House of Commons
Speaker’s Statement
(1 week ago)
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Mr Speaker
Before we come to Northern Ireland Questions, I should remind the House that the case involving Sir Jeffrey Donaldson is sub judice until sentencing. However, I am granting a limited waiver so that Members may discuss wider issues raised in the context of the case. Members should not speculate about sentencing issues.
Oral Answers to Questions
(1 week ago)
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John Slinger (Rugby) (Lab)
The Parliamentary Under-Secretary of State for Northern Ireland (Matthew Patrick)
I take every opportunity to champion Northern Ireland’s brilliant manufacturing sector, and whether it is Denroy, Airbus or Thales, or even Harland & Wolff, which has just announced that it is bidding for a major UK-Dutch shipbuilding deal, there is a lot to champion.
John Slinger
Does the Minister agree that the defence growth deal is a chance for Northern Ireland businesses to access the wider UK defence supply chain? What efforts is he making to achieve that?
Matthew Patrick
I certainly agree with my hon. Friend; many opportunities are arising from the defence growth deal, on which I have worked closely. Many businesses, small and large, across Northern Ireland have dual-servicing capability and they have a real opportunity here. We are supporting them every step of the way.
Jim Allister (North Antrim) (TUV)
Ministers from the Northern Ireland Office talk rather glibly about these matters, but the lived reality of the supply chain is very different: a full international customs border that is now inflicting damage on the import of steel; tightening import control system 2 checks; a parcels border; a plants border; and £192 million spent on building border posts—all to placate a European Union to which the Secretary of State and others seem totally beholden. When will the Secretary of State actually stand up for Northern Ireland? Can we please not have the usual trite reply that it is all the fault of Brexit, when it is the very opposite? The denial of Brexit is the altar upon which our supply chains are being sacrificed.
Matthew Patrick
I worry that the hon. and learned Member is in danger of talking down Northern Ireland and its incredible business opportunities. We are here to champion it. If issues arise from the Brexit that he and others championed, we do our very best to ensure that trades flow smoothly.
Sir Desmond Swayne (New Forest West) (Con)
The Secretary of State for Northern Ireland (Hilary Benn)
The Northern Ireland Troubles Bill will establish a reformed, human rights-compliant Legacy Commission to carry out investigations and provide answers on behalf of families who have waited too long, enable information sharing by the Irish authorities and provide, in law, safeguards for our veterans.
Sir Desmond Swayne
We were promised a substantial package of amendments and that the Bill would return to the House early in the Session. Is the delay occasioned by a pause for thought following the personal statement of the hon. Member for Birmingham Selly Oak (Al Carns) to the House? I certainly hope so.
Hilary Benn
The right hon. Gentleman will have noticed that the new Defence Secretary, who himself served in Northern Ireland, said on Monday:
“This Government are absolutely committed to the troubles Bill”.—[Official Report, 6 July 2026; Vol. 789, c. 15.]
The right hon. Gentleman will not have to wait too much longer—[Interruption]—to see the substantial package of amendments to which he refers.
Colum Eastwood (Foyle) (SDLP)
Members are shouting from the Opposition Benches that people have been waiting nine months, but there are victims who have been waiting decades for this issue to be resolved. Will the Secretary of State bring the Bill forward as quickly as possible, thinking about the victims first, never mind personal statements by anybody in this House? Our strong military lobby does not seem to care about the innocent victims who have been left behind in Northern Ireland.
Hilary Benn
My hon. Friend makes an important point about this piece of legislation. As we know, the Northern Ireland Troubles (Legacy and Reconciliation) Act 2023 did not command support across all communities in Northern Ireland. How can we hope to proceed if that is the case? That is why the Government are committed to reforming, repealing and replacing the legacy Act—that is what is in the Bill. I hope that when people see the full picture they will realise that it is fair, balanced, proportionate and reasonable, and that it seeks to command the confidence of all communities in Northern Ireland.
Alex Burghart (Brentwood and Ongar) (Con)
If the Northern Ireland Troubles Bill was any of those things, why did the former Armed Forces Minister, when he resigned last month, say that it remains
“remains unfit for purpose. It risks failing the very veterans it claims to protect”?
Why does the Secretary of State think that the hon. Member for Birmingham Selly Oak (Al Carns) said that?
Hilary Benn
My hon. Friend the Member for Birmingham Selly Oak (Al Carns) will have to answer that question, but, with respect, I disagree with him. He worked on the package of amendments during his time as a Defence Minister. In the end, we have to strike a balance, as the hon. Member for Brentwood and Ongar (Alex Burghart) is well aware. When people see those amendments, they will realise that they are fair and reasonable with regard to the protection of our veterans. Crucially, they will put into legislation for the first time protections that were not in the Act passed in 2023.
Alex Burghart
It is clear from the Secretary of State’s answer that the former Armed Forces Minister quit because he could see that the Bill remains unfit for purpose and fails to protect the very veterans that it claims to protect. The Secretary of State must realise that there is no cross-party support in Northern Ireland for his legislation, and nor is there support in the Labour party for his legislation. Will he now accept that the Bill should not progress and that we should return to the legislation that the Conservatives brought forward?
Hilary Benn
I do not accept that, because all the Northern Ireland political parties were opposed to the immunity that was at the heart of the 2023 legacy Act. It had no support from political parties in Northern Ireland or from victims and survivors’ organisations. That is why these changes have to be made, and that is why the Government will proceed with this Bill.
Mr Paul Kohler (Wimbledon) (LD)
Back in March, the right hon. Member for Makerfield (Andy Burnham) travelled to Belfast to address the Alliance party conference. In his speech, he warned that
“it is too easy for the powers-that-be to write their own rules and cover up”.
He was talking about the need for a Hillsborough law, which he said at the time
“is currently stalled in Parliament due to an unacceptably wide carve-out for the security services.”
We on the Liberal Democrat Benches are deeply concerned that exactly that issue now confronts veterans, who, under this Government’s draft troubles Bill, are exposed to investigation and prosecution while the state that gave the orders shelters behind similar carve-outs. Will the Secretary of State confirm whether he will support the Lib Dem amendment to the Bill requiring that any decision to block disclosure on national security grounds is referred to the Intelligence and Security Committee to ensure proper parliamentary scrutiny?
Hilary Benn
We will come to debate that amendment, along with all the other amendments that hon. and right hon. Members have tabled, when we get to the Committee stage. The judgment in the Thompson case was absolutely clear—it was also referred to by the Dillon judgment—that the ultimate responsibility for protecting national security rests with the Government. That is a long-established principle that has support on both sides of the House. At the same time, I have made it clear that I wish to see the maximum possible disclosure, consistent with that requirement that falls on Ministers.
Gavin Robinson (Belfast East) (DUP)
The Secretary of State will know that, given the legacy of our past, two Governments are involved. Was he concerned, as we were, that Sir Declan Morgan shared with the Northern Ireland Affairs Committee two weeks ago his concern that he will not have access to unredacted intelligence material from the Irish Government? There is nothing in the Government’s draft legislation or the amendments due to come before this House that would change that around. Is the Secretary of State further concerned that the chief operating officer of the Northern Ireland Office said that day that she would take that point back—to whom we do not know, because she is the chief operating officer—but today has written to the Northern Ireland Affairs Committee to confirm that nothing in the Secretary of State’s amendments or the Irish Government’s legislation would satisfy Sir Declan’s requirement for access to unredacted material from the Irish?
Hilary Benn
As the right hon. Gentleman knows, the Irish Government published on 8 June their legislative outline, entitled “The General Scheme of the Legacy of the Troubles Bill 2026”. That is intended to fulfil the commitment that the Irish Government gave in the joint framework to co-operate to the fullest extent possible with the commission. The right hon. Gentleman is referring to the position today in the light of the Dillon judgment, and I happen to agree with him. Now that the Dillon judgment has made it quite clear that the commission, even in its current form, is compliant with the European convention on human rights and capable of carrying out investigations, I hope that we will see co-operation in response to the requests that the Independent Commission for Reconciliation and Information Recovery is making of the Irish Government.
Gavin Robinson
That is an answer to a question, but it is not really the answer to my question. I want to hear from our Secretary of State a full-throated recognition that there is a deficit, that Sir Declan needs access to the unredacted material, and that the Secretary of State will secure agreement from the Irish Government for such a change. Does the right hon. Gentleman not recognise that, as we stand here today in July, no remedial order was put before the Lords by the end of June? That deadline has passed. With no progress before the Irish assume the European presidency, which apparently was another deadline that needed to be met and has passed, and with no summit on 22 July, there is no chance that the Secretary of State’s troubles Bill will become law in 2026.
Hilary Benn
The right hon. Gentleman makes a powerful argument for why the troubles Bill should be passed, because it will enable precisely the information sharing with the Irish authorities that he and I want to see, and that all the people in Northern Ireland who are still waiting for answers would like to receive. That is one of the central arguments for proceeding with the Bill.
Marsha De Cordova (Battersea) (Lab)
Navendu Mishra (Stockport) (Lab)
The Secretary of State for Northern Ireland (Hilary Benn)
I regularly meet the Northern Ireland Executive and the Police Service of Northern Ireland to discuss a range of issues in Northern Ireland, including community cohesion. However, given the recent serious disorder, there is a problem that needs to be tackled.
Marsha De Cordova
The scenes we witnessed in Belfast last month were truly horrific. The knife attack was an abhorrent act, and I pay tribute to the courage of those who intervened to help, but what followed in the days afterwards was equally disturbing. Innocent people were targeted because of the colour of their skin, families were literally burned out of their homes, and businesses were attacked. Does the Secretary of State agree that overt racism and violence has no place on the streets of Belfast or anywhere in our society, and that those in positions of authority and influence should stop inflaming tensions and legitimising racism and prejudice?
Hilary Benn
I do agree with my hon. Friend. The attack on Mr Ogilvie was truly shocking, and there was no justification whatsoever for the racist thuggery we witnessed on the streets of Belfast in the days following. I met nurses and doctors from a hospital in Belfast, and some of the nurses described to me how, because of the colour of their skin, they were too afraid to leave the hospital at the end of their shift, while others discussed whether they should leave in the back of a colleague’s car covered in a coat or in the boot, because they were afraid of the thugs who had taken control of the streets. The fact that that happened on the streets of our United Kingdom in 2026 should give us all cause for deep concern.
Navendu Mishra
I thank the Secretary of State for that answer. What assessment has he made of the level of online co-ordination during the recent unrest in Belfast, and what discussions has he had with the Police Service of Northern Ireland and other security partners about addressing that issue?
Hilary Benn
That was, of course, an awful feature of what we saw. One of the things I learned in my discussions was that those from the far right had taken a list of houses in multiple occupation in Belfast—a list that, in the interests of openness, was properly available on the Belfast city council website; the council has now taken it down—and used it to try to target houses during the racist violence. There is a clear obligation on social media companies, set out in the Online Safety Act 2023, and there is an obligation on Ofcom to enforce that Act, because there is no doubt that part of the violence was fuelled by that kind of online hatred.
Dr Andrew Murrison (South West Wiltshire) (Con)
The Secretary of State is plainly taking this very seriously, which is very much to his credit. Can he say what points of agreement and dissent there were in the discussions that he and his Ministers are reported to have had with the party leaders in Northern Ireland, and what actions the UK Government undertook to advance in order to try to reduce the possibility of these dreadful scenes—which, for many of us who lived through them, are reminiscent of the 1970s in Belfast—happening again?
Hilary Benn
The right hon. Gentleman raises a really important point, and I am grateful to him for his question. We all have a responsibility—political leaders have a responsibility to call out what was witnessed for what it is and not mince our words, and as I have already indicated, social media companies have a responsibility to ensure that such material, if it is illegal, is not available on social media sites. I pay tribute to the police and the community organisations, who did an extraordinary job on the night of the 10th to find shelter for people who had been burned out of their homes. Parents also have a responsibility; if someone’s son comes back at 11 o’clock at night wearing dark clothing and smelling of smoke, a parent might ask, “Where have you been and what have you been doing?”
Mr Gregory Campbell (East Londonderry) (DUP)
Community cohesion is important, both racially and politically. Everyone accepts that political leaders and others have to be cognisant of what they say and what they do, and whenever we are all remembering our dead, as we do, no one denies republicans the right to remember their dead. Does the Secretary of State agree, however, that if a political leader, such as the First Minister—Sinn Féin’s Michelle O’Neill—not only remembers republican dead, but lauds, praises and defends their indefensible actions, that does great harm to community cohesion?
Hilary Benn
Northern Ireland is a society, as the hon. Gentleman knows better than most, that has been undergoing profound change since the signing of the Good Friday agreement 28 years ago. As the famous lines go, we have a shared history, but not necessarily a shared memory. The progress we have seen is because Northern Ireland society has been working to move beyond that. One of the people I met who was there on the night of the violence said that we now have “another other” in Northern Ireland. The hon. Gentleman will be familiar with the traditional divisions, but there is now another other: the ethnic minority population of Northern Ireland, who are terrified about what is happening. We do not want to add to the troubles of the past by not being clear how unacceptable it is to see that on the streets of Belfast today.
Claire Hanna (Belfast South and Mid Down) (SDLP)
Community cohesion is deeply threatened by the violence and menace that took place on the streets last month, which included deliberate orchestration and paramilitary flags and trappings that now fly as bold as brass from lampposts in my constituency and in many others. We can no longer pretend that loyalist paramilitaries are not a national security threat. Cohesion is also threatened by a sheer lack of delivery and of responsibility-taking by the Northern Ireland Executive. The Secretary of State must see the role that vetoes and structures play in that, and the moment of peril in which we may now be in Stormont. When will he convene the process for democratic reform of the institutions that a majority of people, of parties and of MLAs have asked for?
Hilary Benn
My hon. Friend is right to raise this issue, because five of the main parties have now come forward with various proposals for reform. I have said to the party leaders that I wish to meet them to discuss those proposals. Time and effort is being expended at the moment on trying to sort out the problem of the budget. On the question of the paramilitary displays and flags, the Police Service of Northern Ireland has new powers to remove them as a result of the recommendation of Jonathan Hall, the independent reviewer of terrorism legislation.
