitate to even raise this, but in case the Minister is anxious about time, we can—fortunately or unfortunately—run to 5.30 pm.
Keir Mather
Fortunately, Madam Deputy Speaker—come on!
The hon. Member is right to say that the economic activity and jobs created by Heathrow airport are dependent on international supply chains, and I know his constituents will be looking with concern at what is happening in the middle east. The Department for Transport is engaging very closely with both our refineries and the aviation sector to ensure we have security of aviation fuel supply. That work is ongoing, and we are confident that, working closely with those stakeholders, we can ensure that the impacts of the crisis in the middle east are sufficiently mitigated. I know how important that will be to his constituents.
Capacity constraints are hindering further growth in our aviation sector. Heathrow airport, as the UK’s busiest airport and only hub airport, plays a critical role in enabling international connectivity for both passengers and freight: 73% of UK long-haul flights go from Heathrow and 72% of UK international air freight by value goes through the airport. The decision about a third runway at Heathrow has been ducked and delayed for decades, which has resulted in the capacity of the UK’s only hub airport being constrained. That has had a material impact on Heathrow, with the airport operating at over 95% capacity for most of the past two decades.
Our ambition, as set out by the Chancellor, is clear: it is to enable delivery of an operational third runway at Heathrow by 2035. Better connections and a third runway have the potential to boost the UK economy and support thousands of jobs. Businesses, and business groups such as the Federation of Small Businesses, the British Chambers of Commerce and regional chambers across the country, are clear in their support for Heathrow expansion, as are major trade unions. The Government have been clear that any Heathrow expansion proposal needs to demonstrate that it can contribute to economic growth, be delivered in line with the UK’s legally binding climate change commitments and meet strict environmental requirements on air quality and noise pollution.
As hon. Members will be aware, last October my right hon. Friend the Secretary of State for Transport announced that the ANPS, which is the Government’s policy framework for additional runway capacity at Heathrow airport, would be reviewed to reflect changes in legislation, policy and data, and to ensure that any proposed scheme meets the Government’s four tests—on economic growth, climate change, air quality and noise—for expansion at Heathrow. The ANPS provides the basis for decision making on granting development consent for a new runway. Any scheme must be delivered in line with the UK’s legal, climate and environmental obligations.
In November, the Government announced that the north-west runway scheme, put forward by Heathrow Airport Ltd, will be used to inform the review of the ANPS. However, once the Government have reviewed the ANPS, and depending on the outcome of the review, any applicant, also known as a promoter, can submit a proposal through the development consent order process.
It is for scheme promoters to decide when to submit any DCO application for a third runway scheme, and any promoter may submit a proposal for development consent. It is at that stage of the planning process when the precise impact of Heathrow would be considered. Any DCO application to build a third runway would go through a strict and independent process. It would be examined by the Planning Inspectorate. The Secretary of State for Transport would then make a final decision on whether to grant consent.
Lincoln Jopp (Spelthorne) (Con)
I am very grateful to the Minister for giving way. He is being very generous with his time—although, as Madam Deputy Speaker pointed out, we have quite a lot of it. The UK Government used to have a golden share in Heathrow airport. However, that was ruled illegal by the European Court of Justice in 2003. Given that the Government broadly want the same thing as any promoter might want, inasmuch as they want Heathrow expansion, that would suggest that the Government are at the point of maximum influence in this build-up phase. Post-Brexit, will the Minister consider making any progress with the third runway conditional on the British Government getting back their golden share, so that we can control a great deal more of what goes on at Heathrow at Government level?
Keir Mather
I thank the hon. Member for his intervention. If he does not mind my saying so, I think he may have a slightly over-inflated expectation of my powers as a junior Minister in the Department for Transport to compel a change in Heathrow airport’s ownership structure. What I am pleased to say is that there is broad support for the principle of expansion, irrespective of the fact that the Government have set this as a key priority to generate growth and prosperity in the United Kingdom. I will certainly take his suggestion on board, but I am pleased to say that I think the onus is there to ensure that the project is realised, irrespective of the ownership model that may exist.
To turn back briefly to the DCO process, the Government are working at pace to ensure that the ANPS constitutes a robust framework under which any successful promoter must meet the four tests and the requirements under the Planning Act 2008—a position we have consistently maintained since the Government’s initial announcement in support of expansion last year.
I would like to touch on some of the general points raised during the debate on the potential impact of Heathrow expansion, but two small points of detail were originally raised that I would like to address first. First, on the introduction of a civil aviation Bill, the Civil Aviation (Consumer Protection and Regulatory Reform) Bill is a Lords Bill and I am pleased to confirm that it was introduced today. Secondly, on the principle of night flights, the hon. Member for Richmond Park will know that the current night flight restrictions at Heathrow are in place until 2028, but we intend to consult next year on proposals for the period that follows.
Although the ANPS review is ongoing and limits what can be said in detail at this stage, I want to reassure the House that both Parliament and constituents will have the formal opportunity to engage when the amended draft ANPS is published for consultation and undergoes parliamentary scrutiny.
Heathrow expansion is a private sector project and the Government have been clear that it must be privately financed. Taxpayers will not bear the cost of expansion. The Government are working with the Civil Aviation Authority to ensure that flying out of Heathrow will be affordable and that any increases to fares during expansion are minimised. Protecting the interests of consumers is the CAA’s priority and keeping costs affordable will always be a part of the CAA’s considerations.
Munira Wilson
I am very grateful to the Minister for giving way. Just before he got on to the cost point, he confirmed that the ANPS will receive parliamentary scrutiny. Can he clarify for the House whether that means a debate and a vote on the Floor of the House?
Keir Mather
I thank the hon. Lady for her intervention. Once the ANPS is laid in Parliament, there is a 21 sitting day consideration period during which the House of Commons can resolve that a vote can be called on whether to approve the ANPS. There is also the important principle of Select Committee scrutiny. It is for the Liaison Committee, I believe, to determine which Committee is most appropriate to take forward Select Committee-level analysis of the implications of the ANPS, and to take oral evidence and so on. That process is all to come and will be folded into a robust process of parliamentary scrutiny that the Government fully support taking place through the Select Committee process.
It is our view that expansion could inject billions into our economy, support thousands of apprenticeships, and strengthen Heathrow’s status as a global passenger and airfreight hub. It should also deliver major benefits for passengers, including reduced delays and, ultimately, lower fares when compared with a world where Heathrow does not expand. The Government have been clear that any Heathrow expansion needs to demonstrate that it can contribute to economic growth, and as part of the ANPS review the Department is developing analysis on the economic impacts of Heathrow expansion, the outcome of which will be published for consultation alongside the outcome of the ANPS review.
On the matter of climate commitments, the Government are clear that Heathrow expansion must align with our climate obligations. That is something that the Government remain absolutely committed to. The increasing carbon emissions associated with Heathrow do not in themselves mean that airport expansion cannot take place; the important point is that the Government remain able to meet their carbon reduction targets in the round. Economy-wide net zero and carbon budgets mean that even if emissions rise in one area, such as aviation, they must be fully balanced by either further carbon savings or high-quality and permanent greenhouse gas removals elsewhere.
The Government published their plan for delivering carbon budgets 4 to 6 on 29 October 2025, including on aviation, and we will be legislating for the carbon budget 7 target shortly. The current ANPS sets expectations on measures to mitigate the carbon impact of expansion at Heathrow, and those mitigations are being considered as part of the ANPS review.
The hon. Member for Twickenham (Munira Wilson) mentioned commitments around noise, which are incredibly important. We recognise the concern among communities that a new runway has the potential to cause an increase in noise. The current ANPS provides clear requirements on noise mitigation that any scheme should meet. That includes a scheduled night flight ban of 6.5 hours, between the hours of 11 pm and 7 am, a runway alternation scheme that provides affected communities with predictable periods of respite, and a noise envelope with clear noise performance targets that we will review as part of the ANPS.
On the two studies that the hon. Member for Twickenham referenced, I can confirm that they will be both be published shortly, and that hon. Members will be able to consider them fully alongside the ANPS process. There will be full transparency on the Government’s work to understand the impact of noise on both her constituents and people who live in proximity of airports across the country. We will consider those and other mitigations as part of the ANPS review.
On a separate note, Heathrow expansion could also make it easier for aircraft to land without extensive holding patterns, bringing some noise and carbon benefits. The review of the ANPS will consider whether any change is required to the noise impacts and mitigations set out in the original document.
The Government have consistently made it clear that air quality obligations must be met. The current ANPS sets out clear air quality requirements, and as part of the ongoing review of the ANPS we will consider whether any changes are required to the air quality impacts and mitigation measures contained within it.
Turning to the important reference that my hon. Friend the Member for Bracknell (Peter Swallow) made to surface access, how people get to and from Heathrow airport is vitally important, and will be a key consideration as part of any plans for expansion. Plans must look to mitigate the impact on local and national transport networks. As part of the ANPS review we are considering the Government’s strategic objectives for surface access, including public transport mode share targets and measures to minimise and mitigate the effect of expansion on existing surface access arrangements.
Any promoter that wants to deliver expansion will need to model the impact of expansion on roads around the airport, including the M25, as part of their application, and consult with National Highways on their plans. As I previously mentioned, Heathrow expansion will be financed through private funding. That includes surface access improvements necessary for the expanded airport, including potential rail links.
To touch briefly on the matter of parliamentary scrutiny, it is imperative that we listen carefully to everyone’s views on this transformative and landmark piece of infrastructure. Its impact will be felt for decades to come, and it has the potential to unlock significant economic benefits that could be felt across the United Kingdom. However, we fully recognise that there will be communities who have understandable concerns about what this could mean for them, and that is why the Government are launching a formal consultation on the drafted ANPS by the summer.
Peter Swallow
I want to push the Minister on mitigations around surface access. This is an opportunity not just to mitigate concerns about existing surface access arrangements, but to massively improve those arrangements. He will be aware that across a large swathe of the south of England, there is effectively no way to get to the airport apart from driving. Through this process we have an opportunity not just to mitigate concerns, but to boost and upgrade public transport networks to get to Heathrow airport.
Keir Mather
My hon. Friend makes a fair challenge. He is right to say that the ANPS review and the consultation on it is an opportunity for us to look at some of these questions again and to consider how, with Heathrow continuing to offer its unique opportunity to the United Kingdom’s economy as our only international hub airport, we can facilitate better access for the communities surrounding it, both for the economic opportunities for employment and for people across the United Kingdom to fly and enjoy holidays with their families. He raises an important matter.
Dr Ben Spencer
I invite the Minister to Egham as part of his engagement on looking at surface access, where he will be able to see the carnage caused by the level crossings and the benefits of removing the level crossings and having a direct rail link from Egham to Heathrow. While he is there, he will probably also be able to hear the planes overhead and see the impact the noise is already having on that community.
Keir Mather
If the hon. Gentleman would like to write to me setting out the terms of his invitation, I would be very grateful and happy to consider them. It would be great to visit his constituency.
As His Majesty noted yesterday, the Government are bringing forward the civil aviation Bill, which will ensure that the UK’s aviation sector remains competitive, resilient and fair so that it can continue to drive economic growth while delivering better outcomes for passengers. The Bill will also strengthen consumer rights and protections, promote economic growth and infrastructure provision and enhance aviation safety, supporting our world-leading aviation sector to continue thriving for decades to come.
I thank all Members for their robust scrutiny, both of me and of the measures that underpin our review of the airports national policy statement and the principle of Heathrow expansion overall. On a serious note, I encourage them to engage with us further on these matters. I understand that they have a lot of questions to answer from concerned constituents who want an explanation of how best they can participate in the consultation process for the future of their local communities, so I encourage them to reach out to me. I would be happy to discuss this further to arrange it accordingly. I thank hon. Members for their contributions.
Question put and agreed to.
Written Correction
Ministerial Correction
Environment, Food and Rural Affairs
(1 day, 4 hours ago)
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Emma Hardy
The fishing industry did not engage on the wider testing on the guidance, but will be engaged on measures and met frequently on the policy and the statutory instrument.
[Official Report, Fourth Delegated Legislation Committee, 27 April 2026; c. 10.]
Written correction submitted by the Under-Secretary of State for Environment, Food and Rural Affairs, the hon. Member for Kingston upon Hull West and Haltemprice (Emma Hardy):
Emma Hardy
The fishing industry was not engaged on the wider testing on the guidance, but will be engaged on measures and was met on the policy and the statutory instrument.
Written Statements
British Steel
(1 day, 4 hours ago)
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The Parliamentary Under-Secretary of State for Business and Trade (Chris McDonald)
The Government committed to updating Parliament on British Steel every four sitting weeks for the duration of the period of special measures being applied under the Steel Industry (Special Measures) Act 2025.
The Government’s priority remains to maintain the safe operation of the blast furnaces at British Steel. Government officials are continuing to provide on-site support in Scunthorpe, ensuring uninterrupted domestic steel production and monitoring the use of taxpayer funds.
On funding, the position remains that all Government funding for British Steel will be drawn from existing budgets, within the spending envelope set out at spring statement 2025. To date, we have provided approximately £484 million for working capital, covering items such as raw materials and salaries. This will be reflected in the Department for Business and Trade’s accounts for both 2025-26 and 2026-27.
Next steps
A strong steel sector is essential to supporting our national security, critical national infrastructure and highly skilled jobs in communities across the country. This Government’s steel strategy sets out our long-term plan to revitalise the UK steel sector, ensuring the competitiveness and viability of UK steelmaking to sustain 40-50% of domestic demand being met by domestic production and supporting key sectors including defence, construction and clean energy.
Today, the Government will introduce a Bill to provide a route for Government to bring steel companies or their operations into public ownership, provided the public interest test in the legislation is met. This will allow the Government to safeguard domestic steelmaking capability in line with the steel strategy. We do not take the decision to introduce the Bill lightly.
The Government have engaged in negotiations with the current owner of British Steel regarding a commercial sale, but it has not been possible to agree acceptable terms that would represent a responsible use of public money. We want to see British Steel play its part in in a revitalised steel sector, but it has not been possible to agree this under its current ownership.
Given the information currently available to us, the Government are strongly minded to use the powers in the Bill to bring British Steel into public ownership in the future, subject to the public interest being satisfied and taking into account all the relevant facts at that time.
Safeguarding the long-term future of Britain’s steel capability and capacity is in our national interest. The Government believe it is in the public interest to bring legislation that will give the Government the powers to nationalise British Steel. Bringing British Steel into national ownership would allow the Government to explore what future opportunities there may be for British Steel including to modernise the site, deliver a transition to decarbonised steelmaking at Scunthorpe, and provide stability for workers, suppliers and customers.
The Government recognise that securing the long-term future of the UK steel sector relies on both public and private investment for modernisation. Delivering the best outcomes for taxpayers has been, and will remain, a key priority for this Government.
[HCWS1560]
Access to Banking Services Review
(1 day, 4 hours ago)
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The Economic Secretary to the Treasury (Lucy Rigby)
The way people access banking services has changed significantly in recent years. Access to these services is provided through a range of channels, including different in-person models as well as digital channels, which many customers benefit from. Many find that the ease and convenience of remote banking and digital innovations allow them to manage their finances more easily. However, some still need or prefer access to in-person banking services, including those who are vulnerable, less digitally confident, or who rely on face-to-face support to manage their finances.
It is for this reason that the Government committed in our manifesto to working with the financial services industry on the roll out of 350 banking hubs by the end of this Parliament. Over 275 hubs have been announced so far, and more than 230 are already open.
However, the Government recognise that the location of banking hubs is based upon a legislative framework which protects access to cash, as opposed to access to banking services. Specifically, the Financial Services and Markets Act 2023 provides a framework to safeguard cash withdrawal and deposit facilities, and the Financial Conduct Authority has responsibility and powers to ensure the reasonable provision of such services. There are currently no equivalent statutory protections specifically for access to in-person banking services more broadly.
While the Government recognise it is neither possible nor reflective of customer behaviour to reverse the long-term trend towards digital banking, the Government are committed to ensuring that customers, including those who are vulnerable or less digitally able, retain sufficient access to essential banking services in line with their needs. HM Treasury has therefore commissioned an independent review into access to banking services to assess the impact of changes in the provision of in-person banking services across the United Kingdom. The review will consider the scale and nature of any detriment to consumers arising from a lack of access to banking services, including impacts on vulnerable groups. The review will be chaired by Richard Lloyd OBE, chair of IPSA and former interim chair of the Financial Conduct Authority (FCA).
The review will also seek to examine which groups of customers need or require access to in-person banking services.
It will seek input from market participants and consumer representatives, and Government and regulators may also be consulted. Evidence collected by the review will inform future decisions on whether further action is needed. The review will conclude in October 2026 and the chair will provide a report and recommendations to the Government.
In addition to this, the Financial Services and Markets Bill will include provisions to enable the Government to take further action in respect of this issue, including implementation of any recommendations arising from the access to banking services review, should the evidence demonstrate that this is necessary. This will ensure that Ministers have the ability to act in a timely and proportionate way in future, following the conclusion of the review.
The Government will consider the review’s findings carefully and will update the House in due course.
Further details about the review, including the terms of reference, can be found on gov.uk at: https://www.gov.uk/government/publications/hm-treasury-access-to-banking-services-review
[HCWS1565]
Reforms to Money Market Fund Regulations
(1 day, 4 hours ago)
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The Economic Secretary to the Treasury (Lucy Rigby)
Money market funds play an important role in the financial system. MMFs are widely used for cash management and provide an alternative or complement to bank deposits for a broad range of investors, including asset managers, insurers, pension funds, large corporates and local authorities. However, recent periods of market stress have highlighted the need to strengthen the resilience of these funds.
The Government, together with the Financial Conduct Authority and the Bank of England, have worked actively with international partners, including the European Commission and at the Financial Stability Board, to enhance MMF resilience so these funds are better able to withstand market disruption. As part of this, the Government and FCA committed to reforming the UK money market fund regulation regime, to ensure the UK’s regulatory framework appropriately supports the resilience of these markets while maintaining our international competitiveness. These reforms mark an important step forward in enhancing the resilience of the wider non-bank financial sector.
In 2023, HM Treasury and FCA consulted on replacing and reforming MMFR. The Government will now lay legislation as soon as parliamentary time allows to establish the new regulatory framework, under which most requirements for UK MMFs will be set out in FCA rules and guidance. This will include guidance setting out expectations that UK MMFs hold higher levels of liquidity. This approach reflects internationally developed proposals that the UK helped to shape alongside other jurisdictions. The Government and the FCA also welcomed feedback from across the sector to help develop a proportionate set of proposals that will enhance the resilience of money market funds. The UK’s new regime is expected to be in place by Q4 2026, subject to parliamentary approval, and the FCA will issue a statement shortly with further details on its plans.
The Government recognise the cross-border nature of this sector, and the important role that EU-domiciled MMFs play in the UK market. In March, at the Joint EU-UK Financial Regulatory Forum, the UK and EU recognised the value of constructive engagement on the practices that will enhance the resilience of our respective MMF sectors. The Government therefore welcome the report published by the European Commission on 11 May that sets out its expectations for these funds.
The Government can confirm their intention to extend the temporary marketing permissions regime, with a view to establishing a longer-term solution on market access, in line with the UK’s framework and process for recognition of overseas firms and funds.
[HCWS1562]
Reforms to the Single Source Contract Regulations
(1 day, 4 hours ago)
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The Minister for Defence Readiness and Industry (Luke Pollard)
The defence industrial strategy published in September made it clear that we are in a new era of threat, which demands a new era for UK defence. As we move to warfighting readiness, it is essential to ensure that our defence programmes are delivered on time. The House will be aware that we inherited forces that were hollowed out and underfunded—47 of 49 major defence programmes were over budget and delayed when we took office. The measures that I am introducing today will increase our readiness by incentivising on-time delivery or projects that support our frontline forces and defence operations.
Our defence industry is crucial to ensure the resilience of our supply chains, the strength to resist threats or disruptive events, and the ability to scale-up and surge capacity as needed. We are committing to the largest sustained increase in defence spending since the end of the cold war, and with a promise to invest more comes a responsibility to invest better. For too long, defence procurement has been burdened by waste, delay and complexity. Yet today we know that whoever gets new technology to the frontline first wins. Business as usual is not an option.
The defence industrial strategy set out the requirement for a dynamic and innovation-focused industrial base that assures UK sovereignty, operational advantage and freedom of action. It went on to say that, to achieve this, we must ensure that the commercial tools we deploy incentivise investment and efficiency. This included a review of the Single Source Contract Regulations, which govern some of the nation’s largest and most strategically important defence procurements and account for around half of defence spending on equipment.
I am today announcing the first tranche of legislation that we will make as part of that review. The focus of these changes is to increase the incentives on our single-source suppliers to meet the pressing need to innovate, get more equipment to the frontline faster and maximise the military capability from every pound we spend. I am therefore today laying a statutory instrument to increase the amount of profit available for delivering priority outcomes, such as faster delivery or greater productivity, from 2 percentage points to 10 percentage points. Whether to include such an incentive fee in a particular contract, and its size and structure, will be at the Government’s discretion, within robust statutory constraints. In general, the Government will be expecting exceptional performance in return for the higher rate of incentive profit.
I am also announcing that we will be decreasing the starting profit on contracts that are low-risk, either because they are in lower-risk sectors or because the Government agree to meet all of the supplier’s reasonable costs. This will allow us to powerfully incentivise suppliers to become more productive or to deliver other Government priorities, in order to restore profits to current levels. It will also motivate suppliers to take on more risk- bearing contracts, which is a defence industrial strategy commitment.
I am also introducing reforms that will support our efforts to increase direct spend with UK small and medium-sized enterprises. While the regulations are critical to securing value for money on large, complicated contracts, they can deter smaller, more innovative companies from becoming defence suppliers. Small and novel products, which have gone from factory to frontline in a matter of weeks, have often delivered the greatest successes. It is vital that we continue to maximise results from our small and medium-sized enterprises. We will therefore increase the threshold for a contract coming under the regulations from £5 million to £25 million. This will remove nearly all small and medium-sized enterprises from the regime in the future lifting a recognised regulatory burden and backing small businesses.
We will also be encouraging innovation by introducing an “innovation uplift” to ensure that firms that invest in innovative technologies are properly rewarded for the risk that entails. It will be payable where suppliers invest their own money in developing products without a guaranteed contract or up-front Government funding.
These changes will be brought in through a further statutory instrument prior to the summer recess.
The reforms being established by the NAD—national armaments director—group reflect a deliberate shift in how the Government use the regulations to drive supplier behaviour.
In single-source dominated businesses, suppliers have historically been able to generate strong returns without the performance pressure that competition creates.
These changes are designed to emulate this pressure by making earning strong profits dependent on delivering the outcomes and value the Government need. They draw on feedback from industry and the Single Source Regulations Office and support the NAD group’s wider mission to accelerate procurement and ensure that critical capabilities are delivered to UK war-fighters faster.
[HCWS1564]
Service Complaints Ombudsman for the Armed Forces: 2025 Annual Report
(1 day, 4 hours ago)
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The Minister for Veterans and People (Louise Sandher-Jones)
I am pleased to lay before Parliament today the Service Complaints Ombudsman for the armed forces annual report for 2025 on the fairness, effectiveness and efficiency of the service complaints system.
This report is published by Mariette Hughes and covers the operation of the service complaints system and the work of her office in her fifth and final year as the ombudsman.
The findings of the report will now be considered fully by the Ministry of Defence, and a formal response to the new Armed Forces Commissioner will follow once that work is complete.
Our armed forces are at the heart of our nation’s security. With demands on defence rising, it is right that we continue to step up our support for them and their families.
That is why we have created the new independent Armed Forces Commissioner role, who will have the power to investigate any issues raised directly by serving personnel and their families, to challenge Ministers and military leaders and to report directly to Parliament.
The Government commitment to supporting members of the armed forces and their families to come forward to raise issues, and improve the way they are dealt with, is unwavering.
Attachments can be viewed online at: https://questions-statements.parliament.uk/written-statements/detail/2026-05-14/hcws1568
[HCWS1568]
Capacity Market Consultation Responses
(1 day, 4 hours ago)
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The Minister for Energy (Michael Shanks)
I have tabled this statement to inform Members of the publication of four documents relating to the capacity market. They include:
The capacity market autumn consultation response;
The capacity market winter consultation response;
A summary of responses to the capacity market call for evidence on hydrogen-to-power and interconnectors; and
Updated technical adjustment methodology for de-rating interconnectors in the Capacity Market
The above documents support our objectives of delivering clean power by 2030 and accelerating progress towards net zero, while ensuring security of supply.
Since its introduction in 2014, the capacity market has acted to secure sufficient capacity to ensure consistent and reliable electricity generation in Great Britain. The funding provided through the capacity market incentivises investment in new and existing generation, interconnectors, batteries and consumer-led flexibility mechanisms to ensure that sufficient capacity is available to meet future demand when required. This capacity is acquired through competitive annual auctions held at intervals four years ahead and one year ahead of their respective delivery years. The Government regularly amend the framework underpinning the capacity market before auction cycles to ensure that it is cost-effective and meets broader strategic objectives such as clean power by 2030.
Following two consultations—the autumn consultation, published in October 2025; and the winter consultation, published in December 2025—and a call for evidence on hydrogen-to-power and interconnectors, the Government intend to publish Government responses to the consultations, a summary of responses to the call for evidence and an updated technical adjustment methodology for de-rating interconnectors.
The consultation responses that we are publishing today include reforms to the capacity market rules that aim to secure capacity adequacy to meet the reliability standard through at least the 2030s while keeping the impact on consumer bills as low as possible. These are consistent with achieving capacity adequacy objectives, strengthening delivery assurance, stimulating investor confidence in low-carbon technologies, and strengthening CM legislation to ensure effective scheme delivery.
Capacity Market Autumn Consultation Response
Multiple Price Capacity Market (MPCM)
Having carefully considered the evidence and feedback received, the Government have decided not to proceed with introducing the MPCM and any related policy changes at this time. We will take more time to consider the concerns highlighted by stakeholders and will continue working with industry to address barriers facing dispatchable enduring technologies, while ensuring that the capacity market remains fit for a changing energy system.
Ensuring efficient bidding in capacity market auctions
The Government will raise the excess capacity rounding threshold from 1 GW to 3 GW and limit preauction information to a single rounded excess capacity figure to reduce opportunities for strategic bidding.
Consumer-led flexibility
The Government will streamline reporting for small demand-side response (DSR) components—below 30 kW —and introduce new DSR technology and customer type categorisation to support improved oversight and future methodology development.
Self-nomination of connection capacity for battery storage technologies
The Government will allow battery energy storage system capacity market units to self-nominate their connection capacity from pre-qualification 2026, with full capacity and energy data reporting required and a 50% minimum floor applied. This change reduces the risk of battery storage assets failing performance tests due to degradation.
Determining appropriate means for non fossil fuel generation to access low-carbon CM mechanisms
The Government will allow biomass generators that meet emissions limits and strengthened sustainability criteria to access low-carbon CM mechanisms. The Government will align CM rules to meet the common biomass sustainability framework when introduced. Energy from waste is not to be treated as low carbon under the CM.
Further improvements to capacity market administration and delivery assurance
The Government will introduce termination fees for where a capacity agreement is terminated for making false declarations in an application, confirm the suspension of payments immediately for insolvency termination events, clarify definitions, update the indicative auction timetable, update settlement rules so that they can align with market-wide half-hourly reforms when introduced, and allow pre-qualification extensions in the event of severe failure of the prequalification IT system.
Capacity Market Winter Consultation Response
Managing the transition of existing generating capacity market units into alternative schemes
The Government will amend regulations and CM rules to allow contracts for difference awarded because of a direction from the Secretary of State to pre-qualify for the CM, so long as there are no overlaps in the periods where the generating unit would be supported by both schemes and where this has been evidenced in the pre-qualification application.
Long-duration electricity storage cap and floor (LDES C&F)
The Government will introduce CM rules to provide clarity on how LDES projects participate in CM auctions. LDES C&F projects will assume price taker status as a default. An option to provide a price maker memorandum will remain. A director’s declaration will be required to confirm a project’s LDES C&F status to enable CM eligibility and enforcement.
Standardisation of termination fees and credit cover
The Government will implement a 30% increase in all termination fee rates and require credit cover to be held until a generating unit becomes eligible for payments with escalations at milestones, applying only to agreements awarded from 2027 onwards.
Clarifying rules around secondary trading
The Government will implement amendments to the CM rules to clarify eligibility for secondary trading entrant applications.
Summary of responses to the recent capacity market call for evidence on hydrogen-to-power and interconnectors
Most respondents supported enabling H2P participation using existing gas technology classes, although some noted potential unintended consequences—for example, hydrogen infrastructure reliability, supply chain constraints and impacts on carbon emissions.
Many stakeholders highlighted risks and operational uncertainties—including hydrogen availability, infrastructure readiness and blending impacts—emphasising the need for clear classifications, guidance and policy certainty.
For interconnectors, there was strong support for updating the technical adjustment methodology to the one proposed in the call for evidence, noting that the current method risked becoming outdated.
On the consideration of high-impact, low-probability events in this methodology, most respondents favoured including all outage events to better reflect system risks and maintain consistency with other CM technologies.
As a result of the CfE, Government will:
Adopt the updated technical adjustment methodology from summer 2026, include all outage events in this methodology, and publish a briefing note to detail the final methodology before CM pre-qualification 2026 to provide further transparency over the process.
As the capacity market remains Great Britain’s main mechanism for ensuring capacity adequacy, these publications consider actions to ensure that the scheme continues to meet its primary objective of ensuring security of supply. The proposals put forward seek to ensure that the scheme remains fit for purpose and continues to play a crucial role in achieving the clean power mission.
[HCWS1561]
Energy Infrastructure Planning Projects
(1 day, 4 hours ago)
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The Parliamentary Under-Secretary of State for Energy Security and Net Zero (Martin McCluskey)
My noble Friend Lord Whitehead, Minister for Energy Security and Net Zero, has today made the following statement:
This statement concerns an application for development consent made under the Planning Act 2008 by Morgan Offshore Wind Ltd and Morecambe Offshore Windfarm Ltd for the Morgan and Morecambe Offshore Wind Farms Transmission Assets in the east Irish sea off the coast of north-west England, including onshore connection to the electricity transmission network.
Under section 107(1) of the Planning Act 2008, the Secretary of State must make a decision on an application within three months of the receipt of the examining authority’s report unless exercising the power under section 107(3) of the Act to set a new deadline. Where a new deadline is set, the Secretary of State must make a statement to Parliament to announce it.
The statutory deadline for the decision on the Morgan and Morecambe Offshore Wind Farms Transmission Assets was 14 May 2026.
I have decided to allow an extension and to set a new deadline of 14 September 2026. This is to allow time to request further information.
The decision to set the new deadline for this application is without prejudice to the decision on whether to grant or refuse development consent.
[HCWS1559]
Nuclear Decommissioning Authority and Nuclear Transport Solutions Project
(1 day, 4 hours ago)
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The Minister for Energy (Michael Shanks)
My noble Friend Lord Vallance, Minister for Science, Innovation, Research and Nuclear, has today made the following statement:
I have laid before Parliament a departmental minute describing the contingent liability that allowed the Nuclear Decommissioning Authority and Nuclear Transport Solutions to carry out a project to remove and transport a quantity of legacy civil nuclear material to the US from Venezuela.
It is normal practice, when a Government Department proposes to undertake a contingent liability in excess of £300,000 for which there is no specific statutory authority, for the Minister concerned to present a departmental minute to Parliament giving particulars of the liability created and explaining the circumstances.
Given the sensitivities associated with the project, the Department for Energy Security and Net Zero informed the chairs of the Public Accounts Committee and the Energy Security and Net Zero Committee in confidence of the Department’s intention to take on an indemnity to allow the Nuclear Decommissioning Authority and Nuclear Transport Solutions to deliver the project.
The indemnity was required to cover any residual risk that was left between commercial insurance and the United States of America’s Price-Anderson Act. The maximum potential liability was capped at £10 billion. The risk of this indemnity being relied upon was deemed to be very low. NTS operate a unique maritime transport capability and have done for half a century. They have had no significant safety incidents over that time.
The UK had received requests for assistance from both the United States and the International Atomic Energy Agency which had in turn received a request for assistance from the de facto authorities in Venezuela. The UK’s main contribution was the provision of a purpose-built vessel from Nuclear Transport Solutions to transport the material by sea. The arrival of the material in the US represents the conclusion of the UK assistance to this project.
The Treasury approved this proposal for the contingent liability in principle.
[HCWS1557]
International Claims Commission for Ukraine
(1 day, 4 hours ago)
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The Minister of State, Foreign, Commonwealth and Development Office (Stephen Doughty)
The Government have today laid the following statement as an un-numbered Act Paper pursuant to section 21(2) of the Constitutional Reform and Governance Act 2010:
On 16 December 2025 the United Kingdom signed the convention establishing an International Claims Commission for Ukraine.
The Government laid this convention in Parliament on 13 April 2026 under Command Paper number CP1561, accompanied by an explanatory memorandum.
In accordance with section 21 of the Constitutional Reform and Governance Act 2010, I wish to inform the House that the 21 sitting day period that relates to this convention pursuant to section 20(1) CRaG is to be extended. The 21 sitting day period is to be extended by 10 sitting days.
This extension follows a request from the House of Lords International Agreements Committee for further time to consider the convention.
[HCWS1554]
Special Tribunal for the Crime of Aggression against Ukraine
(1 day, 4 hours ago)
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The Minister of State, Foreign, Commonwealth and Development Office (Stephen Doughty)
I wish to update the House on the Government’s position regarding the establishment of the special tribunal for the crime of aggression against Ukraine. Today the Foreign Secretary is in Moldova to attend the two-day Council of Europe meeting of Ministers for Foreign Affairs where the resolution establishing the operating model for the special tribunal will be adopted.
The special tribunal will have the power to investigate, prosecute and try political and military leaders who bear the greatest responsibility for Russian aggression against Ukraine. It is being established through an agreement between Ukraine and the Council of Europe, supported by participating states via an enlarged partial agreement. The EPA is a Council of Europe agreement that allows members and non-members to collaborate on specific issues.
Current status of the tribunal
Negotiations at the Council of Europe have resulted in agreement on the text of the EPA, which sets out the tribunal’s operating model. Adoption of the resolution establishing the EPA is expected to take place during the Council of Europe Foreign Ministers meeting in Chisinau which begins today.
Following adoption, the EPA will not come into force until further negotiations take place and agreement is reached on appropriate conditions. These negotiations will include the number of states required to join the EPA for entry into force, and agreement on budgetary parameters and financial safeguards.
In joining the tribunal, the UK will have a commitment to consider forms of co-operation with the tribunal, and it is likely that co-operation agreements will require primary legislation. We will keep Parliament updated as the process advances.
The adoption of the EPA will mark significant progress towards accountability for Russian aggression against Ukraine. Ensuring the tribunal’s political and financial sustainability will be vital to its success, and we remain committed to working closely with Ukraine and our international partners to deliver a robust mechanism for justice.
Since Russia’s unlawful full-scale invasion of Ukraine, the United Kingdom has remained steadfast in its support for Ukraine and committed to ensuring accountability for atrocities committed during Russia’s illegal war. We are working closely with Ukraine and other international partners to identify effective pathways for justice, both internationally and through supporting Ukraine on domestic prosecution.
[HCWS1556]
Hantavirus: Public Health Response
(1 day, 4 hours ago)
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The Parliamentary Under-Secretary of State for Health and Social Care (Mrs Sharon Hodgson)
I am updating the House on the outbreak of hantavirus onboard the Dutch cruise ship the MV Hondius, and the action the UK has taken to support British nationals and protect public health.
First, I wish to express our condolences to the families and friends of the three people who have sadly died. I also pay tribute to the passengers and crew who have faced the most difficult of circumstances and showed remarkable resilience.
The UK’s response to this complex incident is being led by the UK Health Security Agency working closely with the World Health Organisation, the Foreign, Commonwealth and Development Office, the Department of Health and Social Care, the Home Office, the Ministry for Housing Communities and Local Government, the Ministry of Defence, the UK devolved Governments and international partners. Collectively, they are doing everything possible to protect the safety and wellbeing of British nationals, and to provide reassurance to UK citizens.
I am grateful too for the strong collaboration received from our international counterparts in Spain, the Netherlands, EU and WHO.
Current picture
As of 9 am, 14 May 2026, the WHO has reported eleven cases of Hantavirus globally, nine of which are confirmed. Three of these individuals were repatriated from the Hondius to Spain, France and the US. Three cases are British nationals—one on Tristan de Cunha, one in Johannesburg and one in the Netherlands. There have been three deaths related to this incident. No British nationals have died.
Timeline
The MV Hondius, a Dutch-flagged vessel operated by a Dutch company, sailed from Argentina and visited the UK overseas territories of South Georgia and the South Sandwich Islands, Saint Helena, Ascension, and Tristan da Cunha.
The MV Hondius arrived in Tenerife on 10 May, where support was co-ordinated by Spain and the WHO. We are grateful to the Spanish Government and the people of the Canary Islands for facilitating the safe transfer of passengers. From Tenerife, the passengers were transported to the airport for chartered flights to their home countries.
On arrival in the UK, Hondius passengers were transferred to an isolation facility at Arrowe Park hospital on the Wirral where they received clinical assessments and testing. Arrowe Park was selected on the basis that it has the required facilities including a dedicated block, self-contained units and access to outside space, with proximity to infectious disease units and to hospital support in addition to proximity to Manchester Airport.