Robin Swann (South Antrim) (UUP)
In his first answer, the Secretary of State said that the recent disorder was a problem that needed to be solved. A fortnight ago, I arranged a roundtable in my constituency that included the Northern Ireland Housing Executive, the police, the Executive Office, the Department for Communities and many other organisations and representative organisations, including the Black Diamond Initiatives. It was apparent that they all had their strategies and their procedures, but what they did not have was a co-ordinated response. They were all looking to the Executive to pull all those organisations together. If dysfunction at the top of our Executive is not allowing that to happen, what actions will the Secretary of State take?
Hilary Benn
There is a responsibility, above all, on the Northern Ireland Executive to deliver for the people of Northern Ireland. There being no Executive in Northern Ireland for 40% of the time since the Good Friday agreement has not helped to achieve that objective. To take one issue, there is an acute housing crisis in Northern Ireland, as there is in other parts of the United Kingdom. In taking action to enable more homes to be built, one of the issues that needs to be addressed is the fact that water infrastructure cannot cope. If that is sorted out, more homes can be built.
Mike Wood (Kingswinford and South Staffordshire) (Con)
The attempted murder of Stephen Ogilvie in Belfast last month shocked people throughout the country. The man accused of this horrific attack is thought to have crossed into Northern Ireland illegally from the south. People from all communities are asking what more can be done to prevent people from coming into the UK illegally across that land border. Following the terrible events in Belfast last month, will the Government commit to significantly enhanced operations on the border, similar to those already run by the Republic?
Hilary Benn
We have already increased the number of operations and arrests in Northern Ireland in the last two years, in comparison with the previous period. About 1,000 people who had no right to be in Northern Ireland have been removed, including 500 who have been returned to the Republic of Ireland. The hon. Member will be well aware of the importance of the open border. Intelligence-led policing at the ports and airports under Operation Gull and visits to workplaces have resulted in more people being detained and removed.
Alison Hume (Scarborough and Whitby) (Lab)
The Parliamentary Under-Secretary of State for Northern Ireland (Matthew Patrick)
My hon. Friend is a powerful campaigner on this issue. The Secretary of State and I recognise the importance of fishing industries across the United Kingdom, and the Secretary of State visited Kilkeel earlier this year with Minister Muir, where this topic was raised. Immigration changes are designed to ensure that our domestic workforce has access to good jobs, and the Secretary of State has written to the Home Secretary about the issue.
Alison Hume
Unfortunately, jobs at Whitby Seafoods, the country’s largest supplier of scampi to caterers, remain at risk. That is because, as the Minister knows, about 70% of crews operating out of Kilkeel who catch the nephrops, or scampi, are foreign workers who will no longer qualify under the new visa rules from the end of this year. While efforts to hire more domestic workers are under way, a small number of bespoke seasonal visas could save the scampi industry. Will my hon. Friend redouble his efforts to work with colleagues to secure a solution and protect those jobs in both Northern Ireland and Whitby?
Matthew Patrick
As I have said, we have written to the Home Secretary about these issues, and I am sure that my hon. Friend will be making her case very powerfully as well. It is our duty to work with businesses across the UK to ensure that they are ready for these changes. We want our fishing industry to thrive, and we want people here to benefit from those good jobs.
Jim Shannon (Strangford) (DUP)
Owing to the severe financial impact of the restricted skilled worker visas, family-owned trawlers in Portavogie, Ardglass and Kilkeel face a perfect storm, alongside fuel costs and the newly imposed Isle of Man transit barriers. The Minister knows about the issue—both the hon. Member for Scarborough and Whitby (Alison Hume) and I have met the Immigration Minister, the hon. Member for Dover and Deal (Mike Tapp)—and there is a proposal that could be acceptable. Will the Minister add his support to it, to ensure that the historic fleet in Portavogie, Ardglass and Kilkeel is permanently able to fish the seas around the coast of Northern Ireland, and to ensure that our fishing sector has a secure future?
Matthew Patrick
As the hon. Gentleman will know, we totally support our fishing sector, and I am interested to hear more about that proposal. If the Immigration Minister is speaking with the hon. Gentleman and my hon. Friend the Member for Scarborough and Whitby, I will, of course, try to be part of those meetings to hear whatever I can hear.
Sammy Wilson (East Antrim) (DUP)
The Secretary of State for Northern Ireland (Hilary Benn)
I regularly meet representatives of the logistics sector and businesses trading between Great Britain and Northern Ireland—for instance, through the Northern Ireland business stakeholders group—to discuss how we can make the Windsor framework operate as smoothly as possible.
Sammy Wilson
The Secretary of State will be well aware of the importance of the logistics industry in Northern Ireland, and also of the burdens that are falling on it at present because of the Brexit arrangements, which have pushed up costs, led to delays, and resulted in many containers coming back empty from Great Britain. On top of that, we now have the added costs of a carbon tax on ferries coming to and from Northern Ireland. Does the Secretary of State recognise that this industry is important to Northern Ireland, and is being strangled by the arrangements with the European Union and the net zero policies? What steps does he intend to take to address those issues?
Hilary Benn
In respect of the EU emissions trading system, yes, we are applying a carbon charge to boat movements between Great Britain and Northern Ireland—the same charge that is being applied between Great Britain and the Republic of Ireland. The purpose of that is to ensure that the carbon border adjustment mechanism does not hit businesses in Northern Ireland, which the right hon. Gentleman would be very cross about if it were to be the case. Let me simply say this to him: if things are as bad as he suggests, why is Northern Ireland one of the fastest-growing parts of the United Kingdom economy?
John Grady (Glasgow East) (Lab)
Janet Daby (Lewisham East) (Lab)
The Secretary of State for Northern Ireland (Hilary Benn)
I met the leaders of the main Northern Ireland political parties on Thursday 11 June to discuss the terrible disorder. The attack on Mr Ogilvie was truly shocking, but the racist violence that we saw in response had no justification whatsoever.
John Grady
The Roma have suffered centuries of prejudice and hate. Under the Nazis, they were subjected to concentration camps and genocide. Roma people have made their home in my constituency and in Northern Ireland, and should be treated with decency, yet they have been subjected to terrible racist violence in Northern Ireland. What steps is my right hon. Friend taking with the Northern Ireland Executive to safeguard the Roma community in Northern Ireland?
Hilary Benn
The single most important thing that we can all do as political leaders is to be absolutely clear that everyone who has made the United Kingdom their home lawfully should be treated with equality, respect and dignity, regardless of where they come from. That is one of the characteristics of our country.
Janet Daby
I cannot begin to imagine what the victims of the recent disorder felt and experienced, and the devastation that it has brought upon their communities. My Labour values are about respect for others, and about treating people fairly and justly. This act demonstrated none of them. Will my right hon. Friend please say what is being done to rebuild and restore every aspect of these communities, from dealing with their trauma to ensuring their protection and restoring the loss of possessions?
Hilary Benn
I am grateful to my hon. Friend for what she says, and I agree with her. There was terrible disorder in Ballymena last year, as a result of which a number of steps were taken to bring the community together. It was noticeable that the recent disorder that we saw in Belfast was not replicated in Ballymena. That is an example of communities working together to build trust and respect, and we need to see a lot more of it.
Carla Lockhart (Upper Bann) (DUP)
Does the Secretary of State accept that while there can never be any excuse for criminal disorder, there is equally no excuse for a border policy that leaves Northern Ireland exposed? How many more incidents will it take before he and this Government deal with the open border with the Republic of Ireland, which is being exploited daily? When will they put in place measures to protect our citizens from illegal immigrants?
Hilary Benn
I hope the hon. Lady will recognise that the common travel area, which is more than a century old, is of great benefit to the citizens of the United Kingdom and the Republic of Ireland. Many people in Northern Ireland live their lives across that border every single day. Anyone who suggests—I know that she is not doing so—that there should be immigration controls on that border is not being realistic, and it would not be the appropriate action to take. As I indicated in answer to an earlier question, we are increasing immigration enforcement activity across the United Kingdom, including in Northern Ireland, as a result of which 1,000 people have been removed in the two years since the election, including 500 who have been returned to the Republic of Ireland.
Alex Easton (North Down) (Ind)
Will the Secretary of State join me in commending the officers of the PSNI, who have responded to the recent disorder with professionalism and integrity? Does he agree that they deserve the very best support, including a modern, high-quality training facility, and can he give the House an update on when that is going to be funded?
Hilary Benn
I join the hon. Gentleman in thanking and praising the brave officers of the PSNI. My hon. Friend the Member for Wirral West (Matthew Patrick) and I visited the officers at Strandtown police station, who dealt with the disorder when the bus was set on fire on 10 June. More than 40 of them were injured, and we wish them a speedy recovery. I know that the hon. Gentleman is a doughty advocate for the new training centre, and I look forward to discussing the matter further with him.
Paul Holmes (Hamble Valley) (Con)
The Deputy Prime Minister (Mr David Lammy)
I have been asked to reply on behalf of the Prime Minister, who is attending the NATO summit. Working with our allies, we are strengthening Europe’s role in the alliance, which remains the cornerstone of our national security. Yesterday the Prime Minister met with the Prime Minister of Norway, and I am sure the House will join me in wishing good luck to the England team ahead of the world cup quarter-final.
This week, we mark the awful anniversary of 7/7, a day when people travelling through London on a bright summer morning had their lives ended and changed forever, including my best friend James Adams. We remember all those affected by those terrible attacks, and we will always stand against terrorism.
The Labour party also pays tribute to Sir George Howarth. He was a champion for Knowsley, a distinguished colleague and a wonderful gentleman. We will miss him deeply, and our condolences are with his wife, Julie, and his family.
This morning, I had meetings with ministerial colleagues and others. In addition to my duties in this House, I shall have further such meetings later today.
Paul Holmes
I entirely associate myself with the Deputy Prime Minister’s opening and personal remarks.
The Prime Minister and the right hon. Member for Makerfield (Andy Burnham) are both proud football fans. Given that the Deputy Prime Minister clearly thinks the Prime Minister has always been match fit, how does he feel now that his own MPs have given the boss the red card and brought on a left winger to get them out of the relegation zone? [Laughter.]
The Deputy Prime Minister
That is not bad for someone who represents a premier league side, but two years since the election, the hon. Member still needs to engage with the facts about the Tories’ failed period in government. His colleagues now accept that. The former Treasury Minister, the former Communities Secretary, the former Health Minister and the former Immigration Minister—and that is just the right hon. Member for Newark (Robert Jenrick)—wrecked the country and helped wreck the Tory party, and now wants to do it all over again with Reform.
Jeff Smith (Manchester Withington) (Lab)
The Deputy Prime Minister
I agree with my hon. Friend: Bev Craig will be a brilliant mayor for Greater Manchester. I am proud that Labour is putting power over bus services back in the hands of local leaders. This Government have extended franchising powers, capped fares and invested to deliver better services, and we are ensuring that children can enjoy free bus travel this summer. I am sure my hon. Friends will want to get behind Bev in Greater Manchester so that we can defeat Reform’s divisive candidate and drive forward the agenda under a new mayor.
Mr Speaker
I call the shadow Secretary of State for Housing, Communities and Local Government.
Sir James Cleverly (Braintree) (Con)
I echo the right hon. Gentleman’s tribute to Sir George Howarth and pass on my party’s condolences to his friends, family and loved ones. I also echo his support and encouragement for the England football team in their forthcoming match against Norway. Of course, I also echo his words about those people murdered on 7/7, and their friends and their families, and I pay tribute to the emergency services that did so much on that day.
Will the Deputy Prime Minister apologise to the victims of the rapists, sexual predators and paedophiles that he is planning to release early?
The Deputy Prime Minister
I am delighted to welcome the shadow Housing Secretary to the Dispatch Box. He, of course, could have been doing that job every week if he were better with numbers. He was the Foreign Secretary in the Government who botched Brexit, the Home Secretary in the Government who decimated neighbourhood policing and one of the shortest serving Education Secretaries in our history.
The right hon. Gentleman asks about a very serious issue, and every decision we have taken has been based on public safety and delivering justice for victims. Let us talk about the context. The last Labour Government built 28,000 prison places. We are building 14,000 by 2031, and we have already delivered 3,200. The Tories closed 23 prisons: Gloucester—closed; Shrewsbury—closed; Portsmouth—closed; Holloway—closed; Northallerton—closed. And what is it now? A block of flats. That is why we have to have an early release scheme and why we passed the Sentencing Act 2026, and we are putting in community powers locally to make sure that we protect the public.
Sir James Cleverly
The right hon. Gentleman makes a joke about the use of figures. Let me give him a figure: 50,000 prisoners released early in just two years on his watch. I am genuinely shocked that, when given the opportunity to apologise to the victims, he very publicly failed to do so. Let me remind him what this is about. Let me quote Fiona Goddard, a victim of grooming gangs who has been brave and open about how his policy will impact her:
“Finding out that they may be released early has completely set me back. I have barely left the house. I feel constantly anxious, frightened and unsafe. I can barely sleep”.
That is the impact his policy is having on victims. He refuses to apologise, but why is he pursuing a policy that he must know is both wrong and dangerous?
The Deputy Prime Minister
This is a very serious issue and the right hon. Gentleman is experienced in this House. He knows that while he was Home Secretary, the Conservative Government had an early release scheme that let out 10,000 offenders—10,000. They had six schemes within a year. They had a scheme that they announced on 6 June 2023, another scheme on 17 October 2023, another scheme on 8 March 2024, another in April, another in May and another in June—all before the election. That is why the right hon. Member for Richmond and Northallerton (Rishi Sunak), it is rumoured, called the election in the first place. They left a system with just 83 empty cells. That is what the previous Justice Secretary inherited when she came into office.
That is why we had to pass the sentencing scheme. The right hon. Gentleman has not said what the Conservatives would do now to fix the system. Of course we think of every victim. That is why we are notifying victims and are in discussion with all victims. I sat, last week in my surgery, with a victim of grooming gangs. All of us want to see offenders locked up. That is why we must have prison capacity.
Sir James Cleverly
The right hon. Gentleman talks about 10,000 early releases over 14 years of Conservative government. The Labour Government have released 50,000 in two years. He knows it is wrong—he is a good man. He must know that it is wrong to release 5,000 serious criminals, including rapists and paedophiles. Not only does he know it is wrong, but his party knows it is wrong—not one of the 400 Labour MPs voted to support the Government’s policy in the vote last night. They know it is wrong and the country knows it is wrong, but he insists on pursuing it anyway. If he will not change course, will he at least make this guarantee: that not one rapist or paedophile will be released early later on this year?