Isolation
High-risk contacts have been asked to isolate for up to 45 days, with regular testing and ongoing care provided by UKHSA and NHS teams. This includes 20 British nationals, one UK resident German national and one Japanese citizen returning from Tenerife, and seven British nationals who disembarked the ship at Saint Helena on 24 April. Of those seven, six are isolating in the UK and UKOTs and one person is isolating outside the UK. UKHSA and the NHS is also continuing to support the isolation—in Arrowe Park and individuals’ own homes where it is safe to do so—of individuals who are considered high-risk contacts from the ship or aircraft where cases are known to have been onboard. UKHSA is supporting UKOTs CMOs on their advice for high-risk contacts in UKOTs.
Public health specialists from UKHSA and infectious diseases specialists from the NHS have assessed whether passengers are able to safely isolate at home or whether an alternative suitable location will be arranged.
Where it is safe and possible, they have been provided with tailored support to help them now isolate at home. They will be closely monitored and supported by health protection teams, with daily contact throughout their isolation period.
UKHSA has notified local authority directors of public health and individual MPs where a person had been requested to isolate in their constituency and will continue to do so when people leave Arrowe Park to complete their isolation period in their homes.
UK overseas territories
UKHSA will also support 9 people from the UK overseas territories of Saint Helena and Ascension Island who have been offered the choice of completing their self-isolation in the UK in order to be closer to the NHS specialist infectious diseases units for clinical care if they develop symptoms This is to ensure they can be provided with the best possible support from England’s NHS high consequence infectious disease network should they become unwell. This is precautionary to support the individuals and communities in the UK overseas territories: We are also supporting Ascension Island where one contact has developed symptoms.
We are also aware of an individual who disembarked the MV Hondius at Saint Helena and subsequently travelled to UK overseas territory of the Pitcairn Islands. While this individual is not symptomatic, we are taking a precautionary approach and working with relevant consular and health authorities to explore options for this individual’s repatriation while ensuring appropriate mitigation procedures while on island.
UKHSA continues to work closely with public health teams in the UK overseas territories to identify and support the management of individuals who may have had high-risk contact with cases. This includes putting in place established protocols around contact tracing and isolation measures where necessary. The risk to the general public remains very low in all UK overseas territories.
The FCDO and other UK Government Departments and agencies are working closely to support the Governments of the UK overseas territories visited by the MV Hondius to get medical support to the affected overseas territories. The MOD has worked with UKHSA to provide vital diagnostic supplies, including PCR tests, which were delivered to Ascension Island via a military plane on 7 May. An MOD team is currently also supporting the provision of medical services on Ascension.
Tests, supplies and MOD and UKHSA personnel have also been sent to Saint Helena.
Additionally, on 9 May, an army specialist team of six paratroopers and two military clinicians parachuted on to Tristan da Cunha from an RAF transport aircraft to deliver critical essential oxygen supplies and additional medical support. This extraordinary operation reflects our unwavering commitment to the people of our overseas territories and to British nationals, wherever they are.
The overseas territory Governments have put out public advice with information on the latest situation and support available for anyone who came into contact with passengers from the ship.
Hantavirus
Hantaviruses are a group of viruses carried by rodents and transmitted through exposure to their urine, droppings, or saliva. They can cause a range of illness, from mild, flu-like symptoms to severe respiratory disease. Infection most commonly occurs through inhalation of airborne particles contaminated with rodent excreta and may also occur via broken skin or the eyes, or, very rarely, through rodent bites. In the strains where person-to-person transmission has been observed, it is associated with very close contact.
The strain of virus associated with this outbreak is Andes Hantavirus. This hantavirus is typically associated with rodent species found in South America that are not present in the UK, and it has never been detected in the UK rodent population.
Although this incident brings into sharp relief the dangers of this infectious disease, it is important to note that the UKHSA has been clear throughout that the risk to the British public is very low.
Information to keep the public updated has been published on: https://ukhsa.blog.gov.uk/2026/05/12/what-you-need-to-know-about-the-hantavirus-outbreak-linked-to-the-dutch-cruise-ship/
[HCWS1573]
Firearms Licensing Fees
(1 day, 4 hours ago)
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The Minister for Policing and Crime (Sarah Jones)
The Government are today laying a statutory instrument before Parliament to introduce increases in firearms licensing fees by the rate of inflation to ensure that these fees continue to provide full cost recovery for the police. These increases follow the comprehensive review of, and increases to, firearms licensing fees in February 2025. The new fees come into effect from 4 June 2026.
The fees are increasing by 3%, in line with the consumer prices index, for all statutory firearms licensing fees, based on Office for National Statistics CPI figures for the 12 months to February 2026.
[HCWS1555]
Social Housing Bill
(1 day, 4 hours ago)
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The Minister for Housing and Planning (Matthew Pennycook)
Everyone deserves to live in a decent, safe, secure and affordable home. Yet far too many families in need of a social rented home are languishing on local authority waiting lists, forced to struggle in the private rented sector or in expensive temporary accommodation, driving up rents and housing benefit costs in the process. At the same time, the ability and willingness of social housing providers to invest in the building of new social rented homes is undermined by the steady and significant loss of existing stock through right to buy.
Today, the Government have introduced the social housing Bill. The Bill has three core objectives: first, to protect much-needed social housing stock and thereby incentivise the building of more social rented homes; secondly, to create a fairer system with greater protections for social housing tenants in instances of domestic abuse; and thirdly, to clarify the statute book and reduce unnecessary bureaucracy so that providers can invest in new social and affordable homes with confidence.
The Bill delivers on our manifesto commitments to prioritise the building of new social rented homes and better protect our existing stock. It builds on the funding and regulatory certainty that the Government have provided to the sector and supports the delivery of the five-step plan we published in July 2025 to deliver a decade of renewal for social and affordable housing (HCWS771).
Protecting existing social housing stock and incentivising the building of more social homes
At the heart of the Bill are comprehensive reforms to the right to buy scheme. The scheme provides an important route for social housing tenants to own their own homes. However, many of the homes sold under the right to buy have not been replaced. Not only has this depleted much-needed stock, but it has also reduced the motivation and confidence of councils to build, and restricted broader investment in council housing.
Following the reduction in maximum right to buy cash discounts that was announced at autumn Budget 2024, we consulted on further reforms to the right to buy between 20 November 2024 and 15 January 2025. In July last year, we published our response to that consultation and committed to bringing forward legislation to implement proposals when parliamentary time allowed.
Accordingly, the Bill includes a range of further reforms to the right to buy scheme, including increasing the eligibility requirement to 10 years, amending percentage discounts to better align with the new maximum cash discounts, and exempting newly built social housing for 35 years.
The Bill will also strengthen the rules that apply after a social home has been sold. It will extend in perpetuity the right of first refusal for homes sold under the right to buy and right to acquire, so that landlords retain the opportunity to reacquire homes when they are later resold. In addition, the Bill will reform the right to acquire scheme to align with the reformed right to buy scheme, improving consistency.
Alongside the right to buy reforms, the Bill also includes provision to ensure councils and other providers in the area are notified before social homes are sold by private registered providers to maximise opportunities to retain stock by preventing homes being lost to the private market.
Protecting tenants who are victims of domestic abuse by providing them with greater security and stability
All social housing tenants deserve to live in decent homes, to be treated with fairness and respect, and to have their problems resolved quickly. The Bill builds on the extensive programme of Government activity already under way to protect and empower tenants by introducing new protections for victims of domestic abuse living in social housing.
At present, landlords and courts have only limited means to remove a perpetrator from a tenancy while allowing the victim-survivor to remain securely in their home. This can leave victims facing additional hardship, instability and an increased risk of homelessness. The Bill will give landlords and the courts new and strengthened grounds to address domestic abuse and, in joint tenancy cases, remove a perpetrator from the tenancy where there has been domestic abuse allowing victims to remain in their home or move to suitable alternative accommodation where this is available.
Clarifying the statute book and reducing unnecessary bureaucracy
The social housing sector needs long-term certainty and stability to drive up investment and boost supply. The Bill includes a range of measures designed to ensure that providers can invest in new social and affordable homes with confidence. It streamlines the outdated consents process, so that councils do not have to seek approval from the Secretary of State when they want to take certain actions to manage their social housing stock. It also repeals a number of unimplemented provisions from the Housing and Planning Act 2016, including the requirement for local authorities to sell high-value social homes, grant flexible (fixed-term) tenancies, and charge higher-income tenants higher rents.
[HCWS1563]
Tackling Antisemitism
(1 day, 4 hours ago)
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The Secretary of State for Housing, Communities and Local Government (Steve Reed)
The first duty of any Government are to keep its people safe. The truest test of whether that is being met is how we respond when a community comes under attack. This crisis of antisemitism —the disgusting attacks being made against British Jews—is a crisis for all of us.
Today I want to update the House on steps we are taking as a Government to combat this sickening hatred, and better protect, celebrate, and support Jewish communities.
Antisemitism is an old hatred, and though its nature changes over time, Jewish people are often the target when extremists are emboldened. Since the 7 October terrorist attacks, there has been a marked increase in antisemitism both here, and abroad. We have seen its devastating impacts in Manchester, Bondi, Washington, and, most recently, in Golders Green. There has also been a magnified threat from hostile states.
In March, we published “Protecting What Matters”, our strategy to tackle prejudice, bring people together, and take on extremists. It includes: action we will take online to give people greater control over what content they see; £7 million to tackle antisemitism in schools, colleges and universities; Lord Macdonald’s review into existing public order and hate crime legislation; Sir David Bell’s review into antisemitism in schools and colleges, and Lord Mann’s review into tackling antisemitism and racism in the health service; the roll-out of training across the civil service; and steps to help faith groups improve their safety and security.
These policies were developed in consultation with Jewish stakeholders, and sit alongside other measures to combat extremism. This includes: embedding the extremism definition; strengthening oversight of charities and universities; expanding disruption powers and operational capacity to counter extremist groups; and using the full strength of powers in the Online Safety Act 2023 to tackle harmful online content.
However, we know that we all need to do more.
On 5 May, the Prime Minister convened a summit of leaders from across business, civil society, health, education, culture, and policing to explore how to tackle antisemitism in all comers of society.
Ahead of the summit, the Government announced a series of measures, including:
A further £25 million for increased police patrols and protective security to keep our Jewish communities safe. This brings the total funding this year to £58 million—the largest investment a Government have ever made towards protecting Jewish communities.
A £1 million expansion of the common ground programme for communities facing antisemitism.
Working with the Arts Council to champion the talent and ambition of Jewish artists and creative professionals, with the Arts Council supporting, and part-funding, the UK’s first Jewish cultural month.
Ensuring the Arts Council is tough on organisations or individuals in receipt of Arts Council funding that peddle or promote antisemitic content, including using their powers to suspend, withdraw, or claw back that funding. DCMS will work with the Arts Council to carry out an independent audit focused on the use of these powers and their effectiveness: these powers will be strengthened where needed.
Strengthening guidance to local licensing authorities on how existing licensing powers can be used to tackle events or venues promoting antisemitic behaviour or content.
Ensuring that Arts Council and Home Office funding can be used to support protective security for Jewish artists and cultural organisations: this will mean that security costs driven by antisemitism do not lead to cancellations or exclusion.
Setting an expectation for universities to publish robust disciplinary policies that explicitly set out the consequences of antisemitism, and how these policies will be enforced.
Calling on universities to publish anonymised data on antisemitic incidents and the action taken: this will improve transparency, monitor frequency, and ensure accountability. Government will review the published data to ensure that this is being taken seriously.
We will also be fast-tracking legislation in the coming weeks to introduce new proscription-like powers to clamp down on individuals and groups carrying out hostile activity for foreign states, including those who act as their proxies.
No one should feel that they have to hide their identity for their own safety. Nobody should think twice before going to a synagogue, hide their Star of David or kippahs, or avoid sharing their identity with school friends or colleagues. Simply put, no one should lead smaller lives to protect themselves.
We will not allow fear to dictate how Jewish people live in this country, or allow antisemitism to become normalised and excused.
We will not rest until the UK is a place where every Jewish person can live openly, safely, and proudly.
[HCWS1567]
Government’s 2026 Legislative Programme
(1 day, 4 hours ago)
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The Leader of the House of Commons (Sir Alan Campbell)
Following the state opening of Parliament, it is normal practice for the Leader of the House of Commons to list the Bills to be introduced for the convenience of the House.
Other measures will be laid before the House in the usual way. The programme will also include Finance Bills to implement budget policy decisions and estimates for public services.
Civil Aviation Bill
Clean Water Bill
Commonhold and Leasehold Reform Bill
Competition Reform Bill
Digital Access to Services Bill
Education for All Bill
Electricity Generator Levy Bill
Energy Independence Bill
Enhancing Financial Services Bill
European Partnership Bill
Highways (Financing) Bill
Immigration and Asylum Bill
National Security Bill
Health Bill
Nuclear Regulation Bill
Overnight Visitor Levy Bill
Police Reform Bill
Regulating for Growth Bill
Remediation Bill
Removal of Peerages Bill
Small Business Protections (Late Payments) Bill
Social Housing Bill
Sovereign Grant Bill
Sporting Events Bill
Steel Industry (Nationalisation) Bill
Tackling State Threats Bill
Bills that will be published in draft this Session include:
Draft Taxi and Private Hire Vehicle Bill
Draft Ticket Tout Ban Bill
Draft Conversion Practices Bill
The following Bills will be carried over from the first Session:
Armed Forces Bill
Courts and Tribunals Bill
Cyber Security and Resilience (Network and Information Systems) Bill
Northern Ireland Troubles Bill
High Speed Rail (Crewe-Manchester) Bill / Northern Powerhouse Rail
Public Office (Accountability) Bill
Railways Bill
Representation of the People Bill
[HCWS1558]
Government’s Legislative Programme: Northern Ireland
(1 day, 4 hours ago)
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The Secretary of State for Northern Ireland (Hilary Benn)
The UK Government legislative programme for the second Session was set out at the state opening of Parliament on 13 May 2026. This statement summarises the programme and how it applies to Northern Ireland. It does not include Law Commission Bills, or Finance Bills.
The Government will continue to work for a stable, prosperous, and vibrant Northern Ireland through the upcoming legislative programme. This Government firmly believe that devolution represents the best means of delivering for the people of Northern Ireland. We will continue to work collaboratively with the Northern Ireland Executive to support institutional stability and we will continue to work closely with Ministers and party leaders ahead of local and Assembly elections in May 2027.
We will deliver the Northern Ireland Troubles Bill, which will repeal and replace the previous Government’s legacy Act.
The Bill will enable victims and bereaved families affected by the troubles—including armed forces families —to seek information and accountability through a reformed Legacy Commission.
The Bill will provide for a fair and more transparent disclosure regime; a new independent commission on information retrieval; and lawful protections for veterans so that those who carried out their duty properly in Northern Ireland will not face an endless cycle of legal uncertainty and are treated with dignity and respect.
This Government will look to share best practice while continuing to strengthen our relationship with the Northern Ireland Executive to provide stability and improve the lives of the people of Northern Ireland.
We will continue to support and invest in Northern Ireland’s economic future, generating economic growth through the Government’s “Invest 2035” industrial strategy and ensure that all our UK-wide strategies have benefits for the people of Northern Ireland. In support of this, we are working with the Department for Science, Innovation and Technology to ensure Northern Ireland is fully considered in the development of UK-wide AI growth zone policy.
Following its launch on 22 April 2026, the Northern Ireland defence growth deal will provide a £50 million boost, part of a £250 million UK-wide investment, to create high-skilled jobs and support small and medium sized businesses to access the UK defence supply chain. This Government are committed to protecting Northern Ireland’s place in the UK internal market, while faithfully implementing the Windsor framework. We will continue to support the work of Intertrade UK as it takes forward an ambitious programme of work to identify barriers to trade in the UK internal market and how these can be addressed.
The Government have provided £235 million funding for public sector transformation. In March 2025, £129 million of this funding was allocated to six projects across health, education, justice and infrastructure. These projects will continue to embed change and act as a catalyst for further improvements as Departments begin to deliver results in the years ahead. Details on the allocation of the remaining £102 million available are set to be announced by the Executive soon.
This Government will continue to facilitate and encourage integration in education across Northern Ireland, in line with the UK’s commitments under the Good Friday agreement, through a £2 million injection of grant programme funding over the next three years.
The Government’s first responsibility is to keep people safe. I pay tribute to those who work so hard to do this in Northern Ireland. In recognition of the security situation, the Government have increased the amount provided to the Police Service of Northern Ireland in additional security funding. This helps the PSNI to tackle terrorist threats, alongside day-to-day policing, so allowing them to continue keeping people safe.
The recent attacks on police stations in Northern Ireland are a reminder that a small minority of people remain determined to cause harm to our communities through acts of violence and it is testament to the tremendous efforts of the PSNI and security partners that the lives of the vast majority of people in Northern Ireland remain unaffected by this threat.
The following Bills will extend and apply to Northern Ireland, either in full or in part:
Armed forces
Civil Aviation
Clean Water
Competition Reform
Courts and Tribunals
Cyber Security and Resilience (Network and Information System)
Digital Access to Services
Electricity Generator Levy
Energy Independence
Enhancing Financial Services
European Partnership
Immigration and Asylum
National Security
Health
Northern Ireland Troubles
Public Office (Accountability)
Railways
Regulating for Growth
Removal of Peerages
Representation of the People
Small Business Protections (Late Payments)
Sovereign Grant
Sporting Events
Steel Industry (Nationalisation)
Tackling State Threats
Ticket Tout Ban (Draft)
The UK Government will endeavour to work collaboratively with the Northern Ireland Executive to secure the legislative consent of the Assembly where appropriate.
[HCWS1570]
Independent Commission for Reconciliation and Information Recovery
(1 day, 4 hours ago)
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The Secretary of State for Northern Ireland (Hilary Benn)
I made a written ministerial statement on 15 April about Peter May’s review into the corporate effectiveness and cultural health of the Independent Commission for Reconciliation and Information Recovery. In that statement, I committed to placing the findings of the review in the Library of the House, along with our response and joint action plan. I can confirm that, with the review having been shared in the first instance with ICRIR staff, these documents were placed in the Library on 11 May 2026.
[HCWS1566]
Government’s Legislative Programme: Scotland
(1 day, 4 hours ago)
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The Secretary of State for Scotland (Mr Douglas Alexander)
The UK Government’s legislative programme for the second Session was outlined at the state opening of Parliament on Wednesday 13 May. This statement provides a summary of the programme and its application to Scotland. It does not include Law Commission Bills, or finance Bills.
The UK Government are committed to delivering change for Scotland. This legislative programme will deliver that change across all four nations, by encouraging economic growth, improving our public services and living standards, and bolstering our defence and domestic security. The Scotland Office will play a key role in the delivery of this programme, both in fully and effectively representing the people of Scotland at the heart of the UK Government, and in making sure that the benefits of these reforms are felt across Scotland. We will work in co-operation with the incoming Scottish Government to achieve this.
This Government are committed to growth in Scotland, and we are investing £2.2 billion in growing Scotland’s economy. We will introduce a new regulatory framework which is fit for the future, bridging the gap between regulation and innovation, unlocking growth, attracting capital and securing high-value employment in Scotland and beyond. A new digital ID scheme will help combat illegal working and make everyday life easier for people by ensuring public services are more personal, joined-up, and effective. We will also introduce measures designed to ensure that businesses, particularly small businesses, are paid fairly and on time. Central to our drive to unlock growth is a closer partnership with the European Union, and the Government will introduce a legislative framework to ratify a future agreement on closer future economic and security co-operation.
We will continue working with the Scottish Government on legislation, providing a legislative framework to support the hosting of future major sporting events across the UK, so we can see more big events like the Euros and Commonwealth games in Scotland in the future. Following the establishment of the Aberdeen-based GB Energy announced in the last King’s Speech, the Government will go further by bringing in new legislation which will lower bills, secure our energy systems and set out a clear path to net zero.
The following Bills will extend and apply to Scotland (either in full or in part):
Armed Forces
Civil Aviation
Clean Water
Competition Reform
Courts and Tribunals
Cyber Resilience and Security (Network and Information Systems)
Digital Access to Services
Electricity Generator Levy
Energy Independence
Enhancing Financial Services
European Partnership
Immigration and Asylum
Health
Northern Ireland Troubles
Police Reform
Public Office (Accountability)
Railways
Regulating for Growth
Remediation
Removal of Peerages
Representation of the People
Small Business Protections (Late Payments)
Sovereign Grant
Sporting Events
Steel Industry (Nationalisation)
Tackling State Threats
Ticket Tout Ban (Draft)
The UK Government will endeavour to work collaboratively with the Scottish Government to secure the legislative consent of the Scottish Parliament where appropriate.
[HCWS1569]
Government’s Legislative Programme: Wales
(1 day, 4 hours ago)
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The Secretary of State for Wales (Jo Stevens)
The Government legislative programme for the second session was outlined at the state opening of Parliament on Wednesday 13 May. This statement provides a summary of the programme and its application to Wales. It does not include Law Commission Bills or Finance Bills.
The legislative programme supports our plan to build a stronger, fairer future for Wales and the whole United Kingdom. It will tackle the cost of living, create jobs and drive economic growth in Wales. This includes by creating a stronger relationship with our European partners and providing opportunities for young people to live and learn in Europe. This will build on the steps we have already taken to strengthen the Welsh economy, which have resulted in higher wages, lower unemployment and tens of thousands of better, more secure jobs in every corner of the country.
Alongside the legislative programme we will continue to deliver jobs, growth and opportunities across Wales through the new local growth fund worth more than half a billion pounds, by delivering our modern industrial strategy and attracting inward investment and promoting exports through brand Wales, and by continuing to secure steelmaking’s future in Port Talbot as well as across the country.
The Energy Independence Bill will transform the country’s energy system, support our work to cut household bills and seize the economic opportunities of clean energy. This will build on the progress we made in the first session of this Parliament to put Wales at the forefront of our work to become a clean energy superpower, with the first significant floating offshore wind projects confirmed in the Celtic sea alongside UK Government investment, and with new nuclear set to bring thousands of jobs to north Wales.
The Railways Bill will bring about much needed reforms to our railways and delivers our manifesto commitment to give the Welsh Government a role in the management of our railways. This will enable our generational commitment to deliver our long-term plan for Welsh rail worth up to £14 billion, which has the potential to unlock 12,000 jobs and connect communities with new opportunities across Wales.
The legislative programme will support our armed forces, ensure our national security and prevent extreme violence through respective Bills. This will complement the UK Government’s biggest sustained increase in defence spending since the cold war. We will also strip away police service bureaucracy, replace police and crime commissioners and put more police on the street through the Police Reform Bill.
The following Bills will extend and apply to Wales (either in full or in part):
Armed Forces
Civil Aviation
Clean Water
Commonhold and Leasehold Reform
Competition Reform
Conversation Practices (Draft)
Courts and Tribunals
Cyber Security and Resilience (Network and Information Systems)
Digital Access to Services
Electricity Generator Levy
Energy Independence
Enhancing Financial Services
European Partnership
Immigration and Asylum
National Security
Health
Northern Ireland Troubles
Police Reform
Public Office (Accountability)
Railways
Regulating for Growth
Remediation
Removal of Peerages
Representation of the People
Small Business Protections (Late Payments)
Sovereign Grant
Sporting Events
Steel Industry (Nationalisation)
Tackling State Threats
Ticket Tout Ban (Draft)
The UK Government will endeavour to work collaboratively with the Welsh Government to secure the legislative consent of the Senedd where appropriate.
[HCWS1571]
Benefit System: Fraud, Error and Debt Statistics 2025-26
(1 day, 4 hours ago)
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The Parliamentary Under-Secretary of State for Work and Pensions (Andrew Western)
The annual statistics for fraud and error in the benefit system for the financial year ending 2026, were published on Thursday 14 May 2026, at 9.30 am.
Universal credit overpayments have now dropped to the lowest level since the pandemic, at 8.5%. This is below both pre-pandemic levels and the OBR forecast of 9.1% for this year. It is also a significant drop of 42% from the record level of 14.7% in financial year 2022, showing the Government are committed to driving down fraud and error.
Today’s figures confirm continued progress to drive down fraud and error, with the overall rate of overpayments at 3.2%, or £9.9 billion,, for 2025-26, compared with 3.3%, or £9.4 billion, in 2024-25. This shows we are on track to meet the OBR forecast of 2.8% in 2028-29, which would be the lowest rate since tax credits were first introduced in 2003.
Overpayments due to fraud stand at 2.2%, claimant error at 0.6% and official error at 0.4%. The total rate of benefit expenditure underpaid in financial year 2026 stands at 0.4%.
This Government made a manifesto commitment that it will safeguard taxpayers’ money and not tolerate fraud or waste anywhere in public services. With welfare benefits paid to 24.3 million people, the welfare system is a deliberate target for both organised crime groups and opportunistic individuals. That is why we continue to take robust action and to strengthen our ability to drive out fraud and error, wherever it occurs. From investigating and prosecuting fraudsters where appropriate to supporting customers to make sure their claims are correct. This will ensure that support goes to those who need it most, and that the right people are paid the right amount, at the right time.
Through recent Budgets, this Government have committed to deliver savings of £14.6 billion up to the end of 2030-31. This will be delivered through a suite of measures, including periodic redeclaration reminding universal credit claimants of the requirement to confirm any change in circumstances, continuing to check accuracy of UC claims at risk of being incorrect through targeted case reviews and, building on the success of TCR, reviewing pension credit claims that are at risk of being incorrect through pension credit case review.
As part of this wider action, the Public Authorities (Fraud, Error and Recovery) Act received Royal Assent on 2 December 2025 and is estimated to deliver benefits of £2.1 billion by 2030-31. Powers contained within the Act will help address overpayments in the social security system, be tough on criminals, fair for claimants and will safeguard public money by reducing public sector fraud and error. Measures also allow the more effective recovery of moneys owed to Government and help spot and stop errors by requiring banks and other financial institutions to share data with DWP. This will help identify any potential overpayments earlier and avoid claimants getting into debt.
Today we have also published our unfulfilled eligibility statistics following reclassification in 2024 from customer error underpayments. Unfulfilled eligibility measures how much a customer could have been eligible for had they told us their correct circumstances. The total unfulfilled eligibility rate in financial year 2026 was 1.2%, or £3.7 billion, compared with 1.3%, or £3.7 billion, in financial year 2025.
The Department will report more on both overpayments and underpayments in its annual report and accounts, which are due to be published in July 2026.
[HCWS1572]
Public Authorities (Fraud, Error and Recovery) Act 2025: Codes of Practice
(1 day, 4 hours ago)
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The Parliamentary Under-Secretary of State for Work and Pensions (Andrew Western)
I would like to advise the House that today the Government are publishing the response to the public consultation on the codes of practice associated with the Public Authorities (Fraud, Error and Recovery) Act 2025. The response explains how the public’s views were considered and, where appropriate, reflected through changes to the codes. Alongside this response, the following codes have been published:
Eligibility Verification Notices
DWP Direct Deduction and Disqualification from Driving Orders
DWP Obtaining Information to Support Fraud Investigations in the Welfare System
These codes have been developed as essential safeguards to support the effective and proportionate application of the newly enacted PAFER legislation. I am grateful to all those who took the time to contribute their views on these documents. The feedback provided was detailed, considered and constructive and the codes have been strengthened as a result of this engagement.
The powers in the Act and the publication of these codes affirm our commitment to root out fraud and waste in public services and safeguard taxpayers’ money. These codes will guide the operation and governance of the new powers by setting out, in more detail, how DWP will apply these new powers to improve its ability to identify, prevent and deter social security fraud and error, and will support more effective recovery of debt.
Today’s action takes us one step closer in delivering the estimated benefits of £2.1 billion over the next five years, as scored by the independent Office for Budget Responsibility. I have every confidence that each code of practice provides a solid and effective foundation to ensure the safe and proportionate use of DWP’s new powers.
[HCWS1553]
Legacy Benefits: Appeals
(1 day, 4 hours ago)
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The Minister for Social Security and Disability (Sir Stephen Timms)
Universal credit is modernising the social security system, improving value for money for taxpayers and ensuring people are better supported to move into work where they can.
As I set out in my statement on 20 April, the full transition from legacy benefits is due to complete by the end of June 2026, with the exception of a small number of customers who require time to find an appointee.
The Department’s “Move to Universal Credit” official statistics, published in May 2026, show that—as of 31 March 2026—2.4 million people across 1.8 million households have been notified of the need to make the transition to universal credit. Of these, over 1.5 million households went on to make a claim and approximately 815,000 households have been awarded transitional protection.
In 2020 the upper tribunal court determined that a customer claiming UC, even where a decision that resulted in benefits ending was later reversed, should not be reinstated onto legacy benefits. However, it also identified some such customers experienced a financial loss where their benefit entitlement was lower on UC.
Today we are launching the successful legacy appeals scheme. This compensation scheme follows the upper tribunal decision in R (on the application of TD, AD and Patricia Reynolds) v. Secretary of State for Work and Pensions [2020] EWCA Civ 618. It aims to compensate certain people who had to claim UC due to a decision to end their means-tested legacy benefits including housing benefit, tax credits, employment and support allowance, jobseeker’s allowance or income support, and on claiming UC received a lower entitlement than their previous legacy benefit entitlement, and who later had the decision to end their legacy benefit reversed.
The scheme constitutes the response of the Secretary of State for Work and Pensions to the determination of the upper tribunal and means that customers affected by similar circumstances do not need to seek redress through the courts or a tribunal.
[HCWS1176]
House of Lords
Death of a Member: Lord Harries of Pentregarth
The Lord Speaker (Lord Forsyth of Drumlean)
My Lords, I regret to inform the House of the death of the noble and right reverend Lord, Lord Harries of Pentregarth, on 29 April. On behalf of the House, I extend our condolences to his family and friends.
Retirements of Members
The Lord Speaker (Lord Forsyth of Drumlean)
My Lords, I should like to notify the House of the retirement with effect from Thursday 30 April of the noble Lord, Lord Curry of Kirkharle, and the noble Baronesses, Lady Eccles of Moulton and Lady Lea of Lymm; with effect from Thursday 7 May of the noble Baroness, Lady Burt of Solihull; and with effect from Monday 11 May of the noble and learned Lord, Lord Irvine of Lairg, pursuant to Section 1 of the House of Lords Reform Act 2014. On behalf of the House, I thank them for their much-valued service to the House.
Cessation of Membership
The Lord Speaker (Lord Forsyth of Drumlean)
My Lords, I have to notify the House that the noble Baroness, Lady Billingham, and the noble Lord, Lord Christopher, yesterday ceased to be Members of the House under Section 2 of the House of Lords Reform Act 2014, by virtue of not attending any proceedings of the House during the parliamentary Session 2024-26. On behalf of the House, I thank them for their many years of valued service in the House.
Civil Aviation (Consumer Protection and Regulatory Reform) Bill [HL]
Social Housing Bill [HL]
Sporting Events Bill [HL]
Built Environment Committee
The Senior Deputy Speaker
The Senior Deputy Speaker (Lord Ponsonby of Shulbrede)
My Lords, these Motions appoint the Select Committees and Joint Select Committees, and noble Lords to be members of these committees, in the new Session. I beg to move.
King’s Speech
(1 day, 4 hours ago)
Lords ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Baroness Crawley
That an humble Address be presented to His Majesty as follows:
“Most Gracious Sovereign—We, Your Majesty’s most dutiful and loyal subjects, the Lords Spiritual and Temporal in Parliament assembled, beg leave to thank Your Majesty for the most gracious Speech which Your Majesty addressed to both Houses of Parliament”.
The Parliamentary Secretary, Cabinet Office (Baroness Anderson of Stoke-on-Trent) (Lab)
My Lords, it is a great honour for me to open our five-day debate on the gracious Speech. These moments allow us to reflect on how much we have achieved after many constructive hours of debate, lots of votes and the occasional—or maybe not so occasional—late night. Noble Lords know quite how ambitious we have been in our legislative agenda. Over 60 Bills were passed in our first Session of Parliament, and yesterday His Majesty set out our ambitions for the forthcoming Session.
Those ambitions have one central mission: to build a more resilient country that spreads opportunity for all. The country in which we live is one in which talent is everywhere but opportunity is not, and the world in which we live has never felt more dangerous and volatile. Even in the last few months, global uncertainty has only increased, and the impact on our neighbours is real. They are struggling with the cost of living and worrying about the impact on their futures and their children’s futures of events outside their control. Our discussions today and in the rest of this Session must be real and tangible for them—they must be felt by people in their daily lives. Delivering on our promises are not just words but our contract with the nation.
That is why the gracious Speech set out new legislation focusing on outcomes, not outputs. It does not just address the problems of today but seeks to strengthen our national foundations, so that we can build a stronger and fairer economy that works for all of us in England, Wales, Scotland and Northern Ireland, bringing prosperity to every corner of the United Kingdom, building on our place in the world and strengthening our relations with key allies.
The Government’s economic plan is based on three pillars: to create a strong foundation for businesses to plan and invest, to deliver growth-driving infrastructure and to crowd in private investment, and to systematically remove the barriers to growth across the economy.
This year’s Spring Statement showed that our economic plan is the right one but, as we have set out, the war in Iran will come at a cost. That is why the measures set out in the gracious Speech will help build growth that is both secure and resilient in order to raise living standards for working people.
At the heart of this, as noble Lords will be aware, we are continuing our work to secure a closer and more stable relationship with our largest trading partner, the EU, valued at £860 billion last year. This is vital, because since Brexit too many businesses are burdened by unnecessary bureaucracy that dominates everyday imports and exports with the EU, compounding the costs that are passed on to British families, pushing up prices and increasing the cost of living. The common understanding agreed last May will remove those barriers, underpinned by sensible legislation that upholds British standards while cutting red tape.
This is a core part of a wider plan. The UK is taking a strategic and clear-eyed approach to major partners, deepening trade where it supports growth while balancing security and economic resilience. That includes securing a landmark deal with India, expected to boost UK GDP by £4.8 billion a year; making the most of our accession to the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, expected to increase UK GDP by £2 billion a year; and a stronger focus on the UK’s global strengths, particularly in services exports.
To achieve growth in the current global economic environment, businesses need as much certainty as we can offer. They need support to take advantage of new trade opportunities, and of course they need assistance and guidance in light of new technological innovations. That is why we have published three landmark strategies setting out our collective vision for growth, seeking to make the UK the best place in the world to do business and the best-connected economy, and delivering targeted support for businesses as they seek to grow.
None of the issues we are discussing today can be considered separately from our national security and our place in the world. The ongoing war in Ukraine has highlighted the importance of European co-operation on security and defence. In an ever more uncertain world, it is right and necessary that we seek to deepen our strategic partnerships, including with our neighbours with whom we have common interests, face common threats and must build common solutions.
Your Lordships’ House will be aware that we have already taken concrete steps towards these objectives. Last year’s historic UK-EU summit announced a series of deals that are good for household bills, borders and jobs. We have also recently announced a significant agreement with France to reduce illegal channel crossings, and deeper co-operation has opened further opportunities for learners, educators and young people through our agreement with the EU on the UK’s association to Erasmus+ next year.
This is a sensible, measured approach that crucially also preserves our ability to strike deals with other countries. In this space we have had notable successes, including signing a trade agreement with India and concluding a deal with the Republic of Korea. We are also currently in the process of negotiating trade agreements with the United States, the Gulf Cooperation Council, Switzerland, Turkey and Greenland. The UK exported around £275 billion to these countries in 2025, and securing FTAs will strengthen our trading relationships.
As part of our mission to kick-start economic growth, we published three key strategies last year. The industrial strategy sets out the vision for the sectors that will help achieve the most growth for the UK, boosting long-term investment; the small business strategy outlines how we will support businesses in the UK to scale up; and the trade strategy details how DBT will make full use of a range of trade tools, from free trade agreements to agile or sector-specific mini deals that allow government to respond rapidly to the changing geopolitical context, maximising opportunities for UK businesses both at home and abroad.
Through the steel strategy, which we published in March, the Government set out our long-term plan to fight to revitalise the UK steel sector, restore domestic production to sustainable levels and secure the industry’s role in supporting sovereign critical sectors. We are now introducing primary legislation that will provide a route for government to nationalise steel companies or their operations, provided a public interest test is met.
Bringing British Steel Ltd under national ownership will allow government to explore future opportunities, including a transition to decarbonised steel-making, and to provide reassurance for its workers, suppliers and customers. This Government recognise that securing the long-term future relies on both public and private investment for modernisation.
We are also helping businesses to navigate Windsor Framework trading arrangements between GB and NI. We have announced £16.6 million for an enhanced “one-stop shop” regulatory support service designed to navigate the knowledge gap facing small and medium-sized enterprises. So too have we supported the work of InterTrade UK with over £2 million in funding. It is ably led by the noble Baroness, Lady Foster, to promote the economic bonds and strengths of all parts of the United Kingdom, and we will continue to back the east-west council in developing ties across it.
However, there is more to do. As set out in the gracious Speech, we will take action to further unlock the benefits of a deeper relationship with our closest neighbours. We are prioritising the conclusion of landmark deals on food and drink, emissions trading and youth experience announced at last year’s UK-EU summit—deals that we seek to conclude this year. As the Prime Minister said in his speech earlier this week, we must put Britain back at the heart of Europe. This year’s summit will provide an opportunity to build on our strategic partnership, including implementing joint commitments and making progress on where further co-operation can drive economic and security benefits for both sides.