The Deputy Prime Minister
The right hon. Gentleman has not proposed what the Conservatives would do if they were in office. They released 10,000 under four different schemes, with no impact assessment when they released them, no victim contact when they released them, and no warning. They did it on the sly.
Let us be clear: we have more probation officers, while the Conservative Government cut probation—decimated it—because of Chris Grayling. We have invested £700 million in probation. We are rolling out the largest programme of tagging in our history. We are forcing offenders to stay boxed in certain areas, rather than where victims are. We are creating alcohol, pub, football and driving bans. We are implementing income reduction orders. We are expanding chemical castration for sex offenders. None of that happened when they were in power.
Sir James Cleverly
I think the Deputy Prime Minister will look back on this exchange and be shocked by how it is coming across: no apology to the victims; and no guarantee that paedophiles and rapists will not be released early. We all know that releasing dangerous criminals on purpose is wrong, but not content with doing that, he is hellbent on releasing dangerous criminals by accident. Last year, in response to my hon. Friend the Member for South Suffolk (James Cartlidge), the Deputy Prime Minister claimed that Labour had got a grip of accidental releases, yet we now know that there have been more accidental releases in the last two years than in the entirety of the last Parliament. I will give the Deputy Prime Minister another chance: will he apologise to the country for his abject failure to keep prisoners in prison, where they belong?
The Deputy Prime Minister
I have got to say, this is rich coming from the right hon. Gentleman. The Conservatives had 14 long years in power; they wrecked neighbourhood policing—he was Home Secretary; prisons were at bursting point—that is why they called the general election; and they let out offenders in secret—and that why we have the Sentencing Act 2026, which passed through this House and the House of Lords. We are getting thousands more bobbies on the beat, toughening up probation—they decimated it—and we have to have the space to lock up dangerous criminals. That is why we passed the Sentencing Act.
Sir James Cleverly
It is the dangerous criminals that the Deputy Prime Minister is letting out early. So he refuses to apologise to victims, and he refuses to guarantee that sexual offenders and rapists will not be released early. Another thing that the country, and indeed this House, knows instinctively is wrong is his personal crusade to scrap trial by jury. We know that it will not clear the backlog, we know that it undermines fundamental British freedoms, and we know that the legal profession is united against it, so will he now admit that it is wrong, and will he commit to reverse his proposals to scrap trial by jury?
The Deputy Prime Minister
Let us be clear: there is no proposal before this House to scrap trial by jury. The right hon. Member needs to do better and get on the detail. There is a threshold change. Margaret Thatcher made a change to jury trials. David Cameron made a change to jury trials. The vast majority of criminal cases in this country are dealt with by magistrates—again, which the Conservatives cut. We are restoring the magistery, so that they can do more. We are investing in our courts—the Conservatives ran our courts down. We are modernising our courts, we are introducing digital ID, and we need reform.
Sir James Cleverly
The Deputy Prime Minister talks in glowing terms about what he claims to be doing, but what we are actually seeing this Government doing is stripping money from where it is needed and squandering it on the welfare bill, which has ballooned by £20 billion this year alone. He talks about getting over the detail, but here is a simple detail for him: when I was Home Secretary, we had more police officers than at any point in British history. Since Labour taking over, that number has dropped by over 2,000 officers.
At the Dispatch Box last week, the Leader of the Opposition highlighted this Government’s failure to defend us internationally. Today, I have highlighted the Deputy Prime Minister’s failure to defend us domestically. If the soon-to-be Prime Minister—is he in the room anywhere?—does not want to be complicit in the Deputy Prime Minister’s failure, he should come out and condemn the plan, not just hint that he opposes it. If this Labour Government cannot protect the citizens of this country, either domestically or internationally, then what on earth is the point of them?
The Deputy Prime Minister
The right hon. Gentleman insists on proving that he cannot count. We lost 16,000 police officers when the Conservatives were in power. The British people have not forgotten what they did to our country. After two years of this Labour Government, I will compare our record with theirs every day of the week. Their record is the biggest fall in living standards in recorded history; our record is the biggest upgrade to workers’ rights in a generation. Their record is wrecking our criminal justice system; our record is bringing down violent crime. Their record is millions of people stuck on NHS waiting lists; our record is cutting NHS waiting lists at the fastest rate in history. Their record is cutting defence—the right hon. Gentleman was a reservist—and hollowing out the armed forces; our record is the biggest boost to defence funding since the early 1990s. Their record is plunging hundreds of thousands of children into poverty; our record is lifting half a million children out of poverty. I will take our record over theirs any day of the week.
John Grady (Glasgow East) (Lab)
The Deputy Prime Minister
This case involves horrific offences against vulnerable children. I know that all Members of this House will join me in paying tribute to the victims, who have shown remarkable bravery in coming forwards. It is evident that these children were failed dreadfully, and Glasgow city council must urgently act on the recommendations of this review. I know that my hon. Friend has written to the Scottish Government to request an independent inquiry, and the SNP should consider that request with the gravity that it deserves.
Daisy Cooper (St Albans) (LD)
I associate myself and my party with the Deputy Prime Minister’s tribute to Sir George Howarth, and his remarks about the 7/7 bombings and all those who live with the consequences of that terrible day.
I wish England good luck for Saturday evening. As the UK braces for its seventh Prime Minister in a decade, I also thank the Deputy Prime Minister for our exchanges and wish him well in whatever role he may have next.
The hon. Member for Clacton (Nigel Farage) used to say, “Leave means leave.” But it seems that his latest stunt is to leave this place just so that he can return as a fully-fledged Member after not just one referendum on his behaviour, but possibly two. Will the Deputy Prime Minister join the Liberal Democrats in urging the Chancellor to delay the hon. Member’s resignation until the investigation is complete, so that the good people of Clacton have all the facts before they cast their votes? Failing that, will he support our “Clacton clause”, so that, even once the hon. Member ceases to be an MP, the investigations can continue?
The Deputy Prime Minister
Well, everyone can see that the Reform leader is just trying to distract from the fact that he is up to his neck in sleaze. He has serious questions to answer and he cannot run away from them. Labour is not going to be part of this circus. I hear it is the people versus the establishment: the City trader, Putin-admiring, professional politician who is pals with crypto billionaires versus Count Binface. There have been unqualified joke candidates in the past—let’s see what the people of Clacton decide.
Daisy Cooper
It is clear that it is a two-horse race. [Laughter.]
On a more serious and very sombre note, MI5 has defended in court an agent who they knew to be openly misogynistic and obsessed with violence. He used his position to coercively control his girlfriend, Beth, and attack her with a machete. To add insult to injury, MI5 gave false evidence to the court. Will the Deputy Prime Minister use this opportunity to offer Beth a full apology on behalf of the Government, and will he use his position to bring back next week a full Hillsborough Bill, which covers the security services, so that we can pass the law before the summer recess?
The Deputy Prime Minister
The hon. Member raises a very serious issue. I will arrange for Beth to meet the Security Minister to discuss the matter in detail. The hon. Member also mentioned the Hillsborough Bill, and I am confident that it will be before the House in the coming days.
Emily Darlington (Milton Keynes Central) (Lab)
The Deputy Prime Minister
My hon. Friend is right that our protections must keep pace with evolving threats such as deepfakes. I know that she has been in discussions with Ministers on the issue. We will look at her amendments closely. We are absolutely focused on protecting our democracy against foreign interference.
Dr Ellie Chowns (North Herefordshire) (Green)
Our politics needs fixing fast. The broken, outdated first-past-the-post system has clearly failed to deliver stable government. We urgently need to rebuild trust in our democracy and ensure that everybody’s vote counts equally. Does the Deputy Prime Minister agree with the right hon. Member for Makerfield (Andy Burnham) that proportional representation is an idea whose time has come? Does he also agree with me and Members across the House that that time is now, before the next general election?
The Deputy Prime Minister
I am very pleased that the hon. Member raises the issue of votes and democracy. But I have got to say this to the Greens: during the local elections, a Green councillor in Lewisham described me and the shadow Foreign Secretary, the right hon. Member for Witham (Priti Patel), as “coconuts”. The Green party looked the other way, kept the candidate in post and rewarded them with the council job—I am not making this up—of cabinet member for healing. The Greens could start the healing process by stopping such racist language.
Douglas McAllister (West Dunbartonshire) (Lab)
Mr Speaker
Order. I think the Deputy Prime Minister can answer that now.
The Deputy Prime Minister
I commend my hon. Friend for the difference that he has made and for his hard work to bring Pride in Place funding to his constituency. He lists an amazing record in two years, and we have got three more to go.
James McMurdock (South Basildon and East Thurrock) (Ind)
The Deputy Prime Minister
I say to the hon. Gentleman that everyone is equal before the law. That is the foundation on which the openness, tolerance and generosity of this country rest. Let us be clear: there is no two-tier justice in this country. The hon. Gentleman was elected as a Reform Member of Parliament and clearly aspires to become one once more. Given reports that concerns were raised with the National Crime Agency about the £5 million gift to the hon. Member for Clacton (Nigel Farage), he should be asking where did the money really come from?
Noah Law (St Austell and Newquay) (Lab)
The Deputy Prime Minister
My hon. Friend is right to champion the huge potential of Cornwall. We are absolutely committed to devolution and putting power in the hands of local leaders. Conversations with local authorities such as Cornwall are ongoing, and we will confirm next steps as soon as possible. I know that Ministers will be happy to update him.
Dr Roz Savage (South Cotswolds) (LD)
The Deputy Prime Minister
The hon. Member is right that we inherited record levels of pollution, and we are determined to tackle that and clean up our waterways. We have acted by banning unfair bonuses, introducing jail time for lawbreaking bosses and unlocking £104 billion of private investment to rebuild vital infrastructure to deliver cleaner waters, and we also have the clean water Bill. Of course I will arrange for her to meet the Minister.
Cat Eccles (Stourbridge) (Lab)
The Deputy Prime Minister
Mr Speaker, I would like to make a statement about the future: it is coming home. I echo my hon. Friend’s sentiments on Jude Bellingham. Not only is he making Stourbridge proud, but he is a source of pride for the whole nation.
In Great British Railways we are seeing the biggest overhaul of our railways in a generation. We will work with all partners, such as local authorities and local businesses, to drive investment, support economic growth and deliver a better service for her constituents.
Helen Morgan (North Shropshire) (LD)
The Deputy Prime Minister
We are raising defence spending to keep this country safe in an increasingly volatile world. That does require tough decisions, and the Department for Transport will set out £700 million-worth of savings from roads funding, but we will consult on the next road investment strategy and set out decisions in due course. I reassure the hon. Lady that safety would come first.
Pam Cox (Colchester) (Lab)
Ruth Ellis was the last woman to be executed in this country. Her case serves as a haunting reminder of a time when our justice system ignored the realities of domestic abuse and coercive control. In the decades since, members of Ruth’s family and supporters have campaigned unwaveringly for her to receive a posthumous pardon. Does the Deputy Prime Minister agree that their courageous campaign and the terrible lessons of Ruth’s case must strengthen the Government’s resolve to free women from devastating cycles of abuse?
The Deputy Prime Minister
I am grateful to my hon. Friend. I have the honour to say that His Majesty the King has accepted our advice to grant Ruth Ellis, the last woman to be hanged in the United Kingdom, a conditional pardon. [Hon. Members: “Hear, hear.”] While the pardon does not claim that she was innocent of killing David Blakely, it replaces the death penalty with a sentence of life imprisonment to recognise a profound injustice in this exceptional case. I know that her grandchildren, Laura Enston and Stephen Beard, are in the Gallery with us today. We hope that this pardon brings a measure of peace to Ruth Ellis’s family, who have carried the weight of what happened to her for over 70 years.
Mr Gregory Campbell (East Londonderry) (DUP)
The Deputy Prime Minister
I know that my right hon. Friend the Secretary of State for Northern Ireland is discussing the budget at this very time. Tackling fraud and error in the welfare system is a priority for the Government, which is why we passed the Public Authorities (Fraud, Error and Recovery) Act 2025, giving the Department for Work and Pensions more powers to stop fraud in its tracks, recover money lost and prevent overpayments.
Luke Murphy (Basingstoke) (Lab)
Yesterday, I was proud to host members of Basingstoke’s Nepalese community here in Parliament, including a number of Gurkha veterans. One of the issues we discussed was Gurkha pensions, and I pay tribute to my hon. Friend the Member for Aldershot (Alex Baker) for all her work on that—I have been proud to work alongside her. Does the Deputy Prime Minister agree that it is time to resolve the long-standing issue of Gurkha pensions, recognising the service and sacrifice of Gurkha veterans to our country?
The Deputy Prime Minister
I am grateful to my hon. Friend. We owe a profound debt of gratitude to the Gurkhas who have served this country courageously. We are listening to the needs of the community and already improving access to healthcare and community support. Ministers have met veterans and the Government in Nepal for constructive discussions on pensions, and those will continue. I will be happy to ensure that my hon. Friend is kept updated.
Rebecca Paul (Reigate) (Con)
The Deputy Prime Minister
We are backing business with the lowest corporation tax in the G7, we have delivered the small business plan with the largest crackdown on late payments in 25 years, we are bringing down costs for businesses through five major trade deals, we have secured £365 billion in private investment since the election and unemployment is down, with over 400,000 more people in work than this time last year.
Florence Eshalomi (Vauxhall and Camberwell Green) (Lab/Co-op)
Last month, I had the opportunity to host the Southbank Centre in my constituency for its 75th anniversary. It is one of the many centres that I am proud to have across Vauxhall and Camberwell Green. The House may know that the Southbank Centre was built as part of the festival of Britain in 1951, which successfully saw people come together to share their identity after the ruin of world war two. Seventy-five years on, sadly, the world is a more divided place. Recently, we have seen two far-right marches—one went through my constituency—leaving many members of the community feeling afraid. There is hope, however, as we see the world cup bringing people together, showing the power of culture and sport. Does the Deputy Prime Minister agree that now is the moment to continue to invest in the things that bring us together, just as the Government did in 1951?