Our collective goal is and must be to deliver real, tangible benefits for people and businesses in the UK. The food and drink deal will fulfil the manifesto commitment to deliver a veterinary agreement with the EU. Once in place, it will lower costs for UK business exports to the EU by removing certificate and route inspection requirements, in turn reducing the pressure on food prices. The deal will help support trade within the UK internal market, strengthening our union by further simplifying the movements of agri-foods between Great Britain and Northern Ireland. By aligning Great Britain with standards already established in Northern Ireland, we are further protecting the internal market. For the vast majority of agri-foods moving from Great Britain to Northern Ireland, traders will no longer need regulatory certificates, checks or paperwork, thereby reducing costs for businesses. The Windsor Framework will work alongside the SPS agreement, continuing to address Northern Ireland’s unique circumstances by upholding the Good Friday agreement and providing Northern Ireland’s unique dual market access to both the UK internal market and the EU single market.
Association to Erasmus+ will open up world-class opportunities for learners, educators, young people, youth workers, sport-sector professionals and communities of all ages across the UK. We will further strengthen our people-to-people ties with Europe by establishing an ambitious youth experience scheme with the EU. This scheme will create opportunities for young people to travel, to take up short-term work or to study, and to take part in valuable cultural exchange. As agreed at the UK-EU leaders’ summit in May last year, the overall number of participants in the scheme must be acceptable to both sides, and participation will be subject to a visa requirement and time-limited. We are negotiating the details of that scheme now, with an aim to agree it at the next UK-EU summit this year. Either through Erasmus+ or our new youth experience scheme, the EU is at the heart of our offer to young people.
The emissions trading agreement, which will link the UK and EU emissions trading schemes, will establish a larger and more stable carbon market. This will support industry confidence to invest in new technologies, leading to new jobs and enabling businesses to decarbonise more quickly and efficiently where possible. It will also create the conditions for mutual exemptions from our respective carbon border adjustment mechanisms, saving £7 billion of UK exports a year from being charged. Combined, the food and drink deal and the emissions trading agreement alone could deliver up to £9 billion to the UK economy a year by 2040, as well as easing pressure on consumer food price inflation. At the same time, they will reduce friction within the union.
We also look forward to starting formal negotiations on an electricity agreement with the EU. This agreement will make electricity trade with our European partners more efficient, driving down energy costs and protecting consumers against volatile fossil fuel markets. Delivering efficient electricity trading means that we can harness the clean energy potential of the North Sea, supporting clean energy jobs and resilient supply chains, and providing secure, affordable energy on the path to net zero. This will also remove trading frictions between GB and NI, and support energy security for the whole UK. Collectively, these actions will deliver for communities across our nations and regions for decades to come.
The European partnership Bill is the means by which we will facilitate the implementation of those deals agreed with the EU, now and in the future. The Bill will enable the Government to deliver their treaty obligations with the EU. On any future alignment, we are making a sovereign choice to align with EU law in specific areas, enabling us to cut red tape, to drive down costs and to boost growth. The cost of non-alignment is added bureaucracy and onerous paperwork for UK businesses. As set out in last year’s common understanding, this will come with an appropriate decision-shaping role for the UK. The Bill has been designed to ensure that Parliament will have its say on new EU legislation before it is applied in the UK. I look forward to discussing the detail with Members of your Lordships’ House in the coming months—for many hours, I suspect—as the Bill progresses.
The European partnership Bill demonstrates the strength of what this Government are seeking to achieve: a new relationship that looks forwards, not backwards, and reflects the realities of our economic and security interests in an uncertain world. Through this Bill, we will unlock tangible benefits for the people of our United Kingdom and provide a strong platform for future growth and co-operation. Putting the industrial, small business, trade and steel strategies into action is a priority, and pushing for more ambitious outcomes on global trade remains a crucial part of our agenda.
Finally, the gracious Speech reminds us that our security and prosperity are not guaranteed; they must be earned and delivered through our collective efforts and determination. The European partnership Bill is pivotal to that effort—a statement that we are moving beyond the politics of division and towards a more productive partnership with our European allies. I beg to move.
Baroness Finn (Con)
My Lords, when the Chancellor of the Exchequer made her first speech in that office on 8 July 2024, she said that, by growing the economy, the Government could
“rebuild Britain and make every part of the country better off”.
That was not a modest claim; it was the central economic wager of this Government. Ministers told the country that the hard arithmetic of our public finances could be overcome by sustained growth across the Parliament, and that higher productivity, higher investment, stronger real wages and the highest sustained growth in the G7 would produce abundance and avoid difficult choices. That ambition is not wrong: Britain needs growth, and we want the country to be more prosperous, more productive and more secure.
However, growth is not summoned by slogans; it is not delivered by a press release, a reset, a mission board, a pillar or another ministerial speech. Growth is earned by those who embrace risk and sustained effort to produce value. Government can, at best, help enable growth by making this country the best place in the developed world to invest, to hire, to build, to innovate and to make things. Two years on, the question before this House is not whether the Government’s ambition was the right one, but whether their policies have matched that ambition. The answer, I am afraid, is clear: the Government have borrowed too much, grown too little and regulated to excess.
The Office for Budget Responsibility tells us that successive plans to reduce borrowing and stabilise debt have “not yet materialised”. Public sector net borrowing was £152 billion in 2024-25 and is forecast at £132 billion this year. Underlying debt has continued to rise. Debt interest spending is forecast to rise from £110 billion in 2025-26 to £137 billion by 2030-31. While government debt is rising and borrowing costs are at a 30-year high, the Government are spending £333 billion annually on welfare. That is more than the Government receive in income tax. That is very the definition of unsustainable.
When the Government sought to cut the rate of the increase in that spending, they U-turned. On Tuesday, the Prime Minister showed us how determined he can be in the face of unsustainable and soaring pressure, but when it came to the essential battle on welfare—the real test of his ability to get those tough and big calls right—he capitulated. The Government’s plans would have merely slowed the rate of growth, not reduced the bill. If we are to deliver the brighter future that young people deserve, we need to be much more radical.
Can the Minister say what measures in the King’s Speech will bring our unsustainable welfare bill under control? Why was welfare, which is so great a challenge, not the subject of one of our debates this week? Those are not abstract numbers. Every pound spent servicing debt is a pound that cannot be spent on defence, roads, hospitals, skills or tax reductions. High debt interest is not a symbol of compassion but the price of policy failure.
At the same time, growth has disappointed. The IMF has cut its forecast for UK growth this year from 1.3% to 0.8%. The economy grew by just 0.1% in the final quarter of 2025. Youth unemployment is up. There are now more than 700,000 unemployed young people aged 16 to 24 and the youth unemployment rate has risen over the year. This is the reality behind the rhetoric. Ministers promised through their words a growth Government, but they have produced through their actions a high-borrowing, high-tax, high-regulation Government. As the outgoing Minister for Safeguarding and Violence Against Women and Girls said on Tuesday, it is deeds, not words, that count.
In the first Session of this Parliament, the Government’s preferences were clear. When in doubt, tax. When in doubt, regulate. When in doubt, create a new body, a new duty, a new levy or a new compliance burden. The rise in employer national insurance contributions was a direct tax on jobs. It was accompanied by a lower threshold at which employers became liable. At the same time, the Government pressed ahead with higher wage costs and an Employment Rights Act which, even after the important concession on day one unfair dismissal rights secured in this House, still makes it riskier and more expensive to take on staff. Employment rights matter but so, too, do employment opportunities. If the Government make it more expensive to hire, more uncertain to manage a probation period and more complex to comply with the law, they should not be surprised when firms hesitate before creating the next job. The people hit first are often the young, the inexperienced, the marginal applicant and the small business that cannot absorb another legal risk.
The same anti-growth instinct is visible in energy. The Government have set out plans not to issue new licences to explore new oil and gas fields in the North Sea. At a time of geopolitical instability and high energy prices, it is extraordinary to choose greater dependence on imports over the responsible use of our own resources. It means less domestic investment, fewer high-skilled jobs and more exposure to shocks beyond our control.
Therefore, when we turn to the Bills announced in the gracious Speech, the Official Opposition will apply a simple growth test to each of them. Does it make it cheaper to hire? Does it make energy cheaper? Does it make it faster to build? Does it increase productivity? Does it make investment more attractive? Does it reduce the burden of regulation rather than merely relabel it? Where the answer is yes, we will be constructive and support the Government. Where the answer is no, where a Bill creates another regulator, another levy, another licensing regime, another statutory duty, another offence, another code, another reporting requirement or another cost on business, we will challenge it firmly. On productivity, I would be grateful if the Minister could provide more detail on the proposals to strengthen the productivity of the Civil Service.
The country cannot afford another Session in which every problem is met with a new rule and every industry is treated as a revenue stream. An alternative King’s Speech would start with what the economy actually needs: lower business taxes, cheaper energy, faster planning, lighter regulation and a serious commitment to competitiveness. It would slash business rates for the high street and hospitality. It would remove the most damaging part of the Employment Rights Act. It would bring forward a serious deregulatory programme, not another request for regulators to write letters about growth. It would make energy policies serve industry and households, not ideology. It would use our freedoms outside the European Union to strike a more agile, more pro-innovation path where that is in the national interest. So I ask the Minister: which measure in the King’s Speech will make it cheaper for a small firm to employ its next worker? Which will bring down the energy bill of a manufacturer? Which will cut the number of forms, approvals and licences faced by a growing business? Which will tell investors that Britain is open, not merely in rhetoric but in law, tax and regulation?
Let us turn to Europe. Like many noble Lords, I listened to the Prime Minister’s speech on Monday, hoping that the Government might have learned from the public’s verdict in the local elections and changed course. I was disappointed. What we heard was not a reset but a retreat into the familiar instincts of the left: more state direction, more nationalisation, more guarantees announced from the centre, and closer alignment with the European Union. There is a place for government action but the Government cannot substitute themselves for enterprise. They cannot nationalise their way to productivity. They cannot guarantee their way to opportunity if the private sector is being taxed, regulated and second-guessed at every turn. They cannot align their way to competitiveness by binding Britain more closely to a European model whose own leaders now acknowledge is failing to deliver the growth Europe needs.
This is not an argument for hostility to Europe. Britain should trade with Europe, co-operate and stand with it on security and work constructively with our neighbours, wherever our interests coincide. But co-operation is not submission. Friendship is not rule-taking and a reset does not become re-entry by stealth. The British people voted in 2016 to leave the European Union. At the last election, the Prime Minister promised not to rejoin the single market, the customs union or free movement. Yet with every speech, summit and reset, the Government appear to edge closer to the EU’s regulatory orbit—closer to payments, mobility schemes and alignment for its own sake.
The irony is that Europe itself is now warning against the very model to which this Prime Minister seems so drawn. At Davos this year, the German Chancellor, Friedrich Merz, said that
“Germany and Europe have wasted incredible potential for growth”.
He said Europe had become
“the world champion of overregulation”.
A few weeks later, at the European Industry Summit, he went further, saying:
“Overregulation … hampers our economic growth”.
He called for a “regulatory clean slate” and said that Europe must “deregulate every sector”.
Those are not the words of a British Eurosceptic caricaturing Brussels. They are the words of the Chancellor of Germany, speaking from the heart of the European project, warning that regulation has damaged growth, investment and innovation. The Draghi report made the same diagnosis. It said that Europe
“largely missed out on the digital revolution”.
It observed that only four of the world’s top 50 technology companies are European. It warned that innovative companies are held back by “inconsistent and restrictive regulations”.
If the leaders of the European Union now know that their penchant for overregulation is a central cause of their economic weakness, why is Britain being drawn closer to that system? Why would we import the very burdens that Europe itself is trying to cut? Why would we trade the freedom to be faster, lighter and more agile for the comfort of alignment with a model that has underperformed? The Prime Minister owes the country a clear answer, not a slogan or another platitude about being at the heart of Europe. Will the Minister confirm that there will be no dynamic alignment with EU rules without explicit parliamentary approval? By explicit approval we do not mean a broadly drafted Henry VIII power. Will he confirm that Britain will not become an EU rule-taker? Will he confirm that there will be no new annual payments to EU programmes without a vote in Parliament? Will he confirm that any youth experience scheme will be capped, time-limited and not recreate free movement by another name? Brexit was a vote to govern ourselves. The Government should use that freedom to make Britain more competitive, not bargain it away in pursuit of applause in Brussels.
The Government’s problem is not that their ambition is too high, it is that their instincts are wrong. They want growth but tax jobs. They want investment but raise uncertainty. They want enterprise but regulate success. They want fiscal space but allow debt interest to crowd out the future. They want to be pro-business but treat business as something to be managed, charged and corrected. Britain does not need another reset. It needs a change of course. It needs lower burdens, cheaper energy, faster building, a tax system that rewards work and investment, and a regulatory culture that asks first whether intervention is necessary at all.
The Official Opposition will support measures that genuinely promote growth. But we will not be silent when the Government repeat the mistakes of the previous Session. The British people were promised growth. They have been given borrowing, tax rises and regulation. It is time for Ministers to stop talking about growth and start removing the obstacles to it.
Lord Fox (LD)
My Lords, nearly two years ago, the general election resulted in a brief outbreak of euphoria on the Benches opposite, and then, during the long parliamentary Session that followed, reality bit. During that campaign, as we heard, growth was declared as the number one priority of that Government, and yet, during that first Session of Parliament, many of the Government’s actions pushed in the opposite direction. The truly disastrous increase in employers’ NIC was a striking example, but it was by no means unique. It meant that the country exited the last legislative Session with greatly increased operational costs for businesses. This sent messages that discouraged investment and pushed thousands of high street businesses and hospitality businesses into oblivion. It was indeed the opposite of a growth-centred strategy, and the hangover from that Session will see yet more non-growth legislation that has yet to arrive.
Now we have a new set of Bills, and, as we have just heard, the prism through which we should look at them is: how does it affect the Government’s mission on growth? Let us look at some of those Bills. On the small business protections (late payments) Bill, yes, it is important that we deal with the scourge of late payments, but we will be looking to see how the legislative back-up will be delivered to support the small business strategy the noble Baroness, Lady Anderson, just spoke about.
Then we have the enhancing financial services Bill. We welcome reforms that may support growth, but we do not want to put pressure on people’s savings and undermine consumer protection, so we will be looking very hard at the details there.
The competition reform Bill seems like an attempt to water down the work of the Competition and Markets Authority in the way that each digital unit has been curtailed, so we will be looking very closely at that plans on that Bill.
The regulating for growth Bill looks like just the sort of technical Bill that your Lordships would like to get your teeth into—I look forward to many hours of that.
All four of these Bills make important points, and I am sure there will be lots of debate in your Lordships’ House, but it is hard to discern a pattern and to see the strategic drive for growth within them. There are no bold moves. In addition, although AI is set to affect every aspect of our economy, there is no AI Bill in this Session. How can that be sensible?
I will use my final minutes to talk about two other Bills—the ones the current Prime Minister chose to pre-announce in one of his fight-back speeches earlier this week—on steel and Europe. Perhaps summoning the ghosts of Clement Attlee and Harold Wilson, Labour proposes nationalising—or should I say renationalising—the steel industry for the third time with the Steel Industry (Nationalisation) Bill. I do not underestimate the importance of this measure to those working in the industry, and to the country’s manufacturing and defence sectors and its industrial strategy. However, the Government have of course effectively been funding this plant since the summer, and this move was one that I think most of us expected to be brought to your Lordships’ House sooner or later. We want to see the details, including the plans to help find private co-investors who can help modernise the sites and put money in to help create more jobs. We need to see a proper long-term plan for the future, with an emphasis on national security, and we need to know the costs.
By choosing to pre-announce this measure, the Prime Minister was clearly aiming to stir the blood of those to the left of his party, and it also followed the surprise appointment of Gordon Brown as some sort of global emissary. I assume that the PM was searching for reflected glory from the halcyon days of the Brown premiership. Perhaps the Minister can throw some light on what Gordon Brown will actually be up to. If he is the Prime Minister’s man, how will he relate to the Chancellor and the Treasury, and how will his activities be accountable to Parliament? Will he be summonable by Select Committees, for example?
Of course, steel nationalisation in sum will not meaningfully increase our GDP or move the needle on national productivity, nor will it address the cost of living. However, the second topic that Starmer pre-announced could indeed materially affect the fortunes of British people. We welcome all talk of moving closer to Europe—of course we do—but the European partnership Bill seems to be just the latest example of a total lack of ambition when it comes to rebuilding trade links with the EU. It offers very little that is new. What the PM announced in that speech seemed to be only a restatement of where we already are, with the UK at least six months into negotiating a reset in its relations with the EU.
Here I note that, at the same time as these negotiations are going on, the EU “Made in Europe” regime proposals pose an existential risk to the EU-UK automotive trading relationship, which is worth around €80 billion a year. The UK is the EU’s number one trading partner in automotive trade. Can the Minister tell your Lordships’ House what negotiations are under way? This is a really important issue, and we have to know that His Majesty’s Government are going all out to reach an agreement. That is vital for our automotive industry.
To return to the proposed legislation, clearly, as we have heard from the noble Baroness, Lady Anderson, some alignment is planned, and we of course look forward to the long discussions that will no doubt ensue when we interrogate the depth of that alignment. However, Prime Minister Starmer has equivocally ruled out crossing the red lines he cautiously drew during the general election. So, assuming that the EU reset is successful, agreement on border arrangements for food and animals would be positive, not least for our beleaguered farmers. Easier EU travel for bands, orchestras and theatrical productions—if we get it—would be really welcome, as would anything else of the like that the noble Baroness, Lady Anderson, set out.
However, so much more is possible. If the Government are bolder, there are huge wins. Business could trade with our largest market so much more easily, making jobs secure, and increasing pay and delivering growth; holidaymakers could use EU e-gates instead of queuing for hours in the “rest of the world” line; and our border police could once again properly use EU data to help them more easily identify and stop the evil people traffickers. Those are just three examples of what could be delivered. These and many more are possible, but they will not happen if the Prime Minister sticks to his red lines. The Government need to go further and faster to strengthen our relationship with the EU if they want to turn around our very low-performing economy and begin repairing the £90 billion Brexit black hole that the Conservatives’ botched deal delivered.
I understand that these red lines were in Labour’s manifesto, but since then the world has changed rather. Our close relationship with the USA has been under pressure, and Trump has indicated to all Britons where our real economic future lies. This hostility from the US President, added to the war in Gaza and the Arabian Gulf, an energy crisis and Putin’s continued pummelling of Ukraine, should set the scene for a revised world view.
In general, people out there also recognise that the whole balance of the world has changed. An awful lot has changed in the two years since that election and that manifesto. To robotically stick to an out-of-date manifesto as if it is a holy writ is a dereliction of leadership. Whoever turns out to be the Prime Minister should be bold and ambitious for our country, and they should work hard to take the country with them, hitting the road to explain why there is a need for a different approach, how people should benefit and what needs to change. That is leadership.
This is not one-sided: our European neighbours are feeling the need to move closer too. For example, last month I was in Berlin for a joint UK-German business meeting as part of the Kensington treaty. The Secretary of State Peter Kyle MP was there, as was his German counterpart, plus the key business organisations for both countries and about 300 businesses. The energy of that meeting demonstrated that we have enormous mutual opportunities, but with each day that passes, it feels as if the work gets harder and business morale gets lower.
This Government have already wasted two years. The country, our economy and our people cannot afford more years of timidity. We need a Government who are bold and who move decisively. The Liberal Democrats are clear that, as a start, Ministers must straight away prioritise negotiations for a new customs union with the EU. This would turbocharge our economy and unleash British business. That would be the start of a real growth policy.
Lord Burns (CB)
My Lords, most of us agree that economic growth is critical. I am very pleased to see that it is on the board, as it is one of the best topics that we are discussing in this response to the gracious Speech. Growth widens the choices that are available for Governments. It increases the scope for making those choices and the trade-offs that Governments are forced to make. As we know, higher output and greater productivity lead to high disposable incomes, generate the taxes that we need to fund public services, and, when you have a decent rate of growth, provide much more room for spending, adjustments and allocations between different areas.
The tough challenge for any Government is that underlying growth rates change only slowly and are difficult to predict. Since 2007, the growth rates of the major countries have been significantly slower than they were in the years before. In this respect, the UK’s performance is similar to that of other major European countries. The reality is that it is difficult to increase the underlying growth rate in the UK if we have slow growth around the world. That has been the pattern and, for the moment, it looks as though that pattern will continue.
We must be much more careful about putting too much emphasis on month-to-month changes, which tend to be erratic. There has been a pattern in recent years of stronger figures in the early months of the year and weaker figures later—possibly a seasonal adjustment problem. This morning’s GDP might show a quarterly increase of 0.6% but the reality is that this is still only 1.1% higher than the first quarter of last year. This compares with the years when we became accustomed to growth rates of 2.5%.
One criticism of the Government’s approach has been the failure to acknowledge at an earlier point that much of the previous Government’s woes were due to this global slowdown and that simply changing Governments has not changed this. Ahead of the election, the Economic Affairs Committee highlighted major spending challenges ahead—the cost of net zero, increased defence spending and an aging population—all of which will put pressure upon financial stabilisation. Given these challenges, my view was that taxes would have to increase across the board or significant public spending savings would be necessary, and probably both. Instead, we have seen increased public spending and attempts to raise taxes either on employers or on a very narrow part of the tax system. This has sparked anger and has not succeeded in raising sufficient revenue. Further, the other measures to protect jobs have done little to improve the economy’s supply side.
However, my biggest concern now is that some groups involved in the current leadership debate are convinced that faster growth can be achieved through increased public expenditure and larger fiscal deficits. My experience is that this is a confusion of cause and effect, and a very serious one. Over time, the scope for higher public spending is a result of faster growth; it is not the cause of faster growth. We start with a debt ratio close to 100% of GDP. Debt interest costs consume 10% of our tax revenue. We have not been able to pay for the huge borrowing at the time of Covid or the cost of supporting energy bills. Proposals to increase this further, either openly or through disguised off-balance-sheet borrowing, which we have heard some chatter about, are high-risk policies.
We all desire a world where spending eventually pays for itself. With some aspects of spending this is the case, although the benefits take time to emerge. However, more often, they do not pay for themselves. The Chancellor deserves credit for recognising and emphasising this. For faster growth, we need an environment with effective incentives for work and investment. We urgently need an overhaul of the tax system to iron out inconsistent and bizarre marginal rates of tax for some people. We need to eliminate the wide range of unnecessary exemptions and allowances and ensure the right incentives for business taxation. However, these are all issues for future Budgets, rather than for the gracious Speech.
There are reforms in the gracious Speech that I welcome and which could make a difference, and we have heard about some of them this morning. I welcome the emphasis given to growth when judging the approach to financial services regulation. It has been a view of mine since the crisis that there has been a significant regulatory overreaction to the 2008 crisis. There is a natural desire to prevent it happening again and it is very important that prudential risks should be managed. However, in the process, increased regulation damaged bank lending to the private sector and the productivity of the banking industry. The focus was on changes that were the easiest to make, rather than on addressing the weaknesses that posed the greatest risk. This was also the action taken by the other major countries. My view is that the growth reduction which we have seen all those countries suffer is, in part, a result of that response to the crisis.
I support efforts to minimise friction in trade and flows of investment within Europe, although reaching agreement will be difficult and contentious, and, as many have pointed out in the course of the debate already, the growth performance of the major European countries has been one of the slowest in the world over this period. It is not exactly a vibrant market at this point.
Also welcome to me are the proposals for Northern Powerhouse Rail. In a predominantly service-based economy, cities have become increasingly important centres of wealth creation. However, they can realise their potential only if they have a functioning public transport system that allows as many people as possible to access them. With the growth of the economic potential of cities, commuting by car into those cities becomes increasingly difficult. This is not just a London issue; we can see the pressure around many cities. I was involved in transport services in Wales, where road systems are struggling to cope with these pressures. I remain hopeful that the proposals for a commuter service in south Wales, which I was involved in putting forward, will be in place soon, despite some of the devolution issues.
The Lord Bishop of Newcastle
My Lords, I am pleased to speak in this debate on the gracious Speech and wish all noble Lords well in this new Session. I declare an interest as president of the Rural Coalition.
It is an honour to follow the noble Lord, Lord Burns, particularly with his north-east roots. I speak from the perspective of the region in which my diocese is located, the north-east. These are communities with deep resilience and enormous potential but which continue to live with the consequences of economic inequality, industrial transition and social fragmentation.
There is much that gives cause for confidence. We see innovation emerging from our universities and wider research communities, growing expertise in clean energy, digital technology and advanced manufacturing, and renewed confidence in sectors helping to shape the industries of the future. The North East Space Skills and Technology Centre, based at Northumbria University, is a notable example of combining public funding, university match funding and private sector aerospace investment—a model that is about long-term economic development.
However, optimism is accompanied by realism. The latest North East Chamber of Commerce quarterly economic survey points to a business community that remains resilient but cautious. Firms continue to report pressures linked to labour costs, energy prices, inflation and uncertainty around future demand. Businesses are still recruiting but many are delaying investment decisions and remain concerned about long-term productivity and skills shortages.
The rural economy is especially important within Northumberland, yet often insufficiently recognised in national economic debate. Farming, land management, tourism, food production and rural small businesses contribute enormously not only to economic activity but to environmental stewardship, cultural identity and the sustainability of rural communities. Yet many rural businesses continue to face challenges linked to transport connectivity, digital infrastructure, workforce shortages and access to services.
If growth is genuinely to reach every part of the country, rural economies must be treated not as peripheral to national prosperity but as integral to it. As my noble friend Lady Batters has often pointed out, food security is vital for economic prosperity and stable food systems reduce poverty.
In Newcastle, areas such as Ouseburn and Grainger Market reflect the imagination and determination of local enterprise. Businesses such as Greggs, founded in Newcastle and still strongly associated with the region, show how commercial success can remain connected to local identity and social responsibility, with a much wider reach. It can be argued that the humble cheese and onion bake is now an instrument of EU partnership, as there is a Greggs in Tenerife airport.
On a serious note, this connectivity is why economic policy cannot be judged solely by where the growth occurs but by the nature of that growth and who shares in its benefits. Do people experience greater dignity, security and opportunity through that growth? Do communities feel strengthened or left behind? Do younger generations believe that they have a meaningful future in the places where they grew up? Does work enhance human flourishing or does it leave people exhausted, insecure and excluded?
It is right that the Government’s proposed legislative programme seeks to support investment, industrial renewal and closer co-operation with our European neighbours. The proposed European partnership Bill is important for regions such as the north-east; our relationship with our neighbours is not an ideological abstraction but a matter of practical economic significance.
I hope the Minister might say more about how the Government intend the proposed Bill to strengthen opportunities for regional exporters, universities and smaller firms outside London and the south-east. How will the Government ensure that improved relationships with the EU lead to tangible economic benefits for places such as Newcastle and Northumberland, rather than reinforcing existing geographical inequalities?
I also welcome the emphasis placed on energy security and industrial renewal within the gracious Speech. Northumberland is well placed to contribute to the nation’s transition towards cleaner and more secure sources of energy, through offshore renewables and associated industries. Yet the transition to a low-carbon economy must also be rooted in justice and fairness. Communities that contributed so much to earlier generations of industrial and energy production should not feel excluded from the opportunities now emerging. Economic transition cannot simply happen to communities; it must happen with and for them.
Can the Minister say more about how the Government intend to ensure that smaller local businesses, local workers and younger people are able to participate fully in the opportunities created through energy transition and industrial investment? What role do the Government see for devolved leadership and community wealth-building in ensuring that prosperity is genuinely shared?
I also welcome the Government’s proposed regulating for growth Bill and its stated intention to create greater clarity and consistency for business. Along with the noble Baroness, Lady Finn, I ask the Minister how the Government intend to ensure that smaller businesses are properly supported within this agenda. How will they balance economic flexibility with the need to maintain fair employment standards, workforce well-being and responsible business practice?
Economic life is ultimately about human beings, relationships and moral responsibility. As we pursue growth and competitiveness, we must resist any tendency to treat human beings merely as economic instruments or units of productivity. Every person possesses inherent dignity and worth, which no labour market can define and no economic circumstance can erase. Modern slavery remains a painful reality in our country. It represents not only criminal exploitation but a profound moral failure—the denial of human dignity for economic gain. In that respect, I ask the Minister what further steps the Government intend to take to strengthen transparency and accountability within supply chains, particularly in sectors vulnerable to labour exploitation.
Good growth is not growth at any cost. Good growth strengthens communities, widens opportunity and enables people to live with dignity and hope. The success of this Session of Parliament will not be measured solely through national growth figures or investment totals; it will be measured by whether people truly experience greater dignity, stronger communities, wider opportunity and renewed hope in the places that they call home.
Lord Barber of Chittlehampton (Lab)
My Lords, it is an honour to follow the excellent contribution from the right reverend Prelate the Bishop of Newcastle. Her messages are directly relevant also to the area where I live, the south-west of England, and I congratulate her on her thoughts. It is also always daunting to follow the legendary noble Lord, Lord Burns, but that is the order in which the speakers turned out.
Yesterday’s gracious Speech emphasised “economic security”. Public expenditure is vital in achieving that. I strongly support the Chancellor’s spending reviews and Budgets. Her goals could not be more important: to create the conditions for growth, to maintain and improve public services, and to manage and reduce debt. I realise that the conflict in the Middle East poses significant challenges but, thanks to the progress already made, we face them with enhanced resilience.
The public debate and ours in this Chamber tend to focus on the amount government spends and the level of taxation. These are indeed fundamental questions, but I will focus on two related questions that perhaps get less attention. First, what matters most to the citizen and to economic growth is not just the amount we spend but how well we spend it. Every day, the Government spend £3.5 billion. How do we maximise the public value of every one of those tax pounds? Secondly, how might we innovate in the way that we raise and allocate funding for the social outcomes that we need?
I will start with the first question. Maximising public value surely demands that, at every level—from a teacher in a classroom or a nurse in a hospital ward to a civil servant or a Minister in Whitehall—there is a constant, daily focus on delivering real value. The noble Baroness, Lady Finn, made a similar point about Civil Service productivity. This is not a new insight; a previous Parliament concluded that “officials at every level will be ordered to make due, swift and good execution without tarrying or delaying”. The sentiment sounds contemporary, even if the language does not. It is from 1376. Parliaments have been urging more effective and rapid delivery for at least 750 years, and rightly so, because Governments spend other people’s money and should be firmly held to account for what they deliver in return.
To take an example, we are now seeing a welcome increase in defence expenditure, and we already know that there needs to be more still. In this dangerous world, the public will want to know both what capabilities that extra investment will provide and that there is urgent, evident progress towards their realisation. Similarly, there will surely be further growth in health expenditure and, again, in return, the public will expect to see measurably reduced waiting times and significantly improved care. We have made a start, but there is much more to do.
Willingness to continue paying taxes has always depended on the impact that results from those taxes. The world over, this pressure to deliver public value is sharper now than ever. But what exactly is public value? How do you know it when you see it and how do you monitor it? At times, the Treasury in this country has led the world in thinking through these questions—I am going back to the noble Lord, Lord Burns, to Gordon Brown’s time as Chancellor and to the work of the noble Lord, Lord Macpherson, who was in charge of public expenditure back then. Later, in 2017, and building on that earlier work, David Gauke, as Chief Secretary, commissioned a report on public value from me. It was strongly welcomed at the time but sadly got lost in an ever-changing world of Chief Secretaries and the pandemic. Now might be the time to revive and build on that agenda.
The report described four elements of managing public value. The first is inputs: is the allocated funding being efficiently managed? The second, which my noble friend Lady Anderson emphasised, is outcomes: are we making progress towards the intended outcomes that the money was allocated for, and how do we know? The third is engagement: are the intended beneficiaries willing to take their share of responsibility for delivering the outcomes? For example, health outcomes are improved by people who manage diet and exercise; getting into employment is enhanced by people actively seeking work rather than waiting for it to come to them; and, in schools and universities, we need people to study hard rather than just show up briefly. In each of these cases, the same amount of public expenditure will deliver greatly enhanced outcomes if the beneficiary engages. This is important to public value. Finally, there is stewardship: as the funding is spent, is it also enhancing the underlying quality of a service—its technology, buildings, resilience, workforce, skills, leadership and commitment—thus leaving the service better than it was found, all the time?
By tracking indicators relevant to these four elements in close-to-real time, we can measure the impact our public expenditure is having and adjust implementation as necessary. Some social outcomes partnerships are already well advanced in this respect, which leads me to my second point: innovation. The Treasury recently established, and allocated £500 million over 10 years for, the Better Futures Fund. It is boldly aimed at solving some of the most complex social problems affecting children and young people. The fund will add to Britain’s already world-leading experience in social outcomes partnerships, and the fund will become the largest of its kind globally. It builds on the Life Chances Fund, established by the previous Government in 2016, and the work over many years of the great Sir Ronald Cohen.
The characteristics of such social outcomes partnerships make them a major innovation. They attract philanthropic and private investors, which, in the case of the Better Futures Fund, could double the funding that the Government have made, making the total £1 billion. They engage local government charities and social enterprises as partners in prevention, not just cure. They work exceptionally well for those tough, cross-cutting challenges that bedevil public policy. Crucially, for each funded scheme, there are defined outcomes, and government outcomes payments are paid only once the defined outcomes have been delivered and independently verified. There is increased prevention, collaborative partnerships, devolved delivery, high-quality data analysis, measurement of public value, and evidence from ATQ Consultants that such social outcomes partnerships deliver up to £9 of public value for every £1 they spend.
To conclude, with such innovative approaches to delivery and a consistent focus on delivering public value throughout the public services, we can enhance public sector productivity, contribute to private sector productivity and create the conditions for growth. The downward spiral that followed the financial crisis of 2008, with its declining return on investment, is not inevitable. We can turn it into an upward spiral with a rising return on investment.
A year of delivery lies ahead. In time, we might even delight people, perhaps including our ancestors from 1376.
Lord Hunt of Wirral (Con)
My Lords, is a great pleasure to follow the noble Lord, Lord Barber of Chittlehampton, given his background as head of the Prime Minister’s policy unit under Tony Blair. Also, if I might, I will commend to colleagues his book, entitled Instruction to Deliver, which sets out very much the message he was giving about outcomes.
I refer back to the comment by the noble Lord, Lord Fox, about the steel industry, because the National Audit Office—he will know the importance of that institution—has produced a very detailed report. Rather like the noble Lord, I found the announcement that the Government now seek the power to nationalise British Steel to be fascinating—although perhaps not surprising, because it should be seen for what it is: not the emergence of a plan but the admission that a plan has already failed.
A year ago, Ministers came to Parliament—and we all arrived here on a Saturday, specially—to provide the emergency powers needed to prevent the imminent closure of the blast furnaces at Scunthorpe. We were told that this was a temporary intervention, that constructive discussions with Jingye were continuing, that the taxpayer’s support was recoverable, and that there was a route to a commercial solution. I do not know whether this features in the book, but I am reminded of Milton Friedman’s observation that there is nothing so permanent as a temporary government programme. Well, after all that, we are back precisely where the Government insisted on that day that we were not going: nationalisation anyway. The question for Ministers is simple: what has been bought for the money already spent?
The National Audit Office, releasing its investigation into the Government’s intervention in British Steel’s Scunthorpe site, revealed that, by 31 January this year, the department had spent £377 million on this and that costs were expected to exceed £642 million by June. That means £1.3 million to £1.4 million every single day. The NAO further observed that
“DBT intervened without a clear exit strategy”
and warned that the intervention has not stabilised the company’s finances, that there is no clear end date, and that spending could exceed £1.5 billion by 2028 before transformation costs, compensation to Jingye, or exit costs are even considered. This is not a rounding error, nor a bridging loan, nor a prudent investment patiently awaiting a return. It is a daily call on the taxpayer to keep alive a business that Ministers have still not shown can be made viable.
In paragraph 2.6 of its investigation, the NAO records:
“Advice provided by DBT officials to ministers on 28 March”
2025
“noted that there was ‘no affordable solution to maintain steel-making at Scunthorpe’ … the advice recommended that the government ‘not intervene to stop the company from making commercial decisions to close’. DBT told us that it had no budget or legal power to intervene at that time, and that there was no strong value for money case to do so, advising instead to focus on the impact on the local area and to support steelmaking elsewhere”.
Over the subsequent 14 months, apparent operating losses have doubled, while production levels have fallen further. What is the value-for-money justification today? Ministers will say, of course, that British Steel is strategically important, and no one disputes that steel matters—for defence, construction, rail, energy and manufacturing. The question is not whether steel matters but whether this Government have a credible plan to make steelmaking in Britain competitive, and at present I do not believe that they do.
Nor can this debate be separated from the Government’s new tariff regime. From July, the Government propose to cut tariff-free steel quotas by 60% and impose a 50% tariff above quota. Ministers describe that as protection for British steelmaking, but, for automotive, construction, aerospace and engineering businesses, it is a direct increase in input costs.
Think of the automotive manufacturer already under pressure from the Government’s EV mandate, the construction firm facing squeezed margins and higher material prices or the exporter using steel as an input. They are facing higher costs at home and fiercer competition abroad. All of them will inevitably pay the price, a high price, for a policy framed as saving jobs in one turn while quietly making jobs more expensive to sustain in many other places.
There is also a profound contradiction running through the Government’s position on energy and steel production more broadly. India, to cite one example, is driving a substantial share of the global rise in coal-based steel capacity, expanding output, expanding furnaces and expanding its competitive position in world markets. In contrast, this Government have banned domestic coking coal production, pushing domestic steel-makers towards more expensive alternatives, and then seemingly wonder why the taxpayer must step in to make the difference. The result is that we make domestic production more expensive, restrict cheaper imports and load the industry with additional regulatory costs, and then we present the bill to British industry.
When the noble Lord winds up this debate, can we please have a strategy for steel? The Government published one, but it does not have the long-term impact that we all want to see. Steel has been the backbone of this nation. It must be part of its future too, and it is about time that we had a clear strategy that takes us all further forward.
Lord Liddle (Lab)
My Lords, it is a great pleasure to follow the noble Lord, Lord Hunt, whose brand of Conservative politics I have always personally admired. He raises very important questions about the steel industry. However, I will make just two points. First, I agree that there is a case for a sovereign capability in steel, and we have to work out a strategy as to how best and most efficiently to do that. But, secondly, it has to be part of a European policy. We have to be there because we have integrated supply chains in the steel industry. A lot of our exports—something like two-thirds—go to the European Union, and there is a similar flow in the other direction, so we cannot have an effective policy without it also having a European dimension.
I want to focus my remarks on the gracious Speech’s commitment to building a much closer partnership with the European Union. I strongly support the Government’s proposed legislation but urge them to make fast progress. As the Prime Minister said, we need to be at the heart of Europe, and it seems to me that that is the only way forward to meet the frightening new geopolitical challenges that Britain now faces. It is also a necessary, but in my view not sufficient, precondition of restoring broad-based economic growth in our country, which has eluded us since the financial crisis, and more particularly since the 2016 referendum.
As we approach the 10th anniversary of the Brexit referendum, we need to ask ourselves what benefits positively have been realised. I am not aware of any respectable economic analysis that demonstrates positive benefits. How much have the so-called Brexit freedoms delivered? Some people here refer to the ability to make our own free trade agreements. My noble friend made an excellent speech this morning and referred to those Brexit freedoms. Let me just point out to the House that the benefits in economic growth to which she referred amount to about 0.5% of GDP per year, when the loss as a result of Brexit is something of the order of 4%, and some economists say far, far higher.
For some people on the other side, none of these questions of fact about the impact matters because what matters to them is that, with Brexit, Britain has regained its sovereignty. In a technical sense in constitutional law, that is correct, but what is worth while about technical, legalistic sovereignty if all that does is impose additional costs and burdens, as in the chemical industry and many other sectors, on whole swathes of our business? This is the challenge that the alignment Bill will address, and I think we should get it through this House as quickly as possible.
The noble Baroness, Lady Finn, made a very good speech, even if I did not agree with it. She asked why we should align ourselves with a stagnant European Union. I have two points about that. First, 40% of our trade is with Europe. Most people think that geography is what determines trade, particularly trade in services, which is our great strength. The reality is that Europe is going to be by far our biggest trading partner for decades ahead, and we have to have a better relationship simply in those terms. I agree with what Chancellor Merz says about the need for regulatory reform in Europe and think the Draghi report is excellent. I would like to see some of its lessons applied in the United Kingdom. One of the reasons why we may find support in key member states for our alignment Bill is that I think Chancellor Merz will see Britain as a potential ally in future on the need for pressing for that regulatory reform.
What we are trying to do is difficult. Nothing to do with the European Union is easy, as I have known for a long time, having worked on these issues. First, we have to face the issue of budget contributions. We have to find a formula that can be applied relating to our share of joint GDP and the economic significance of the particular sector we are talking about.
Secondly, we have to have flexibility on freedom of movement. I think the youth experience scheme is an excellent idea. This House has demanded freedom of movement for artists and performers in Europe, one of the key things that we have lost. The same applies to professional services. I would make these movements on freedom of movement in return for closer co-operation in tackling illegal migration. I find it odd, by the way, that people on the other side can criticise freedom of movement. As soon as they got Brexit, what did they do? They implemented the biggest wave of immigration that we have seen in the post-war era. One of the reasons for the rise of Reform today is that the Conservative Party did exactly the opposite of what it promised in the referendum as far as immigration was concerned.
Thirdly, we have to raise our game in Europe and all that means for rebuilding our Brussels capabilities, having strong co-ordination machinery domestically, having the political will to impose solutions from the centre—from No. 10—where departments disagree, and having a Cabinet that takes the Europe relationship seriously and spends time on it. We have a lot of common interests in joint EU-UK co-operation—in defence procurement, in a joint approach to the regulation of artificial intelligence, in trade and in technology, where we have so much to offer. Jean Monnet said Europe was born in crises; we are certainly living through a big crisis now. We have to think boldly, and I would like to see the possibility of a commitment to rejoin the European Union in the next Labour manifesto.
Lord Lilley (Con)
My Lords, it is always a great and nostalgic pleasure to follow the noble Lord, Lord Liddle, whose enthusiasm for rejoining the European Union reminds me of the remarks of Samuel Johnson about a friend of his who was contemplating a second marriage—that it was a triumph of hope over experience. No experience or facts will dint the hope and enthusiasm of the noble Lord, Lord Liddle.
But we all make mistakes—we predict things which do not happen and advocate policies which do not work—and there is no great shame in it. Indeed, I am sure the right reverend Prelate would accept that as long as we acknowledge our mistakes and repent of them, we will be forgiven. I certainly made mistakes. Indeed, I made the same mistake as this Government are making and which lies behind their policy on the reset. The Government actually believe that, in the words of the Business Secretary, the single market is “where the magic happens”, and that rejoining it or aligning with it will make our exports grow and our GDP likewise.
As the Trade and Industry Secretary responsible for preparing this country for participation in the single market and overseeing the process, I made similar speeches. I did not invoke magic, but I did say that membership of the single market would boost our exports to the EU and with it our growth. I said it would do so even more powerfully than the Uruguay round, which we were simultaneously negotiating and which halved tariffs worldwide and created the WTO.
For many years thereafter I assumed that that had happened, but eventually I was confronted with the facts and they showed that I was wrong. Throughout our more than a quarter of a century of membership of the single market, our exports of goods to our fellow founding partners of the single market had stagnated. They grew at less than 1% a year for 28 years. At the same time, our exports to countries worldwide with which we had no trade agreements had grown four times as much, by 87%. Our services exports within the single market grew more slowly than all but two other rather minor countries in the single market.
The single market magic, whatever it is, failed for Britain. Why do the Government not recognise that? Why do they still believe—I am sure they are sincere in their belief and are not just lying to us—that the single market will magically boost our exports? They are not alone. Most of the commentariat also assume that the single market was good for us. Indeed, how many noble Lords who are going to speak in favour of a reset today were aware that the single market was such a failure in terms of our goods exports to the EU? I think half a noble Lord was aware of it; the others were not.
There is a reason for that. I have been thinking about why this view is so prevalent. The reason why the facts are so little known is that the single market was the aspect of European membership which commanded near universal support. Free-market Conservatives like me hoped that it would unleash market forces and make us all richer. Eurosceptics put aside any reservations because Mrs Thatcher was a great advocate of it. On the other side of the political spectrum, Jacques Delors persuaded an initially very sceptical Trades Union Congress, and with that the Labour Party, much of which had been opposed to membership of the European community, that the single market would enable it to control and regulate markets in the public interest. What was more, it could do so from a European level without the need to win an election in Britain, which eluded it for 18 years. None of us ever doubted that it was a good thing and nobody queried it.
I googled to find out what studies had been made by academics and politicians of how much the single market had benefited British goods exports, or not, during our membership. There were almost none during that period. Eventually, some studies were made and the facts are incontrovertible. Our goods exports to the EU grew at a snail’s pace and our service exports did little better. We can respond to those effects by adjusting our predictions and policies accordingly—that is what we should do—or we can react like Hegel, who claimed he could derive all the theories of natural science from his first principles and his dialectic method. His disciples went out and came back and said, “But master, the facts contradict your theories”, to which he replied, “So much the worse for the facts”. That seems to be the Government’s attitude as far as the facts of our past experience in the single market are concerned.
There is a lesson from that experience: what drives trade is not trade deals. Trade deals can bring some benefits if they are not off-set by the greater burden of regulation which one imports with them, but it is only a second order benefit. The noble Lord, Lord Liddle, is right to say that trade deals with the rest of the world are not going to be an elixir. What drives trade is producing goods and services that other people want to buy, going out and selling them, preferably in fast-growing markets, and not allowing yourself to be encumbered by unnecessary burdens and protection from Europe, which have made Europe the slowest-growing continent in the world.
Sadly, that is not what we have been doing. We have stopped producing things. We have been introducing policies which make it more difficult to produce things, and you cannot export what you do not produce. The Government have a policy of stopping all new exploration and development in the North Sea, but our exports of oil and gas to Europe were considerable. As a result, we have closed down one-third of our refineries and our export of our important refined products. That has undermined our chemicals industry, and with that we have lost production of fertiliser and ammonia. It is not just in oil and gas related industries; anything dependent on energy has been undermined by the fact that we have the highest energy prices in the OECD. That has meant that we have lost much of our aluminium industry and processes. We saw that happen in the steel industry, as mentioned in the brilliant speech from noble Lord, Lord Hunt, and we are losing production in all energy-intensive industries: ceramics, bricks, cement and so on. It is a self-inflicted wound. We cannot export what we do not produce.
I urge noble Lords to read an excellent report by Catherine McBride and others called Premeditated Industrial Destruction? She is one of our leading trade analysts, and it paints a very grim picture of what is happening to our trade and why. It is nothing to do with trade deals—if you do not produce, you cannot export. The obsession with tweaking our trade arrangements with the EU is a displacement activity for those who will not face up to the damage that our domestic policies are inflicting on industry after industry.
Lord Alderdice (LD)
My Lords, when I am speaking about the gracious Speech, I normally speak in the debate day on foreign affairs. But in January of last year, I was appointed the UK trade envoy for Azerbaijan and central Asia, so perhaps it is more appropriate that I speak on the day when we are thinking about trade and the economy.
When I was appointed, I read the briefs sent by civil servants, of course, but I have always been interested in the history and culture of places that I try to engage with, so I started to read about the history and culture of central Asia. Reading books such as The Great Game by Peter Hopkirk, I came across some names that I knew: for example, that of Sir Henry Pottinger. He came from the Pottinger area of East Belfast, which I represented in the Northern Ireland Assembly, and if you go to the Foreign Office, there is still a more than life-sized portrait of that more than life-sized character. What was striking about him, however, and relevant to what I was doing, was the fact that not only was he an extraordinary colonial administrator—the first governor of Hong Kong and so on—but as a young man, when there was a great conflict and struggle going on between Britain and Russia over links to India, he went out and, like many other young men, acted with the most extraordinary venturesomeness and courage in trying to ensure the well-being of his country.
The reason I was struck by that was that as I engaged with people from Azerbaijan and central Asia, I was really struck by how venturesome many of the young people in those countries had become when they were freed from the yoke of the Soviet Union. But I was also struck by how, in our own country, we seem to have lost much of this. There is a degree of risk aversion which is not healthy for business. I also see that in government and if we do not venture out, we will not succeed. Risks have to be taken. You cannot be sure that everything will always be successful. It is a worrying world at the moment. It is a frightening place and there are lots of dangerous things happening. If we look at the questions of oil and gas, it is not just that the costs have gone up. There are all the uncertainties of managing a country and concern about other actors, including some of our allies or former allies who do not obey the rules any more. Many of our businesses and, as I say, our Government have often become risk averse. One thing surprised me, though.
The area in which I saw the most venturesomeness and success was one that I did not really think of as part of business and trade: the development of English language higher education. There is a huge appetite for this among young people in that region, and a preparedness on the part of our own universities to get out there, develop campuses and engage with universities there. I thought to myself, “Well, this is very interesting. I wonder why that happens”. Then I thought, “Maybe it’s the fact that if you’re going to be a serious academic and scientist now, you need to be prepared to go to conferences and meet others who are doing scientific work”. You would need to be prepared to engage in research across countries and borders, and, because that is part of the natural thing, you then meet with people who you start to work with. You develop a relationship with them, so some of our academics and universities are doing more and being more outgoing and courageous. They are prepared to take risks, rather than having the risk aversion that I see—not always, but often—in business and in government.
We have to face the realities, which have changed and are very difficult for us. There were things that we used to think. The noble Lord, Lord Lilley, talked about the way he had changed his perspective on things. It used to be thought that if countries could be brought to a liberal economic approach, liberal democracy in politics would ultimately follow. China is the great end to that notion. Then there was the notion that if you have military power, you will win wars. That used to be the case, but the United States did not do so well in Korea or Vietnam, or Afghanistan or Iraq, or Libya or Syria, or now in Iran. Military power can enable you to destroy things and kill people, but it does not create democracy. It can just lay waste and leave a shambles.
We thought of Europe as the centre of civilisation in the past, and that it would be for the future. But there are older civilisations, and increasingly impressive economic and scientific advancement, to the east, where we have tended not to look in the past. While we still have strengths, which are significant and recognised, we are not as rich, powerful or significant as we were, while other countries are becoming more wealthy and powerful.
Another illusion that is often around is that you can continue to cut the workforce and still have expansion. As I look at the cutting of the workforce in DBT and FCDO, I cannot see how there will be anything other than retrenchment and retraction. I ask the Government to think again about some of those cuts if we really are to achieve what they want to achieve.
We talk things up with endless superlatives. There is a danger of overplaying our hand when we talk about being world-beating and world-leading in everything we do, when we are not. Propaganda is particularly dangerous when you inhale; one of the problems is that we have started to believe some of these things that we tell. It is not that we have no world-beating things, but they are not in many of the places that we speak of. There is another problem: not only do we sometimes believe it, but our people believe it. If you tell your population that they are world-beating and leading in everything, they expect you to be able to pay for all the kinds of services that they want: for welfare services, for the National Health Service and for defence, which we need. That is playing a story to them which is not true, and you have to be very careful about that kind of thing.
I was talking to a nationalist friend from Northern Ireland and she said, “I’ve suddenly realised that I’ve made a big mistake. When I go down to Dublin, I tell them about how terrible things are in the north. I’ve suddenly realised that if I persuade them that it’s terrible, why on earth would they want to take it on? I need to go down and tell them that there are problems but that we’re able to do something about those, so please work with us on that”. We have to be careful about the kind of things we say, because people sometimes believe us, and then we are in real trouble because that is not really what we want them to do.
At the same time, we are neglecting our soft power by cutting back on the BBC, the British Council and our Diplomatic Service, as I already said, while neglecting not so much hard power as our capacity to defend ourselves. The noble Lord, Lord Robertson, will undoubtedly say something about this, because he has said a lot publicly, and quite rightly so. We are not now able to defend ourselves. We told ourselves and our people for years that the world would be more peaceful. We had a world-class military machine and, anyway, we could depend on the United States to defend us. None of these things is true any more. The world has changed, which means that we must change our way of approaching it.
Leaving the EU did not bring the benefits we were promised, but simply reversing Brexit without recognising that we have changed—and that Europe and the world have changed—will not solve the problems either. Prime Minister Mark Carney has made it clear that the world is a different place. We need to listen to his injunction that middle powers, of which we are now one, build a future based more on a variable geometry of workable relationships, rather than some of the institutional structures that are vulnerable to the vetoes of the mighty. We need to build relationships more than institutions and structures. That would be my appeal: that we address the risk aversion in business and government; that we face the realities of the world as it is now, not as it was in the past, or as we wish it was; and that we build relationships in this changing and challenging world, not just conduct transactions.
Lord Redwood (Con)
My Lords, the noble Lord, Lord Alderdice, is right to warn us all that our relative prosperity and power is waning.
I have always been happy to fully support this Government’s main aim, as set out in the general election and repeated in all the economic speeches that I have heard them make. They are right that this country can achieve so much more. It can grow much faster. It can unleash enterprise and develop more business. However, I fear that my noble friend Lady Finn set out in her brilliant speech just how, for almost two years now, this Government have done everything wrong if we wish to promote growth. They have clobbered entrepreneurs instead of praising them; they have taxed people instead of rewarding them; they have taken incentives out and made it more difficult to employ young people—they seem to have a grudge against young people. Now we are presented, in this gracious Speech, with what they think is one golden thread that I think will turn out to be leaden and depressing: the idea that an EU reset will somehow promote trade, which in turn will give us that missing growth.
Let me try to help the Government think this through. Quite often, Ministers here and elsewhere tell us that we have suffered a 4% GDP loss as a result of Brexit. But all the graphs and charts of what happened to GDP between 2016 and today, in the leading European countries and here, show that there is absolutely no sign of an extra 4% drop as a result of either our voting to leave or actually leaving. If you ask Government Ministers why they think there has been a 4% drop, they say that the OBR has said it. But the OBR report is a forecast, which says that between 2020 and 2035, the British economy might grow its productivity 0.25% per annum less than if we had not left the EU. It is not forecasting any drop in GDP at all; it is not even forecasting a drop in productivity—it says that it might grow a bit slower, and if you compound out 0.25% for 15 years, you get to roughly the 4% they all wrongly cite. Ministers must be honest with themselves and the public: there was no 4% drop, and their reset will not recover the 4% that they wrongly allege has disappeared.
Let us explore the idea that increasing trade would uniquely provide growth. I fear that Ministers are again mistaken, because our trade with the European Union results in a very large trade deficit, particularly in goods. It sells us a lot more than we sell it, so if we could agree a set of policies with the EU that might increase the exports of each side by, say, 10%, which is quite a sizeable number, the deficit would rise and our GDP would fall, because the EU would export much more to us than we export to it and we would have to close down things in Britain to receive the exports we decided were cheaper or better as a result of the changes. To have the same volume, we would need to grow our exports by 17% to match the 10% growth in the EU’s exports. If you wanted to get more GDP, you would have to grow our exports a lot faster than the European Union because—I repeat to the Government—exports add to our GDP, but imports do not. If we import more German cars and close a UK car factory, our GDP goes down; it does not miraculously go up because our trade figures with the EU have gone up.
That is exactly the Government’s strategy, thanks mainly to their net-zero policies. My noble friend Lord Lilley set it all out very well. They are literally going to ban us making any diesel or petrol cars from 2030, five years earlier than they would stupidly ban them on the continent. Do they not see that that means that we would close our factories first, and definitely lose all the jobs, while Europe was still thinking about making more of these cars that people want to buy? The Government will say, “Well, we’re going to buy battery cars”. Yes, some people will buy battery cars if they cannot buy diesel or petrol cars, but most of them will probably be imported from China, or they might be made in eastern Europe and imported via that route, so the Government will not get more jobs, growth or economic activity from that source.
Here is my friendly proposal. I really want this country to do well; I want this Government to do well. I know that they are not about to fall—Prime Ministers might come and go, but they will presumably carry on governing—so I say to them: please govern well. Instead of having the wrong idea that promoting more imports from Europe and perhaps a few more exports to Europe will miraculously transform the position, I want them to put in place in Britain a series of policies for import substitution.
It is much easier for small companies to sell to people, shops and businesses near them than to go through all the hassle of exporting, however much red tape the Government think they can reduce. That would give our small businesses more chance by creating more opportunity for British production. It should be much cheaper and easier to replace imports than to try to develop exports to markets with different languages and customs which may not like what you are doing or offering. I know this well from my experience running industrial businesses, when we found that by far and away the most difficult markets to export to were France and Germany, although they were geographically much nearer. We always hired staff who loved the countries and spoke the language, but it was still much more difficult to sell there than it was to the English-speaking world, including America, or to Asian countries where English was the common business language.
We need to lift the ban on making our own petrol and diesel cars, because they have always been one of our leading exports to the continent. We need to lift the ban on getting our own oil and gas out, because they too have been leading exports to the continent. We need to get energy prices down, as my noble friend Lord Lilley rightly said. We have in the past exported a lot of petrochemicals and refined oil product, and if we are shutting all our refineries, petrochemical works, ethylene plants and so on, we will not export anything like that volume in the future.
The Government need a dose of reality and common sense and an examination of the data. It is not good enough for Ministers to say, “We will get the British economy to grow as soon as we have signed away our powers to make our own business laws and given some more money to Brussels”. They cannot identify billions of pounds of extra exports we can make at a time when they, through their policies, are ensuring that we export fewer and fewer cars and chemicals and less and less oil, gas and refined product, and are in the process of closing 21 plastics recycling plants.
As my noble friend Lord Hunt set out in another brilliant speech, there is no plan to save steel. Indeed, I heard the Minister say in her opening remarks that it is still the Government’s policy to go over to electric arc furnaces. They need to be honest to the workers in Scunthorpe: the Government are not going to permanently save the Scunthorpe jobs. They still want to sack all those people, but just a bit later, after they have wasted billions of pounds of public money on keeping open a works that is struggling to compete, in the way that my noble friend set out. I ask the Government to please level with the workers in Scunthorpe about the fact that their plan is anti-blast furnace and anti-burning coal in any sense, and to come to a decent settlement with them. The workers should not think that the Government have a solution to steel, because they clearly do not.
Baroness O'Grady of Upper Holloway (Lab)
My Lords, it is a pleasure to follow the noble Lord, Lord Redwood, and to perhaps offer a slightly different perspective. I declare my interest as a member of the Great British Energy start-up board and my responsibilities around a just transition.
We live in times of global economic shocks, from the financial crash to Brexit, Covid and conflict in the Middle East, and there is no guarantee that the global picture will get any easier. On the contrary, such shocks could speed up and intensify, which makes it ever more important that we build our economic resilience. At times like this, it is even more important that the UK has an industrial policy that is both agile and long term. To succeed, it must certainly last longer than the life of a couple of Parliaments, and that means that we need a broad national consensus to sustain it.
This Government’s industrial strategy has won support across traditional lines, and that is reflected in the make-up of the Industrial Strategy Advisory Council. There is broad agreement that a long-running problem for the UK has been low investment in technology, capital equipment and skills, which leads to low productivity, and that this challenge must be met by not just the Treasury but the whole of the Government, at the local as well as the national level. There is widespread consensus too that the Government have made the right call in identifying eight strategic sectors, with the right balance between industry and the services sector.
Economic security and stability matter for families and communities as well as for the country. It should therefore be self-evident that a key objective of the industrial strategy must be to cut carbon and reduce energy costs and to deliver prosperity and good, skilled jobs in the parts of the country that need them most. We have to recognise that there is a growing public expectation on the state to step up and protect people against the volatilities and failures of the free market and to tackle structural inequalities. A mission for growth becomes meaningful in everyday life when it also delivers rising living standards and fair shares. Polls show that public support for a modern, mixed economy is strong. To put this plainly, I merely observe that the privatisation of Royal Mail, British Rail and the utilities is now seen as an almighty rip-off. I commend the Government for taking back public control of rail and of steel, which is a core foundation industry that is critical for the security of this country and indeed Europe. I am sure I do not need to remind noble Lords that polling shows strong popular appetite for more public ownership, not least of the water industry.
We need the private sector to play its part in delivering fair growth for the British people. According to the latest data from the Office for National Statistics, share ownership in Britain is dominated by overseas investors. It has now reached a record high of nearly 58% of UK quoted shares and, on average, shares change hands in a matter of months. That is why I believe that an intelligent industrial strategy must address the case for corporate governance reform, to encourage directors to focus on company long-term success and to ensure that the workers’ voice is included.
While there is growing consensus in favour of an active industrial policy here in the UK, others are not standing still; they are moving ahead too. I end by asking my noble friend the Minister about proposals for EU alignment and the EU’s draft Industrial Accelerator Act, published in March, which was touched on briefly by the noble Lord, Lord Fox. The draft Act sets a clear goal to bring EU manufacturing back up to 20% of GDP by 2035. It is said that this will be delivered by introducing “made in EU” and low-carbon preferences in public procurement. It will regulate foreign direct investment in emerging strategic sectors, streamline and digitise permission for new industrial projects, and launch acceleration areas to encourage the creation of clean manufacturing clusters. I have some questions. If the Minister understandably cannot provide answers now, I would be happy to receive them in the form of a letter. What is the Government’s assessment of the impact of this EU Act on the UK? Is it on the agenda for the reset and dynamic alignment discussions with the EU? Will the Government agree to open a public conversation, including with British-based manufacturers, alongside the TUC and unions, on how we can match the Act’s ambition here in the UK?
Baroness Penn (Con)
My Lords, following the noble Baroness, Lady O’Grady, I too want to focus on the theme from yesterday’s gracious Speech as being one of security—defence security, energy security and economic security. I will resist the temptation to make a joke about job security, particularly as I believe the Health Secretary has just resigned.
That theme was the right one. In today’s volatile world, we are too insecure as a nation and people feel too insecure in their day-to-day lives. However, as is becoming more apparent day by day, the Government’s rhetoric is not borne out in reality. To start with the cornerstone of our national security, defence, the Government commissioned the serious and widely welcomed strategic defence review. The review concluded nearly a year ago but remains largely unimplemented. I am sure we will hear shortly the views of the noble Lord, Lord Robertson, on that. We have no defence investment plan and in the gracious Speech there was no defence readiness Bill. It is no good talking of the largest sustained increase in defence spending since the Cold War if Ministers are not prepared to take the decisions needed on how it is spent. The claim rings even more hollow as defence spending is due to fall next year. That is the cornerstone of the Government’s agenda, and there is nothing to show for it.
If the national security implications of our changed world have been explored through the strategic defence review, the economic implications for the UK of a changing world economic order remain underexplored and underprovided for in government policy. There have been moments when the Chancellor has attempted to do this, such as securonomics and the two Mais Lectures, but it has come on and off the agenda as priorities change with each new focus group. As is too often the case with this Government, there remains a set of vague, often contradictory intentions, unwilling to make the serious trade-offs needed to meet the new reality. For example, on energy security, the measures to implement the results of the Fingleton review are welcome, but the pace of decision-making and implementation has been painfully slow.
More broadly, in a world in which we have had two energy shocks in under five years, and with projected energy demand for AI, quantum and other technologies due to soar, the Government have failed to look again at the trade-offs between security, cost and decarbonisation—because there are trade-offs. I strongly believe that renewables will be a big part of our domestic energy security and that investment in green technology has the ability to drive growth and jobs. However, it is also true that, when it comes to the Government’s clean power target, focusing on getting to 95% clean power, instead of the around 90% that we were already on track to deliver, over a five-year period, has significant additional marginal costs. Pursuing the last mile of decarbonisation may have the perverse effect of failing to incentivise people to power their homes and cars with electricity as we drive up its cost. At a time when people and businesses are struggling with their bills, the Government are not being straight with them about the decisions that they are taking that drive those bills up even further.
The Government have been equally unable to make the trade-offs needed on spending. Instead of investing in growing our economy and using the proceeds of higher growth and productivity to boost spending, as was outlined in the manifesto, the Government have raised taxes in the most damaging way to growth so as to increase welfare spending before any of that growth or productivity has materialised. Even this Government have realised that the public and the economy are unlikely to tolerate further tax rises. However, we have a set of commitments and demands that must be met, including increasing defence spending to 3% then 3.5% of GDP—the short-term trick of switching ODA to defence cannot be repeated—and meeting the growing demands of our health service and an ageing population. These pressures must, at least in part, be met from savings in spending elsewhere, but the gracious Speech contained not a single proposal for where such savings might come from. There was no sign of welfare reform measures, which the Government continue to claim are necessary but fail to take action on.
Given the demands placed on us in a more insecure world, and given that we are at record levels of taxation, tax reform must now come on to the agenda. If we want to avoid further damaging tax rises, we need to find a way to raise the same revenue, if not more, from a more efficient, more growth-friendly tax system. Instead, we have had a national insurance tax change designed in the worst possible way to discourage work, and the gap between the tax treatment of employment versus self-employment or other income continues to grow. We continue to have a tax system, as the noble Lord, Lord Burns, said, that discourages mobility and investment, and that creates perverse incentives and cliff edges along the way. Perhaps the Government will reflect on the gap between their election promise—and continued claim—that they will not raise taxes on working people and the reality of their decisions as something that may have contributed to the lack of trust in the Government displayed at the ballot box last week.
I turn last to growth and the Government’s regulating for growth Bill, which some might call a contradiction in terms, although I am inclined to be more generous. We will have to wait to see the detail, but, on first impressions, although well intentioned it looks like it will struggle to have an impact. Instead of fundamentally revisiting whether the regulatory architecture that we have built over the last 20 years makes sense in today’s economy, it makes a few tweaks here and a few there. Again, it refuses to engage in the trade-offs that might be involved in some of this decision-making. We need to take a step back and look not just at the individual merits of each piece of regulation but at their cumulative effect. The half-measures, the lack of pace and the lack of vision that this represents sum up the Government’s approach.
If growth is the number one priority, you have to go further and faster on planning and on artificial intelligence. If growth is the number one priority, you do not make the labour market more rigid at the exact time you need more flexibility. You need a Government who are willing to take decisions and change the process for implementing those decisions so that it does not take years to get anything done. To quote a different part of the former Home Office Minister’s resignation letter to that quoted by my noble friend Lady Finn, this Government are
“the definition of incremental change. Nothing bold about it”.
For the Government to deliver on our national security, our energy security and our economic security, they need a strategy that faces up to the new realities in which we live, and that recognises that the open and globalised rules-based order that was the foundation of our previous growth and productivity has fundamentally changed. That means we need to look fundamentally at how we support business at home and how we engage abroad. I do not intend to focus on our relationship with the EU—many others in this debate will cover that ground—and personally I am pragmatic about the opportunities and potential costs of a closer relationship with Europe. But in this new world, we need a new approach and—here I agree with the noble Lord, Lord Alderdice—an approach that engages with the world as it is, not as we wish it would be or as we once thought it was.
The Government speak the language of a new global economic order while governing in the paradigm of an old one. That is perhaps best summed up by the response to last week’s local elections being the appointment of Gordon Brown as the special reviewer on global finance. This country cannot afford a Government who are unwilling or unable to take the decisions needed to meet the challenge before us. Something has to give, and I expect that we will find out in the coming days and weeks just what that is.
Lord Frost (Non-Afl)
My Lords, I am delighted to speak in today’s debate on the humble Address. As noble Lords will probably expect, I plan to focus on European issues and, in particular, the sadly misnamed European partnership Bill, which would be better called the European subordination Bill, for in reality that is what it will achieve: it will deprive this Parliament of any say in areas where the Government have agreed to accept EU law and dynamic alignment. I look forward to debating the Bill at great length when it reaches your Lordships’ House.
The bigger question behind it, of course, is: why are the Government going down this road at all? Why are they embarking on this reset? There are three reasons. The first is slightly surprising, and we heard about it this week: the apparent belief of the current Prime Minister that we can get Britain to be at “the heart of Europe”—a retro phrase if ever I heard one. It takes me back to John Major in 1990, and a lot has happened since then. There has been a lot of back and forth, but at no point in that period has this country ever been at the heart of Europe, and I doubt very much that it ever will be, for we do not share the goals of those who run and manage the European Union.
Looking back over that period, we spent almost our entire period of EU membership under both parties resisting any kind of European defence agreement. Indeed, last year the Polish Foreign Minister celebrated the fact that we left because Europe could now get on with such an agreement. That is not being at the heart of Europe. Neither party wanted to be part of the justice and home affairs agreement, and neither wanted to join Schengen. Of course, the reason we are not in the euro is thanks to the many efforts of the man who is now apparently an adviser to the current Prime Minister, the former Chancellor Gordon Brown. The truth is that any policy based on trying to put this country at the heart of Europe will be based on an illusion and will lead the policymakers astray. I suggest that that is exactly what is happening. That is the first reason.
I turn to the second reason. Ministers ask us to believe that there has been significant economic damage from leaving the EU. Unfortunately for them, the truth is that our growth pattern has not changed compared with those of our European comparators. However you cut the figures, Brexit does not show up, and the noble Lord, Lord Redwood, has already embarked on this point. Look at the World Bank figures since the 2008 crash. If noble Lords think that 2016 was the inflection point, I note that before 2016 we grew at about the same speed as Germany and faster than France, and after 2016 it was the other way around. If noble Lords think that 2020 was the inflection point, I note that before 2020 we grew a bit slower than Germany and faster than France, and since 2020 we have grown faster than both. If noble Lords think that 2022-24 is the most important period, I note that then we grew faster than France, Germany and the eurozone. There is an alternative world where Ministers might be talking about this morning’s growth figures as reinforcing what the British economy could achieve outside the European Union, for none of the reset measures is actually in force yet. I do not expect to hear that argument from the Front Bench today.
What is going on, then? Why can you not see Brexit in the figures? My view is that there has been some small transitional effect from leaving the single market and the customs union—maybe 1% or 1.5% of GDP. It is hard to tell. I certainly would not put it anything like as high as the OBR does. But of course that is not the only thing that is going on. We have made reforms since 2020. We have, happily, stayed out of the worst of the EU’s legislation. In particular, EU laws on AI have helped make this country the third centre in the world for AI and brought in much investment, which is probably the major reason for the growth figures we have seen. We have reformed some financial services, and we have reduced tariffs to the rest of the world and made food cheaper. Indeed, the Government themselves have just done another wave of that, which makes one think that they must think there is some value in it. We have innovated in food and gene editing, with fewer obsessional bans of pesticides and so on.
Of course I wish we had done more—we should have done much more—but what we have done very plausibly makes up additional growth of perhaps 1% to 1.5%, which is why you cannot see Brexit in the figures. The costs of Brexit, such as they are, are paid, but the benefits are still to come, and there are many more to be had. But, sadly, this Government are doing the best they can to squander them. The real economic risks do not come from Brexit at all; they come from bad policy-making here and in the European Union. Perhaps that is why the latest Deloitte poll of CFOs shows that they are now more worried about
“economic weakness in the euro area, and the possibility of a renewed euro crisis”
than about the effects of Brexit. So, in summing up, instead of repeating the zombie figures of 4%, 6%, 8% or whatever, can the Minister perhaps comment on what the real-world data actually shows us, and therefore explain why it is so important for us to give away our legislative and economic power to deal with a problem that does not exist?
Finally, the third reason is that the Government have messed up the negotiations. They did not know what they were doing. It is clear to see what happened: in opposition, they believed that the EU would simply warm to them, and it would be easy to negotiate something better than the TCA while remaining within the so-called red lines. They believed that some of the outstanding problems from the TCA were outstanding because we had simply chosen not to deal with them for ideological reasons, rather than because the EU was not interested in negotiating collaborative solutions. They thought that a few token offers in the manifesto and lots of warm words would fix things. Well, they did not and they have not, and I imagine our negotiators are a bit more realistic now.
However, instead of drawing the correct conclusion that it would be better to try to make the TCA work and focus on economic reform in this country, they cannot admit the misdiagnosis. They have got sucked into the machine. They realise that what they promised cannot be delivered, so their only option to avoid looking like they got it all wrong is to take whatever the EU is prepared to offer. So now they are in the traditional position of British Governments: colluding with the EU about what is being agreed, with the EU saying, “If you accept our way of doing things, we will help you tell your own people there’s nothing to see here”. That really is the only explanation for why the Government have achieved so little while being dragged so far from its manifesto commitments; they are simply misleading the British people about what is going on.
Let us have a final look at what their manifesto actually said. It promised only four things, actually. On help for touring artists, they have got nothing. On mutual recognition of qualifications, they have got nothing. On the UK-EU security pact, they have got an agreement to attend meetings. On the veterinary agreement, the fourth, they have got that, but they have got a lot else besides: they have been sucked into the EU single market on food. Against that, they have agreed lots of things that were never in the manifesto. Where in the manifesto is the 12-year extension on fishing grounds? Where in the manifesto is the commitment to dynamic alignment and obeying EU laws with no say? Where is the product standards Act, which would allow Ministers to align with the EU by fiat? Where is the commitment to follow EU rules on cars? Where is joining EU carbon pricing? Where is joining the single market for electricity? Where is joining the EU’s customs union rules for carbon-intensive goods? Where is rejoining Erasmus for £1 billion a year? Where is the youth mobility scheme that is apparently going to be more ambitious than ever, according to the PM on Monday. The answer is: nowhere. The dams of the red lines are long since broken and the incoming tide of EU law is once again flowing up the estuaries and rivers of this country’s independence.
Only once we have ended this constant attempt to try to pretend the British people did not take a decision will we get back to a proper relationship, without passive aggressiveness on the EU side and a chip on the shoulder on ours. We know what needs to be done: we need to reverse the reset and we need to remove EU law and foreign courts, and we need to do that in the whole country, in Northern Ireland as well as in GB. Next time, I hope we will finish the job. It needs to be done and it cannot come soon enough.
Lord Sharpe of Epsom (Con)
My Lords, I shall start on an area that was largely ignored in the King’s Speech. Unfortunately for small businesses across the country, the King’s Speech offered very little.
Business groups had once again urged the Government to use the King’s Speech to address the long-standing iniquity of business rates, a reform the Government themselves promised in their manifesto but have not delivered. The shops, the pubs, the restaurants, the cafés, the leisure venues and the small firms that sustain our high streets are still waiting: what they see in the meantime is not relief but further layers of administrative obligation.
Of course, we acknowledge and tentatively welcome the late payments Bill, and we look forward to reading it closely, but the devil will be in the detail. To be factually accurate, that is counterbalanced by other things such as the overnight visitor levy Bill, which is more properly and commonly known as the holiday tax. That has already been rejected, publicly and forcefully, by hundreds of business leaders across the hospitality, tourism and leisure sectors, who understand that it would lead to fewer visitors, higher prices, lower margins and the gradual erosion of local economies that depend on domestic tourism for their vitality. How does that generate growth? We look forward to further scrutiny on it.