The Deputy Prime Minister
I thank my hon. Friend for her tireless work in this area. She is absolutely right that we must stand united against those who seek to divide us. Our social cohesion action plan sets out how we will tackle extremism, bring communities together and restore national pride, and we are providing local communities with up to £1.7 million to insulate them against the threats to social cohesion.
European Entry and Exit System
(1 week ago)
Commons ChamberRead Full debate Read Hansard Text Watch Debate Read Debate Ministerial Extracts
Sir Roger Gale (Herne Bay and Sandwich) (Con)
To ask the Secretary of State for the Home Department, what measures the Government have put in place to ensure that in the coming holiday season, travellers and business freight are not delayed at our ports, our international railway stations and our airports as a result of the imposition of the European entry and exit system.
The Minister for Border Security and Asylum (Alex Norris)
I thank the right hon. Gentleman for his important question. The entry-exit system is an EU scheme and its implementation is the responsibility of the European Commission and participating member states. This Government have been working closely with the EU, member states and industry to understand the impacts, particularly for the juxtaposed border controls at the port of Dover, at Eurotunnel and at St Pancras, and to advocate for the pragmatic use of the flexibilities available within the legislation to minimise disruption for UK citizens.
The Government have supported all three juxtaposed ports to ensure that they have the right technology and processes in place to make sure that EES registration runs as smoothly as possible. That has included providing £3.5 million of funding to each one to help them make changes to their infrastructure and purchase the equipment they need to ready their sites for EES. It is not unusual to see queues at the Kent juxtaposed ports at peak times due to the unique geography, and that has been the case prior to EES. However, we want to minimise its impact.
On the late May bank holiday weekend, both Ministers and officials engaged with French authorities to ensure that arrangements were in place to handle large volumes of traffic. This resulted in assurances from France that it would have adequate staffing levels and clear escalation plans in case of severe disruption. These arrangements were made use of on 23 May, when the French police aux frontières employed flexibilities available within the regulations to alleviate congestion on the road network. I and my officials and ministerial colleagues across Government are actively engaging with France and the EU to make similar arrangements ahead of the summer period. The Department for Transport continues to support the Kent and Medway resilience forum, which has tried and tested plans in place to manage disruption to the road network in Kent.
For passengers travelling to Schengen countries by air, EES registration will take place at their destination. It will not take place in UK airports, and queues in EU member states are for those states to manage. However, this Government continue to engage with the Commission and relevant member states to advocate for the pragmatic use of the EES flexibilities allowed to avoid delays for passengers. We are also engaging with our European partners on the use of technology, such as the EES app, to move elements of registration away from the border. We continue to encourage travellers to check with their travel operator before departing so that they know when to arrive and are aware of any possible impacts on their journey.
Sir Roger Gale
As the Minister has indicated, over the spring bank holiday there was chaos at Dover, at St Pancras and at the channel tunnel because of the failure of the EES. The French authorities were quite simply not prepared or able to implement the facilities properly. Based on bookings for the coming season, which starts in 10 days’ time, the authorities are now predicting that there could be 12-hour delays to passengers and therefore to freight, which affects our businesses. That is simply not acceptable. Will the Minister, before it is too late, approach the French authorities again and suggest that a waiver must be put in place before the holiday season starts so that we do not again face the chaos that we faced in May?
Alex Norris
I recognise that it is a shared goal for ourselves, for locally affected Members of Parliament and for the French to ensure that we do not see scenes of huge queues. We know the impact that has on individuals and on businesses. The right hon. Gentleman talks about making more efforts, and I can assure him that we will be doing this on a daily basis, as we already are, both with France and with the Commission. We have pushed on this fundamental point. This is a complex scheme in operation, and when volumes peak shortly, the fundamental question will be the prioritisation of flow or of compliance with the scheme. We are pushing heavily, as we will every day between now and then, to ensure that the French use the flexibilities available to prioritise flow. That is what I want, it is what he wants and it is in everybody’s interest.
Ruth Cadbury (Brentford and Isleworth) (Lab)
The right hon. Member for Herne Bay and Sandwich (Sir Roger Gale) is quite right to highlight this challenge and the impact on Kent when these queues build up, and of course the impact on British people trying to get out through Dover, Folkestone and other places. I want to ask the Minister what can be done for British holidaymakers coming home who have been stuck at airports for hours and missed their flights because of the airlines needing to get moving under working time directives. I am led to understand that fingerprints are required on entry but not on exit from the Schengen area, yet many of these delays are being caused because airports in different countries are making holidaymakers provide fingerprints again, as well as the much easier face recognition. Could the Minister pick this up, please, and tell me what is happening?
Alex Norris
I am grateful to the Chair of the Select Committee for that characteristically thoughtful question. As she would expect, a lot of ministerial focus is on juxtaposed ports as they involve things that happen on UK soil and have an impact in UK communities. Nevertheless, we want our travellers to have the best possible experience wherever they are. The checks in Schengen countries are a matter for them, but as I have said, we are engaging with all countries, not just France, to ensure that a proportionate and sensible use within flexibility is made. My hon. Friend and other colleagues will know, too, about the changes that we are making with our own e-gates, including lowering the age involved, so that passengers who have had a difficult journey out have the smoothest arrival back on to UK soil.
Matt Vickers (Stockton West) (Con)
I thank my right hon. Friend the Member for Herne Bay and Sandwich (Sir Roger Gale) for securing this important urgent question. Anyone who has travelled or spoken to those who have tried to use the new European entry-exit system understands why the scale of the challenges over summer is so great, and despite all the problems, it has now been reported that a separate new online system to preauthorise entry to the EU will be delayed until next year. That is a pitiful response, indicative of the problems facing so many UK travellers, and there is nowhere near the urgency needed to address the problems facing the EES as we enter the summer holidays. As the president of Airports Council International Europe recently expressed, politicians should
“stop pretending...that EES is working just fine. It is not.”
That delusional attitude among EU colleagues is not acceptable. With the EU telling representatives of the travel industry that a full suspension of the system is not needed and not possible, the Government must stand behind the interests of British travellers. For instance, there appears to be a ridiculous situation in which a facility built in Dover cannot be activated until the technology for the kiosks, which is the responsibility of the French authorities, is working.
My right hon. Friend the Member for Staffordshire Moorlands, who chairs the Home Affairs Committee, is right: it is time to “apply maximum pressure” before chaos arrives at the border at Dover. Will the Minister detail what conversations the Government have had, and what pressure they will apply? Have they asked for a temporary suspension, relaxation or phased use of EES checks at periods of exceptional congestion? Given the increased traffic, what have the Government done to strengthen plans in case queues spill out of Dover or Folkestone? It is in all our interests to ensure that people can get through border checks quickly, and it is time to ensure that that happens.
Alex Norris
I am grateful to the shadow Minister for his questions. As I said at the beginning of my remarks, I share his point about the importance and impact that preauthorisation can have. We want that to become the norm, and as I said, we are engaging with member states to encourage them to take up use of the EES app. He asked about the intent of our colleagues in the European Union, whether in the Commission or in member states, and I do not detect a lack of intent. They are keen to engage with us, and we engage with them frequently. They want this system to work, and it is important that it does. It is a good thing that our neighbour wants good security arrangements, and we benefit from that too—we certainly have that level of engagement.
The hon. Member talks about full suspension, and as I said yesterday to the right hon. Member for Staffordshire Moorlands in the Home Affairs Committee, I would not set that as the goal and aspiration because I do not believe it is deliverable. What we delivered in May, and what we will seek, is that when we get to peak times and the system is clearly not managing flow appropriately, we need the right flexibilities in place on the ground for staff to make changes that prioritise flow. That is my priority. The hon. Member talks about the facility, and I say gently that of course that facility cannot be used until the technology that it is based on works. We want that to be the case as soon as possible, but that is not a business for us. We have made the money available so that the infrastructure is there. We have delivered on that element, but the technology is clearly taking time to stand up.
The hon. Member talks about pressure, and we are engaged at all levels of Government. In the Home Office, the Home Secretary has engaged with her counterpart and with the Commission, as have colleagues from the Department for Transport, including the Secretary of State, and the Minister for the Cabinet Office, and we are raising these issues on a daily basis. On contingencies, let me take this opportunity to say what a good job the Kent and Medway Resilience Forum has done on this. I am a big resilience forum enthusiast: those are local people making direct local changes to improve their community under pressure. There is also the Dover traffic assessment protocol and Operation Brock. Those arrangements are in place, and we will work with people so that they make the best operational decisions they can along the way.
Chris Murray (Edinburgh East and Musselburgh) (Lab)
Last week I visited the port of Dover with the Home Affairs Committee, to see those operations in action. Given that this is an EU entry-exit system, we must face the fact that this is an inevitable consequence of Brexit, and we have to make it work. The best solution to the challenges facing our constituents this summer is sustained engagement—[Interruption.]
Mr Speaker
Sorry about this. Can the hon. Members for Faversham and Mid Kent (Helen Whately) and for Perth and Kinross-shire (Pete Wishart) stop the little argument on the Back Benches?
Chris Murray
The best solution to managing those challenges this summer is sustained engagement with the French, at leader level, Cabinet level, ministerial level, and working official level, so that the police aux frontières have a delegated responsibility to let flows through. What discussion will we be having at every level with the French, using the better relationship we have struck, so that our constituents and British holidaymakers trying to get a holiday abroad this summer, do not face the consequences of Brexit, which will be missed flights and long queues?
Alex Norris
Sustained engagement with the French is crucial, and it is happening at all levels, be that ministerial, senior official, or operationally, to ensure that prioritisation of flow. This is not something that has just started, and neither is it coming to its end. We are in that constant position and have been for many months, even before the EES started its operations, and that will continue. I say gently that it is not just the French but all EU member states. At some point this summer our constituents will end up in all those different member states. I want them to have the best possible experience, so we are also having those engagements.
Max Wilkinson (Cheltenham) (LD)
It is now 10 years on from the Brexit referendum, and in the words of the right hon. Member for Newark (Robert Jenrick), where are we? We are here, stuck in queues at the EU border for hours at a time, because he and his acolytes forced a damaging Brexit on this country. It is interesting to note that the Conservatives have come to the Chamber today complaining about the consequences of the Brexit deal that they negotiated. The Brexit plan of the hon. Member for Clacton (Nigel Farage), implemented by the Conservatives and unresolved by this Government, has left British holidaymakers in this position. Indeed, the Government are guilty not just of failing to plan, but of political and diplomatic failures that have let down holidaymakers. We are already seeing reports of queues of up to five hours—what a way to start our holidays.
What immediate steps is the Minister taking to mitigate disruption? Will he seek an immediate meeting with the European Commission so that contingency measures can be put in place to protect passengers as a matter of urgency? Will the Government drop their red lines on Europe, and commit to joining the single market and customs union? Not only would that reverse the damage done by Brexit and get our economy back on track, but it would mean that we—[Interruption.]
Mr Speaker
Order. Sorry, but you’ve gone way over your one minute. I think your border queue has just gone. I call the Minister.
Alex Norris
To address the point about Brexit, we must be clear—for example, the Republic of Ireland, which is outside Schengen, also has these challenges, so the idea that reversing to previous arrangements would change that reality is tricky. There is a fundamental choice here, as real practical measures will affect the hon. Gentleman’s community and those of many right hon. and hon. Members, and lots of British holidaymakers. We can choose to use our efforts and leadership collectively to have conversations about the past, or we can work together to ensure that those people have the best possible experience. That is what we are doing, and why we are engaging with France and the Commission. That is the best approach, rather than having global conversations about things that do not really go anywhere.
Daniel Francis (Bexleyheath and Crayford) (Lab)
I travel on the channel tunnel twice a year, and the carrier knows that, in case of evacuation, one passenger in my vehicle is a wheelchair user. The information that comes from the carrier is poor, and my concern over the summer months ahead is about how that continues. People will have to get out of their vehicle for the first registration check, and for some vulnerable users that will cause a huge disturbance on the journey. The pre-registration service is available, but my concern for many people travelling over the summer is about how much information is currently given to them by the carrier. What are the Government doing to work with carriers so that people have as much information as early as possible to help them on their journey?
Alex Norris
My hon. Friend makes an exceptionally important point about vulnerable users. Operation Brock and the Dover traffic assessment project give scope for the KMRF to stand up contingency plans to make movement for domestic travel easier, because the last thing we want is for people, particularly vulnerable people, to be in cars for long periods of time.
On my hon. Friend’s point about communications from the carriers, we work closely with the carriers and they are working hard, as are the ports. My message to travellers would be to check in with the advice they are getting from the carriers, particularly on how long to give themselves. They should not change their travel plans, but they should engage to ensure that they arrive on time. I am a sinner on the Eurostar because I leave things as late as possible, but that is not a prudent approach at the moment. Instead, travellers should check in with their carrier to get the best up-to-date information. I will undertake to have conversations with carriers to ensure that things are as good as possible, in the spirit he suggests.
Dame Karen Bradley (Staffordshire Moorlands) (Con)
The Minister must think he is having déjà vu after our exchange at the Home Affairs Committee yesterday. I implore him once again to make every endeavour and to use his best offices with the EU Commission and the French to try to get them to understand that we cannot wait for there to be delays; we have to anticipate switching off the system. The Port of Dover, Eurotunnel and others have extraordinarily intelligent and complex ways of forecasting flow. Will they look at those flow forecasts and use them to decide when to put measures in place, not wait for the delays to start?
Alex Norris
That is an excellent point. Ahead of the May bank holiday, we demonstrated that we were able to use that rich sense of who is coming—it is not a surprise—and to plan for when the system needs flexibility, particularly for PAF officers. We did that for the May bank holiday and we are doing it again now. We are having conversations to give flexibility in the service of the goal that we all want to see: the prioritisation of flow.
Ben Coleman (Chelsea and Fulham) (Lab)
I am grateful to my hon. Friend for all that he is doing to sort out this mess. Does he agree that the queues and delays facing British travellers under the EU’s entry-exit system were entirely avoidable? Had Britain kept its seat at the table, we would not be subject to these to checks at all, we would have had a voice in the system design and roll-out over the past five years, and we could have made it work better. Instead, just as with steel and electric vehicles, we find ourselves on the receiving end of decisions rather than shaping them. Does he agree that is precisely why we need an ambitious new partnership with the EU, so that Britain can genuinely take back control and British people’s European holidays do not start and end in chaos?