Under this Government, businesses have been taxed more heavily in their decisions to hire, regulated more extensively in how they operate, and treated less as partners in national recovery than as convenient sources of revenue and targets for political demonstration. Unemployment, including the particularly troubling matter of youth unemployment, as my noble friend Lady Finn pointed out very powerfully, has continued to rise during this Government’s tenure, and one might ask how it was ever supposed to be otherwise when the cost of taking on an additional employee was raised as a matter of deliberate policy. While the Prime Minister is occupied with fighting members of his own Cabinet for possession of his job, young people are finding that there are no jobs available to them.
The Government’s response to a weakening labour market has been to pass the Employment Rights Act, imposing billions of pounds of additional burdens on employers who were already navigating an exceptionally difficult environment. We were told, with some confidence, that this would empower workers, yet many of the new entitlements it creates cannot in practice be realised at all, because the tribunal system is so overwhelmed that claimants face delays of such length as to render their rights, in any functional sense, illusory. Workers do not win; businesses, who bear the cost and uncertainty regardless of outcome, do not win; the beneficiaries, if there are any, tend to be the trade unions, whose institutional strength is enhanced by precisely this kind of legislation, and whose leadership is at this very moment preparing to bring down the Prime Minister and bring further disruption to London through Tube strikes that will harm the small businesses and hospitality venues that have already endured more than enough.
I turn to the Government’s proposed competition reform Bill. Superficially, we should welcome this, but on close reading we see the Bill’s precis states:
“Market reviews can take over three years. The Bill will speed these up so that when markets are not working properly, such as when consumers face high prices or businesses face barriers to entry, competition problems are identified and addressed more quickly”.
Neither high prices nor barriers to entry necessarily signify that markets are not working properly; in fact they can signify precisely the opposite. So we should be concerned by the suggestion that market reviews should be accelerated whenever consumers face high prices or businesses face barriers to entry.
As we read it, the proposed removal of the independent CMA panel in phase 2 investigations risks reducing the independence of decision-making and increasing the potential for political influence over competition cases. So I ask the Minister a precise question: what safeguards will ensure that decisions remain independent of Ministers? Is it not the case that, in many sectors, high prices are caused not by a lack of competition but by the direct consequences of this Government’s policies? Businesses are facing higher employment costs, higher employer national insurance contributions, increased regulation, rising compliance burdens and, as my noble friend Lord Lilley mentioned in his brilliant speech, the highest energy costs in the OECD. In those circumstances, prices may rise because firms are trying to survive the costs imposed on them. The Government must be careful not to punish businesses in haste for pressures that Ministers themselves have helped to create.
The same applies to barriers to entry. Often, those barriers are the result not of private market abuse but of public policy: higher labour costs, tax burdens, licensing requirements, planning restrictions and regulations that make it harder for new firms to enter a market. If the Government genuinely want more competition, they should begin by examining the burdens they place on enterprise.
High prices can be a signal that supply is insufficient and that new entrants have an opportunity to compete. Over time, that increased supply can place downward pressure on prices. That is, incidentally, an experiment that the Government should try with oil and gas. If regulators rush to intervene before market forces have had the chance to work, they may distort the incentives, deter investment and produce unintended consequences. Faster reviews are not necessarily better reviews; the test should be whether they are fair, proportionate and properly grounded in an understanding of how markets actually operate.
I turn to the regulating for growth Bill. Like my noble friend Lady Penn, the first thing that I would recommend is that the Government change the name of this Bill, because you cannot regulate your way towards growth. We of course want to see further innovation in the UK, in particular with emerging technologies and AI. But, looking at the proposed AI sandboxes in this Bill, I shall ask a couple of questions. Will the Government tell us how they will maintain the UK’s high-standard IP and copyright protections, including within the AI sandboxes? Following on from my noble friend Lord Frost’s comments, how do the AI sandboxes square with the reset? As we have heard, the European Union is not as far advanced when it comes to AI as we are.
Yesterday, I read an economics brief that is widely respected in the City. It concluded by saying that
“the smaller structural reforms—on housing, employment, transport, pensions and minimum wages—have been unequivocally damaging to economic growth”.
That is what the markets think, which is why they are charging us the highest interest rates since 2008. I venture to suggest that nothing in the King’s Speech will change that. What a very sad indictment of this Government’s growth agenda.
Lord Robertson of Port Ellen (Lab)
My Lords, I declare an interest as a senior counsellor with the Cohen Group. The opening lines of the gracious Speech hit the nail on the head:
“An increasingly dangerous and volatile world threatens the United Kingdom, with the conflict in the Middle East only the most recent example. Every element of the nation’s energy, defence and economic security will be tested”.
And indeed, we are being tested.
I want to remind the House what we said in the strategic defence review last year, when I was the lead reviewer, which was adopted by the Prime Minister and the Government. The review said:
“The UK and its allies are once again directly threatened by other states with advanced military forces”.
It went on:
“The UK is already under daily attack”.
All that is true and troubling enough, but, as the Prime Minister himself said at the Munich Security Conference only a few weeks ago:
“Time and again, leaders have looked the other way, only re-arming when disaster is upon them. This time, it must be different. Because all … the signs are there”.
These are tough words and, if we had that promised national conversation about defence, I am sure the country would agree with the Prime Minister.
Why do I raise the subject of defence in this economic growth debate? It is a fair question. Although the Prime Minister has made these grave forecasts, we still have no clarity in this speech or in the Munich speech about the steps necessary to get to the agreed 3.5 % of GNP by 2035. I remind the House that that figure would add £36 billion to the present £70 billion that we already spend on defence. These are eye-watering figures, but 30 countries committed to them at the Hague summit, and President Trump is watching all the time.
In his introduction to the document accompanying the King’s Speech, the Prime Minister highlights the Iran conflict. He says:
“But in the light of that conflict, we … need to move with greater urgency”.
This builds on what he said in Munich:
“We must build our hard power, because that is the currency of the age”.
He went on:
“So together we must rise to this moment. We must spend more, deliver more, and co-ordinate more”.
I will make two points about the powerful Munich speech. First, there must have been a page missing from it: the one which logically went on to say what additional funds the British Government were committing to spend to acquire that necessary hard power. Without that commitment, it is simply rhetoric. Secondly, the Prime Minister needs to make that speech again, with its solemn and worrying warning about a potential Russian attack on NATO before the end of the decade, which is in three years’ time, and make that speech not just in Munich but in Manchester, Middlesbrough, Mallaig and many other places.
I repeat what I recently said, which caused a degree of controversy: we are underprepared, we are underinsured, we are under attack and we are not safe. It is a blunt message which the country needs to hear, and from the top of government. Only when people realise the dangers that we face and the threats to them, and to their children’s futures, will the Chancellor and her advisers be willing or forced to make the budgetary trade-offs to spend and deliver more. So I ask my noble friend the Treasury Minister: when will the Treasury set out the steps to get to the 3.5% plus 1.5% promised at the Hague NATO summit? The next summit is only eight weeks away and our country is now 10th in NATO’s league table for spending.
I appreciate that the Government have already pledged to increase expenditure to 2.5% by 2027, and this is welcome. But is this nearly enough, in light of the challenges and threats that face us at the moment? NATO and SACEUR are forecasting a possible Russian military attack on the alliance in just three years’ time. Why are we sleeping? Why are all of us not rearming at pace and rebuilding the hard power so necessary to deter current and future threats to our land, sovereignty and democratic way of life?
I have said it before, but it needs repeating: when the lights go out, the hospitals close, the data centres melt and the ATMs stop working, the public will rightly say to all of us, “Why did you not do something to sort this out before?” If, somehow, we are attacked with cruise and ballistic missiles when deterrence fails, will we stand in the ruins of our cities, homes and schools, and proudly say, “Well, yes, we protected the fiscal rules”?
Will the Minister consider this question: what if we do not increase defence expenditure and rebuild deterrence in the way the Government have agreed in the defence review? Will the Chancellor and the Treasury accept the blame for our continued weakness and the open door that it represents to our aggressive and fast-learning adversaries?
The gracious Speech is not strong on defence—our adversaries will note that and draw some conclusions—and the absence of the defence readiness Bill is a major failing in it, but it says something:
“My Government will also uphold the United Kingdom’s unbreakable commitment to NATO and our NATO allies, including through a sustained increase in defence spending”.
I welcome that promise, but what does it mean, how much does it mean and when will it mean? The threat is immediate. In Ukraine, we can see that it is very real and very nasty. It is no longer theoretical. Under the threshold, it is happening now. When will we see the steps and the commitment to the 3.5%? Only when we do will the British people feel safer than they are today.
I conclude with the words of Denis Healey, speaking in 1969. He said that
“once we cut defence expenditure to the extent where our security is imperilled, we have no houses, we have no hospitals, we have no schools. We have a heap of cinders”.—[Official Report, Commons, 5/3/1969; col. 551.]
It was wise then; it is a warning today.
Lord Bridges of Headley (Con)
My Lords, it is a very great pleasure to follow the noble Lord’s extremely powerful and searing critique of the Government. To help the Minister in his summing up, let me suggest some parts that he might like to cut. I know he likes always to refer in his speeches to the Liz Truss mini-Budget—I think he has mentioned it about 53 times. He can cut that out entirely. All of us on this side of the House would agree that it was a disaster.
We would agree that the last Government left office with taxes, spending and debt too high, largely—but not entirely—due to Covid and the energy shock. But, of course, the Minister’s Government now hold the record of long-term borrowing costs soaring to the highest level for 28 years, largely thanks to the Government’s self-inflicted chaos. Rather than talking about the previous Government’s faults, which I assume we on this side of the House all agree we are responsible for, I gently suggest that the Minister focuses on what he is responsible for, which is the current state of the economy and where we go from here.
That brings me to the gracious Speech. As a number of my noble friends have said, including my noble friend Lady Penn and, of course, the noble Lord, Lord Robertson, a recurrent theme is the Government’s wish to strengthen our security and resilience. It is an aim we can all agree on. However, the question as regards the economy is, how do we achieve it? The Chancellor has a special word for it: securonomics. In her view, state intervention, regulation and spending more on welfare and the NHS all build economic resilience, and with that resilience comes growth. But as a number of my noble friends have said, especially my noble friend Lady Finn in her excellent opening, evidence suggests that securonomics is delivering completely the reverse: lethargic growth, higher debt and an economy more vulnerable to shocks.
Just consider a few facts. Between 2024-25 and 2029-30, welfare spending will rise by £75 billion to £389 billion. Debt will rise, and with it debt interest spending: from £105 billion in 2024-25, it will hit £134 billion by 2029-30. As the Chancellor likes to remind us, £1 in every £10 the public sector now spends goes on debt interest. That is four times what we spend on nurses. As the noble Lord, Lord Robertson, just pointed out, at a time when war is raging in Europe and there is a stand-off in the Middle East, this makes it even more difficult to increase defence spending. The rise in welfare spending this year alone would be enough to pay for 15 Royal Navy frigates.
So what is securonomics doing? It is making us less secure, both in terms of our economy and our national security. I know the Minister will try to dispute all this when he sums up. He will, I am sure, point to the so-called regulating for growth Bill. I absolutely welcome any measures to ease regulatory burdens on business, and I particularly welcome the concept of strengthening the growth duty. We absolutely have to fundamentally rebalance our risk appetite in this country—we have to encourage more risk-taking, innovation and enterprise—but surely, if the Government were really on the side of businesses and helping get regulations off their back, they would not have implemented the Employment Rights Act, which will increase costs by £5 billion a year, not to mention hitting employers with national insurance. Maybe the Minister can square the circle when he sums up.
Then there is the so-called reset in relations with the EU, which the Chancellor views as
“a strategic imperative for deeper integration between the UK and the EU—in our shared need for greater economic resilience”.
This argument assumes that the EU economy is becoming more resilient and more competitive, and that closer alignment to the EU will, in turn, benefit Britain.
However, as my noble friend Lady Finn pointed out—I want to dwell on this—what is happening in Europe suggests otherwise. Some 18 months ago, in the landmark report that the noble Lord, Lord Liddle, referred to, Mario Draghi warned that Europe would need “to change radically” to meet the economic challenges it faces. But instead of radicalism, many in Europe are concerned that the EU is sinking ever deeper into the economic mire. Why? Its institutions, its culture and the very nature of being a rules-based system means that it is finding it very hard to find a regulatory reverse gear.
At the weekend, the CEO of one of the world’s biggest banks, UBS, pointed to the EU’s record of “no growth” and a “clear divergence” in productivity compared with rival economic powers. This is what he said:
“If it would be over-regulation only in banking, one could probably live with it. We have over-regulation across the board. That’s the real problem. The amount of bureaucracy, the lack of innovation that goes on is a fact”.
Now hear what the CEO of Germany’s BASF, the world’s largest chemical producer, said:
“Europe is losing industrial capacity at a speed we have never seen before. This is … a structural”
trend in “competitiveness”.
Noble Lords may think that this is big business whingeing, but hear this:
“We are on the brink of an existential crisis”.
That was the Prime Minister of Belgium speaking about European competitiveness in February. Then there is this:
“we lack appetite for risk … we are out of step with a shifting world … we are over-regulating”.
That is President Macron. Then there is this:
“The single market was once created to form the most competitive economic area in the world, but instead, we have become the world champion of over-regulation … we must now put a stick in the wheels of this machine in Brussels to put an end to this constant regulation from the European Union’s legislative machine”.
That was Chancellor Merz.
Despite the tough talk from Berlin and Paris, this has yet to yield any results in Brussels. Efforts to make Europe more competitive, productive and innovative are, to put it mildly, spluttering. Before we even get to the price the Government are willing to pay to forge closer relations with Europe, the Minister needs to answer this question: given that the EU’s leaders lament Europe’s lack of competitiveness and growth, and seem unable themselves to do anything about it, why would closer alignment of our economy with the EU benefit the UK, and why would it help build British economic resilience?
This gracious Speech is the latest scene in the tragedy of this Labour Government. When the Government came to office, the Economic Affairs Committee—which the noble Lord, Lord Burns, sat on and which I chaired at the time—warned that tough decisions needed to be taken in that Parliament to put the UK’s finances back on a sustainable path. The Government were given a massive majority to take those tough decisions. But they made the wrong tough decisions, because they believe that economic growth comes from regulation, the state and Whitehall. They are a Government who refuse to confront the brutal reality that we are spending and taxing too much. They believe that we can afford more welfare and less wealth creation. They think that more and more regulation will increase economic security, whereas it increases costs, crushes job creation and makes inflation stickier, which in turn keeps the cost of borrowing high. The Labour Party may change it leader, but it will not change any of these beliefs, so this tragedy will continue.
This gracious Speech will do little to stop our country becoming weaker, more vulnerable, less resilient and less secure—the very opposite of what the Government and all of us want.
Lord Strasburger (LD)
My Lords, I will address the impact of Brexit on one of our largest economic sectors—the creative arts sector—and reflect on what that impact tells us about the direction of our economy and the changing mood of the country. In the years since Brexit, not only has our cultural life been affected but our capacity to grow our economy has been damaged. Before Brexit, the creative industries contributed over £110 billion annually to UK GDP and were the largest sector of our economy after the financial services.
The creative industries were also among the fastest-growing parts of our economy, expanding at nearly twice the rate of the wider economic base. They were export-driven, innovation-led and deeply integrated with European markets. That matters because growth in a modern economy increasingly depends on precisely these kinds of sectors, which are mobile, knowledge-based and internationally connected. Yet Brexit has introduced friction at every stage of that model. The previous Conservative Government promised to protect the creative industries from the downsides of Brexit but then completely omitted them from the trade and co-operation agreement, of which the noble Lord, Lord Frost, has just told us he is so proud.
Touring, the backbone of income for many musicians and performers, now involves visas, work permits, cabotage limits and complex tax arrangements. The result is not simply inconvenience but lost activity. Tours are shortened, scaled back or cancelled altogether. These are lost earnings, lost exports and lost contributions to our GDP. A generation of talent has been lost. Young people who would have become our performers, designers and skilled support staff of the future are now scratching a living with Uber or Deliveroo and could be lost to our creative arts for ever.
Collaboration has also been hit. Coproductions, joint ventures and cross-border projects, once routine, are now more complex and costly to organise. That reduces not only output but innovation as the exchange of ideas becomes harder. Investment follows the same pattern. When access to European markets becomes less predictable, investment decisions shift. Productions relocate away from the UK, companies themselves relocate elsewhere and, over time, that weakens the UK’s position as a hub for creative enterprises. Taken together, these effects represent a drag on growth in a sector that should be helping to drive it. The consequences ripple outward. The creative industries support tourism, hospitality and regional economies across the United Kingdom. When creative activity declines, so too does the wider economic ecosystem that depends on it.
This is not a niche concern. It is part of a broader pattern that reduces trade intensity, lowers business investment and slows the growth that we might otherwise have achieved. If we are serious about restoring real, sustained, export-led growth, we must reduce those barriers. We must reconnect with our largest and closest market and rebuild the conditions in which sectors such as the creative industries can thrive.
So far, I have restricted my remarks to the economic benefits of the European Union. But perhaps more important and urgent than the obvious financial upsides is the need to face up to the rapid collapse of the international order that existed at the time of the referendum. Since then, in just 10 years, the world has become not merely more complicated but more dangerous and less predictable. We have seen war return to Europe, persistent threats from hostile states, cyber attacks, terrorism, energy shocks and growing pressure on the rules-based international order. The second Trump presidency has added a further layer of volatility by unsettling alliances, sharpening transatlantic uncertainty and encouraging a more transactional approach to international relations.
As we heard recently from the noble Lord, Lord Robertson, we have come to the painful realisation that our military capacity is not what it was and we cannot afford to do much about it in the foreseeable future. In these conditions, the case for Britain to work more closely with its neighbours is compelling. A country of our size cannot best protect its interests and citizens by standing apart from the institutions and partnerships that help anchor stability. That is precisely why the need to work with our European neighbours—and to do so from a position of influence, rather than isolation—has become even more pressing.
In a nutshell, the changes to the world since 2016 have vindicated co-operation, not detachment. The British people can sense that. They can see that our economy and national security are being threatened by the isolation brought by Brexit. That is reflected in the polls by an increasing majority in favour of abandoning the failed experiment of Brexit and rejoining the EU. This is a significant and sustained shift in public opinion. Democracy is not a one-time instruction; it is an ongoing conversation between the public and those who represent them. When the facts change and when the public sentiment evolves, it is our duty to respond.
To rejuvenate our creative industries, to boost growth in our economy more generally and to bolster the stability and security our people need, we must get started now on rejoining the European Union. There is no time to waste.
Lord Johnson of Lainston (Con)
My Lords, I will take a slightly different tack and praise the Government for some of the Bills put forward in the most gracious Speech. However, before I do, I want to admit to a slightly shady secret: I am a capitalist; I like making money, I am on the boards of companies, and I invest in businesses that will, I hope, be benefited if the Government actually get their act together and carry through on some of the wonderful things in this great Speech.
The first is the competition reform Bill, and we have had some extremely good interjections from my noble friends Lord Sharpe and Lord Hunt and other noble Lords, who have rightly pointed out the importance of making sure that the Competition and Markets Authority functions properly. However, my concern—I realise I am speaking on this subject with noble Lords surrounding me who probably created these legislative functions in the first place—is that we have it upside-down. Competition under the Thatcherite model used to be to try to break things up: to have as many smaller companies as possible in order to reduce prices and increase competition. But the reality is that now, in the AI age, we need super-companies. We need to go the other way, encouraging conglomeration and amalgamation to create companies that are big enough and which can become global super-champions, which will allow this country to stay at the centre of the AI arms race.
I say to the Government, and I hope they will take this into account, that competition reform is not simply about making the CMA work better—and, my goodness, it needs to—but about changing the very nature of how the competition process works, to enable us not to reduce competition through reducing the number of companies offering goods and services, but to make sure that we understand the nuances around creating the sorts of companies that will allow us to have power in what is now a winner-takes-all economy.
The second Bill I want to heap praise on is the regulating for growth Bill. I was the Minister for better regulation; rather like the title of the Bill, that is probably the greatest oxymoronic ministerial title in the western world. The idea that you can regulate for growth is slightly bizarre. The measures that the Government have outlined are good, and the last Conservative Government wholeheartedly supported this, and indeed introduced some of these principles in the regulatory reform White Paper: concepts such as sandbox powers; and, very importantly, strengthening the growth duty of regulators, holding them to account on that most important task, that their function is not to stop things from happening but to allow them to happen in an orderly fashion. However, one of the most serious issues I came across in government, which I think we still suffer from today, is around the layering of regulations and the conflict between different government bodies, departments and quangos that make it very difficult for businesses to navigate.
One good example was a company that came to me that was creating artificial dog food. I have a caramel-coloured, long-haired miniature dachshund called Daisy, and her health is of paramount importance to me, so I am the last person who would want her to consume anything that might be dangerous. But this innovative small company had to go to Defra. It was then sent to the Food Standards Agency, which then sent it back to the food administration, which sent it back to Defra. It went round and round, and no one Minister or agency would take responsibility for the universe in which it was operating. If we are going to design an economy for the future, and if these regulatory bodies are going to put growth and innovation at the centre, we have to have more rationalisation in terms of who takes responsibility for the areas that they govern or we will continue to have overlapping responsibilities.
The second part of the regulatory agenda that needs reforming is that around the environment. I am told by property developers and people who wish to build that the environmental controls are now a far more significant hindrance to their ability to do what we need—build infrastructure and houses—than the planning process itself. I declare another interest in that I am trying to build an outside study area. It is an old piggery. However, it is not that simple. Last November, I got planning permission, but I could not get full planning permission because I had to do a bat survey. I said, “Let’s send for the bat survey man”, but I could not send for him until May, as that is when the bats start to fall in love with each other. That is the romance season of the bats.
I waited until May, so we have already lost six months. The bat man comes. He is called Tristan. He wears a gilet. He turns up with an infrared camera. He sits night after night, for seven nights, trying to film my bats in an intimate embrace. This is not a joke but a true story. I almost imagine Sir David Attenborough, the great centenarian, crouched in a safari suit, talking about “Lord Johnson’s domestic bat environment” and then putting it in a nature film. That cost me thousands of pounds and took months. The outcome, the mitigation, was to put a bat box up outside my piggery.
We have lost the plot. The process has become the principle rather than the outcome. The bat box cost £60. I would have loved to put one up. I probably would have put one up anyway, so why not look at the outcomes rather than the process? If all that I had to do at the beginning was make a choice—put a bat box up or go through a torturous process—we would have had the same outcome. We have lost our way when understanding how we regulate and what we are regulating for—which, in this instance, is to protect bats.
The last Bill that I congratulate the Government on—and I am glad to see the noble Lord, Lord Livermore, back in his usual place—is the enhancing financial services Bill. A few months ago, I raised regulation in finance in a question. The Minister laughed. Well, he is not laughing now. He is taking it so seriously that he is pioneering a new Bill to help the financial services industry, which I am afraid our Government, as my noble friend Lord Bridges of Hedley pointed out, did nothing but denigrate from 2010.
Can the Minister take note of a few key points? The first is consumer duty. The bizarre idea that somehow we have to be responsible for so many parties down the chain makes it impossible for us to create proper financial products. All companies have a consumer duty. We all have a duty to the customer who uses our products. The idea that we have to regulate for that is just causing more problems and more complexity. It creates an ever more byzantine amount of paperwork. Consumers click “I accept” or “I agree”, thinking that they are protected when they are not.
The second thing that I would like the Government to look closely at is MiFID II. As a Minister, I used to offer a prize. I was not allowed to offer money for reasons of probity and integrity, so it was a bottle of wine. It was for any person who could name for me a benefit to humankind of MiFID II. One person put their hand up and said, “Lawyers”. I am sorry to say it to any noble Lords in this House who are lawyers, but I am afraid that they do not count. That prize still stands. It destroyed the research capabilities of small companies and with it the A market and the small company market.
I want to mention institution-to-institution sales. We are obsessed with compliance and regulation around how we sell to the retail market, as we should be. However, when it comes to institutions-to-institutions, we should allow 1,000 flowers to bloom. We should make it our ambition to ensure that if dealing inter-institution, where there is no risk for individuals to be mis-sold, we should be allowed to do almost whatever we like. That is how you create strong financial innovation.
My last comment on financial service regulation concerns a very worrying outcome from a report written by the Financial Services Regulation Committee in this House, which was presented a few months ago, about how the FCA had created a climate of fear in how it managed its affairs. I draw noble Lords’ attention to this because it is a very serious point. A regulator has created a culture of fear rather than one of innovation and growth. I wrote to the FCA asking for a response to this. It has not bothered to write back. I ask the Minister to impress upon the FCA that its job is not to create fear but to create a successful financial services sector that allows us all to have wealth.
Baroness Bi (Lab)
My Lords, in following that speech, I will cover many of the areas covered by the noble Lord, Lord Johnson, but I welcome the focus on economic growth, trade and our partnership with the EU contained in the gracious Speech.
It is imperative that we take measures to improve our rate of growth to offer hope to the many people who feel that society no longer works for them. I am particularly concerned about the impact on young people, not just those who are not in employment, education or training but the many others who do everything right and then find that they cannot find a job that reflects their training and aspirations, and that they cannot buy a home or start a family. History is full of examples of revolutions started by disaffected young people who do not have a stake in the society in which they are living, and I am concerned about the impact on the future of our democracy if we are not able to grow the economy to meet their legitimate expectations.
We are all now hearing a clamour for bold change from my colleagues in the other place, and I join it to this extent: the broader geopolitical situation means that we need to choose whether to seek growth primarily through deregulation, as the United States has done, or through closer dynamic alignment with the European Union—our largest and nearest market. I accept that both routes have the potential to offer us higher growth than we are experiencing. However, as a cake enthusiast, I know that we cannot have the benefits of both while accepting the discipline of neither. The choice we make—whether to follow a US model or to be more closely aligned with the EU—has to run through all our decision-making on tax, regulation, skills, capital markets and energy costs.
Like my noble friend Lord Liddle, I urge the Government to choose alignment with the EU and hope that the British public have an opportunity to reverse Brexit in due course. We ultimately belong in the European Union not just because it makes economic sense but because we share the same values as our neighbours. We need to work together with them to enhance our joint defence capability, the importance of which my noble friend Lord Robertson so eloquently explained. In a world of large economic blocs, we are exposed. Although I applaud the Government’s progress on free trade agreements, the increase in growth that these FTAs are able to achieve does not make up for the loss of access to the single market and customs union.
I also accept, not least because of the manner in which we left, that the EU is understandably hesitant in responding to our overtures, but the review of the TCA due this year and the upcoming EU-UK summit provide an opportunity to make meaningful progress within the current framework to achieve business mobility, youth mobility, mutual recognition of professional qualifications and civil judicial co-operation, all of which will help to boost growth. Increasing growth depends on strengthening those sectors in which Britain is genuinely world class. I agree with the noble Lord, Lord Johnson, that financial and professional services are some of our world-beating industries. The sector generates jobs, tax revenues and exports, but it is overregulated, with compliance costs for just financial services exceeding £30 billion each year. I accept that regulation is necessary for growth, but it must be targeted and proportionate.
In the past, our approach to EU regulation was often to overcomply and gold-plate requirements. As we consider dynamic alignment in the future, I urge the Government to adopt the method advocated by Marie Kondo and consider keeping those regulations that spark joy and discarding those that we no longer need. As a lawyer—I declare my interest as the chair of a law firm—I hesitate to suggest fewer laws and thereby deprive my colleagues of the prospect of advising clients at attractive hourly rates, but too often new laws and regulations are issued in response to a failure or scandal, when existing legislation should simply be enforced. Solicitors, from sole practitioners to those in larger firms, are now contemplating the prospect of being regulated by the Financial Conduct Authority, which has no experience of overseeing professional services to date. This is for anti-money laundering, a role that has been performed thus far by the Solicitors Regulation Authority—one of 15 regulators and bodies whose requirements and guidelines we are currently required to observe in the UK.
I am bemused by the fact that, in London, we are deemed to need ever more regulation, overseen by growing numbers of regulators, whereas colleagues in New York, Paris and Frankfurt seem to get by perfectly adequately with a local Bar Association and compliance with the laws which apply to the rest of society.
I note that many noble Lords have discussed concerns about overregulation, but I am afraid my experience in the legal sector is replicated in many other areas of the economy. We need to be much bolder in deciding what regulatory oversight is actually needed to protect consumers, preserve stability and sustain confidence—with significant input from those sectors themselves, as they have a primary interest in maintaining their good reputation—and to remove the rest. We need proportionate regulation, alignment with the EU and support for our great industries, especially financial and professional services, to drive the growth that is needed for the next generation.
Lord Jackson of Peterborough (Con)
My Lords, to begin, I strongly commend the noble Lord, Lord Robertson of Port Ellen, who is not in his place, for his coruscating criticism of the Government’s dilatory approach to defence and national security. It was a courageous contribution.
I intend to confine my remarks to the Government’s proposals for dynamic alignment, now rebadged euphemistically as a putative European partnership Bill, the details of which are as yet unclear. Your Lordships’ House may be aware that the European Affairs Committee is currently conducting an inquiry into the policy, and is still the only discrete body in Parliament interrogating this Government’s wider policies in respect to EU-UK relations.
Almost 10 years ago, the British people made a decision to leave the European Union, the single market and the customs union. They chose to return sovereignty to the United Kingdom. That was the democratic will of the British people, and it risks being overturned by politicians who never accepted the validity or the potential benefits of Brexit. The Government are pushing for closer alignment with the EU, but they have gone far beyond any mandate they can claim from their manifesto. They have decided to define themselves by a close relationship with the EU.
In his speech at the beginning of this week, the Prime Minister admitted that he felt it was necessary to go beyond what was stated in 2024 and that, at the next EU summit, he wants to put
“Britain at the heart of Europe”.
However, he refused to admit whether he would ditch the red lines in his manifesto, which ruled out membership of the EU single market or customs union, and instead committed to “take us closer”. This is an attempt to deflect from the failures of the Government—failures demonstrated by their devastating and unprecedented losses in the local elections last week. Rather than take responsibility for their unforced errors and U-turns, they blame the decision which has allowed this country to take back its sovereignty.
The Government are wilfully betraying the people of this country in staking out such an ideological position, and they know it. Reform UK’s gains in the local elections show this. Frankly, leave voters do not trust this Labour Party, and the Government’s announcements in the gracious Speech only validate this argument and the disrespect they have for those opinions. As it happens, YouGov polling for Queen Mary University of London has found that only 9% of Labour voters believe that UK tariff policy should be decided by a non-UK entity.
In our alternative summary to the European Affairs Committee report, Unfinished Business: Resetting the UK-EU Relationship, published last year, we showed how the Government’s EU reset objectives had expanded over time. By the end of the year, this Government intend to publish a Bill including mechanisms which would align the UK to EU law. However, in order to gain the privilege of losing our ability to make our own trade and energy policies, the UK will have to pay and be subject to the fiat of the European Court of Justice.
The EU’s objectives were leaked in a negotiating paper in 2024, in which it made clear the strong desire for the extension of the pre-existing arrangements on reciprocal fisheries access and the support among EU member states for a UK-EU youth experience scheme and a UK return to the Erasmus+ scheme—which, incidentally, comes at significant cost to British taxpayers, with little or no value-for-money analysis. The key EU objectives of the 2024 negotiation document have been agreed to by the UK. The EU has now made it clear that if the Government are determined to push for closer alignment with the single market then we will have to pay in the region of £1 billion a year into the European Union’s budget—something that we have not had to do since we were a member. This completely undermines the UK’s political and financial autonomy.
This would be understandable, were Ministers to have brought forward a comprehensive, robust cost-benefit analysis of how dynamic alignment may benefit British business, but they have not. Our committee has received substantial evidence that the true cost of this policy of dynamic alignment will be a hit of £15 billion to our economy, as it will destroy UK regulatory headroom by importing EU anti-competitive market distortions.
British exceptionalism in areas such as gene-editing, novel foods, AI and, of course, animal welfare standards will be stymied by such a foolhardy policy, and all for a minuscule gain in GDP over the long term, based on contested figures pulled together by lobby groups—according to the Centre for European Reform a gain of just 0.1% of GDP with a sector-specific SPS agreement, or just 0.04% of GDP with youth mobility and a touring artists’ regime in the near to medium term.
We already know that the estimates of the so-called damage to the UK economy of Brexit are based on dodgy figures and have been comprehensively rebutted. For instance, the NBER working paper, used recently by the Chancellor, which claims a hit
“by as much as 8%”
to the UK economy, was derived by comparing growth in UK GDP per capita with the averages of a wide range of other countries with many different characteristics. UK underperformance since 2016 was solely attributed to Brexit and ignored other key factors, such as Covid, the Ukraine war and the energy crisis, which impacted different economies in different ways. We know as a fact that UK growth in GDP per capita has been only a little below that of France and better than Italy, Canada and Germany. Of course, those Brexit-sceptic commentators invariably ignore our hugely successful improvement in services exported to the EU since 2016. That is why the City of London is now wary of linking regulations to a single European jurisdiction.
Dynamic alignment will require at least five years of complex primary legislation and runs the risk of severe retaliation by non-EU countries, as there will develop, for instance, a structural incompatibility with our obligations under the CPTPP. This is bad for our economy. For instance, UK exports of pharmaceuticals to the United States, worth £11 billion, are at risk of a 100% tariff in order for us to, let us face it, protect the EU agricultural sector.
Ministers have completely ignored the fact that mutual recognition and equivalence are tools used by most mature economies trading globally as a means to reduce regulatory friction while protecting parliamentary sovereignty. If the Government continue to yield to the EU’s demands, the UK will be committed to contributing to EU cohesion funding, and we will have to pay financial contributions to help reduce economic, social and territorial disparities within the EU. We will be paying the European Union for the privilege of undermining our global competitiveness. Dynamic alignment offers us nothing that we do not already have.
Finally, these proposals have significant ramifications for parliamentary sovereignty. Ministers intend to use statutory instruments to bypass parliamentary scrutiny every time the EU updates the rules that we are forcibly aligned with. To compound this, we will have no real influence over the EU regulation-making process, merely the opaque illusion of so-called decision-shaping, about which Ministers have not yet opined.
The Government have a choice to make: to change tack and uphold the commitments and democratic will of the British people, producing a Budget that cuts business taxes, reduces regulation and welfare spending, boosts jobs and skills, and secures new global trading opportunities, or to turn their back on the people they claim to serve and shackle our country to a declining, overregulated, dirigiste market that will hobble British enterprise and innovation in a vain attempt to prop up a discredited Administration and a struggling Prime Minister.
Lord McNicol of West Kilbride (Lab)
My Lords, it is a privilege to speak in response to His Majesty’s gracious Speech, and I am grateful to my noble friends who moved and seconded the Address with such witty eloquence. I want to use my time to speak about two issues I think are critical to the future of the country: social mobility and artificial intelligence—not as parallel tracks, but as a single challenge and a single opportunity.
The journey that brought me to this Chamber started a long way from Westminster. I grew up in West Kilbride on the west coast of Scotland. Many of those around me held a simple belief: work hard, keep learning, grasp the opportunities, and doors can open. My journey was the product of the architecture built into British society that had decided deliberately that all individuals should share equal opportunities to succeed and fulfil their potential, no matter their postcode or their parentage.
That architecture was built by the people of this Parliament, by previous Labour Governments. Attlee’s Government created the welfare state to declare that no talent across Britain should ever go to waste, and when Harold Wilson spoke of the “white heat of technology”, he was making a promise to working people that technology would lift people up, not leave them behind. The architecture of social mobility was built by Labour hands with Labour values, and it is those same values that must shape what comes next.
We must be honest: the architecture has weakened and the scaffold of social mobility has decayed, hollowed out after years of underfunding and neglect. The Institute for Fiscal Studies confirms that spending on classroom-based adult education stands at 40% below the figure for 2009 and 2010. Even those who break through face a class pay gap, with professionals from working-class backgrounds earning on average of £6,000 less per year than other colleagues. Look at the good work that KPMG did, analysing its own professional staff and the people working for it: its data shows this.
Yet, arriving alongside this decline is a technology of extraordinary potential—artificial intelligence. But AI is not neutral by design. Deployed without intention, structure or political will, AI will not heal divides in our society but could actually deepen them. As the McKinsey Global Institute has said, AI’s productivity gains will not be evenly distributed unless government actively intervenes to shape adoption. That is precisely the challenge, and our responsibility. The question before this House and for the Government is whether the arrival of AI becomes a moment we can use to rebuild that ladder of social mobility, or one where we see it continue to slip.
I welcome the Government’s approach to AI so far. After years of drift and missed opportunities, we finally have a Government with a vision and a courage to drive an AI agenda rooted in opportunity. The AI growth labs announced by DSIT are now operational in priority sectors including healthcare, professional services, transport and advanced manufacturing, representing a significant step forward by creating controlled, real-world sandboxes where regulations can be temporarily adjusted to test AI innovation responsibly. The labs are designed to cut unnecessary bureaucracy while maintaining safeguards.
The commitment to bring AI tutoring to 450,000 disadvantaged children is social mobility in action. Skills England will provide skills training with AI tools for millions of workers across the country. I welcome and commend this agenda, but we need to go further, and I want to put three direct asks for the Minister to respond to.
First, Britain must not be a passenger in the AI revolution. We must build sovereign capabilities right here, not import our future. The sovereign AI fund is a start, but this Government must go further. They must create the industrial conditions, the infrastructure, the investment and the strategy for Britain to develop and grow its own AI capabilities. This is not only an economic argument; AI infrastructure built in Britain means jobs created in Britain, in the towns and cities that have been overlooked for too long. An industrial mission must reach Motherwell, Merthyr and Middlesbrough.
Secondly, we must make further education one of the vehicles for this agenda. The practical and technical hands-on skills taught in our colleges and sixth forms are not secondary to this mission but central to it. It will be these skills that help to build our future infrastructure. Our AI skills agenda must reach every type of learner.
The third ask is perhaps a bit more personal to me. AI is coming to every workplace in the country. As a Labour Government, we must guarantee that this transformation is led jointly by businesses and the workforce. Workers who shape the technology will trust it, adopt it and ultimately benefit from it.
I close by returning to where I began. The Government’s own AI Skills for Life and Work report, published earlier this year, stated plainly that the concentration of AI capabilities
“among a small, highly educated, and well-compensated proportion of the workforce risks creating a divide in AI accessibility and adoption”.
That divide maps precisely on to the fault lines of class, region, education and opportunity that have defined our social mobility challenges for decades. There is nothing inevitable about that. Whether AI becomes the greatest equalising force of our age or the latest mechanism to enrich privilege is a political choice.
My journey to this Chamber was made possible because those who came before us made those right political choices. Do not let that opportunity pass: construct the architecture, restore Britain’s commitment to social mobility, and make it last.
Baroness Bennett of Manor Castle (GP)
My Lords, I thank everyone who has participated in this interesting debate, even if we know that the country’s attention is largely directed otherwise today. No, I am not talking about what is happening within the Labour Party but in many areas around the country, the politics that has the most immediate impact on the lives of people and communities is changing.
New councillors and new leaders of councils are settling into their roles: 587 of them are Green councillors, two of them our first Green elected mayors. In Hackney, Waltham Forest, Norwich, Hastings and Lewisham, Greens are settling into control of those councils. In news just in, the Green Party’s Matt Jenkins has just been elected leader of Worcestershire County Council, displacing a chaotic Reform Party leadership. He will no doubt be working closely in Worcester city with the wonderful 26 year-old musician Tor Pingree, who is taking over as mayor. As Greens, we are really showing that politics can be done differently, and Worcester woman, and many others, are taking note. I must also note the imbalance between the votes just cast and the number of Greens in your Lordships’ Chamber. It would be nice if that could change in the near future.
I turn to the specifics of today’s debate. I try to praise where I can, so I am pleased to see the desire to build a closer partnership with the EU. I hope that very soon we will restore, at least to our young people, some of the freedoms and opportunities they have lost since Brexit, as we need to see the country move closer to a customs union and the single market, and eventually return to membership. Unlike the noble Lord, Lord Jackson, I know that the people’s democratic will is not set in stone: it does not last for decades or centuries; it can change. I know that the public understand that if you are in a hole, you should not keep digging.
On our main subject, the economy, I thank the noble Lord, Lord Burns, who offered the Chamber a sombre, realistic view of the UK’s prospects as a middle-ranking power with an ageing population in a world of long-term “global slowdown”, in which
“it looks as though that pattern will continue”.
That showed a realism that we might expect from the Cross Benches but which we urgently need other corners of the House to grasp. The noble Lord also acknowledged—I thank him for recognising that there are alternative economic views to those that have put us in this mess—that not everyone in this Chamber regards growth as the holy grail.
We are not hearing from the Tory Benches or the Labour Front Bench any assessment of whose growth it is. Is it the few getting richer while the rest of us get poorer? Are we building up even further an unstable, insecure financial sector that concentrates wealth in a few hands in a few parts of the country? Are we ensuring that our economy can endure climate, geopolitical and health shocks, and that resilience, rather than spindly, fragile poles, props up the GDP figures? What costs are being borne by exploited human bodies, as the right reverend Prelate the Bishop of Newcastle said, or by the already parlous state of nature on these islands and around the world? What costs will future generations bear for any growth that we seek today?
The noble Baroness, Lady Anderson of Stoke-on-Trent, spoke about aiming to strengthen and reform our foundations and bring “prosperity to every corner” of the economy. That deserves to be contrasted with the Prime Minister’s introduction to the Speech, which talks about creating “more highly paid jobs”. If we want prosperity in every corner, surely we need to ensure that every job is at least decently paid—one that gives individuals and households security and stability, and the ability to live well now and plan for the future. With, after housing costs, 20% of the population living in poverty, the words we heard from the Chancellor this morning, summarised by the Guardian as,
“if it ain’t broke, don’t fix it”,
will ring very hollow indeed for many people, including those in poverty and those nearing and fearing it, who find themselves running faster and faster just to barely survive economically.
What would the Greens do instead? For starters, urgent action is needed to bring down people’s bills, and we need rent controls, nationalisation of water, freezing of energy prices and the taxing of wealth. People, particularly those living economically on the edge, are being subjected to an increasingly depleted, polluted environment, which, as we are understanding more and more every day, is terrible for their health.
Where is the environment in the Speech? We have plans that are awful and indefensible, both environmentally and economically—just look at the financial carbon bubble we face already—to expand airports, build roads and slash the regulation of nuclear power plants. Whose back gardens are those plants likely to end up in? Not those in Chelsea or the Cotswolds, we can be sure. My noble friend Lady Jones will cover more of this next week. Additionally, in the promised regulating for growth Bill, we have a vow to “strengthen the growth duty” for Natural England, the Environment Agency and the Health and Safety Executive. The Government are lining up with the Tory Benches with an ideological attachment to so-called slashing red tape, an approach that has left us with the unhealthy nation we have now.
Your Lordships’ House has heard me speak often on chemicals regulation, an issue raised this morning by Greenpeace, counting the more than 100 pesticides likely to have been sprayed on your Sunday roast, seven of which are banned in the EU. We might at least see some positive steps there, but I come back to the health of the population—our ageing population. Why is there nothing about this in the Speech and the Government’s presentations of it? Healthy life expectancy in the UK—the average number of years a person can expect to live in good health—fell by two years in the past decade. Healthy life expectancy has now fallen below the state pension age of 66 in more than 90% of areas. In more than one in 10 local areas, healthy life expectancy is below 55 years.
What else is missing? Those who advocate for animal welfare are rightly fuming at one gaping hole. As recently as December 2025, Defra published its Animal Welfare Strategy for England, a document that sets out a series of commitments intended to raise standards, strengthen protections and position the UK as a global leader in animal welfare. In its 2024 election manifesto, Labour promised to
“improve access to nature, promote biodiversity, and protect our landscapes and wildlife”.
Perhaps the noble Lord, Lord Livermore, can tell me more about the Government’s plans to deliver on this, given they are missing from the Speech.
I also have to mention a report out this week about the state of our universities from the Education Select Committee. It warns that the Government have no clear plans for universities facing insolvency or protections for students who could be caught in that trap. The committee says that 24 universities are at risk of insolvency and closure within 12 months. Many of them, of course, are economically crucial to the communities in which they are placed.
Finally, there are a couple of other missing things. I declare my vice-presidency of the National Association of Local Councils. The Government promised to act on remote and hybrid council meetings, but that is lacking, as are measures to strengthen the framework for standards.
I started with local government and I return to it as the levels of government that, with adequate resources and power, could strengthen many of the foundations of our society—the health of our people, the supply of healthy food, the support for vulnerable children and adults—and rebuild our society in a way that Whitehall, at least under successive legacy parties, has demonstrated it is unable to do, and which this Speech, whether the legislative programme is delivered or whether we have a whole new one in a few weeks, is certainly not going to do.
Lord Kirkhope of Harrogate (Con)
My Lords, it will probably come as no great surprise to the House that I have a slightly different view about Europe from my noble friend Lord Jackson, who spoke a little while ago. As the co-chair of the All-Party Parliamentary Group on Europe, I can think of few questions more central to the prospects for economic growth in this country than the state of our relationship with the European Union and how we choose to take it forward. I am therefore pleased that the King’s Speech includes legislation to ease the passage of future negotiations with European partners. The European partnership Bill deserves some support, but it will require very careful scrutiny to ensure that it delivers positive outcomes without engendering fresh divisions on this clearly still sensitive area.
The European Union remains, by a considerable distance, our largest trading partner. In 2024, exports of goods and services to the EU were worth some £358 billion. However, analysis suggests that, as a result of our leaving the union, by 2025 our GDP per head was between 6% and 8% lower than it otherwise would have been, with business investment lower by something in the order of 12% to 18%. In financial services alone, more than 440 firms have moved part of their operations from the United Kingdom to the European Union, taking with them assets of roughly £900 billion. That is shocking, as these are jobs and economic opportunities that we simply cannot afford to lose at a moment when national growth has recently been so anaemic.
In that context, I very much welcome the announcement on Monday that the Government intend to place Britain once more at the heart of Europe, and I assume that the proposed legislation will be designed to help that. But the admittedly positive rhetoric of this Government can be no substitute for tangible progress on so many of the opportunities that arose from last year’s UK-EU summit, following the welcome reset in those relations achieved by Rishi Sunak with the Windsor Framework. We are still waiting to see tangible results on a youth experience scheme, on a full sanitary and phytosanitary agreement for our farmers and food producers, on the mutual recognition of professional qualifications, and on a proper resolution to the challenges currently facing our touring artists and musicians. There are references to these matters in the proposed legislation, but time moves on and the Government must move further and faster if British businesses are to feel any meaningful relief from the costs and bureaucracy with which they have been saddled post Brexit.
This will of course require compromise on both sides. We must be honest with ourselves and with the public about the trade-offs required and what closer co-operation might entail in practice. The agreements being negotiated on sanitary and phytosanitary measures, on the linking of our emissions trading schemes, and on participation in the EU’s internal electricity market will all, by common agreement of both sides and as accepted by the Government in their proposals, require a measure of dynamic alignment with relevant EU rules. That is in principle a sensible course, provided it is undertaken with due regard to this country’s regulatory autonomy and the proper authority of our Parliament.
Of course, if we wish to benefit from a new partnership with our European neighbours and the considerable economic advantages attached to this, we also have to be prepared to make a fair contribution to the relevant EU budgets, as the Norwegians and the Swiss have done for many decades. We should be honest and up front with the electorate on that. But, equally, the Commission and the member states must also demonstrate a positive and pragmatic approach, and show willing to offer exceptions to dynamic alignment rules where it is sensible to do so. Importantly, as the noble Lord, Lord Bridges, alluded to, they must make changes at their end to effect the deregulation and reform that the EU itself patently requires at this time.
There remains, however, the question of how this should all be done. Any proposals to align ourselves with the European Union by way of Henry VIII powers, without this House having a full and ongoing say, are in my view simply wrong in principle. As the Supreme Court set out in the Miller litigation, leaving the European Union required the consent of Parliament. It is therefore only right that what are in my view welcome attempts to move closer to Europe should also be subjected to the fullest parliamentary scrutiny, with proper respect for our sovereignty. To be fair, the new proposals suggest parliamentary scrutiny at all stages, but the Minister must, even at this early stage, give clear assurances that this will include all proposals and both primary and secondary legislation.
However, even as we pursue these important opportunities, there are other and more immediate routes by which we can co-operate with our European partners for significant economic gain. We should now explore them without waiting for more legislation. The Comprehensive and Progressive Agreement for Trans-Pacific Partnership is one such route. The UK is already part of this expanding platform, representing some 15% of global GDP, and the prospect of the European Union itself acceding to that agreement could give considerable opportunities for us all. As Mark Carney, the Prime Minister of Canada, rightly observed at the World Economic Forum earlier this year, it is incumbent upon the middle powers to act together, and there could be no more obvious expression of that principle than for the EU and the CPTPP to draw closer. This would allow us to rebuild our relationship with our fellow European democracies while harnessing the dynamism of the Indo-Pacific, and it would signal a profound shift in the architecture of world trade towards the interests of the middle powers. The two blocs should be encouraged to streamline the unnecessarily cumbersome accession process, our own having taken some eight years, and to prioritise long-term prosperity.
We are now facing serious geopolitical challenges and, as recent events have made clear, the era in which we could rely completely on our closest partner across the Atlantic for support has patently been put in doubt. Our security and economic prosperity now lie more directly with Europe. It falls to this Government to make sure that the forthcoming UK-EU summit is more than simply another exercise in warm words and offers of legislation at some point in the future. We must deliver the substantive reset that British businesses, British workers and the UK’s national interests urgently require, and we must deliver it quickly.
Lord Stoneham of Droxford (LD)
My Lords, it is a pleasure to follow the noble Lord, Lord Kirkhope, whose views I have listened to over the last nine years with great care and whose views today I totally agree with. For the past nine years, I have been able to make speeches in the House only when somebody has not turned up or no one has wanted to do it at 7 pm on a Thursday. It is good to speak again, and to regain my freedom.
My overriding interest, particularly as I have been going around the doorsteps over the last couple of months, is to think through what we have to do to counter populism and Reform in this country. The sorry tale of static living standards, low growth and poor productivity in our national economy is one of the compounding factors that has contributed to the problems we now have in the national scene. It must be the objective of the Government to get more growth, and they must succeed.
The Government have to focus on growth. We heard from the noble Lord, Lord Robertson, in a very strong speech today, about how our national defence security needs to be funded. We need to pay for an ageing population and a proper system of social care. We need to recover and reverse the decline in services and infrastructure, which low growth has imposed on us, and we have to find a successful response to climate change.
A lot of policy areas have been covered today, but I would like to concentrate on just three that are important to the growth objective in the long term, medium term and short term. In the long term, the Government’s industrial strategy and the various other reports that they have done are key. It requires commitment, energy and determination to see these documents implemented. Above all, it needs, if possible, the continuity of Ministers completely committed to them to make our products and our services more competitive.
I would like to draw attention to one aspect that I think needs particular attention. We are a great nation of innovators and entrepreneurs. We have world-class innovation, but it too often fails to capture the economic returns from this work. Before scale is reached, our ideas are often traded on and taken overseas. I welcome last year’s report, Bleeding to Death: the Science and Technology Growth Emergency, by the Science and Technology Committee, and indeed the Government’s response to it. Our world-class universities have to be a major source of this potential, and our world-class capital markets need to be responsive to the needs of high-growth technical companies. Government also needs to be sensitive and supportive—and, frankly, we need cross-party support for these long-term policies to be enacted.
My own area of Hampshire, with its wonderful universities, its medical schools and its Farnborough air facilities and research, has the potential to repeat what it was in the 1930s, with its aeronautical industries, before the German bombers dissipated it. We have almost achieved our local government reorganisation, but now we need to get on with the appointment of the new councils and a mayoral election, which the Government have postponed to 2028 in their latest pronouncements. For goodness’ sake, let us get on and do it at the same time as the new council structures are introduced or voted on next year.
The medium-term objective I want to talk about is our re-engagement with Europe. I am not sure what the government legislation will achieve, but I am obviously supportive of it. Brexit was a tragedy as far I am concerned, and as far as the country is concerned. I have yet to hear today people talking about the benefits we have got from it. Some 30% of the country are still against it, so we should not underestimate the difficulties of re-engaging and taking public opinion with us. One of the results of our debate today, as we heard from noble Lords, Lord Lilley, Lord Redwood, Lord Jackson and Lord Frost, is that we need independent assessment of the advantages and disadvantages of these benefits. We are going to have constant going backwards and forwards. I know where I stand and Iu agree with what the noble Lord, Lord Kirkhope, said. My party, and others, advocate prioritising going into the customs union, because it is possibly the easiest thing to do politically. However, in my view, the benefits of the single market are greater and, if there is political pain, we might just as well go for that, rather than the customs union on its own. Setting that objective might also make it easier for us not to be seen by Europe as trying to cherry-pick.
Finally, I turn to the short term, and I declare my interests in land and housing. It has not yet been revealed, but the information that seems to be coming from the housing sector on housing starts in the first quarter of this year is pretty serious. The problem is going to get worse with the rise of interest rates, if the Iran war continues, and we will then be in an emergency situation for all those who have been trying to restore the housing sector and provide the houses that young people want. A number of housebuilders are already beginning to bail out of buying land. There is some indication that some could collapse, and we need the Government to look at this very carefully. Social housing could be used in downturns in the construction industry, and at the moment the housing sector is blaming construction costs and lack of viability, and it is cautious about development. The Government may have to intervene, and I hope they will use this opportunity to offer to buy private unsold stock to sustain the industry, which otherwise could be a major setback but will now provide an opportunity to expand the amount of social housing in this country.
I commend to the Government three areas of priority: turning innovation and entrepreneurship into scale, restoring our rightful role in Europe, and acting promptly in the housing sector to avoid calamity and job losses in construction. They cannot afford to delay or bluster; they must act decisively.
Baroness McIntosh of Pickering (Con)
My Lords, I am delighted to follow the noble Lord, Lord Stoneham of Droxford, who has so recently been released from his duties as what you might call the enforcer of policy on the Liberal Democrat Benches. It was a joy to hear his contribution. I welcome the opportunity to speak in the debate on the humble Address, and I congratulate the proposer and seconder on their opening contributions. I was honoured to have coincided with the noble Baroness, Lady Crawley, in our time together in the European Parliament, and pay tribute to her work both there and here. I was also hugely impressed by the contribution from the noble Lord, Lord Roe of West Wickham, who has served this country with great distinction both in a military capacity and, more recently, in the fire service. We look forward to many contributions from him.
I find myself in agreement with much of what was said in the last two speeches. I particularly want to build on the points raised by the right reverend Prelate the Bishop of Newcastle, in particular, the challenge of the rural economy and the contribution that farming and food production can make to economic growth in rural areas.
This presents both a challenge and an opportunity. Obviously, we have seen the challenges of energy supply and the challenges to farming from the ongoing hostilities in Ukraine and the Middle East, and, more recently, the clean energy proposals put forward by this Government, which are primed to take 10% of some of the best farmland out of production. I believe they should be looking at alternatives such as nuclear, and I welcome the contribution nuclear will make going forward.
I would like to pause for a moment and look at the European partnership Bill. Like many others, I have been following the SPS agreement and the negotiations. I hope that this approach will lead to something more along the lines of the frictionless trade we were promised at the time of the referendum. Other promises, noble Lords might recall, included to “take back control”. In areas such as immigration that certainly has not materialised, but a lot could be achieved on an ongoing basis through the SPS agreement, and by building on that in the new European partnership Bill.
I ask the Minister whether we could look in particular at BTOM—the border target operating model—which was introduced relatively recently. Are the Government going to review and refine that as part of this agreement? We were very late in putting checks in place on imports of food and drink, plants and horticulture from EU countries, whereas our producers have obviously experienced delays and barriers arising from the checks and balances imposed on imports of our goods. I would be very interested to know whether there is scope for further welcome refinement of what is a relatively new development.
I would also like to understand the thinking behind the Government proceeding on the basis of dynamic alignment in an agreement with Europe, and whether other farming competitor countries, such as New Zealand, have achieved an agreement with the EU of equivalence on SPS and imports and exports. Our farming community would have greatly favoured that, and I hope the Government will keep an open door in this regard. There is a coalition of agreement across the House that equivalence is a better way to proceed. Dynamic alignment would mean automatically having to follow EU rules, which could retain barriers that it is the will of the Government and this House to remove; we do not wish to see new barriers put in their place. Therefore, I voice a vote of confidence in the Government’s negotiating skills—that we can look more to equivalence than dynamic alignment. That would greatly help our farmers and food producers.
In noting Government’s clean energy proposals—we are going to have another clean energy Bill—I hope that they will seek to protect the countryside as we know it. It is unacceptable that those who live in the countryside are going to face massive installations, such as in the very village in which my noble friend Lord Kirkhope lives, and where my goddaughter and niece also live. The little village of Scotton, and adjoining Lingerfield, are facing all sorts of horrors: two solar farms and a huge battery installation, married to the pylons and overhead power lines that will have to transport this into the grid. I make a plea to the Government in looking to the grid not to obsess about our national grid. Why are we not looking at a local grid, making sure that the electricity and energy generated can be consumed as close to the point of production as possible? That would be a much better way forward.
I turn to the water Bill. I welcome the Cunliffe review, the subsequent water White Paper and the proposals that were outlined in the King’s Speech. However, I add a word of caution: there are challenges in merging the economic regulation of the water sector and environmental regulation into one body. What I think is clearly missing since we left the European Union is the role of the European Commission, backed up by the possible referral to the European Court of Justice, which had real teeth in relation to underlying infringements by any water company. That, together with privatisation, has dramatically changed the way the water sector cleaned up the act of both our rivers and our seas in the 1980s. I am delighted that that took place under a Conservative Government; it is an achievement of which I, for one, am personally very proud.
I hope that the Government will take the opportunity of the water Bill also to give water companies the tools they require to do the job. I welcome the reference to looking at pre-pipe solutions—that is where it is going woefully wrong at the moment. All the emphasis seems to be on saying, “Let’s deal with the water—let’s call it sewage—coming out of these four- or five-bedroom homes”, whereas we should look at pre-pipe solutions. Planning applications should be granted only if there is capacity for the waste and sewage to be disposed of safely.
Let us give water companies the power to do the job. Let us make them statutory consultees, particularly in major planning applications of all kinds, including for data centres and major housing developments. Let us look at more natural solutions to flooding and water resilience and to making sustainable drainage systems mandatory. Let us have more slow-the-flow water schemes, such as we currently enjoy in Pickering, which has prevented Pickering and the downward communities from flooding.
I look forward to scrutinising these Bills as they appear before the House. I lend my support to what the Government are trying to do, but I believe that we need to look at, for example, areas of equivalence, rather than dynamic alignment, to make sure that we have joined-up thinking on farming, food production and energy supply.
Lord Murphy of Torfaen (Lab)
My Lords, I noticed earlier that two of my predecessors as Secretary of State for Wales talked about steel. I will touch briefly on that, although it is not the thrust of what my remarks will be about.
It is almost 60 years to the day that I attended a great rally in Sophia Gardens in Cardiff, when Harold Wilson, the Prime Minister of the day, addressed us on steel nationalisation. He announced that it would be one of his first tasks—it happened in 1967—and a great roar went up from the very large Labour Party crowd in Sophia Gardens. Those were the days when we had those crowds there. That reminds me that steel was hugely important, not only for Wales but for our whole country—it was integral to it. I am not sure that I agree with everything that the noble Lord, Lord Hunt, said, but I agree with his emphasis on doing something about steel, and I very seriously agree with the Government on what they are going to do in their Bill.
I will now touch on the European Union Bill. We have had some very colourful and spirited contributions from the other side of the Chamber on this issue. Whatever side one took in the Brexit debate, the reality is that 20-odd miles away, 350 million people live and trade with us, and therefore it is the biggest trading partner we have. It simply does not make sense that we do not trade with it in the best way we could. It makes sense that we should ensure that the SPS arrangements for food and drink are in place for the industries and businesses that want those changes to come about. My successor as Member of Parliament for Torfaen, the right honourable Nick Thomas-Symonds, is doing a very good job in that regard.
The same is the case with Erasmus. Does it not make sense that we have Erasmus+ for our young people in all parts of the United Kingdom? Of course it does. Therefore, those proposals are hugely important.
My noble friend Lord Robertson made, as always, a spectacularly impressive speech about where we are with regard to defence and our global position. I hope that the Government listen to him and his wise words. He told us that the landscape in our world has changed dramatically over the last number of years, and so has the landscape with regard to the 11 million of us who live in devolved Administrations in the United Kingdom. When I was the Secretary for Wales and for Northern Ireland, there was a Labour Government in Cardiff, in London and in Edinburgh. There was no Labour Government in Northern Ireland. There was direct rule. So I negotiated with myself on those particular issues.
That was an important factor in those early days, but the world has changed. The world changed last Thursday in Wales, of course, as Plaid Cymru is now the governing party in Wales. In Scotland, after 19 years, the SNP still rules there. Northern Ireland, which I will come to in a second, is rather different. But in Scotland, which voted to remain in the European Union, the Scottish National Party is a pro-European party. Scotland, under a Labour Government and indeed under an SNP one, benefited enormously from its membership of the European Union. Wales benefited enormously. We had the Objective 1 money coming to us all those years ago, which brought billions of pounds for investment in Wales. Wales voted to leave. But the Plaid Cymru Government is a pro-European Government.
In Northern Ireland, 56% of the people voted to remain. But, as your Lordships know, there is deep division. Generally speaking—not exclusively—nationalists voted to remain and unionists wanted to leave the European Union. The problem we then had when Brexit came was: how can you reconcile the terms of the Good Friday agreement, which was firmly based on a common membership of the European Union? The Irish and British Governments were partners in the Union. It meant that we could negotiate that agreement on very different terms from what had happened many years before. Objective 1 money came to Northern Ireland—billions of pounds again. Social Fund money but particularly, of course, peace money came to Northern Ireland. That meant that the nationalist and the unionist communities had to negotiate at local level in order to acquire that money and it helped the peace process.
So, when Brexit came, what could you do? The problem then was that Ireland remains in the European Union and the United Kingdom has come out of it, so we had the protocol, which was not very good. It was a start but, in fact, had there been at that time, and there was not, the institutions in Northern Ireland, both the Executive and the Assembly, I believe they could have solved the issue of how to deal with it themselves. As it was, it was imposed and did not work. Then we had the Windsor Framework, which was better, certainly—although, in between, the institutions had collapsed, which brought the Windsor Framework about. But that has been proven to be very complex, with huge bureaucracy for business and there is a democratic deficit.
Last year the Government asked me to do a review of it, which I did, and I made 17 recommendations. The Government accepted them. It means that we are going to have a one-stop shop in Northern Ireland so that people can overcome the bureaucracy. In addition, steps have been taken to deal with the democratic deficit. When we look at this EU Bill to come and the issues surrounding the democratic deficit which people argue will occur if we adopt it, you need look only to Northern to see whether we can adopt some of the new proposals to ensure that we ameliorate those difficulties. I say to my noble friend the Minister from the Treasury—as always, the Treasury is very important—that although money has come to Northern Ireland as a result of my review, we also need more money to ensure that those recommendations are put into practice, and that all political parties in Northern Ireland are involved in it.
My other plea to the Government, on the negotiations that are to come with the European Union Bill, is the involvement of all the devolved Administrations in that issue. Even though there are an SNP Government in Edinburgh and a Plaid Cymru Government in Cardiff, it means we have to take the people along with us, and there are very different views—of course there are. All I know is that only benefits can come from this Bill. If industry wants it, if business wants it and if the academic community in our country wants it, surely it must be a good thing, and so it has my fullest support.
Lord Fuller (Con)
My Lords, since July 2024 the wheel has fallen off our economy. Tax revenues and growth have fallen, and as a result of choices that Labour has made. The consequences have blighted lives and made us more vulnerable to external shocks. Living standards have stopped improving, while we are less secure at home. While government spokesmen line up to blame Donald Trump, Brexit, the Tories, climate change, farmers, bankers, billionaires—everybody—last week the public pinned the tail on the donkey. They know who is to blame, and Labour must now grasp that it is nobody else’s fault but its own. Blaming everybody else for the way in which our neighbours are faring less worse than ourselves is not a strategy; it is a delusion.
The gracious Speech spoke about the cost of living, but renters’ rights have hiked rents to new highs and reduced supply so that the few with impaired credit or difficult circumstances will not get a roof over their head. The Government signal their intention to stop the scourge of a whole generation sitting idle, but the truth is that their Employment Rights Act prevents youngsters getting their first Saturday job or employers taking a chance on a graduate making a start on their career.
Everybody wants to do more for the high street, but Labour’s business rates reforms have driven high street clubs and restaurants to oblivion, and now new tourism taxes will reduce demand for hospitality for an industry that is already on its knees. No, Donald Trump or Brexit has not done this; at every step, well-meaning, honest intentions have made things worse. That is because, for all the worthy measures announced yesterday, Labour’s basic ignorance of economics is the golden thread that stitches together one policy disaster with another.
Working people who pay their taxes become disproportionately poorer. Unemployment is at a five-year high. Inflation is showing all the signs of running out of control. Gilts are at 20-year highs. Labour’s choices have caused this. Labour told us it would tread more lightly on our lives in pursuance of the economic growth that would make us richer. Now we look forward to more state intervention, market distortions and counterproductive interferences that chill investment, raise uncertainty and make Britain less attractive to do the business that pays for the state.
The Government should be supported in their desire to help people upskill but, like the worst sort of apprentice, Labour is not learning on the job. There is continued denialism around the Laffer curve and tax yields. Some 0.1% of taxpayers pay 10% of all the tax raised, while 10% of taxpayers contribute nearly a third of state revenues. It would be rational to tempt more of them to set up here so that working people bear less of the taxation burden. Instead, they are chased away. It is just crazy.
Worse, Labour has chosen a casual disregard for the deindustrialisation that flows from the highest energy taxes, a cost borne by our factories and chemical industries, all of which makes us more reliant on strangers and makes the promise of AI investment a pipe dream. We have seen a class war on private schools that costs more than it saves, attacks on the farmers who feed us, attacks on country sports followers who keep those country pubs going in the winter, and the cancellation of drivers of twin-cab trucks who get up in the morning to work for us all. Labour has not got the message on the cost of living, with new fertiliser taxes that will increase the prices of bread, beer, biscuits and the weekly shop, unleashing an inflation disaster, just at the moment the EU is stepping back from these fertiliser taxes.
All these simplistic ideas have been introduced without concerns for the second-order consequences of economic reality or fiscal responsibility. Everything in the gracious Speech is grounded in ignorance of how business and trade generate wealth for us. Now we get to the hub of the matter. Honestly held views do not trump economic realities. Wishful thinking is admirable. It is not a crime, but it is no substitute for proper economic understanding. The trouble is that the Labour Benches do not know the difference between the profit and loss and the balance sheet, between income and capital or between assets and revenue. To them, “It’s just money, and we’ll have that”. This financial ignorance—especially in the other place—and the economic illiteracy of the Front Bench are tragic.
Quite simply, they do not understand the economics. They may not like it, but not believing in the bond market that channels the kindness of strangers to our shores and enables us to pay for our pensions, defence and education—denial of that simple truth—is ignorance. I only wish that His Majesty had announced a measure that would enforce mandatory economic lessons for the Front-Benchers. I live in hope. Then we would not see ourselves being hog-tied to the EU, which wants to erect a high tariff wall to keep everybody else out, one in which we do not even have a say ourselves. Protectionism will not make us richer or grow our economy in a month of Sundays.
Who knew that if you made it more expensive to hire youngsters, youth unemployment would rise? Who knew that if you taxed family businesses that employ millions and whose assets have been grown in trust for the next generation, fresh investment will collapse? What about the effect of new, unadvertised changes to charitable legacies? They will decimate gifts in wills to good causes—a direct harm to those who Labour professes to represent.
I turn to the gracious Speech. The idea of shaping markets sounds attractive to the untrained ear, but the state has a poor record of picking winners. An active state sounds like introducing more risks and distortions that harm investment and damage growth. When the Government talk to business about partnerships, it is time to reach for your pocketbook. Governing is much more than the pursuit of petty grievances, pet projects and sixth-form obsessions. At some point, the penny needs to drop that the people who pay their taxes are tired of being milked. Creating 300 Civil Service jobs at the GB Energy quango in Aberdeen is less important than protecting the 1,000 jobs a month in the granite city that are disappearing. Placing a carpet of solar panels on our best and most versatile land makes our grid structurally unstable and damages our food security. The callous hounding of former soldiers in their twilight years harms our defences. All the breakfast clubs in the world are not going to repair the problems that Labour has created for itself.
The gracious Speech was an opportunity to weave an economic golden thread through a Government in a hurry, to provide the right incentives for those who just want to work hard and improve their lot while rolling out the red carpet for those around the world who will co-invest in our future and contribute their taxes along the way. In so doing they would provide the fiscal headroom to pay for some of the initiatives in that speech—reducing humanitarian need, building social housing, revisiting Hillsborough, fighting extremism and imposing ID cards. Those are their choices. But without a complete understanding of what makes the economy tick, without appreciating the power of incentives, without understanding that unleashing the creativity, innovation and optimism of the British people will make us richer in every sense of the word, the Government are doomed to fail.
We get to the dénouement. With the resignation of the Health Secretary and media reports of the Cabinet marching on Downing Street, I ask the Minister whether the Labour Party would be better off spending the next six months going on mandatory economics training rather than fighting each other in a way that makes our nation poorer while making the gracious Speech and this debate irrelevant.
Baroness Gill (Lab)
My Lords, yesterday’s gracious Speech set out the Government’s agenda, focused on growth, investment, security and restoring Britain’s standing in the world. It comes at a moment when the country urgently needs honesty about the economic choices that we face and the inheritance that we got from the last Government. I found it rich to listen to the noble Lord, Lord Fuller, because we are correcting the mess that they left us with. The Government deserve credit for recognising that Britain cannot prosper through isolation. Recent trade agreements with India and the Republic of Korea and stronger engagement with the UAE are positive steps that will create opportunities for British businesses.
But we must also level with the public: those agreements are not large enough to compensate for the weakened trade that we have with Europe, our largest market and closest economic partner. For years, the British public were sold a narrative that leaving the European Union would automatically unleash growth and prosperity. Instead, over the last six years, Britain has experienced weaker growth, lower business investment, reduced exports and stagnant productivity compared with many similar economies. The consequences are no longer abstract economic arguments; they are directly felt in people’s lives.
Small businesses that once traded freely across Europe now face customs checks, export paperwork, VAT complications and regulatory barriers that they simply cannot absorb. Food exporters have lost markets. Manufacturers have faced delays and rising supply chain costs. Independent retailers importing goods from Europe have had little choice but to pass increased costs on to consumers, and ordinary families have paid the price: higher food prices, labour shortages, increased transport costs and supply chain disruptions have all contributed to pressures on household budgets during an already severe cost of living crisis. Britain outside the EU has not become more economically dynamic; in many ways, it has become more economically constrained.
This debate is now about more than economics alone. It is about Britain’s place in an increasingly dangerous world. The war in Ukraine has fundamentally changed Europe’s security landscape. Russian aggression has reminded us that peace and stability can never be taken for granted. At the same time, the growing threat posed by Iran through regional destabilisation, proxy conflicts, cyber threats and support for extremist groups demonstrates how interconnected modern security challenges have become. These crises and the threats we face were eloquently articulated by my noble friend Lord Robertson. It is important that this House and the Government take his speech and comments very seriously, because Britain cannot afford strategic isolation in this environment.
Outside the European Union, we are no longer fully integrated into many of the defence, industrial, procurement and strategic initiatives shaping Europe’s future security architecture. That matters not only militarily but economically. Defence procurement, advanced manufacturing, cyber security, energy resilience and technology investment increasingly depend on large-scale European co-operation.
No serious country can confront these challenges alone. Intelligence sharing, sanctions enforcement, energy security, defence manufacturing and technological resilience all require deeper collaboration with our neighbours. The idea that Britain can go it alone in a world shaped by Russian aggression, instability in the Middle East and intensifying global competition is not realism; it is a dangerous illusion.
This is why the debate must move beyond simply managing Brexit towards correcting its long-term consequences. Rebuilding a closer partnership with Europe is no longer optional; it is essential. Ultimately, Britain should be prepared to make the case for rejoining the European Union.
The economic case is overwhelming. Rejoining the EU would restore Britain’s access to the single market and customs union, removing barriers that currently damage trade, investment and growth. It would also strengthen supply chains, restore investor confidence and make exporting easier for British businesses once again.
Independent economic analysis has consistently suggested that closer integration with Europe could increase UK GDP by several percentage points over time, adding tens of billions of pounds to the economy, increasing tax revenues, improving productivity and supporting higher wages and living standards. That would mean lower costs for businesses, cheaper imports for consumers, renewed investment in science and manufacturing, and greater opportunities for creative and young people to work and study across Europe. It would also mean Britain once again helping shape the decisions that affect our continent, rather than standing outside reacting to them.
None of this, I believe, weakens Britain globally; it strengthens us. A Britain with strong European partnerships is more influential with weakening allies such as the United States, more attractive to investors and better able to compete in a rapidly changing world. Yesterday’s gracious Speech acknowledged that Britain needs growth, stability and renewed international leadership. The challenge now is to match that ambition with honesty and courage to admit where mistakes have been made, reject the politics of isolation and pursue a serious new relationship with Europe that restores prosperity and strengthens our security. The greatest danger facing Britain today is not change; it is refusing to change course when the evidence is clear for all of us to see.
Baroness Ludford (LD)
My Lords, like others, I wish to speak about EU partnership, and I very much agree with the remarks by the noble Baroness, Lady Gill. As my Lib Dem group leader, my noble friend Lord Purvis of Tweed, said yesterday,
“it is a strategic priority that we make real progress for a reunion with our close allies in the customs union and single market, and then EU membership, which remains our long-term objective”.—[Official Report, 13/5/26; col. 17.]
The reason for this clear and ambitious Liberal Democrat aspiration is that it makes sense for both our security and our economy, so it is very hard-headed.
On the geopolitical and security aspects to be debated next Thursday, I repeat my own view, for what it is worth, that Prime Minister Starmer has done a good job on Ukraine and in placing the UK as a firm member of a security partnership in Europe, with maybe a new European security council. Thank goodness for that, given the dangerous and unpredictable state of the world, as others, including my noble friend Lord Strasburger, pointed out.
But in trade and economic affairs, progress is pretty slow, while the need is pressing. It is absurd for some to say that voters have to be stuck with a decision made a decade ago. It is a striking example of where the boldness that dissatisfied Labour voices are calling for is missing. Labour’s red lines, including on free movement, are not in the national interest. Free movement in Europe, especially now, with more prosperous economies in central and eastern Europe than there were 20 years ago, means much lower immigration than we had under Conservative Governments. We have opened the door to immigration from around the world.