Alex Norris
I share some of my hon. Friend’s analysis, but not all of it. If we are dealing in counterfactuals, which I am usually loath to do but this one is quite entertaining, if we were within these arrangements, a Minister—probably me—would be at the Dispatch Box being pressed, quite rightly, by right hon. and hon. Members, who would be saying “Is your system going to work? Is it going to stand up?” The reason I know that is because that conversation is happening in every EU member state. I encourage colleagues away from the idea that a single counterfactual change in our history would mean that we would have no issues with travel at our ports, because the evidence does not bear that out.
However, I agree with my hon. Friend wholescale about having a close relationship with the EU. Whereas our Conservative colleagues spent a lot of time thumbing their noses at our neighbours, which is never in the interest of the British people, we have a close partnership on data sharing and more, as I told the Home Affairs Committee, so that we work as well as possible with our neighbours to ensure flows of travel and to secure borders.
Helen Whately (Faversham and Mid Kent) (Con)
Every holiday period, Kent and my constituency of Faversham and Mid Kent is brought to a standstill, and that has become much worse with the introduction of the EU entry-exit system, despite the fact that our ports and Eurotunnel have invested in the technology. I understand that it is not working because the French have not managed to get it to work. I disagree with the Minister that everything is fine when Operation Brock is on—Operation Brock is terrible for my area. However, I agree with his point that this has nothing to do with Brexit. I hate to break that to the Liberal Democrats and others who have being trying to make that argument, but the problems have nothing to do with Brexit. The situation could be horrific this summer: imagine people, including children and elderly people, and potentially pets, waiting in their cars in this heat for around 12 hours. It is a disaster. I implore the Minister to involve the Prime Minister—and, most likely, the right hon. Member for Makerfield (Andy Burnham), as this could happen under his watch—in the negotiations with the EU to suspend these checks in advance, not to wait and see, so that we can stop these queues happening?
Alex Norris
It is important to recognise, as I did at the start, that these queues are not new, but the entry-exit system risks being a compounding factor. I too look at the weather and think that I would not want people, including vulnerable people, and pets to be stuck in cars for long periods of time, and we absolutely recognise that. I agree that the operations that I talk about are not a panacea—they do not make queues disappear—but they are about pragmatic ways, in challenging circumstances, of trying to make things better for people, which is a good thing. The resilience forum does a good job with that and we will work alongside it to deliver that. On the hon. Lady’s point about engagement, I hope that she has heard that our approach is not to wait and see—it has not been in the past and it is not now. We want to plan ahead of time so that PAF staff can make flexibilities to prioritise flow.
Dr Scott Arthur (Edinburgh South West) (Lab)
In Scotland, the holiday season has already started. I understand why the Minister has rightly focused on the connection with France, but people in Edinburgh South West are concerned about there being real issues in Portugal, Spain, Italy and Greece when it comes to delays at airports. Is the Minister speaking one to one with those countries to ensure that, at the very least, we are aware of what the challenges could be?
Alex Norris
It is reasonable for the House and the Government of the day to have a real focus on the juxtaposed ports, because the issues happen on UK soil and have impacts in UK constituencies. My hon. Friend is right that our constituents will go to all EU member states and, I would be willing to venture, they will travel to all ports in all EU member states at some point over the summer period. I do not want to see them delayed there, have their holidays ruined or to have a less enjoyable time. In the spirit that he suggests, we have talked to the European Commission and we have talked to member states individually. We have a rich sense individually of not just where every member state is, but where each port is, so that we can impose on them the clear view from the British people that they want flow prioritised, and that is what we are doing.
Sir Bernard Jenkin (Harwich and North Essex) (Con)
Will the Minister point out to the European Union that, because we have a common travel area with the Republic of Ireland, and because the Republic of Ireland is not applying any of these checks on British citizens going to and coming from Northern Ireland or direct from the United Kingdom, there is actually an open border between the European Union and the United Kingdom, so they might as well allow the same access through Dover rather than trying to impose all their rubbish on the United Kingdom? On the suggestion that this is all the fault of Brexit, this did not exist when we left the European Union; this is a result of a decision that the dysfunctional European Union is inflicting on travelling British citizens for its own reasons, not for any practical benefit.
Alex Norris
There is a lot in the hon. Gentleman’s question. I would slightly challenge the assertion that the CTA is an open border. If an individual crosses that border into the UK, they have to have a reason for being there. They have to have real leave and they are subject to enforcement activity if they do not. I would not want anybody, whether they are connecting into the EU or anywhere else in the world outside the CTA, to have the idea that any of our ports are an open border. I want to know who is coming and who is going: that is in our nation’s interests. On his final point about there being no practical benefit, it is not for me to make the EU’s arguments for it—it can do that for itself—but given the conversations that we have in the Chamber about the flows of people across the European Union and then to the UK, it is really good thing that the EU wants to have borders where it knows who is coming and going, because that plays an important part in ensuring that we have a safe border. I think that is a good thing.
Mike Reader (Northampton South) (Lab)
As an MP who represents a constituency at the heart of the golden triangle, with one in five of my constituents working in logistics, this issue comes up regularly, including most recently with Steve Deveraux from BSI Transport, who explained to me the costs and the red tape that the current entry system creates. Will the Minister set out what assessment his office has made about the economic impact of the new system on HGV drivers and hauliers, and what measures the Department will take to support that sector going forward?
Alex Norris
My hon. Friend raises an important issue. On HGVs, there is degree of ease because the majority of HGV drivers are European nationals and are not subject to the same degree of checks, so that makes things flows more easily. That does not help if they are in the queue, but it helps to ensure that they do not cause the queue. On his point about the checks themselves, the good thing about the scheme is that once people have done the check, they supposedly will not need to do it again for three years, so things will get easier over time. We are looking at the impacts on the economy and the ordinary lives of the British people. Our clear message is to prioritise flow, and that is why we are having those conversations in that way.
Mike Martin (Tunbridge Wells) (LD)
I thank the Minister for all his efforts in trying to sort out a Tory mess. As a fellow Kent MP, I like and greatly respect the right hon. Member for Herne Bay and Sandwich (Sir Roger Gale), but is it not a bit cheeky to ask the Government of the day to sort out the mess that the Conservatives voted for? Will the Minister ask the Conservative party to respond with regard to creating the problem that he is having to sort out?
Alex Norris
I have always taken the view that I get to do the answers, but I do not get to do the questions as well—you know that well, Mr Speaker. I will seek to address whatever is put to me to the best of my ability. The hon. Gentleman is right; I spend a lot of my time clearing up the mess made by Tory predecessors, but I am not necessarily sure that this is one of them. However, there are plenty of other messes, including the rampant use of hotels that they allowed, small boat crossings in their entirety, and plenty more.
Chris Vince (Harlow) (Lab/Co-op)
I thank the Minister for his answers so far. This is a hugely important issue for residents and businesses in my constituency of Harlow, not least because we have an international airport on our doorstep. I am a big believer in co-operation, and I know that when we co-operated with our French allies in the ’60s, the result was supersonic. What is the Minister doing to work with our French allies and other European countries? I do not seek to repeat the arguments of the past, but it is hugely important that we co-operate with our European allies to sort out this situation.
Alex Norris
Along with me, my hon. Friend holds that most exalted status of being a Labour and Co-operative Member of Parliament. By instinct, I am the same as him; in anything in my life, I have never found that a problem with my neighbour, whatever its nature, got better by shouting rather than by co-operating. That is the spirit of our engagement at the moment. I believe that is the best approach going forward, and that is what we will continue to do.
John Cooper (Dumfries and Galloway) (Con)
Haulage, agricultural and fisheries firms in my constituency are heavily reliant on Dover, and delays, particularly to seafood, are disastrous—the value of the cargo disappears practically overnight. I am a member of the Business and Trade Committee, and when we visited Dover I was delighted to see £40 million-worth of infrastructure on our side of the short strait. The reality is that the difficulties lie on the far side of the short strait. Is it not time that, rather than warm words about an EU reset, we had the French ambassador in for an interview sans café?
Alex Norris
The hon. Gentleman is testing my GCSE French—maybe I will be found wanting in that regard. On his first point, we absolutely accept that for some products, time is absolutely crucial. That is why the ports have put their money where their mouth is, but we have also put the British people’s money into that, because it is important for his constituency and for all of us to ensure that British seafood thrives. That is the right thing to do. I do not his approach is the most effective way of engaging. Rich conversations are happening on a daily basis, and it is better that we do that, rather than summoning the ambassador or anybody else. Our approach with France and with the Commission is better.
Graham Leadbitter (Moray West, Nairn and Strathspey) (SNP)
There are clearly significant challenges to work through, and that is not unusual with large-scale technology adoption, as we know. I welcome the fact that the Government are working hard to find the trigger points where measures will be reduced or suspended for periods to try to keep queues to a minimum.
There are two areas that I think the Government could do a bit more with. They could do even more to promote the official “Travel to Europe” app, which might help with some of the delays. Will the Government also ensure that perishable goods have prioritised access at ports? That is particularly important for fish exports and other short-life produce, which is critical to our economy.
Alex Norris
The nature of who is driving short-use freight can make that easier, but there is a challenge in terms of prioritisation. As I have said to colleagues, there is a very good reason for the prioritisation of vulnerable individuals in cars for long periods of time, and there is flexibility in KMRF’s plans. There is a real challenge in finding that, because many if not most people have a good reason to move through at the quickest possible pace, and we want everybody’s flow to be as good as possible.
The hon. Gentleman makes a really important point about travel information. We need people to avail themselves of that information at early points, particularly the amount of time that they need to leave, in order to plan their travel.
Greg Smith (Mid Buckinghamshire) (Con)
It should not have come as a surprise that the system is a complete disaster. In the previous Parliament, the European Scrutiny Committee, which I served on, was looking at this very issue and at many of the steps that could have been taken. However, on taking office, this Government abolished the Committee, so scrutiny was not carried through to preparations for implementation. One of our suggestions for the transitional period before the three-year rule took effect was to provide off-site units where people could have their fingerprints taken under supervision. That would have cut queues at those juxtaposed ports. Why did that not happen? Why was that suggestion not taken up? Will the Minister put it to the French Government that that could be a solution?
Alex Norris
I might contest the idea that we do not do very much European scrutiny in this place. That would be very difficult to say, because I do not recall ever standing at the Dispatch Box without talking about the European Union—it seems there are some colleagues who seek to talk about nothing else. We do have the chance to look at these plans adequately.
On the point about off-site infrastructure and similar matters, the issue is not with the infrastructure available. We can have the best infrastructure available, but if the technology that pulls through to it does not work, the system will not work. My absolute belief, which the hon. Gentleman will get to challenge in due course, is that when that tech is operational, the infrastructure will be in place and in the right parts of the ports, but we need the tech to work before we can properly test that.
Mr Paul Kohler (Wimbledon) (LD)
Despite the unholy alliance between the Minister and Members on the Tory Front Bench, this issue is clearly a product of Brexit. I visited Dover with the Home Affairs Committee last week. Dover has invested more than £40 million in infrastructure, but the software is not working, and there will be chaos unless the EES is suspended this summer. This is a Brexit dividend, but will the Minister emphasise to the French that, rather than enjoying the schadenfreude, they should know how much their economy will be damaged by the chaos that will ensue?
Alex Norris
On the point about alliances, I have always taken the view in this Chamber that if I agree with somebody, I say that I agree with them; if I disagree with them, I say that I disagree with them. It does not really matter which party or what part of the UK they come from. That is in the interests of all our constituents.
The hon. Gentleman has heard my answer to the point about Brexit. Whatever the well-meant and different positions we may hold, I know for certain that if we went tapping on the windows of people in queues to say, “By the way, do you know that this is about Brexit?”, they would not consider that a suitable or sufficient answer from their leaders.
I do not recognise the point about the French and schadenfreude. I have not heard that in this debate, and it is certainly not the view of the Government. We always see these things as shared challenges with our neighbours. We have what we think is a very important way forward, and we are having conversations with our neighbours.
David Mundell (Dumfriesshire, Clydesdale and Tweeddale) (Con)
I echo the point made previously about the Scottish holidays having already begun and the need to focus on holiday hotspots, if I can use that expression, such as the Spanish and Greek islands, to ensure that travel is made as easy as possible for Scottish travellers. May I raise the issue of coach travel? Many people travel by coach. What assessment has the Home Office made of the impact of the EES on not just passengers but coach drivers?
Alex Norris
The point about Scottish holidays has been well made by colleagues. We can model volumes relatively accurately, because we know who is and is not on holiday and who has and has not booked holidays. We have prepared throughout for different spikes, particularly around different events. I was worried— forlornly, it seems—that Manchester City fans would not be able to get to the champions league final. I am sad to say that, as it turned out, we did not face that particular challenge.
The right hon. Gentleman’s point about coaches is very important in terms of both passengers and drivers. It is a heavily regulated profession, which means that there are hard and fast rules about what drivers can do. Coach companies are well placed, because they routinely travel on these routes—it is their business. We are having conversations with all sorts of transport carriers about preparation and planning.
Carla Lockhart (Upper Bann) (DUP)
Yesterday, in a session of the Northern Ireland Affairs Committee, Mr Eddy Montgomery—a senior Home Office official—revealed to my right hon. Friend the Member for Belfast East (Gavin Robinson) that this Government are focusing purely on the ports. A senior official has confirmed that this Government are concerned only about the ports and about who is coming into Great Britain, not Northern Ireland. Does the Minister agree with that, given all that has happened in Northern Ireland with regard to illegal immigration?
Alex Norris
The hon. Lady may or may not have had the chance to see from the transcript or, indeed, the video that I was on the subsequent panel for that session. That is not the view of the UK Government; the point being made was that we have significant levels of immigration enforcement for the common travel area. There have been over 2,600 visits since the general election, and more than 1,000 people have been removed from the UK as a result of those visits, 500 of them back to the Republic of Ireland—we take that enforcement very seriously. Of course, for very good reason, we focus on all of our ports as a point of challenge, but that enforcement activity happens across Northern Ireland, not just at the ports. We take an intelligence-led approach to Northern Ireland, and we always will, because we do not want to see the CTA abused.
Charlie Dewhirst (Bridlington and The Wolds) (Con)
Further to the excellent point made by my hon. Friend the Member for Dumfries and Galloway (John Cooper), the Minister will no doubt be aware that Bridlington is the lobster capital of Europe, and therefore any delays at Dover have a serious impact on our vital export market. However, I want to address the wider issue of tourists this summer. Does the Minister agree that other countries—such as France, Spain and Portugal—should follow the lead of Greece and delay the implementation of the EES system until such time as it is fit for purpose?
Alex Norris
I commend Bridlington’s lobster industry. I have to say, that was a new one to me, but let me correct that error at the first possible opportunity. Lobster is, of course, the ultimate time-sensitive seafood product—I am stretching my seafood knowledge to some degree—and we are therefore very aware of the impact on Bridlington’s seafood industry.
I agree with the hon. Gentleman about member states using their flexibilities. The conversations we are having—with France, but also with the Commission and across EU member states—are about using flexibilities to prioritise flow. I think all colleagues would agree that that is the right thing to do.
Pete Wishart (Perth and Kinross-shire) (SNP)
Mr Speaker, it is the 10-year anniversary of Brexit, but you would barely know it. There have been absolutely no celebrations whatsoever—no carrying of the hon. Member for Clacton (Nigel Farage) shoulder-high down the mall, no celebrations of how we spent that extra £350 million per week—but here we have it, the Brexit birthday present after 10 years: a miserable start to people’s holidays and our business being disrupted. Scotland did not vote for Brexit. Scotland wanted nothing whatsoever to do with Brexit, so why are Scottish holidaymakers getting caught up in this situation, and what is the Minister doing to alleviate it?
Alex Norris
The hon. Gentleman has heard what we are doing—engaging with our partners across member states and the Commission to make sure they prioritise flow over compliance, which is the right thing to do. He raises important points about Brexit, which come up frequently in our discussions. As he may well have heard me say, I deal with challenges on a daily basis that result from the decision the British people took, such as access to data and information that we are doubtlessly missing, which we are seeking to add back as part of the UK-EU summit. I am just not sure that this situation fits into that category, because we would be having this conversation in some form either way.
Dr Al Pinkerton (Surrey Heath) (LD)
It is clear that the delay to the UK-EU reset summit—it was initially scheduled for July, but has now been delayed till October—has not cancelled the problems which that summit was, at least in part, designed to address. Might the Minister suggest an interim emergency summit to deal explicitly with this issue, bringing together the French and the European Commission to try to resolve it before we hit peak summer season? If he is willing to organise that summit, could he also raise the case of UK hauliers, who are reporting inconsistent scanning of their exit from the Schengen area and real fears that their 90 in 180-day entitlement will artificially run down as a result? That is going to have a profound effect on our economy.
Alex Norris
The hon. Gentleman perhaps ascribes to me greater power than I have with regard to convening international summits. This issue is being considered outside of that process, anyway—these conversations are happening every day. I also know that my right hon. Friend the Home Secretary will meet her European counterparts next week and that the EES is on the agenda for that meeting. That work is going on.
I am concerned to hear about the inconsistent scanning, which I know has a profound impact on businesses and workers. If there are examples, I would be very keen to look at them, to make sure people are not being affected in ways they should not be.
Jim Shannon (Strangford) (DUP)
I thank the Minister very much for his positivity in his answers—he always tries to calm us when it comes to these questions, fairly successfully. While the Home Office scrambles to prevent chaos at English ports, what specific, targeted measures is the Minister putting in place at our Northern Ireland seaports—such as Belfast and Larne—and at our airports, to stop this EES loophole turning Northern Ireland into a magnet for illegal, untracked transit into the rest of the United Kingdom?
Alex Norris
It is important to say that of course, there will not be EES checks at those ports; the only EES checks taking place on UK soil are at the juxtaposed ports I have talked about. Nevertheless, I am very interested in the travel arrangements and good holiday arrangements of the people of Newtownards and the rest of Strangford. It is really important that when they get to their destination and when they come home, they are able to flow through, and we are having conversations with all member states on that basis. Similarly, the hon. Gentleman will have heard about the changes and flexibilities we are introducing with regard to our domestic e-gates, to make sure that when his residents get home, they can get through their ports more quickly.
Maritime and Coastguard Agency
(1 week ago)
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Mr Alistair Carmichael (Orkney and Shetland) (LD)
(Urgent Question): To ask the Secretary of State for Transport if she will make a statement on the management of the Maritime and Coastguard Agency and proposed changes to payments made to coastguard rescue officers.
The Parliamentary Under-Secretary of State for Transport (Keir Mather)
I thank the right hon. Member for Orkney and Shetland (Mr Carmichael) for tabling this urgent question on what is an incredibly important matter. I welcome the opportunity to set out the Government’s position on the remuneration of coastguard rescue officers, and I want to begin by recognising the extraordinary contribution made by CROs across the United Kingdom. For generations, His Majesty’s Coastguard’s coastal response has depended on people from local communities who choose to serve, often alongside full-time employment and family life. The reason we are here today is that the model had to change.
For years, when people signed up as volunteers, they had their expenses covered and an offer of hourly pay—which they did not need to claim—in recognition of the incredible service they undertook and the impact it had on their personal life. A Court of Appeal judgment has clarified that this payment overwhelmingly shifted what many considered to be a volunteer relationship into a work-wage bargain, and that this in turn conferred worker status. Everything we have done since has been to respect that judgment, understand what we do next, and allow CROs to continue fulfilling their vital public service and retain operational capacity.
There is no perfect solution, but ultimately, the volunteer model was judged at the time to be the better outcome for the service. That was the judgment reached by the MCA, which—as experts in search and rescue—took into account a variety of factors including profiles of incident types, geographies and organisational implications, as well as a survey of CRO sentiment and legal analysis, with which it made a recommendation. That recommendation allowed CROs to retain volunteer status, with the aim of protecting flexibility and the ability of people to serve alongside their primary employment. Careful consideration was given to options, including legal position, the operational implications and the wider organisational impact.
I have heard the concerns of the CRO community about this change. That is why the next stage of the process—the engagement sessions that were due to take place this week—have been postponed while I carry on working with CROs, trade unions and colleagues across the House. I will reflect on what has been raised in these discussions and consider how our coastguard volunteers can be recognised in the long term. Volunteering has been at the heart of His Majesty’s Coastguard’s response for over 200 years. It enables individuals to serve their communities alongside their primary employment, maintaining choice and flexibility. I remain grateful to all members of the Coastguard Rescue Service for their unwavering commitment to their communities and people in distress around the UK coastline.
Mr Carmichael
Through you, Madam Deputy Speaker, I thank Mr Speaker for allowing me the opportunity to ask this urgent question today, and I thank the Minister for his answer. As he knows, last week, we had more than 30 Members in Westminster Hall for a debate on these changes. I am pleased to hear that as a result of his intervention, the check-in meetings were postponed, and that the matters are now under full consideration. Is the Department considering the possibility of legislative change to deal with this problem? The House goes into recess at the end of next week, so can the Minister give the House an undertaking that those check-in meetings and this process of change will not be resumed during the recess, and without a statement first being made to this House?
Since last week’s debate, I have been contacted by a number of full-time officers who have described to me a toxic management culture within the agency. I have been told of at least three whistleblowing complaints that were made to the Department in March. Despite the passage of time, the whistleblowers remain unclear about the progress of their complaints. Can the Minister give me some reassurance that those whistleblowing complaints will be properly and speedily investigated, and that a proper and independent investigation will now be initiated into the management culture within the Maritime and Coastguard Agency?
Finally, information obtained under a Freedom of Information Act release indicates that responses to the MCA’s own survey show that almost 40% of CROs would either reduce the number of call-outs to which they respond or leave the service completely. That contradicts what Members of this House were told by the MCA. Can the Minister please explain why this information was not disclosed voluntarily by the agency? Will he now fully disclose the outcome of that survey?
Keir Mather
May I begin by thanking the right hon. Member not only for his championing of CROs, but for doing so in such a fair-minded, open and constructive way? I will respond substantively to some of the points he has made. On parliamentary scrutiny of prospective changes or working through options for the future of CROs, I make the commitment to him that Members of Parliament will be updated fully on any changes and on the next steps. During the Westminster Hall debate on this issue, he made the important point that MPs need to be allowed access to CROs to have meaningful conversations about what they think the future of the service should look like.
The right hon. Member asks whether survey data was used to inform the judgment that was made. I can confirm to him that survey data was one constituent part of a package of advice in regard to an operational recommendation by experts at the MCA about what the future model should look like. That was used alongside impact assessments and modelling. He raised this in his contribution to the Westminster Hall debate, but if he has further information about how CROs believe this change will impact them, and about the reality for his rural constituency and the island communities that he represents so fulsomely, I strongly encourage him to share that with me. I reiterate that I want Members of Parliament to be able to play a full role in representing CROs throughout this process.
Torcuil Crichton (Na h-Eileanan an Iar) (Lab)
I declare my chairmanship of the all-party parliamentary group for volunteer rescue services. I inform the House that, along with my hon. Friend the Member for Scarborough and Whitby (Alison Hume) who chairs the all-party parliamentary group for coastal communities, we are holding a joint evidence session for CROs next week, so that they can come and tell their stories to parliamentarians. When I spoke to my CROs in Stornoway and across the Western Isles, their message was one that I hope has been received by the Minister: pause the consultation, listen to CROs and hear about the vital role that they play as a fourth blue light service. The role is about not just coastal rescue, but delivering carers and emergency workers to the elderly in time of need. Can I also have an assurance that he will keep CROs fully informed about the process and come back before Parliament goes into recess to ensure that we are fully informed?
Keir Mather
I have already made a commitment to the right hon. Member for Orkney and Shetland (Mr Carmichael) to keep the House fully informed about any next steps that are taken, but my hon. Friend raises a broader point about how CROs have been engaged throughout this process. There are some fundamental truths that I keep coming back to. One is that remuneration takes place because it allows CROs to carry out the work that they do. They do not do it for the money, but it allows them to carry out this vital public service. Another truth is that it is not always possible to reflect the scale of the contribution that CROs make. I was in Southampton the other day and spoke to around 15 CROs. They were talking about the system not recognising when they take the van for an MOT or douse down the equipment after somebody has been rescued from mud. Ultimately, it is about fairness and recognition, and that is what I want to do my level best to inject into this process.
Greg Smith (Mid Buckinghamshire) (Con)
I congratulate the right hon. Member for Orkney and Shetland (Mr Carmichael) on securing this urgent question, and Mr Speaker on granting it. There is deep concern across the whole country about the Government’s decision, which particularly affects our coastal communities. That was demonstrated clearly by all Members in the Westminster Hall debate last week, during which the Minister said that he would reflect on what he had heard. He has repeated that today, but from the answers he has given so far, I suggest that he reflects a little harder and with more urgency.
I pay tribute to my hon. Friend the Member for Isle of Wight East (Joe Robertson) for his tireless work in highlighting these issues. The problem is not speculative; the data revealed by The Times from the MCA survey is clear: this change will decimate the coastguard. The survey showed that across all regions, between 25% and 58% of those who responded said a volunteer model would lead them to quit or reduce their hours, including 56% in the south-east and southern England regions, which cover the busiest stretches of coastline in the UK. A decrease in the number of coastguard officers of this scale would put people’s lives at risk. It is that simple.
Despite knowing that this decision was coming for months, there appears to have been a complete failure by the Department to appreciate and anticipate its impact. Why is that? Why was the impression given that even though it was a tough decision, the coastguard would be able to carry on as normal and there was sufficient support for the changes? Can the Minister explain who within the Department and the MCA knew about the revelations in The Times this week? Why was the MCA allowed to share information with Members in what can only be described as a questionable manner? The data is the data; it is not part of some sort of package.
The first responsibility of Government is to protect the public, but in this matter I fear that they have failed. As we look ahead and approach the height of summer, protecting our waterways is critical, so will the Minister answer a simple question: what will he do urgently and immediately to solve the problem?
Keir Mather
On what I am doing personally to solve the problem, the reason that those consultation sessions are not going ahead this week is that I am honouring the commitment I made to the House last week in the Westminster Hall debate in responding to the number of concerns expressed by Members of Parliament about the operational implications of the decision that was taken. The right hon. Member for Orkney and Shetland (Mr Carmichael) raised serious concerns and questions were asked about parliamentary engagement with CROs. Allegations were made that MPs were not granted proper access to engage with CROs prior to the decision being taken. Those things are all of serious concern to me, and that is why this pause has gone ahead.
I question what the shadow Minister says about the data standing alone in the operational judgment that was made. I reiterate that a package of measures enables us to make a decision. It is based on impact assessments, operational evidence and the surveys that he references. The surveys only form a constituent part of that process. The salient point remains that it is right to reflect on the concerns that have been raised across this House and to consider long-term options that will ensure that CROs feel valued and that operational capacity is retained in every part of the United Kingdom, including our rural areas. That is what I am committed to doing.
Alison Hume (Scarborough and Whitby) (Lab)
I declare my interest as co-chair of the APPG for coastal communities. I recently met coastguard rescue officers from Ravenscar who are seriously concerned about the future of the service. These CROs bring decades-long experience and routinely respond to complex call-outs in my constituency of Scarborough and Whitby, including, sadly, those involving suicide. As my hon. Friend the Member for Na h-Eileanan an Iar (Torcuil Crichton) has mentioned, we are holding an evidence session next week in Parliament. May I invite the Minister to attend and hear at first hand from CROs about their fears for the future?
Keir Mather
I thank my hon. Friend for her doggedly determined support for her CROs. She is absolutely right to do what she is doing. I would be pleased to engage with the evidence sessions that are taking place next week, and I look forward to seeing the findings from them. She is right to point to the fact that CROs have decades of experience. I spoke to a CRO in Southampton just the other day who had served, including through the MCA, for the best part of 50 years. We cannot afford for that experience to slip through the cracks. She also mentions that CROs often have to respond to the most tragic of circumstances, when unfortunately it has not been possible to save people. Remuneration does not obscure that fact or make it better, but it is a way of recognising the enormous contribution that CROs make. That point about fairness and due regard for the contribution that CROs make has to run through the centre of what comes next.
Madam Deputy Speaker (Caroline Nokes)
I call the Liberal Democrat spokesperson.