I entirely agree with the noble Lord, Lord Liddle, that the Brexit damage dwarfs the tiny benefits of any post-Brexit trade deals. We are familiar with the figures: Brexit has reduced our GDP by up to 8%—between 4% and 8%—which means a loss per capita of £3,700 and around £90 billion in foregone tax revenue. This is a Brexit black hole.
As far as I know, there are no specific proposals in the Government’s plans for easing of trade in services, but perhaps the Minister could correct me if I am wrong.
My noble friend Lord Strasburger rightly stressed the overlooked importance of the creative arts sector bashed by Brexit. The topic of services is also raised by the Law Society, which points out that the reset has so far failed to produce any proposals for legally binding arrangements to address services trade, such as legal services, for which the EU is a £3 billion market for the UK. It wants action on business mobility as well as youth mobility, and mutual recognition of professional qualifications. I would be interested to know whether there is anything in the pipeline on these and whether there is any prospect of progress on civil judicial co-operation, improving access to justice and consumer protection for British and EU citizens. We also need progress on police and criminal co-operation, as my noble friend Lord Fox said in opening. Civil legal alignment is very relevant to the economic debate we are having today.
Top of the list for a new deal with the EU is the food and drink trade, with the mouth-twisting sanitary and phytosanitary agreement. This would represent a significant improvement in slimming Brexit red tape by removing routine physical checks and the burden of certification, documentation and registration. I heard the chief vet on the radio—I think it was this morning, but it was a bit early—pointing out the importance of tackling threats of diseases, such as swine fever, which this SPS agreement could provide because the UK would get access to EU databases and intelligence that will aid detection.
It will be important not only for UK-EU trade but also for trade, particularly in agrifood, within the UK, as it will align the rules in GB and Northern Ireland and help to address the hesitation we have heard about on the Northern Ireland Scrutiny Committee of GB firms to do business with those in Northern Ireland. The removal of the “Not for EU” label through the interaction of the Windsor Framework and an SPS agreement will also be very helpful. I applaud the work that the noble Lord, Lord Murphy, who spoke earlier, did in his important review, and I am glad that the Government have accepted its recommendations.
The Minister, the noble Baroness, Lady Anderson, referred earlier to the work in Intertrade UK of the noble Baroness, Lady Foster. I know from my membership with her of the Northern Ireland Scrutiny Committee how well qualified she is for that vital work. Last night, I attended a reception at the Irish embassy for Trade NI, which brings together retail, hospitality and manufacturing businesses. Its document points out that, while all economies have been impacted by inflation, Northern Ireland businesses have had to absorb higher post-Brexit trading and logistics costs linked to the Windsor Framework, particularly those importing goods from Great Britain. One of its priorities is to mitigate supply chain and post-Brexit cost pressures, including certification and logistics burdens. However, an SPS agreement will still leave the customs declarations and VAT requirements that all UK exporters to the EU have to contend with—hence the value of what the Lib Dems are calling for in the immediate, which is a customs union with the EU, which, as my noble friend Lord Fox stressed, could turbocharge growth.
I think I heard the noble Baroness, Lady Anderson, refer earlier to upholding British standards. The EU partnership Bill will provide a mechanism for the UK to dynamically align with EU law sector by sector: not only those already being worked on but perhaps other future deals. The upside here is free-flowing, frictionless trade. The downside is that we will have to take our instructions by fax from Brussels without having a say. I think anyone who has ever been involved in EU legislative decision-making, whether as an MEP like me or in the Council of Ministers, will find that hard to swallow. Despite the fashionable claim of decision-shaping, any British influence in contributing thoughts and suggestions will be modest. As the saying goes, if you are not at the table, you are probably on the menu.
I will accept that, while the UK has to make a start somewhere in reversing the disaster of Brexit, this undemocratic lack of a voice cannot last long: nor can Henry VIII powers. But, while it lasts, we have to strengthen UK influence in EU bodies, boosting the role and capacity of UKMis, our mission in Brussels, and relations with the European Parliament and its committees, as well as with the Commission the Parliamentary Partnership Assembly, with input from business and civil society. We need to think carefully about how Parliament will be involved in this process. The other place needs to think about its arrangements, because it currently does not even have a European Committee.
Derogatory remarks have been made about regulation, but the noble Baroness, Lady McIntosh, made an excellent point about the effectiveness of EU enforcement. The only reason we have the Thames Tideway “super sewer” is that, with a push from the European Parliament following a petition from me 20 years ago, the Commission took infringement action and the Court of Justice ruled. Compare that with the feeble performance of Ofwat and the Environment Agency in allowing ongoing sewage discharges.
The King’s Speech yesterday referred to maintenance of stability. I hope we are going to get stable government going forward that is able to carry through an ambitious programme of EU reset.
Lord Shinkwin (Con) [V]
My Lords, my noble friend Lord Hunt of Wirral mentioned value for money. Taxpayers’ and businesses’ confidence to contribute to economic growth, whether through the consumption of goods and services, investment or job creation, must go hand in hand with the confidence that all government policy is developed and evaluated through the lens of value for money. Confidence in each are two sides of the same coin. At a time when the cost of living is, as we have heard during this debate, increasing inexorably, it is surely even more essential that taxpayers know that their money will not be wasted.
I hope we can all agree that, however many noughts there are, the principle remains the same: value for money, transparency and trust matter. That is why I am introducing a Private Member’s Bill on value for money in the policy area where, it could be argued, value for money has never been more important: disability. At a time when the disability employment gap remains at around 30% and the increasing cost of disability benefits threatens to bankrupt the very welfare system on which so many depend, my Bill will enable transparency, specifically in relation to what government departments are spending on employer disability membership organisations. It will provide for scrutiny of both the criteria used to safeguard value for money and the extent to which those criteria have been met.
At the moment, it is far from clear what those criteria are and whether they are being met. The Business Disability Forum is a case in point. This is an organisation which, according to analysis by Professor Kim Hoque at King’s College London and Professor Nick Bacon at Bayes Business School of more than 132,000 job adverts and survey data from more than 160,000 employees, is failing to deliver better outcomes for its members, whose members are less likely than non-members to offer guaranteed interviews in the recruitment process to disabled applicants, and none of whose members offer Braille, and just 3.6% of whose adverts offer reasonable adjustments on account of disability. Moreover, BDF members are proportionately no more likely to employ disabled people than non-members, and disabled members employed by BDF member organisations report poorer job-related mental health and lower job satisfaction than those employed by non-members.
Yet, bizarrely, according to the same research, government departments are among the highest contributors to the BDF, with the Cabinet Office spending £26,400 for its 2024-25 partnership-status membership, and the Department for Transport spending £25,200 of taxpayers’ money as well. In 2025 alone, the BDF earned £652,580 in government contracts. That is more than double the previous year. I would be grateful if the Minister could explain both how that represents value for money and how such an arrangement does not qualify as borderline corruption.
I do not use that term lightly and I am not accusing the Government of corruption, but I worry that they have got themselves into an invidious position whereby they are giving taxpayers’ money to an organisation—the BDF—that is at the same time seeking to influence government policy. Yesterday’s failure by the Government to honour, in the King’s Speech, their manifesto promise of legislation to mandate ethnicity and disability pay gap reporting by organisations of more than 250 employees provides a prime example of the BDF’s pernicious influence in favour of the status quo, to the disadvantage of both disabled people and the taxpayer.
Indeed, the research I have mentioned shows that a transparent mandatory reporting system would not cast BDF members in a particularly favourable light. Furthermore, the introduction of generic rules for organisations with more than 250 employees could also result in a dramatic fall in BDF’s income, given that it relies on charging members for bespoke solutions. The sustainability of its business model depends on the status quo and while this happens, the taxpayer foots the bill.
As a Conservative, I subscribe absolutely to the wisdom of, “If it ain’t broke, don’t fix it”. But no one could possibly argue that disability employment ain’t broke and doesn’t need fixing, urgently. It may not be a panacea but, on the basis that what gets measured gets done, mandatory reporting would help by injecting transparency and consistency into how we incentivise and reward employers to harness the untapped talent of disabled people and people from minority ethnic backgrounds, through recruitment and, crucially, career progression, to everyone’s benefit. It is a win-win situation, which is why Dianne Greyson, the founder of the #EthnicityPayGap campaign, and I are deeply disappointed that the legislation was not in the King’s Speech.
In closing, and on a cross-party basis, I ask the Minster to say what message he thinks the legislation’s omission sends to disabled people and people from minority ethnic backgrounds about this Government’s commitment to extending equality of opportunity. I ask him to confirm that its omission in yesterday’s King’s Speech does not preclude such a measure being introduced in this Session.
Lord Sikka (Lab)
My Lords, it will take a long time to undo the damage done by 14 years of Conservative rule. However, that task has been made difficult, as the Government’s ambition on so many fronts is not matched by actions. I welcome the attempts to build a closer relationship with the European Union, though that will not fully undo the damage inflicted by Brexit.
The energy resilience proposed by the energy independence Bill and the increase and extension of the windfall tax on electricity generators from 45% to 55% promised by the electricity generator levy Bill are most welcome. Can the Minister explain why there is no comprehensive plan to curb profiteering by energy companies? Since 2020, their UK operations have made profits of over £125 billion. More than 120,000 people in this country die in fuel poverty every year. Surely that deserves some kind of government response.
I have misgivings about the highways financing Bill, which will promote the dreaded private finance initiative, albeit under another name. Previous PFI schemes resulted in a £6 repayment for every £1 of private investment in infrastructure. The Government can fund projects at lower costs through borrowing, or issue public bonds, but such alternatives are ignored. The 129 pages of background notes miss out the word “manufacturing” altogether, even though every £1 of manufacturing activity supports a further £1.80 through multiplier effects. Can the Minister explain the Government’s plans for self-sufficiency in semiconductors, rare earth minerals, bricks, cement, auto, medicines and other essential items, to increase economic resilience?
The regulatory consolidation offered by the enhancing financial services Bill is welcome, although I am concerned that the reforms are framed around words and phrases such as “competitiveness” and “regulatory simplification”, which are buzzwords for deregulation. So far, they have facilitated the abolition of the post-2008 crash constraints and weakened consumer protection. The Government’s briefing notes make no mention of the social costs of deregulation. Can the Minister explain why there is no attempt to regulate private equity, which is devouring hospitals, care homes, veterinary services, supermarkets, and water, energy, retail and other businesses?
The so-called industry-friendly reforms of the Financial Ombudsman will weaken consumer protection, and there is complete silence on how UK institutions cover up fraud and financial abuse. We are still waiting for an investigation into the 1991 closure of the fraud-ridden Bank of Credit and Commerce International. I have asked questions in this House about the failure to tackle HSBC after it was fined $1.9 billion in the US in 2012 for facilitating money laundering. The then Chancellor, George Osborne, and the regulator secretly urged the US authorities to go easy on the bank. The response to my questions has been ministerial silence. On numerous occasions, I have referred to the HBOS frauds, which date back to between 2002 and 2007. Regulatory inertia and ministerial indifference have denied compensation to victims even after the courts established criminality. What good is an ombudsman system when Ministers and regulators sweep financial crimes under the carpet?
There are mixed messages from the Government about nationalisation. I welcome nationalisation of British Steel, but why are other steel producers not to be nationalised? Tata Steel also receives a subsidy. The Government, in return, have not taken an equity stake or a seat on the board. Why is this free money being given to companies for distribution to their shareholders?
I welcome the railways and passenger benefits Bill to establish Great British Railways and unite track and train management under a single body. However, why is no attempt made to bring lucrative freight and rolling stock companies into public ownership? These rolling stock companies have a profit margin of 41.6%. There is absolutely no justification for that. People are being told that the nationalisation of rail passenger services and British steel is in the public interest, but so is the nationalisation of water, energy, mail, social care and other essential services. Why are those things off the political agenda altogether?
Sustained economic growth, which is the Government’s aim, cannot be achieved unless people have good purchasing power, but 25.3 million people live in households below the minimum income standard. A major cause of this is the erosion of the workers’ share of gross value added, or GVA. In 1975, workers’ share of GVA was 71.9%. By 2025, despite economic growth in the intervening years, it had declined to 59.7%. There is a huge transfer of wealth from labour to capital, and it has coincided with lower rates of corporation tax. The headline corporation tax rate in 1974 was 52%, compared with 25% now.
The massive increase in capital’s share of the economy has not resulted in higher investment in productive assets. In 2025, the UK invested 18.9% of GDP in productive assets, the lowest figure among G7 nations. For the last 30 years, the UK has been at or near the bottom of the OECD league of investment. Inevitably, productivity and economic growth is low. Can the Minister explain how the Government will boost workers’ share of GVA and why there is no reform of corporate governance and short-termism in the City of London?
People’s purchasing power could be boosted by progressive taxation, but that is not on the agenda. The poorest 20% pay a higher proportion of income in direct and indirect taxes compared with the richest 20%. At the same time, capital gains and dividends are taxed at lower marginal rates than wages. How do you expect people to buy things? Problems are compounded by the freeze on income tax personal allowance. In April 2021, the Conservative Government froze the annual personal allowance at £12,570. The Labour Government continued with it. If the personal allowance had increased in line with inflation, it would today be £16,048. Due to the freeze, someone earning £20,000 will pay an additional £696 in income tax in this tax year alone. Adherence to regressive Conservative policies by this Government cannot deliver resilient households.
Overall, the Government have some good policies, but in the absence of transformative policies it will be difficult to declare sustained economic growth and resilient households. I urge the Government to change course.
Lord Tyrie (Non-Afl)
I was hoping I could agree with something there, but I am not sure I can, so I have decided to say only that I very much hope that the noble Lord will at least find something in my speech he can agree with.
I want to address the fact that we are becoming a poor relation among advanced countries, and I will say something about how we can improve Britain’s economic performance. But, rather than make a lot of detailed suggestions, I will make only one substantive point: we have been here before several times, and we got out of the mess. We were here, in a way, in 1945, and we were certainly here in the late 1970s—actually with worse problems—and we found answers: Britain’s economic performance improved dramatically in the 1980s and 1990s.
In order to find the answers for the 2020s, a number of conditions need to be met. First, the penny needs to drop among the political and bureaucratic establishment, and among the wider public, that the UK is in very serious difficulties. Secondly, we need a workable recovery plan, and considerable intellectual energy needs to be deployed by politicians to find some plausible answers to the problems. That will occur only once the penny has dropped. Thirdly, politicians will need to have enough courage to implement some pretty radical policies and to secure at least acquiescence to them from the public. None of those conditions is currently being met.
Such evidence as can be found comparing the mood of the 1970s with now suggests that, although the public are depressed about the desultory economic performance of the UK and are worried about the cost of living crisis, none of that is at 1970s proportions at the moment. The recent reversals of welfare reform by the Government tell us something about the lack of courage at the top—points being made openly now by other parts of the Labour leadership.
Labour’s manifesto scarcely amounted to a bold recovery plan. I note that Wes Streeting recently told Lord Mandelson in a WhatsApp message, which has been leaked, that the Labour Party had
“no growth strategy at all”.
I do not know whether that will become more relevant in the weeks ahead. On that last point, if people think I am making a party-political point, I say that this Administration is only as short of intellectual capital as those of the catastrophically short-termist Administrations of the Cameron and Johnson years. They have a lot to answer for.
But the rot set in earlier. Successive Governments—Conservative, coalition and Labour—have all been managing the legacy of the Brown inheritance, and far more than is generally appreciated. What do I mean by that? I mean that policy was built, or became built, around the notion that growth could be stimulated by technocratic redirection of both public and private investment by the Government and by government incentives, with the benefit of independently administered regulation of very large parts of the economy. This was, and I think it still is, believed by many to leave plenty of scope for politicians to focus on redistributive objectives. All that should take place within a relatively permissive public expenditure framework, and while tolerating the complexity that comes with deploying and extending a tax system deeper and deeper into fulfilling redistributive goals. The Cameron-led Government brought public expenditure back under control, but for the most part it failed to challenge most of the rest of that consensus.
So what might signal a break with the consensus? The main challenges are coming from the Greens and Reform. They are right to rail against the new economic establishment that now clusters around that consensus, but the solutions that they are coming forward with, such as they are, are incoherent and inchoate, and the numbers do not add up. On current evidence, the concern must be that, if they were elected, they would represent an escape from reality and a postponement of the reckoning.
I have been theorising up to now. How could what I am saying be reflected in practical policies? As a country, we have been struggling towards something of a consensus on a few of them, such as the need for a radical reform of planning, although it has been too little and too slow, and the need to rejoin the single market or something similar. There has been some dispute about that today, but it is worth pointing out that a large proportion of those who voted for Brexit thought that we were going to retain very close links. There is some agreement on the need to deploy tough regulatory tools to stimulate competition. But I do not think enough has been done there.
Several essential policies are still considered unacceptably radical. We need tax cuts, accompanied by deep simplification of the tax system, and it will have to be paid for by reductions in welfare—few dare talk about that. A number of policies would be considered political suicide—for example, the need to encourage immigration in parts of the care and health system, and to facilitate the retention of large numbers of very high-quality foreign graduates who are currently leaving once they get their degrees. Trump is busy pushing them out; surely we should have a better policy for trying to persuade them to come here. Many people also quietly agree that an unacceptable price is being paid for the crash programme of fossil fuel reduction, but there is no consensus on the policy implications of reversing it or reconsidering it.
I have named four things there: tax simplification, EU renegotiation, tolerance and acceptance of fossil fuels for the foreseeable future, and targeted accommodation of immigration. None of these is a magic bullet, but they will all make a contribution. There is very little appreciation in the political establishment of the need for a radical shift towards them, nor of the need to jolt expectations among a wider public. Plain speaking is in scarce supply. AI’s jolt to the economy and public expectations will be much bigger than anything that we are seeing delivered by the Government, who seem, extraordinarily, immobilised by their own very large majority.
Having said all that, we can see that Kemi Badenoch is doing some plain speaking—and plain speaking is not just coming from the right. Here is an extract from a recent publication of the Labour Growth Group, I think out this week or last week:
“The planning system rations land. The energy system rations power … Regulation protects incumbents while crushing challengers”.
I think both Kemi and I would agree with all that, even if we would not agree with all the solutions in that document.
I will end where I began, but I will put it differently. The UK’s problems derive from politics, and so do the solutions. It is possible, fundamentally, to improve Britain’s economic performance. We are not prisoners of the global growth rate, as has been implied on one or two occasions in this debate. It has been done before and it can be done again. What is required is a full appreciation of the problem and the guts to implement radical supply-side solutions. We are a long way from that and, until we get there, the UK will continue to struggle on in the slow lane of middle powers.
Lord Moynihan of Chelsea (Con)
My Lords, this week the Prime Minister—if indeed he still is the Prime Minister; I am not sure—abandoned his red lines to stealthily reintegrate with the EU, to change our laws to its laws, with the UK having very little say in what those laws will in future be. The direction of travel of the Government’s reset is not just a betrayal of Brexit; it is a blundering destruction of our future economic opportunities. The long bond today trades 10% lower than it did at any time during the Truss Administration.
Brexit has not, as claimed by the noble Lord, Lord Liddle, who is not in his place—
Lord Moynihan of Chelsea (Con)
Oh, I apologise—the noble Lord has moved further back. Brexit has not cost our economy, an idea that was ably demolished by my noble friends Lord Redwood and Lord Frost. Indeed, the OBR, in its claim that there has been a diminution, published my 10-page letter to it rebutting its claim—but, interestingly, made no attempt to respond to it.
Here are the facts. The City of London, our key strength, has flourished, as even the Economist, with some embarrassment, admitted. That is because we have diverged from the EU. Our key tech sector has flourished, thanks to avoiding the EU’s disastrous AI Act. The UK’s precision breeding Act has given us a genuine first-mover advantage in gene-editing, with high-lipid barley, low-asparagine wheat, climate-resilient camelina, cancer-beating tomatoes, and many more in the pipeline. We have escaped over 13,000 new regulations and 12,000 new EU directives which have been created since we left.
Contrary to the noble Lord, Lord Strasburger, who is in his place, this country does not want to rejoin the EU. When voters are asked whether they want to retain control of our laws and retain the pound, and, above all, retain control of our borders, you get the same solid rejection as we got 10 years ago. This Government are wrong to sense electoral advantage in crawling back to the EU.
Let us look at what is already planned and agreed for this reset. British fisheries have been handed away to the EU for 12 years, the enormous cost of which was not even assessed. The efficient Turing degree programme is abandoned for the far less useful Erasmus short-term travel scheme—and we pay £815 million a year for that change. There will be dynamic alignment with EU rules across food, agriculture, the electricity market and carbon pricing, with its court, the European Court of Justice, adjudicating on any dispute—we can guess how those rulings are going to go.
The EU, eager as ever to exploit our needy gullibility and rook us for astonishing sums of money, is apparently demanding a further £1 billion a year for just this first set of dynamic alignment agreements, yet those agreements, mostly consisting of concessions and payments by us, will be a negative for our economy. The Government say, unconvincingly, that dynamic alignment will benefit the economy by £5 billion, while the Growth Commission says that it will cost us £15 billion.
The chief alleged positive is the SPS agreement, removing the need for export certificates that cost £120 to £250 each, at a total of some £70 million a year. However, those fees are charged by us; we could remove them at any time, but we do not. It is almost as if someone wants us not to, so as to push us in the direction of rejoining. The entire value of all UK agricultural exports is £12.8 billion, which is less than half of 1% of the economy. We will pay £1 billion a year to save £70 million and claim a mysterious £5 billion benefit from that—we should ask the Government to pull the other one.
Norway and Switzerland pay nothing to be in the electricity market, nor should we pay anything. However, that is not what it is about. Joining means assenting to the EU’s requirement that 42.5% of all our energy must come from renewables by 2030. Our current target is for renewables to be 100% of electricity, which is only 20% of our total energy usage, by 2030, so our current target is less than half of what we will have to sign up to. It is an impossible new target, and, as Kathryn Porter has shown and as we have seen in Spain, the more renewables in the mix then the more brownouts and blackouts.
As for the carbon tax deal, it is mainly for six commodities: steel and iron, aluminium, fertiliser, cement, electricity and hydrogen. Dynamic alignment will mean that we no longer pay carbon tax on exports of those products to the EU. However, our exports of those commodities to the EU are nugatory, and we will be required to charge a carbon tax on our much larger imports from the rest of the world. Our competitive position will decline and the EU’s will improve—well done.
Worse, if we enslave ourselves to existing and all future EU rules in these areas, the entire UK economy in these sectors will be required to adhere to these rules. All we produce in these sectors, whether for UK sales or for export to the rest of the world, must follow these rules. What are these rules? For example, there are totally different, although no better, packaging rules—so changing packaging will be a huge expense for British producers across the economy. There are also pesticide residue rules, based not on scientific evidence but on the kindergarten-level idea of the precautionary principle, so UK farmers will have to change what pesticides they all use.
Above all, unless the Government secure a carve-out—of which the chances are extremely low, particularly for this Government—our world-leading position in gene editing will disappear. Bang goes the finest and most productive gene-editing cluster in Europe, of 100 or more companies, supported by eight world-class research institutes. Any products developed there will not be allowed in the UK—the cluster will collapse.
In yet another huge hit to the economy, changes will also apply to all the goods we import from the rest of the world. The UK’s Fresh Produce Consortium forecasts
“thousands of additional and unnecessary border delays, considerably more inspections, more paperwork and port congestion”.
Restrictions on Moroccan cucumbers, Indian mangoes, South African citrus, US sweet potatoes, Californian almonds, and on and on, all add £400 million to supply chain costs. The UK consumer, who will pay for all that in inflated prices, may make their views on that known at the next election, do you not think? Dynamic alignment will clash with our new trade deals such as CPTPP. Not being able to comply with both, we will necessarily end up being taken either to the WTO court or to the European Court of Justice—more cost, more woe and more confusion.
The problems with our economy do not come from Brexit—they come from net zero, as my noble friends Lord Lilley and Lord Redwood so clearly explained, and from the Government’s willingness to make not working more attractive in this country than working. Remove just those two problems, and develop further the regulatory freedoms that Brexit allows, and we can flourish.
Finally, how can we be happy to hear this week that this inept Government now plan to double down on their already disastrous surrender plan to the EU, in the vain and economically illiterate hope that doing so will prove either popular or beneficial?
Lord Bruce of Bennachie (LD)
There goes Liz Truss’s trusted adviser—I think we all know how that turned out.
In 2024, Labour won 411 seats on 33.7% of the vote and a turnout of 59.7%. Last week, the results were fragmented across six or seven parties. There were gains for Reform, the Lib Dems and the Greens in England, and heavy losses for Labour and the Conservatives. Reform was actually down compared with last year, although you would not know it from the comments.
What is clear is that first past the post in the present circumstances is likely to produce distorted results, leaving most voters dissatisfied with the outcome. That in itself possibly explains why the turnout is down. In Scotland, we had Scottish Parliament elections, and turnout was down there too. The vote share for the SNP, Labour and the Conservatives was sharply down. Reform and the Lib Dems were up, and the Greens were marginally up. That election in Scotland was widely described as a “meh” kind of election.
My take—and I was knocking on quite a lot of doors—is that most people wanted to see measures to turn Scotland around, to address declining education standards and waiting times in the health service, to provide care support, to focus on the weak economy and to address the cost of living. Independence was not the issue, and the fact that the SNP is absurdly claiming a mandate is a distraction from its monumental failure on all the issues for which it actually has direct responsibility.
The SNP’s incompetence in government will result in a massive financial, unfunded deficit, with alarming consequences coming down the track in Scotland. Something as important as breaking up the UK needs an honest and open debate and overwhelming support from the population—there is no such support, no open debate and no idea of where it is heading.
However, one economic issue that was live in the Scottish debate was the energy industry. The offshore oil and gas sector is in natural long-term decline and renewable energy investment is increasing; however, this is anything but a zero-sum game. The jobs created by renewable energy are not as numerous or well paid as those created by oil and gas, nor are many of them interchangeable. In this debate, Reform—let us be honest—are aggressive climate change deniers and would reverse the renewables policy and destroy the jobs that are being created in that sector. The Conservatives also prioritise oil and gas over renewables and would delay, or possibly abandon, net-zero targets.
The fact is that, thanks to the Iran war and the actual pace of transition, the UK is facing higher costs and increasingly relying on imported gas, mostly from the USA and a security-compromised Middle East, when we still have significant economically recoverable reserves of our own. There is a contradiction here. We have signed a contract with Norway to bring gas from its gas fields through our gas fields, which we will apparently not exploit. I have been a long-term supporter of policies to achieve net zero—I was writing pamphlets in favour of renewable energy in the 1970s—but I have always agreed that the transition will take time, both in terms of jobs and investment and in terms of energy diversification. Net zero means just that—even when achieved, there will still be oil and gas in the mix. It makes no sense, especially faced as we are now with the insecurity of dependence on the Middle East, to accelerate the rundown of our own naturally depleting resources and to increase imports from Trump’s America, which may also prove uncertain as there are calls for America to keep it at home.
We are currently losing around 700 jobs a month, and major operators, such as our own BP and Harbour Energy, are talking of complete withdrawal from the UK continental shelf. I repeat: BP is talking about withdrawal from British oil and gas. A Government who are struggling for growth should think very carefully about policies that would destroy jobs and investment. I hope the Minister will address this issue, because there is growing pressure on the Government to do so. Briefing on the energy independence Bill says the aim is to:
“Manage existing oil and gas fields for their lifetime through legislation to introduce Transitional Energy Certificates, and show climate leadership by meeting the manifesto commitment not to issue new licences to explore new fields”.
There is therefore scope for enhanced recovery from existing fields by reducing the tax burden and allowing associated drilling—that is compatible with the Government’s policy. Without such changes, the lifetime of existing fields is likely to prove short. The argument that because world oil prices determine the price we pay, there is no benefit in production ignores energy security, balance of payments benefits and the retention of jobs and investment in the UK instead of exporting them to the USA and elsewhere.
On another tack, as a member of the International Relations and Defence Committee—our illustrious chair is sitting opposite me—my information on the impact of the war in Ukraine and the depleted state of UK defence has been pretty sharply brought home to me. I am astonished that defence and security do not have a higher salience in the debate in Scotland, when we know that Russian ships, subs and planes are cruising our seas and airspace all the time. The contract to build frigates for Norway on the Clyde, as well as for the home fleet, is surely positive, especially when the Scottish Government struggle to build ferry boats. But the idea that closing our air and marine bases—which is presumably what an independent Scotland would do—would make Scotland safer is mind-bogglingly naive. The defence investment plan is long overdue. It is urgently needed if we are not to signal weakness to our enemies, and it needs to focus on the capacity we have and that we can quickly develop.
That leads me to my final point, which binds everything together: reconnecting with the EU. Leaving the EU was a monumental error that weakened the UK and the EU. Had the vote taken place when the Ukraine war was under way and Trump was ensconced in the White House, I am certain that the result would have been different. As it is, we have been left bobbing around in the uncertain waters of the north-west Atlantic. Scotland voted to remain in the EU, but many have not recognised that the world is much changed. For the UK, including Scotland, the way back is not clear or straightforward; I accept that—our standing in the world has diminished. But asking for a reset while ruling out rejoining will sharply limit what can be achieved. The EU will not want to go down the Swiss route of myriad and ever-changing treaties and rules. Of course we should strengthen our relationships with Canada, Australia, New Zealand, the Commonwealth and others, but we should be clear that we accept that the reset is to set in train a process for Britain to become a fully participating part of the European Union.
For our own domestic reasons, we also need to adopt a reformed and more proportional electoral system. If we do not, we could end up with a Government with a strong electoral majority with under 30% of the vote. I doubt if the EU would have confidence in any agreement while that is a real possibility. Otherwise, we will be outsiders paying heavily for the privilege of trading on terms we have no part in shaping. EU negotiators will surely reach a point of saying, “Thus far and no further unless you rejoin”.
The situation is quite clear. We have a voting system that will give confidence that the UK can rejoin and stay within the EU, and we will recognise that unless we take a clear and decisive decision, we are going to drift in the north-west Atlantic for the foreseeable future.
Lord Horam (Con)
My Lords, before I contribute to this extremely interesting debate, I will pay a small tribute to those who are connoisseurs of these debates, and recognise the late Lord Skidelsky, who died unexpectedly and sadly last month. I felt particularly close to him because, although he was born in Harbin, Manchuria, and I in Preston, Lancashire—rather a long way away—we were both born in the same month in 1939. We both went to Cambridge University in the same period, he to read history and me, economics. Of course, he is most famous—apart from his contribution to this House—for his three-volume history of the life of John Maynard Keynes, the greatest economist in history in my humble, perhaps Cambridge-oriented opinion. I see a certain dissent on this side, but we can disagree about that. But, of course, the noble Lord gained perhaps most joy from his final book on the subject, written with his usual impish humour after the financial problems of 2008, The Return of the Master. He made his last speech from the Cross Benches in our last economic debate, and he enjoined all economists to use less jargon and to speak more directly and simply to the people, so they could understand what this important subject was all about. He will be greatly missed.
On the subject of today’s debate, I think all parties agree that the Government’s fundamental view that economic growth is central, which is what they hoped to achieve when they came in and which all parties hope they will achieve, is absolutely right. The problem is that if you state that then all political common sense and political history clearly indicate that you have to pursue it with single-minded determination. That is the essence of it.
I see the noble Lord, Lord Burns, sitting on the opposite Benches. He was at the very centre of the Treasury when Margaret Thatcher was Prime Minister, and he will recognise that it was not entirely a smooth process. There were many critics of monetarism at the time—the noble Lord, Lord Moynihan, is shaking his head behind me again—but the central fact is that she persisted. There were no U-turns: “The lady’s not for turning”. She carried on despite all the difficulties—I think the noble Lord, Lord Redwood, would agree with me on this—and emerged triumphant to set the basis for 20 or 30 years of sensible economic growth, ending Britain being the disaster of Europe. That is what it requires.
Just to prove my essential British fairness, take the Blair Government. They came in, were handed a much better hand by the Major Government and in all respects realised that they had to assert their own economic competence. What they did, very sensibly, was not to rush in with particular socialist or semi-socialist Bills and so forth but to accept the Conservative spending programme, which they did for two years, and only in the third year did Gordon Brown think that it was sensible to increase national insurance contributions to pay for a big increase in National Health Service funding. That was an entirely sensible and professional political point of view.
This time, on the other hand, the Government rushed in immediately with increases in the National Health Service, workers’ rights pledges, an inheritance tax raise and a gamut of Labour proposals which, in their own terms and on their own grounds, made some sort of sense, but they are all anti-growth and anti-business. Therefore, they could not in any way be reconciled with the Government’s central objective of going for economic growth.
To bring things up to an international level and up to date, look abroad. The social democratic Governments of the world can do things properly by economic growth. Anthony Albanese, the Prime Minister of Australia, sensibly accepted the Liberals’—that is, conservatives’—proposals on immigration, which solved their problems in a way we tried to do over Rwanda but which was ditched by the incoming Labour Government. Building on that, he has cut taxes for middle-class people in Australia on the grounds that this improves incentives, and they really need to get their economy growing. Not only that, he has doubled down on the expansion of oil and gas and fossil fuels in Australia, of which Australia is a big supplier. It is quite clear that a Labour Government somewhere in the world is capable of doing sensible things.
Equally, in Canada, Mark Carney, who leads a Liberal Government, has in fact resiled from a previous proposal to increase capital gains tax in order to improve entrepreneurial skills and encourage entrepreneurship in the Canadian economy and improve its business prospects. He too has doubled down on the exploration of oil and gas in Alberta and elsewhere in Canada.
That is just a sensible thing done by a left-of-centre Government. The sad thing is that we appear to have a left-of-centre Government here who are totally incapable of getting a group of people together—we do not know whether it is the present group or some alternative group—who can do the sensible things that even a social democratic Government could do.
So there we are. The things we need to do are not rocket science. We need to do something about energy pricing. Energy pricing is destroying not only the old industries but the new industries, such as databanks. We need to reduce welfare and link it to work. We need to reduce the size of the Civil Service and look at Civil Service pensions. As the noble Lord, Lord Blunkett, said in an article in the Guardian—I do read the Guardian occasionally, in the Library—we need a massive programme to get employers to take on apprentices at scale, not with the puny, ridiculous scheme that we have had for the last few years under Labour and Conservative. This needs a big improvement.
This country has real potential. Unfortunately, we have a Government who are unable to see that the fundamental thing, to refer to Lord Keynes again, is to release the animal spirits of business. Then we might make some progress.
Lord Pitkeathley of Camden Town (Lab)
My Lords, I pay tribute to the noble Lord, Lord Horam, not only for his long service but for the delicate way in which he stepped around the debate between the monetarists and the Keynesians—a debate I always enjoy observing. I pay tribute to some other contributions. The noble Lord, Lord Stoneham, reminded us of the world-class skills and reputation that we have in this country, which we must value. There cannot be many in this House who have as good an understanding of our relationship with the EU and its benefits as my noble friends Lord Murphy and Lord Liddell. I also pay tribute to my noble friend Lord Barber, who reminded us that public value and delivery matter a great deal. I am also sure that we will all continue to heed the wise words of my noble friend Lord Robertson.
I always approach debates on economic growth with a certain humility. As a musician, regeneration chief executive and now a Member of your Lordships’ House, I have managed to experience three industries not universally associated with rapid productivity growth. However, one of the advantages of your Lordships’ House is that we are sometimes able to take a longer view than the immediacy of daily politics allows elsewhere. From that perspective, it seems to me that many of the challenges facing Britain today are cumulative rather than sudden: the productivity weakness, underinvestment, uneven regional growth, fragile infrastructure and declining public confidence that have developed over time.
That is why I broadly welcome the strategic tone of this King’s Speech. Having spent much of my professional life working in and around regeneration, business improvement and economic development, I have seen at close quarters both the strengths and frustrations of the British economy. We remain an extraordinarily creative and entrepreneurial country, as many have noted today. But too often we make it unnecessarily difficult for that potential to flourish consistently. I therefore welcome the emphasis on economic security, industrial resilience and infrastructure investment.
I also, along with many in the House, welcome the proposed European partnership Bill. Without revisiting old arguments, it is surely sensible to seek the most constructive and friction-reducing relationship possible with our nearest trading partners—particularly for the benefit of smaller businesses, which are often least able to absorb complexity and uncertainty. Similarly, the focus on late payments and protections for small firms may appear technical, but such matters have significant cumulative effects across the wider economy.
I also hope that we will continue to think carefully about the implications of technological change, especially AI, of which many in the House are already acutely aware. Britain should indeed seek to lead in innovation, as well as look at long-term economic resilience, which depends not simply on technological capability but on an awareness of public confidence, social cohesion and widespread opportunity. If citizens feel excluded from the benefits of economic transformation, political consent for change itself will weaken. For that reason, I particularly welcome the Speech’s emphasis on opportunity, skills and inclusion, alongside growth. Economic policy succeeds most sustainably when people feel that they have a meaningful stake in the future being created.
No legislative programme can resolve every challenge immediately, but I believe that this Speech reflects a serious attempt to address long-term structural issues with greater realism and strategic intent. It is in that spirit, and in support of my noble friends the Ministers, that I support the Motion.
Lord Kempsell (Con)
My Lords, I listened with great interest to the many excellent speeches in this debate and I commend, in particular, my noble friends Lord Jackson of Peterborough and Lord Moynihan of Chelsea for their outstanding contributions.