Ben Maguire (North Cornwall) (LD)
I sincerely thank my right hon. Friend the Member for Orkney and Shetland (Mr Carmichael) for asking the urgent question. Highly skilled, experienced coastguard volunteers are being badly let down by the Government, and I cannot imagine other rescue service personnel being treated in the same way. No one could argue that £11 an hour was enriching these volunteers; it was merely enabling them to do their vital work. As one coastguard volunteer from my constituency put it,
“I make significant personal and financial sacrifices to be available for emergency callouts—and I didn’t join the service to get paid.”
Sadly, we did not need to get to this point.
Did the Minister even speak to any of the CROs to hear what impact the changes would have on them before this rushed decision was made? Will he commit himself to a full risk assessment of these damaging changes? Finally, will he confirm that the Government are considering viable alternatives, such as a statutory stipend system, passing legislation to exempt CROs from worker status, or even just embracing their worker status?
Keir Mather
The Liberal Democrat spokesperson was right to say that CROs do not do it for the money, but it is the money that makes what they do possible. He also said that £11 an hour does not constitute remuneration in the way that it might, given that we would all hope that CROs can be respected. What it does do is go some small way towards compensating for the Christmas dinners and birthdays missed, the call-outs in the middle of the night, and the disruption to family life. That is a part of the CRO experience that I think needs to flow into our decision making and that was certainly reflected to me when I spoke to the 15 CROs in Southampton the other day and learned about their lived experience of processing these changes.
The hon. Gentleman asked me about risk, about mitigating risk, and about operational certainty. I can confirm to him that operational impacts were carefully considered in the advice that was put to me, and that that modelling has been done and has informed this part of a package of data, alongside the survey information. That informs the experts in the MCA, who are there to advise on what the operational impacts would be, of the reality of the situation.
Anna Gelderd (South East Cornwall) (Lab)
I thank the Minister for his continued engagement with me and with other Members, but given the unique nature of the role of coastguard rescue officers and their extraordinary commitment to responding at all hours in areas including my own constituency, will he ensure that the Department undertakes a comprehensive assessment of all viable options so that the Government can reach a fully informed decision that is right for both CROs and the communities, such as mine, that they serve with such dedication?
Keir Mather
My hon. Friend has given me an opportunity to reiterate that CROs, their lived experience and their views on these changes must be at the heart of what happens next, which is why the meetings that were scheduled to take place this week are not taking place this week. I want to take the time to reflect on what hon. Members have told me, and also what CROs have had the opportunity to tell me about how these changes will affect them. Nowhere is that more important than in rural communities like the one that my hon. Friend represents. Let me build on that point. As the local Member of Parliament, she should be able to engage with her CROs on this matter where it is most convenient to do so—perhaps at the station itself—so that she can represent them. It is also important for trade union representation to be factored into ongoing engagement with CROs, so that we can make sure we get the details right.
Joe Robertson (Isle of Wight East) (Con)
The boss of the Maritime and Coastguard Agency told MPs in person that 93% of CROs surveyed were happy with moving to an unpaid volunteer model. That was false: the survey data shows that in many areas across the UK, nearly half would reduce their hours or quit. I am amazed that the Minister has any confidence in the boss of the MCA. Will he now confirm that the decision will not take effect in September and that he will consult properly himself, and will he say if he does have confidence in the boss of the MCA?
Keir Mather
We need to ensure that the CROs who are affected by these changes have an opportunity to carry on raising their concerns, but also to raise other instances. The hon. Gentleman has argued forcefully that the worker model is an appropriate way in which to continue, and that could be true in a great number of cases, but it is not true in every case. Indeed, I spoke to a CRO in Southampton for whom it is not the case.
We need to tease out the detail of all these matters. We need to listen carefully to CROs, and we need to create the space to allow that to happen. I am not going to say specifically what options I may or may not take in the coming days, but by pausing the sessions that were meant to happen this week I am creating the space that will make it possible to weigh up those options dispassionately and ensure that we can get them right, so that CROs can continue to share their views and we can make decisions that reflect the incredible contribution they make.
Justin Madders (Ellesmere Port and Bromborough) (Lab)
I refer the House to my entry in the Register of Members’ Financial Interests and my membership of the GMB trade union.
I am sorry to say that it beggars belief that the response of a Labour Government to a court judgment confirming workers’ rights should be to run in the opposite direction, in some perverse form of fire and rehire. I hope the Minister will make it clear that that is not what we stand for, and that he will do his utmost to address the situation. However, there is a wider point, isn’t there? Too often we see ambiguities in employment status dealt with by the courts on an ad hoc basis. Is that not a reason for us to get on with our manifesto commitment to move to a single status of worker?
Keir Mather
My hon. Friend has a great deal of experience in the House of making sure that workers and their rights are protected, but his characterisation of the situation at the start of his question was one that I could not reject more strongly. Changes in the coastguard rescue service operating model are the result of a legal judgment which meant that the current model could not legally continue. What we are attempting to do is maintain a system whereby CROs feel valued in their work and feel motivated to turn up and carry out their shifts, and ensure that the fairness that is inherent to that is respected and implemented. That is exactly why I have postponed those meetings this week, and created the space in which to hear from CROs directly about their concerns and to get the detail of this right.
Ian Roome (North Devon) (LD)
The MCA has told MPs that it has data to back its claim that CROs would rather be volunteers than employees. Can the Minister confirm that those findings can be shared? This has a massive bearing on the MCA’s decision, and may greatly undermine the essential lifeline that CROs provide to coastal communities like mine in North Devon.
Keir Mather
I understand that for the hon. Gentleman it is not an option to have a coastguard service that works effectively; it is an absolute necessity to protect people in his coastal community. What I can say to him is that we will continue to engage with CROs. When one of his colleagues in the Westminster Hall debate asked me what information could be shared, I made a commitment that I would go back to my officials and ask that question, and that is something that I am currently working through. However, what I have derived from this process is the need to ensure—this has been my enduring objective throughout the process—that CROs feel heard and are able to share their concerns, including through their MPs, and the hon. Gentleman has rightly allowed that to happen.
Helena Dollimore (Hastings and Rye) (Lab/Co-op)
I, too, refer the House to my entry in the Register of Members’ Financial Interests in respect of the GMB, and also declare that I am a supporter of the Royal National Lifeboat Institution.
I thank the right hon. Member for Orkney and Shetland (Mr Carmichael) for asking the urgent question, and pay tribute to the lifesaving work done by our local coastguard officers, as well as the brilliant volunteer RNLI officers and those in independent lifeboats, like the one at Pett in my constituency. I also thank the Minister for stepping in and pausing this process. I agree with him that it is vital for us to review the process fully and reflect on the MCA’s handling of the issue—which, in the experience of my local coastguard officers, has been pretty shocking—and to pause and take enough time to get this right for our coastal communities. Given the increase in extreme weather events owing to climate change—we are experiencing a heat wave now, we know that there will be more storms, and there might even be more sharks coming to our waters—the work of the coastguard officers is more important than ever before.
Keir Mather
I thank my hon. Friend for raising those points, and for enabling me to reflect on a question that has been raised by a number of Members: the question of about how engagement is to take place from now on. Let me make it absolutely clear that my expectation is for all engagement with CROs, whether through the MCA or meetings with Members of Parliament, to be conducted as openly and transparently as possible. I want CROs to feel able to share their views openly in all their complexity—and I found some of the allegations made last week by the right hon. Member for Orkney and Shetland about CROs being made to feel uncomfortable about sharing their views deeply concerning.
Let me reiterate that I will be making it clear to the MCA’s leadership that that is how I want them to approach this engagement. It includes ensuring that MPs and trade unions play their full role, and I hope that my hon. Friend can do so.
Sir Roger Gale (Herne Bay and Sandwich) (Con)
This House has the capacity to criticise, but it also has the capacity to be fair. The Minister probably finds himself between a rock and a cliff face in a situation that he did not make himself. That does not absolve the MCA from the criticism that has rightly been levelled at it earlier today.
Mine is one of those peculiar constituencies that have both a north coast and a south coast. Those two coastlines are served by dedicated volunteers who go out in all weathers to save lives, and I have heard from some of them. It is quite clear that unless this situation is resolved swiftly, those people will be lost—and if they are lost, they will not come back. Obviously I cannot speak for others on these Benches, but I will back whatever measure the Minister seeks to take in order to ensure that there is a timely resolution to this issue, so that we do not lose good people.
Keir Mather
I thank the right hon. Gentleman for his remarks. I share his view that we cannot afford to lose the level of experience that we have within the MCA and the CRO community. I, too, heard the scale of concern that he so ably references and has experienced among his own coastguard volunteers. It is critical to recognise all the work that CROs undertake that lies outside the call-outs they receive. They do an enormous amount of work, which is not fully recognised and needs to be. On treating them with due respect and esteem, it is essential that we figure out a way forward that allows us to do so. The right hon. Gentleman has picked up the necessity to do that, and it is certainly my intention that that will inform whatever comes next in this process.
Fred Thomas (Plymouth Moor View) (Lab)
I am very grateful to hear that the Minister has engaged with coastguard rescue officers in Southampton, which is typical of his diligent manner and his approach to difficult issues like this. I invite him to interact with my constituents who are part of the Plymouth coastguard rescue team, who tell me harrowing stories of supporting the ambulance service and the police—sadly, too often with suicide-related issues. It is an unbelievable service and, yes, CROs deserve remuneration, but they also deserve a lot more recognition. Will the Minister agree to speak to those constituents of mine?
Keir Mather
I would be glad to speak to my hon. Friend’s constituents, and he raises an incredibly important point: very often, CROs are not only discharging the responsibilities that we would expect of coastguard rescue officers; they are increasingly filling in the gaps for other emergency blue light services that, for whatever reason, are not able to get to people in time, or are thinly stretched and require CROs to step up. That requires them to go beyond the operational requirements that we would expect of them. This process is not just about recognising the incredible service that they contribute within the envelope of what is expected of them; they go beyond that every single day. My hon. Friend explains the issue well, and I would be happy to engage with his constituents.
Steve Darling (Torbay) (LD)
In my discussions with coastguards in Torbay, they have shared the full spectrum of their activities. One of the most disturbing and harrowing is the recovery of dead bodies—not only where humans or pets may have gone over the edge of a cliff, but where people have died from drowning. That may be an accident or a suicide, and it will leave emotional scars on the officers. Does the Minister agree that choosing not to financially compensate people who undertake work that many of us would find really difficult is nothing short of an insult?
Keir Mather
The hon. Gentleman speaks powerfully about the contributions that CROs make in the most tragic and emotionally traumatic circumstances. We need to do a number of things, including building a system that allows us to retain operational capacity so that we can keep people safe in our water, and granting CROs, and the MCA more broadly, the resilience to be able to carry out their meaningful work. We also need to treat CROs with the fairness, dignity and respect that they require. He is right to say that remuneration allowed us to do that. We are now dealing with the consequences of the Court of Appeal judgment to process how we move forward, to make sure that fairness and due respect continue into the future. I hope that he can continue to hold me to account as we do so.
Alan Gemmell (Central Ayrshire) (Lab)
I thank the Minister for his statement and for his engagement on this issue. Coastguard rescue officers are an essential part of our emergency response and are much supported by people in Ayrshire, and I put on the record my thanks for their dedicated service. My hon. Friend the Member for North Ayrshire and Arran (Irene Campbell) and I are very worried that coastguard services in north Ayrshire are facing a crisis if they are not able to claim compensation. I am pleased that the Minister has postponed further meetings and is working with unions, but will he do all he can to resolve this issue, so that our coastguard rescue officers can continue to perform their essential service?
Keir Mather
My hon. Friend speaks powerfully about rural and island communities in Scotland, and about the impact that coastguard services can have. From speaking to CROs in Southampton, I am cognisant of the principle of demotivation, and I am deeply concerned about its implications. A CRO said to me that this is ultimately about fairness—the money is not anything to brag about, but it is fair recognition for what they do. I do not want any CRO to feel devalued, or to feel less motivated to turn up to a call-out, because of decisions that have been made. That is why it is so important that, with regard to the engagement that is happening next week, we take a beat, take some time to reflect on what CROs are saying, and try to find an equitable solution. I am sure that my hon. Friend will be part of that process.
Sir Bernard Jenkin (Harwich and North Essex) (Con)
May I help the Minister answer the question he was asked by my hon. Friend the Member for Mid Buckinghamshire (Greg Smith), who is on the Opposition Front Bench? The answer is that the law is an ass and the law should be changed, as the right hon. Member for Orkney and Shetland (Mr Carmichael) said. How can it be that the law is interfering in a perfectly happy relationship between coastguard volunteers and the MCA? The law is an ass, and that is quite clearly the view of the coastguards I met last week in West Mersea in my constituency.
Keir Mather
The hon. Gentleman is a far more seasoned Member of this House than I am, so I will leave it to him to opine on whether “the law is an ass” is parliamentary language or not. It is incumbent on the Department to deal with the legal reality that has been created as a consequence of the judgment. It is also right to say that the volunteer model that exists for CROs, with hourly remuneration, is rather unique with regard to how volunteering works, and it therefore requires a bespoke response. I can assure him that I am weighing up options for the long-term future of CROs to ensure that recognition can take place. There is a potential primary legislative route that I want to explore, which involves a carve-out, but it would take a lot of time to do; it is very legally complex, and it has other implications that go beyond the Maritime and Coastguard Agency. I very much respect and thank the hon. Gentleman for his urgency, but I have to take these decisions dispassionately and with full cognisance of their implications.
Dame Nia Griffith (Llanelli) (Lab)
My dedicated volunteer coastguard rescue officers are absolutely vital to the safety of the public along the very long coastline all around my constituency. Can the Minister tell us what response he expects the Maritime and Coastguard Agency to give to the formal written request by the GMB union for collective bargaining purposes and voluntary recognition?
Keir Mather
I have already been very clear from the Dispatch Box that I do not just want, but expect, the Maritime and Coastguard Agency to allow trade unions to play their full role when it comes to working with CROs to articulate their vision of what they want the future of the service to be. I do not feel that it would be appropriate for me to comment on negotiations between a trade union and an employer in the way that my hon. Friend expects, but I am very clear that trade unions must be allowed to play their full role in this process.