However, it is to another speech that I return, because I have been turning it over in my mind: the speech on 5 July 2024 that the Prime Minister gave when he stood on Downing Street and delivered his first statement in office. If noble Lords cannot recall it word for word, I do not blame them—the reset button has been hit many times since then. In that first address as Prime Minister to the British people, the current resident of 10 Downing Street—or at least he was when I checked a few moments ago—set out his agenda for the country. When I reread those words, it dawned on me that he made barely any mention of the economy. Given how the Government have performed over the 678 days since, that oversight now makes perfect sense.
Under Labour, the British economy is like a mirror reflecting the worst instincts of the Prime Minister: it is slow to move, overly biased towards an outdated rulebook and now dangerously close to implosion. As noble Lords have reminded us throughout this debate, since 2024, growth has been relentlessly flat, and the IMF has now downgraded the UK’s growth forecast to 0.8%, which is the largest downgrade in the G7—and all this despite the Government claiming that growth would be its watchword and its number one priority. The Prime Minister himself once famously said, “Growth is the answer”, but under this Government it has become only an ever more pressing question.
Hard-working people across the country today see Westminster at its worst. The civil war consuming the Labour Party is more than a story in this postcode district. Outside these confines, Labour chaos is causing real damage to what was already a struggling and fragile economy. Among 6 am Britain—the strivers and risk-takers who build businesses, create jobs and strive for a better life for themselves and their families—they hoped for answers from the gracious Speech, but, again, it has transpired that the Government have nothing to say to them.
The situation is at breaking point for my own generation. Under this Government, unemployment has increased and the OBR says that it will get worse. For young people, the unemployment rate is now a scandalous 15.8%, up 2.4% since Labour came to office. My contribution to this debate is on behalf of the 1 million young people not in work, education or training, a statistic now worse than that of Spain or Greece—the economies that we used to point to as the international high watermark of youth unemployment. The crippling rise in employers’ NICs stole their entry-level jobs. The very opportunity that noble Ministers refer to as one that this Government have tried to create is in fact being crushed by them. That means no first job on the high street to get your working life off the ground, no casual work to fit around your studies and too few high-quality apprenticeships—for example, for families who simply cannot afford university education.
The ITEM Club forecasts that the labour market will weaken significantly this year, and the British Chambers of Commerce finds that 41% of businesses are worried about business rates, up 7% on last year. It is no surprise to me at all that business investment is down, decreasing by 2.5% in the last quarter of 2025.
As we know, on the macro side, borrowing costs are surging: this Government are paying £305 million a day just to service the cost of debt interest. This week, gilts hit an 18-year high thanks to No. 10’s instability, higher than in any other G7 country—all this from the party that told the electorate that
“the grown-ups are back in charge”.
When he was elected, they called the Prime Minister “Mr Rules”, but as he reaches the end of his time in office, we can say only that he is “Mr Chaos”. What is the answer presented by the Government in the gracious Speech? What is the plan set out today? It is to waste endless hours of parliamentary time in this forthcoming Session on unwanted EU integration, turning away from the dynamic and high-growth partner economies that are traditionally strengthened by their trade with the UK and back to the outmoded plans of the past.
I urge Ministers to intercede with their colleagues in the other place and ask them to bring an end to the chaos and instability that we see today, to put jobs and prosperity first, to get the economy motoring and to let growth flower. If they do not, we can conclude only that the economic legacy of this Government will be the same as of every other Labour Administration in history: higher taxes, higher borrowing, higher unemployment and lower growth. Will it be the case that in the desk drawer in No. 11 there will be another note left behind saying, “I’m sorry, there is no money left”? If that is the case, we will be able to conclude only that, once more, Labour has done it again.
Baroness Kramer (LD)
My Lords, my noble friend Lord Fox has had to leave, as the cold lurgy got him; undoubtedly, it will now get me over the weekend. The core point of his speech—the significance of and need for ambitious and strong leadership now—is almost the central point of the debate we have had today. I hope that the Government are going to take that on board. The impact of the turbulence we face domestically and overseas on the cost of living for ordinary people is really quite devastating. The Government have to deliver bold action in response. I am not sure that this King’s Speech meets that test.
I say to the Government: stop pussyfooting in the European partnership Bill and seize the opportunity. The noble Lord, Lord Livermore, has talked in the past about the 6% to 8% scarring of the economy in 2025. I have seen the numbers and I am with him, but I will leave him to argue that case with the Conservatives, who do not appear to have taken note of them.
I also want to point to the speech made by my noble friend Lord Strasburger, who talked about the specific damage done to one of our most important industries—the creative industry—by Brexit. I could bring industry after industry before this House to make exactly the same case. To those who think that Brexit has not been a huge damage, I say: go out and speak to industry after industry. I defy anyone to continue to make that statement.
Lord Lilley (Con)
My Lords, does the noble Baroness speak to the NFU, which does not want to rejoin Europe because it believes that the divergences from EU rules since Brexit have benefited it enormously? Doing away with those divergences would cost £600 million to £800 million a year just for PPPs, and £500 million a year for fisheries.
Baroness Kramer (LD)
We may be speaking to the people at the NFU, but I suggest that the noble Lord go out and start speaking to individual farmers. He will find that the agricultural sector has been really badly hit by the processes that we have been through. It also underscores the inadequacy of trying to fill this just with trade agreements. I listened to a lot of the ideas that came from the Conservative Benches; if you added them together, you would be lucky to get 1% to 2% growth, even if you were able to implement them in a positive way. That does not anywhere near offset the 6% to 8% damage. Again, I will leave the Minister to continue with that argument.
This is an important time to be much more ambitious on the European front. Of course I support youth mobility schemes, the recognition of professional qualifications and the reduction of red tape, but this is the time when we need to be going for a bespoke customs union and building the trust, as well as building the British economy, that will enable us to be on a trajectory towards the single market and eventually to rejoining. If I look at just the customs union, I think it is widely accepted now that the impact of that would put £25 billion more into the UK economy every year. That money could bring some relief to our debt numbers, could help us deal with the need for additional investment in defence and could in turn help struggling people.
Missing from the King’s Speech is action to turn around the sad trajectory of small businesses. I applaud the late payments Bill, but I say to the Government that it is time to grasp the nettle and completely revise business rates to keep small businesses viable, and it is time to force the energy companies to offer competitive pricing to small businesses. I do not know what is holding the Government back from referring that industry to the CMA because it is clearly not offering competitive options to small business, and we are paying a huge price for that. A scheme for apprentices is very important, but it is meaningless if we keep losing small businesses because they are the ones that can take on apprentices and they are often the only real source of jobs in our most deprived communities.
What about access to finance for small businesses? The British Business Bank has made a commitment to support community development banks and financial institutions, which is laudable, but the Government have given it pennies to work with. A sector that can lend at best £150 million in the UK lends more than $300 billion in the US; it is the complete backbone to small business and provides the secure foundation for its economy. Will the new legislation allow the National Wealth Fund to step into that space and let us properly grow the community development investment financing sector?
These Benches will scrutinise very carefully the enhancing financial services Bill. It has not been much discussed today but I notice that, in their briefing, the Government—this counters other messages that we heard from the Conservative Benches—finally recognise that the financial sector has suffered quite severely because of Brexit and has been stagnant while other areas have been growing. It is salami slice by salami slice. The EU is building capacity in financial services across a network of cities, often in partnership with British firms. People talk fluently now of Lloyd’s of Brussels, LCH has replaced the term London Clearing House, and LCH Paris is becoming a major force. This will become far worse if in June 2028 the EU decides to limit its grant of equivalent status to UK central counterparties. The risk is not just that we lose trillions in derivatives clearing business but that the financial operations that collocate with CCPs could make that call to collocate elsewhere. Neither the EU Bill nor the financial services Bill seems to deal with any of this.
The enhancing financial services Bill intends to enable credit unions to expand. We have called for that for some time and it should help with financial inclusion, but we need a more far-reaching strategy, including clarification of the future of banking hubs. Consolidation of the PSR and the FCA can be successful if it is done with care, but I am much more concerned about plans to scrap much of the certification regime that sets the standard for senior management recruiting and accountability in the banking world. Before the certification requirements were brought in, senior bankers simply hired their friends. I was shocked, in going around to HR department after HR department, to discover that they did not even require CVs or check references if someone was referred by a senior banker within their own organisation. That accounts for a lot of the failures that we have had to deal with historically.
I also suggest that the Members here who question the importance of the certification regime look at the evidence that the Parliamentary Commission on Banking Standards got from senior bankers. The changes I can see to the certification regime weaken individual responsibility and return to the concept of collective responsibility. It was on that basis that bankers were shocked that they should have been expected to call out any kinds of concerns or failure in management, or carry the can for what went wrong. This is an industry that genuinely needs good regulation. I do not care if it is streamlined—that is always an advantage—but we have to recognise the importance of regulating this industry.
I am equally concerned about changes to ring-fencing. The co-mingling of retail and investment banking was a major factor in the 2007-08 crisis. The free money from retail deposits fuelled casino-type investment. Retail banking dropped credit standards, mis-sold products such as PPI, and switched to short-term funding. If anyone thinks that reducing the ring-fence will help the financing of small businesses, think again. The major banks have restructured their operations and staffing in ways that make cash-flow lending impossible except to large clients.
I cannot see how this Bill tackles risks outside the recognised institutions. I have been truly concerned with the Government’s love fest with private credit, which we saw during the passage of the Pension Schemes Bill. Private markets play an important role in financing productive investment, but these markets, which now exceed $18 trillion, as Sarah Breeden, Deputy Governor of the Bank of England, said,
“have not yet been tested, at that scale and complexity, by a broad-based macroeconomic shock in a higher-rate environment”.
There is little transparency, underwriting standards are weak, the loans are sliced and diced, and liquidity is very limited. Private credit is now deeply wound into the banks, insurance companies and pension funds through lending arrangements. Interconnection matters. Add in potential bubbles in tech and AI valuations, and the play by hedge funds now in the gilts markets, and it becomes evident that risk has not gone from the financial sector, it has simply taken a new shape. This Bill is a chance to make sure our regulators have the powers and capacity to respond. I am afraid there is a current complacency and that is very dangerous.
This Bill is also an opportunity to urgently address the issues of digital currency, both fiat and stablecoin. Too many powers have been switched from Parliament to the regulators. Digital is not just a variation on plumbing. Should sterling stablecoin be redeemable at par, for example? What quality of assets is required to back it? I suggest not gold and bitcoin. Who controls the exchanges that can shut off transactions at will? At the international level, what happens to UK monetary sovereignty when future cross-border trade is dominated by dollar and renminbi stablecoin? These issues are above the pay grade of the FCA and the Bank of England, and need to come to Parliament.
We will support the expansion of the sandbox in the regulating for growth Bill, but my noble friend Lord Clement-Jones will, I think, speak extensively on the risk of getting on a deregulation bandwagon without looking extremely carefully, particularly as we are dealing with AI. We saw the damage that has been done by the failure to regulate social media early enough—a price paid by vulnerable people and by many of our youngsters. This is not to be repeated in AI, so again, beware the worship of a deregulation programme.
We will also look closely at the highways financing Bill to make sure that the RAB funding is not a way to burden ordinary people with funding costs that the capital markets have rejected. It has a place, but we have to be careful with it.
My noble friend Lord Fox has detailed our support, but with care, for nationalising the steel industry as we try to sort out its role. There is a need for a long-term strategy to underpin that process.
I thank my noble friend Lord Stoneham for focusing on housing, which is an issue that has not been extensively debated today but which absolutely underpins the future of our economy. I also thank him for his focus on the industrial strategy.
We will work hard to ensure that the competition reform Bill ensures an independent CMA with teeth. This should not be a proposal to weaken the CMA; it should be a proposal to strengthen it in very changing times.
However, none of this, frankly, is enough. Our work is going to be to put together a programme of much greater ambition—ambition that can be managed without excessive risk but that takes real care and real energy.
Baroness Neville-Rolfe (Con)
My Lords, I thank everyone who has taken part in today’s debate. I thank the Minister, the noble Baroness, Lady Anderson, for her crisp and helpful summary of the new legislative programme at the beginning of the day.
The most important economic aim for the UK is to achieve increased growth rates, as the Government initially—long ago in 2024—insisted was their priority. There is nothing in the gracious Speech which suggests that this is still the major objective. Two per cent growth, which we achieved over the 200 years or so to 2008, would make all the difference to our prospects. It is unfortunate, indeed depressing, that the Government have, in reality, given up on any real attempt to achieve such results. The Government have made much of this morning’s better news about the first three months of 2026. Let us see if this is sustained, given the political turmoil of the last few weeks, sadly continuing today. As my noble friend Lady Penn said, the half measures and lack of vision are representative of this Government’s unpopular incremental approach.
We have set out in detail what needs to be done in our Alternative King’s Speech, a much more exciting policy programme than the Government’s. In particular, we must ease the pressures that are holding back ambition, enterprise and small businesses, and which are costing jobs: extra national insurance contributions and business rates are two of the clearest examples. We must stop sending the message that success, investment and wealth creation are things to be punished. Lower tax thresholds, VAT on school fees, the extension of inheritance tax, higher stamp duty—all introduced by the present Government—and repeated talk of a wealth tax all risk driving away the very people, capital and confidence that our economy needs.
We have a Government who are not facing up to what needs to be done, and the bond markets are reflecting that. The UK rate has hit 5.1%, which is above that in Greece at 3.6%, and indeed that in all major economies. This is a higher level and a bigger premium than during the time of Liz Truss, to which Ministers are prone to refer so scornfully. In the trade, this is known as a moron premium. That might seem an unkind description of the Government Front Bench, who are ultimately responsible for these matters, but the facts stand out clearly.
The Government have been going in the wrong direction from the start by imposing higher taxes on business and individuals alike, and more and more regulation on everyone, while making no sustained effort to deal with welfare reform, as we have heard, and allowing a welfare bill which has increased by £18 billion this year to £333 billion, with overall welfare spending projected to reach £409.6 billion in 2030-31. They will not do what is needed because they are frightened of their own Back-Benchers. I fear we did not get enough done on welfare when we were in government, but the need for economies is much clearer now. Yet nothing has been done, and there is nothing in the King’s Speech.
This failure is behind Kemi Badenoch’s proposal in the Alternative King’s Speech for a welfare reform Bill. This would restrict eligibility for PIP, provide face-to-face—not online—assessment, reform sick notes, reinstate the two-child benefit limit under universal credit and prevent those who are not British citizens accessing so much welfare. These are the strong, necessary reforms that the present Administration are, sadly, incapable of making.
I turn now to the debate on the specific proposals in the King’s Speech. Although it has been the major focus of the debate, I do not plan to go into detail on the European partnership Bill, as my noble friend Lady Finn dealt with that well in her powerful and lively introduction. We have had important interventions from a number of my noble friends. My noble friends Lord Redwood and Lord Lilley analysed the pattern of growth and the balance of trade with the EU, especially in goods. From his perspective as a member of our respected European Affairs Committee, my noble friend Lord Jackson of Peterborough pointed out that, to gain privileges in the EU, the UK will have to pay and be subject in part to the fiat of the ECJ. He and my noble friend Lord Kirkhope emphasised the vital importance of ongoing—I stress that word—parliamentary scrutiny, and my noble friend Lady McIntosh of Pickering rightly asked about the future of the border target operating model.
I add that the cost of the EU reset will be greater than the benefits, especially with the negotiations being led by the Prime Minister. He does not seem able to engage with the EU without giving things away—12 years with the French and the Spanish plundering our waters rather than the originally envisaged five years, and free access for young people, more of whom will want to come here than the reverse. The EU should be paying us. Even our growth in AI and gene-editing could be at risk from dynamic alignment, as the noble Lord, Lord Frost, and my noble friend Lord Moynihan of Chelsea pointed out in two precautionary speeches. Moreover, our vital trade agreements with Australia, Japan, India and Canada, the CPTPP, and with the US, especially on pharmaceuticals where good work has been done, could come under pressure as dynamic alignment pushes into new parts of the acquis. Noble Lords can see that we on these Benches do not share the starry-eyed optimism of some speakers on the EU reset.
There is still no progress on the overdue defence investment plan. In a decisive contribution, the noble Lord, Lord Robertson of Port Ellen, pointed out that there seemed to be a passage missing from the King’s Speech on the additional funds needed to acquire the hard power we need to deter current and future threats. Indeed, my noble friend Lord Bridges of Headley pointed out in an excellent speech that security comes with growth and fragile public services are a real security issue. You cannot spend more on defence if your debt-servicing costs are soaring.
I now focus on three other areas: employment, regulation and productivity, and the high price of energy and its industrial impact. The prospects for employment are disturbing. Unemployment is at 4.9%, and a terrifying 15.8% among 19 to 24 year-olds. As we heard from my noble friend Lord Kempsell, that is above the rates in Spain and Greece. Moreover, the ITEM Club reports this week that it forecasts 163,000 further lay-offs this year. The truth is that the incentive to work has weakened as benefits have risen, and the combination of the Employment Rights Act, NICs and hefty minimum wage increases has made hiring risky and expensive for employers, especially in the vital entry-level jobs for our young people, as my noble friend Lord Kempsell said. AI is changing the marketplace at record speed, which means that flexibility is more important than ever, yet we are moving away from that.
This is also an example of the growing blight of regulation, an area of concern for many noble Lords today, including my noble friends Lord Johnson of Lainston and Lord Fuller. There is increasing evidence that excessive regulation acts as a drag on productivity, deterring investment, slowing decision-making and making it harder for businesses to grow. It is particularly difficult for SMEs, as we have heard from the right reverend Prelate the Bishop with Newcastle and the noble Baroness, Lady Kramer—we often agree on issues relating to small business. I know the Minister shares, at least in part, my concern about this regulatory area. I note the Government’s announcement of an enhancing financial services Bill, a competition reform Bill, and a regulating for growth Bill. It appears that the Government might finally have begun to recognise the scale of the problem. However, like my noble friend Lord Johnson, we are not convinced and we will examine the proposals very carefully as they come forward.
The Civil Service has expanded significantly, with costs in pay, unfunded pensions, and support costs. The shift to the public sector reduces productivity, as output per head is lower than in the private sector. It is government’s job to get a grip of this. Unfortunately, there is little sign of that grip in the gracious Speech. There is no sign of tackling the size of the Civil Service or productivity-sapping practices such as working from home. The gracious Speech promised proposals to strengthen its delivery, accountability, innovation and productivity. Perhaps the Minister will kindly explain what that will mean and whether there will be legislation on any of this.
Above all, as many have said, we have a severe problem with energy prices and energy regulation, which is set to get worse with the proposed EU reset. Cheap, reliable energy is essential to competitiveness. We cannot be ideological about something so fundamental to living standards and to the capacity for economic growth. We need to open up the North Sea, rather than leave it to Norway to take advantage of it. The Government’s energy independence Bill is going in completely the wrong direction, ruling out licences for new oil and gas fields. If the Government want to make energy more affordable and accessible, why do they continue to refuse to utilise the energy resources that we have at home?
State intervention to subsidise bills is not the answer to this problem when we have the resources to increase domestic supply in the North Sea. As my noble friend Lord Lilley pointed out, we have crushed our major goods exporting sectors and we cannot export what we cannot produce. The Government make much of their net-zero policies, but I put it to them that, if you end up with the highest energy prices in the developed world, their policy will not be the object of admiration that the Government so often claim but an example of self-harm.
My noble friend Lord Hunt of Wirral reminded us of the lack of a credible plan for making British Steel competitive, which he rightly described as a daily call on the taxpayer for a business that Ministers cannot guarantee will be viable. This, the electric vehicle mandate and high energy prices are together having a devastating effect on the cost of goods, especially vehicles.
My noble friend Lord Sharpe of Epsom highlighted how little the gracious Speech does for SMEs, which are already facing an exceptionally difficult environment. Not least there is the new holiday tax on top of higher NICs and business rates, the compliance burden, energy costs, planning restrictions and, I would add, horrific delays in the tribunals that will police the mistaken Employment Rights Act, costing business at least £5 billion. As my noble friend Lord Horam said, so many of the Government’s measures are anti-growth and anti-business—once the backbone of Britain.
In conclusion, the central question before us is whether this legislative programme meets the scale of the economic challenge facing our country. I am afraid that it does not. Britain does not need more reviews, more strategies, more consultations, more regulation or more ministerial powers. It needs growth. It needs a Government prepared to take the difficult decisions that growth requires: to reduce the burden of tax, to cut back needless regulation, to make work pay, to restore incentives, to bring welfare spending under control and to ensure that British industry has access to energy that is affordable, reliable and secure.
That is why the Official Opposition will scrutinise this programme relentlessly. Where the Government bring forward measures that genuinely improve competitiveness, simplify regulation, support business and increase growth, we will engage constructively. But, where they add new burdens, duck difficult choices, weaken our competitiveness or pretend that process is a substitute for reform, we will oppose them. We are in a mess, and this programme will not solve our problems.
The Financial Secretary to the Treasury (Lord Livermore) (Lab)
My Lords, I thank His Majesty for his gracious Speech and all noble Lords for their thoughtful contributions today. I congratulate my noble friend Lady Anderson on her excellent opening speech, and it is now a great privilege to close this debate. It is nearly two years since the first King’s Speech of this Labour Government and two years since the first time I stood at this Dispatch Box with the honour of being a Treasury Minister. In the many debates I have spoken in in that time, this House has provided an education like no other, and I am grateful for the kindness and good humour shown to me by so many noble Lords. It is a privilege to learn from the knowledge, expertise and real-world experience that combines to make the collective wisdom of this House.
I particularly pay tribute to the noble Baronesses, Lady Neville-Rolfe and Lady Kramer. We have not yet agreed as often as I was perhaps hoping, but they are always warm and decent in all their dealings with me, and I am certain that all noble Lords recognise their commitment to serving this House. I look forward to continuing to work with both noble Baronesses on the measures contained in this King’s Speech.
As the noble Baroness, Lady Finn, noted in her opening speech, and the noble Baroness, Lady Neville-Rolfe, noted in her closing speech, economic growth has been this Government’s number one priority over the past two years. Economic stability has been the cornerstone of our approach, and we have seen in recent days the economic damage done by the risk of deviating from that approach, and the importance of sticking to our economic plan. Now is not the time to put our economic stability at risk.
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. As my noble friend Lord Barber of Chittlehampton said in his contribution on how we spend public money—a theme also raised by the noble Lord, Lord Shinkwin—at the spending review last summer we stuck to our fiscal rules, keeping a tight grip on day-to-day spending and getting debt on a downward path, while investing an additional £120 billion in growth-driving infrastructure such as roads and rail, and record levels of R&D.
In our second 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. This year’s spring forecast showed that our plan was the right one. Inflation was at 3% and set to fall to target. Borrowing was set to fall more over this Parliament than in any other G7 economy. GDP per capita was forecast to rise by 5.6% over the Parliament, compared to a fall of 0.2% in the previous Parliament. We increased headroom to over £23 billion. Unemployment was coming down, real wages were continuing to rise and borrowing in the year to February fell by £20 billion compared to last year.
Many noble Lords spoke about economic growth, including the noble Baronesses, Lady Finn and Lady Neville-Rolfe, the noble Lords, Lord Burns, Lord Redwood, Lord Bridges of Headley, Lord Stoneham of Droxford, Lord Fuller, Lord Horam and Lord Kempsell, and my noble friends Lady Bi and Lord Pitkeathley of Camden Town. Today’s data release shows that growth was faster than previously estimated at the end of last year and accelerated sharply in the first quarter of this year, at 0.6%, making us the fastest-growing economy in the G7.
As a result of the action we have taken, Britain today is in a stronger position to withstand the uncertainty created by the conflict in the Middle East, which is putting pressure on energy markets and creating renewed fragility in trade and supply chains. We did not start this war and we did not join it, but it will have consequences for our country and our economy. The Government are continuing to plan for every eventuality, as well as dealing with the economic costs already being felt by families and businesses. The IMF described our plan as the “appropriate response” to the conflict. The decisions we take going forward will continue to be responsive to a changing world and responsible in the national interest.
The noble Baronesses, Lady Finn and Lady Penn, spoke about the importance of energy security. The Government have announced steps to delink the price of electricity from the price of gas, protecting households and businesses from rising bills caused by gas price spikes. This includes offering voluntary long-term fixed contracts to existing low carbon generators not on fixed-price contracts. More widely, we are investing in clean, home-grown energy in renewables and in nuclear. In 2025, we imported 17% less gas than in 2021. Gas generation now sets the wholesale price for electricity around one-third less frequently than it did in the early 2020s.
Several noble Lords spoke today about defence spending, including the noble Baronesses, Lady Penn and Lady Neville-Rolfe, the noble Lords, Lord Burns, Lord Alderdice and Lord Bruce of Bennachie, and, of course, my noble friend Lord Robertson of Port Ellen. We are delivering the biggest sustained increase in defence spending since the Cold War; we are investing £270 billion over this Parliament, after years of our Armed Forces being neglected under the previous Government. We will increase defence spending to 2.6% of GDP from 2027, and we are increasing spending on defence by £5 billion in this year alone. Our ambition is to reach 3% in the next Parliament, when fiscal and economic conditions allow, and the defence investment plan will be published in due course.
Some noble Lords also mentioned welfare spending, including the noble Baronesses, Lady Finn, Lady Penn and Lady Neville-Rolfe, and the noble Lord, Lord Tyrie. As many noble Lords know, this Government inherited from the previous Government a broken welfare system, and we are committed to ensuring welfare spending is fair and sustainable. Through the Milburn report on young people and work, as well as the Timms review of personal independence payments, we will ensure we have a system of benefits and employment support that meets the needs of people and the economy.
As well as immediate support with the cost of living, we must also continue to build growth that is secure and resilient, as my noble friend Lady O’Grady of Upper Holloway said. She also spoke about the importance of our industrial strategy and rightly said that we must continue to turn around the UK’s productivity performance and build an investment-led growth model. We will do that through stability, investment and reform—stability to create a strong foundation for businesses to plan and invest; public investment to deliver growth-driving infrastructure and to crowd in private investment; and reform to systematically remove the barriers to growth across the economy.
My noble friend Lord McNicol of West Kilbride spoke about the importance of AI to future growth and social mobility, a key theme of the Chancellor’s recent Mais lecture. As the noble Lord, Lord Burns, said, many of the issues facing us are for future fiscal events, but they are also the priorities on which the pro-growth legislation set out in the gracious Speech is being delivered. First, we are introducing legislation to reform regulations and remove the barriers to growth faced by businesses, including in financial services. The UK is the world’s largest net exporter of financial services and a leading global financial centre, but we face rapidly growing competition from other markets, as noted by the noble Baroness, Lady Kramer. That is why our financial services and markets Bill will maintain the UK’s competitive advantage by delivering key parts of the Chancellor’s Leeds reforms, the most wide-ranging package of reforms to financial services regulation in more than a decade. I am grateful to the noble Lords, Lord Burns and Lord Johnson of Lainston, for their support for this Bill in their speeches today.
Alongside this, the new competition reform Bill will improve decision-making in mergers and markets investigations, speeding up the work of the Competition and Markets Authority and ensuring that its remedies are regularly reviewed. The noble Lord, Lord Sharpe of Epsom, asked about safeguards to ensure that decisions remain independent. We will ensure appropriate governance and procedural safeguards to maintain expert decision-making that is independent of government.
The noble Lord, Lord Fox, and my noble friend Lord Pitkeathley mentioned the small business protections Bill. It will tackle the scourge of late payments, which costs the UK economy £11 billion each year and leads to the closure of 38 UK businesses every day. This was mentioned, too, by the noble Lord, Lord Sharpe of Epsom, who also asked about future business rate reform—mentioned too by the noble Baroness, Lady Kramer—which the Government remain committed to over the course of this Parliament.
The noble Baronesses, Lady Penn and Lady Finn, spoke about the importance of regulatory reform, which is something I agree with. The regulating for growth Bill will strengthen the duty on regulators to promote economic growth, as mentioned by the noble Lord, Lord Bridges of Headley, and will introduce new sandboxing powers so that businesses can safely test cutting-edge new products and technologies. To address a question posed by the right reverend Prelate the Bishop of Newcastle, there will be no dilution to the protections provided by the regulatory system as a result of the Bill. Maximising growth and innovation are key to this country’s future success, but this will never be at the expense of wider protections.
Secondly, we are building resilience to protect the critical infrastructure needed for growth. As the Prime Minister said earlier this week:
“Steel is strategically important to our economy and our national resilience. That’s why we acted last year to avoid a sudden halt to production at Scunthorpe, protecting workers and the community that depend on the site, and why we’re now bringing forward legislation to give us options to protect Britain’s steelmaking capability”.
The British Steel Bill was focused on by the noble Lords, Lord Fox and Lord Hunt of Wirral, and my noble friends Lady O’Grady of Upper Holloway, Lord Murphy of Torfaen and Lord Sikka. Since our intervention last year to stop steel production in Scunthorpe coming to a halt, we have been talking to British Steel’s owners to find a realistic solution for the business. It has not been possible to agree a commercial sale with the current owners, and we do not believe an agreement which delivers value for money for taxpayers can be met. British Steel is an important asset for UK steelmaking. It plays a strategic role for UK critical national infrastructure, our wider steel sector objectives, local jobs and the economy, given its unique production capabilities. Securing the long-term future of the UK’s steel sector relies on both public and private investment for modernisation.
The nuclear regulation Bill, mentioned by the noble Baroness, Lady McIntosh of Pickering, will modernise the way that new nuclear projects are regulated so we can deliver safe, secure and affordable nuclear power and infrastructure sooner, while maintaining strong environmental protections.
On energy, the energy independence Bill will help to protect households against volatile fossil fuel markets, create more highly skilled jobs across the UK and mobilise investment in clean technologies. The noble Baronesses, Lady Finn and Lady Neville-Rolfe, spoke about the importance of the North Sea, which I agree with. We must harness our domestic supply of oil and gas production from the North Sea. That is why we are managing existing fields for their entire lifetime, including by allowing tiebacks for those fields to ensure they remain viable. In advance of legislation, we have published further details on tiebacks, which external analysis has predicted could result in tens of millions more barrels of oil being available for UK supply. Our clean water Bill will help to build a resilient water system to supply businesses and attract investment, and I am grateful to the noble Baroness, Lady McIntosh of Pickering, for her support for the Bill and the Cunliffe review.
As the Chanceller set out in her Mais Lecture, we are also delivering on our manifesto commitment to transfer power out of Westminster by granting new revenue-raising powers to local leaders in the overnight visitor levy Bill, mentioned by the noble Lord, Lord Sharpe of Epsom.
The right reverend Prelate the Bishop of Newcastle spoke about the importance of connectivity. I agree, and we are improving connectivity to unlock growth. In our economy today, too many parts of Britain lack reliable transport connections and the agglomeration benefits that come with them. Northern Powerhouse Rail will help build a northern economy that reaches its full potential. The Northern Powerhouse Rail Bill, touched on by the noble Lord, Lord Burns, is an essential part of delivering this transformational scheme. It confirms the high-speed route from Manchester to Millington, providing fast and more frequent services for people and businesses across the north’s key economic centres.
We are also delivering on our commitment to support a third runway at Heathrow. Our hub airport connects us to emerging markets all over the world, opening up new opportunities for growth, but for decades Heathrow’s growth has been constrained. Our civil aviation Bill will support Heathrow expansion and that of the entire aviation sector by reforming airport slot allocation and modernising airspace to meet future needs.
Economic resilience in an uncertain world cannot be about turning inwards. Britain’s future prosperity will not be built in isolation but through partnership with those who share our interests and values. No partnership is more important than that between the UK and our European neighbours. Many noble Lords focused in their contributions on the EU partnership Bill, including the noble Baronesses, Lady Finn, Lady Bennett of Manor Castle, Lady McIntosh of Pickering and Lady Ludford, the right reverend Prelate the Bishop of Newcastle, the noble Lords, Lord Fox, Lord Lilley, Lord Redwood, Lord Frost, Lord Bridges of Headley, Lord Jackson of Peterborough, Lord Kirkhope of Harrogate, Lord Stoneham of Droxford, Lord Tyrie, Lord Moynihan of Chelsea and Lord Kempsell, and my noble friends Lord Liddle, Lady Bi, Lord Murphy of Torfaen and Lady Gill.
The noble Lord, Lord Frost, with apparently no irony, accused this Government of messing up negotiations. The truth is, Brexit has done deep and lasting damage to our economy. Recent independent statistics indicate that its GDP impact could be as much as 8%. The noble Lord, Lord Redwood, spoke about the OBR figures, which show clearly that, by the end of this Parliament, the British economy will be £100 billion smaller than it otherwise would have been, which the OBR continues to believe is happening. The reality is that Brexit has created new trade barriers, equivalent to a 13% increase in tariffs for manufacturing and a 21% increase in tariffs for services. Goods exports have fallen by 19%—some £42 billion—and 20,000 small businesses no longer export to the EU at all. It has meant higher costs for businesses, shrinking markets for UK exporters and our strategic industries exposed. It has damaged many other sectors, including the creative industries, as the noble Lord, Lord Strasburger, and the noble Baronesses, Lady Kramer and Lady Ludford, all reminded us.
My noble friend Lord Liddle and the noble Lord, Lord Kirkhope of Harrogate, said that we should be more ambitious and that we should move quickly. I agree. Just as the previous Government were defined by breaking Britain’s relationship with Europe, this Government should be defined by rebuilding our relationship with Europe. We are already making significant progress on agri-food, electricity, emissions trading and Erasmus—but there is a strategic imperative for deeper integration between the UK and the EU, and we must look towards a new and stable future relationship.
The noble Lord, Lord Fox, and my noble friend Lady O’Grady of Upper Holloway, asked about Made in Europe. We are of course engaging with the EU on this vital issue. I cannot say more than that at present.
In answer to the noble Baroness, Lady McIntosh of Pickering, we will pause further implementation of the BTOM while we negotiate new arrangements with the EU. Where it is in our national interest to align with EU regulation, we should be prepared to do so, including in further areas of the single market. That alignment should be forward-looking and durable, providing the certainty that businesses on both sides need to invest and grow.
The EU partnership Bill in this King’s Speech will enable us to implement our agreement with the EU on electricity, emissions trading, and food and drink, now and in the future. Where it is in our national interest to align with EU regulation, including in the single market, the Bill will enable us to do so.
Several noble Lords spoke about the customs union, including the noble Lord, Lord Fox, and the noble Baronesses, Lady Kramer and Lady Ludford. Some of my noble friends spoke about eventually rejoining the EU, including my noble friends Lady Bi and Lady Gill. At the next EU summit, we will set out a new direction for Britain, with significant moves forward on trade, the economy, defence and security, as well as an ambitious youth experience scheme, all of which will create a platform on which we can build as we go forward.
The prize is considerable: costs for doing business reduced for UK companies; new opportunities to export; new experiences for travel, work and study for our young people; a more reliable and efficient energy system across Europe; scale-ups gaining access to deeper pools of capital and talent; and greater choice for consumers, helping to bring down prices and inflation. Closer alignment with the European Union is clearly the right choice for Britain in our national interest.
The noble Baroness, Lady Finn, asked about parliamentary scrutiny. We are committed to being open and transparent in our engagement with Parliament regarding implementation of the summit outcomes and further negotiations to put into effect what the UK and EU have agreed, as well as throughout the passage of the Bill itself. Where we are making commitments to introduce new laws, Parliament will as always play its role in scrutinising the legislation that implements those commitments. We look forward to working with Parliament on the exact arrangements for scrutiny of the legislation as negotiations progress.
The noble Baroness, Lady Finn, also asked about fiscal contributions, which were also spoken about by my noble friend Lord Liddle and the noble Lord, Lord Kirkhope of Harrogate. We accept the principle that when the UK participates in an EU instrument, programme or other activity, we should make a fair financial contribution to its budget to cover the costs of our participation. Any UK financial contribution would be subject to negotiations with the EU, and no contributions have yet been made or agreed on. The Government are clear that agreements made with the EU must be in the national interest, and that although trade-offs will be required, these are worth making where the benefits to the UK exceed the costs.
My noble friend Lord Murphy of Torfaen spoke about the importance of the Bill to Northern Ireland, and I am of course very grateful to him for the work he did on his review of the Windsor Framework. The application of these agreements, alongside the Windsor Framework, will sweep away the majority of regulatory barriers for businesses moving agri-food goods. This will support GB to Northern Ireland and EU movements as well as boosting exports. Businesses moving goods into Northern Ireland will continue to be able to use the vital facilitations under the Windsor Framework for the limited number of requirements not covered by these agreements. Northern Ireland will also benefit from lower energy prices and assurances that there will be no divergent approach to emissions trading.
This Government have consistently made the responsible choices to bring stability to our economy and to raise economic growth through our economic plan. The spring forecast showed that this plan is the right one, with lower inflation and borrowing, higher living standards and a growing economy. As a result, Britain today is in a stronger position to withstand whatever uncertainty comes our way. We did not start the war in the Middle East and we did not join it, but it will have consequences for us all. That is why we have taken action to deal with the economic costs already being felt by families and businesses.
We must also build prosperity that is secure and resilient in a fast-changing world—this is the basis on which the pro-growth legislation set out in the gracious Speech is being delivered. This legislation will remove barriers to growth faced by businesses, build resilience to protect the critical infrastructure needed for growth, and improve connectivity and boost trade to unlock growth, including through a deeper economic partnership with the EU. Those are the right choices and this is the right economic plan to build a stronger and a more secure economy for our country’s future.