Christine Jardine (Edinburgh West) (LD)
I thank my right hon. Friend the Member for Orkney and Shetland (Mr Carmichael) for bringing forward this urgent question. My constituents in South Queensferry, where we have a lifeboat, have written to me in great numbers to say that they are concerned about the coastguard service. The service in South Queensferry is unlike many of the others that have been mentioned. It is not rural or in the highlands; it is largely suburban. It patrols an area under three very large bridges, and the CROs have to deal with a lot of tragic incidents. The coastguards there have told me that they are concerned about what might happen as a result of the changes. Will the Minister come to my constituency to hear what they and the community have to say as we hit peak tourist season?
Keir Mather
I am very happy to engage with the hon. Lady’s constituents on this matter, and I thank her for so robustly defending them in this House. She is right to say that we have spoken a lot about the importance of CROs to rural, island and coastal communities. She brings an incredibly important perspective on the implications for cities, especially as we look towards the summer period and peak tourist season. She is right to point to the fact that this will build as an issue over the summer. When the changes were originally announced, they were due to be implemented in September, but that is not to say that I am not cognisant of the fact that there could be implications if people feel demotivated and unwilling to attend a call-out before then. It is really important that we take the time to re-engage with CROs, such as those in her constituency, and to talk about the long-term options.
Lorraine Beavers (Blackpool North and Fleetwood) (Lab)
Fleetwood and Lytham have been officially recognised as the two busiest coastguard stations in the UK, and I place on the record my thanks for their amazing dedication to keeping our people safe. Will the Minister reassure the House that the GMB union and volunteer coastguards will be fully consulted at all stages, and that communities like mine in Blackpool North and Fleetwood are not going to be put at risk?
Keir Mather
The safety of the public and the operational capacity of the Maritime and Coastguard Agency are of the utmost importance to the Government. CROs feeling that they are respected and able to play their full part in this process will facilitate that, and that is what I am determined to achieve. My hon. Friend is right to push me on the question of trade union involvement, and my expectation is that trade unions should play their full role in representing their members.
Alison Griffiths (Bognor Regis and Littlehampton) (Con)
Last week, I met Paul Greenwood of the Selsey coastguard, one of a team of CROs who cover my constituency. The Court ruled that coastguards can be workers when paid for duties; it did not order Ministers to scrap payments. Can the Minister tell me what lawful alternatives were considered, why the impact assessment has still not been published and whether he will publish the MCA survey? Will he pause September’s change while considering an approach that will not risk gaps in emergency cover when people in coastal communities such as mine dial 999?
Keir Mather
I have been very clear from this Dispatch Box that I am tasking my officials with determining what information can be released in relation to the hon. Member’s questions. It is critical that MPs are able to engage fully in this process and hold me to account as they do so. As I said at the start, ultimately we had to comply with the judgment passed down by the Court of Appeal. That mandated the need to change the current system, because if we had carried on implementing it, we would not have been compliant with the law. The question now is what comes next and what the long-term options are, and I am committed to exploring that with Members from across the House.
Tom Hayes (Bournemouth East) (Lab)
I draw the House’s attention to my entry in the Register of Members’ Financial Interests as a GMB member.
I recently met coastguard rescue officers in my office, and they told me how they respond in all conditions and at all hours. They drop everything to save life, and providing that public service often leaves them out of pocket. Can I ask the Minister to consider all options, including carving out an exemption when it comes to HMRC? Can I take this opportunity to encourage all CROs to join the GMB union, so that it can care for their needs, particularly given the recent concerning allegations in a national newspaper about the MCA, which I believe is not being straight with the Government? Can I also ask the Minister to thank the coastguard rescue officers in Bournemouth East for all they are doing to save life?
Keir Mather
Coastguard rescue officers in Bournemouth East carry out an incredible service on behalf of their local community and their country in keeping the public safe, and we thank them deeply for their service.
I can confirm to my hon. Friend that we are looking at a range of options for what comes next. He must play his part in that process, alongside trade unions. I reiterate that I want CROs to feel they can fully and frankly contribute their views about the implications of this decision, especially now that there is more time, which allows them to properly consider the full range of how this may impact them, alongside primary employment and other considerations. I would encourage him to share that with me, and let us all collaborate in this process to make sure that the voices of CROs are heard.
Graham Leadbitter (Moray West, Nairn and Strathspey) (SNP)
My constituency has coastguard rescue services operating in Nairn, Burghead and at Gordonstoun school. One constituent who works for a local team told me:
“After September, the cost would fall entirely on myself or my small business employer—this is not right”,
and that the
“changes will force me to no longer be available for call outs during working hours”.
They also said that they
“don’t do this role for financial gain, but the small amount of remuneration enables those of us who are employed to respond to emergency call outs without suffering a financial loss during a cost of living crisis.”
Will the Minister give an assurance on two points: that the changes will not be made until we are collectively satisfied that these volunteers have been treated fairly, and that a life-or-death emergency service will not be diminished as a consequence of the changes?
Keir Mather
The situation that the hon. Gentleman describes of a CRO in his constituency is exactly what I want to avoid. He is right to point out that, like a number of the CROs I spoke to the other day, some are small business owners, and we appreciate how hard they need to work, often with small margins, to keep their businesses running. That takes us back to the point that the level of remuneration is not something to brag about, but it does allow CROs to do their job, and it is incredibly important that we are cognisant of that.
I am very keen to facilitate all of us having an opportunity to play our role in engaging with what comes next. It goes back to the point I made to the right hon. Member for Orkney and Shetland (Mr Carmichael) about ensuring that MPs are kept up to date on all of the latest steps in this process and that they can play their full role in holding me to account, so that we get this right for CROs.
Alan Mak (Havant) (Con)
Hayling Island coastguard rescue team provide a vital service in my south-coast constituency. They fear that the MCA’s proposal will have a massively detrimental effect on local recruitment and retention, particularly from the island. How will the Minister ensure that CROs are properly consulted? Will he come to Hayling Island and meet the CROs who do this fantastic work?
Keir Mather
I thank the hon. Gentleman for being such a champion of the CROs in his constituency, and I am very happy to engage with them if he would be willing to facilitate that.
Making sure that CROs can share their views fully and frankly is incredibly important to me. I am attempting to facilitate that by making it very clear that my expectation is that the MCA leadership should give CROs the space to engage fully with me, their local Members of Parliament, their trade unions and their local leadership, so we can get a clear picture of their views about how these changes may impact on their operational ability and we can all work together to find an equitable solution to this challenge.
Caroline Voaden (South Devon) (LD)
I have four coastguard stations in South Devon—Kingsbridge, Dartmouth, Brixham and Bigbury—and hundreds of volunteers, many of whom have written to me with their concerns about these changes. The Kingsbridge team have been out 34 times this year. Last Friday night, they were called out at 1 am and spent all night rescuing three people from a vessel that had got stuck in the mud. These people wake up in the middle of the night to go out to rescue strangers they have never met.
The Minister says he has considered several options, but have the Government done a full risk assessment of the resilience—the long-term resilience—of the service if these changes go ahead? If so, will they publish it? Has he considered changing the law so that the call-out charge is classified differently with HMRC? CROs could then continue as volunteers while continuing to be remunerated for their dedicated service.
Keir Mather
When I was in Southampton a few days ago, the intricacies, the difficulties and, ultimately, the horribleness of mud rescues were explained to me. The hon. Lady very powerfully makes the point that it is difficult for people who are not active CROs to understand the level of commitment required to carry out this dangerous work in the service of people they have never met.
On changing the law and legislative carve-outs, I have been quite clear that, while there are options to facilitate this, they are not a quick fix. Such options will not give CROs certainty in the moment, but they have been considered. On operational risk, I can confirm to the hon. Member and reassure her that impact modelling based on data was carried out by the MCA to inform the recommendation. Robust contingency plans do exist across the search-and-rescue capability of the coastguard and other services to enable them to respond to people in distress across the United Kingdom. We do not want to get into such a situation, however, and that is exactly why I have said what I have said to the House today.
James Wild (North West Norfolk) (Con)
The Hunstanton coastguard rescue officers I have met responded to 150 emergency shouts last year, and the small payment helped them to perform this role for locals and visitors alike. However, with 50% of officers in East Anglia saying they would quit or reduce their availability, is the Minister really prepared to take responsibility for the risk to public safety, or will he now simply stop these changes from coming into effect in September while we work on a long-term solution?
Keir Mather
We need to work through this process strategically and methodically to ensure we are taking the right decision based on data and the lived experience of CROs. I have paused the engagement this week to allow us to more clearly get a better read of this situation, and that will inform my approach.
Ben Lake (Ceredigion Preseli) (PC)
First, I thank the right hon. Member for Orkney and Shetland (Mr Carmichael) for securing this important urgent question. I have spoken to coastguard rescue officers from Ceredigion Preseli in recent weeks, and they all share common concerns. The first is that as many as half of their colleagues in the coastguard service will reconsider their position should this new proposed model come into effect. Secondly, and just as importantly, there is the impact on partner emergency services. Given the MCA leadership’s statements about the operational impact of these changes, could the Minister ensure that the assessments and the modelling are made public, so that we can properly scrutinise them and have confidence that we understand the consequences of this decision before it comes into effect?
Keir Mather
The hon. Gentleman points to the important fact that the MCA CROs conduct their work alongside other emergency services and full-time employees of the MCA, and we need to take all those operational impacts into account. In response to another question, I said that I have instructed officials to determine what can be shared in relation to this process, and I will have more to say on that in due course.
Charlie Dewhirst (Bridlington and The Wolds) (Con)
I am sure the Minister will join me in paying tribute to the team at the Maritime Rescue Co-ordination Centre at Bridlington, who keep people safe all the way from Northumberland down to Suffolk across 250 miles of coastline 24 hours a day, 365 days a year.
The proposed changes to make CROs unpaid is just one of the problems facing the MCA. National issues include recruitment and retention, understaffed teams in high-pressure environments working long hours, leading to stress and sickness, and pay that is not commensurate with other emergency services. Will the Minister ensure that the agency is appropriately resourced, but also that it is putting that resource into the right place to ensure our frontline teams have the tools they need?
Keir Mather
The hon. Gentleman will know that my constituents and I are no strangers to Bridlington—a wonderful place to visit—and the CROs who work there to protect us must be given the tools they need to carry out their vital work. The broader review of the MCA will look at exactly the questions the hon. Gentleman raises. I will ensure he plays his part in that process, so that we come to the right answers.
Andrew George (St Ives) (LD)
As the Minister knows, my west Cornwall and Isles of Scilly constituency has almost 150 miles of coastline. In an earlier answer, he said that the model has to change, but it does not need to be trashed. He referred to the fact that the remuneration arrangements for CROs are bespoke, but so are the arrangements provided to special constables and retained firefighters. Surely the Minister and his colleagues can find a model that meets the legal obligations and remains a bespoke remuneration system for CROs?
Keir Mather
The hon. Gentleman is right to point to the fact that there are a number of operative models for volunteers. I can assure him that I am looking at the long-term options to ensure that the CRO volunteering model is respected. We had an exchange in Westminster Hall about how the retained fire service model creates implications, but I understand that he is just pushing me to have a broad lens on what the solutions might be and I thank him for doing so.
Graham Stuart (Beverley and Holderness) (Con)
On 2 January, Grace and Sarah Keeling and Mark Ratcliffe tragically lost their lives in the sea at Withernsea. Through that day and late into the night, coastguard rescue officers fought in the most terrible conditions to save lives. They did so out of duty, not for remuneration.
When thousands and thousands of people go to the coast this summer and onwards, how can the Minister ensure that they can continue to rely on courageous coastguard rescue officers in future, as they have been able to in the past? I appreciate what he has said today, but will he show even greater urgency in recognising the need to make this change? September is just weeks away and the people we rely on to do this heroic work deserve quick answers.
Keir Mather
I thank the right hon. Gentleman for raising the tragic case of Grace, Sarah and Mark. My condolences to their families. He is right to say that this is not a theoretical question. We have an urgent need to address this issue now to ensure that CROs can do what we need them to do, which is carry out this phenomenal public service, and to retain safety and operational capacity across the country. He encourages me to go further and faster, and I have heard his call.
Jess Brown-Fuller (Chichester) (LD)
The CROs I have spoken to in Selsey in my constituency do their job out of a real sense of duty. Many of them have done it for many years. It is not actually at all about the remuneration, but the reality is that some of them will have to take on additional paid work if they lose the very small amount of money given to them by the Government to recognise their value. Will the Minister please come to Selsey, which is an isolated coastal community, to talk to my CROs so that he can see not only the brilliant work they are doing, but the value that they bring to the community?
Keir Mather
I have no doubt about the contribution that CROs in Selsey make, and I would be happy to engage with the hon. Lady’s constituents on this issue. She raises the particular issue that for rural communities the impacts might be felt especially keenly. That is why it is critical, as we continue to engage with CROs—I will continue to do so across the country—that we do so with the geographic lens she describes to make sure we can pick up all the operational complexities about what future options could mean.
David Reed (Exmouth and Exeter East) (Con)
In Exmouth and Exeter East, the local coastguard rescue team covers the Exe estuary, mudflats, tidal waters and busy open coastline. It is called on when local people or visitors are cut off by the tide, trapped in mud, in difficulty in the water, or at risk of self-harm. The Minister says that a move to an expenses-only model is needed following the Court of Appeal judgment, but the House has been told that an impact assessment has already combined incident demand, survey data, demographics, employment information and financial analysis. Will he therefore publish that assessment as soon as possible, including any modelling for Devon and high-demand coastal areas such as Exmouth? Most importantly, can he guarantee that the charge will not proceed unless he is satisfied that he will not reduce coastguard rescue officer availability or weaken emergency resilience in communities such as mine?
Keir Mather
I thank the hon. Gentleman for his robust defence of CROs in his constituency and their incredible contribution to his local area. I have already confirmed to the House that I have instructed officials to determine what can be shared to make sure that he is able to carry out his role of holding me to account and representing CROs. In the meantime, I continue to the thank the CROs in his constituency, who he is such a powerful advocate for, for carrying out their essential work.
Vikki Slade (Mid Dorset and North Poole) (LD)
This decision is clearly a kick in the teeth for brave people, like Chris from my constituency, who is worried that it will make the situation worse for whistleblowing rights. He challenged a bullying culture, was terminated and then denied his 20-year service medal. But this is not about money, is it? The CRO payments equate to only 1.5% of the agency’s income. I understand the comments made by my hon. Friend the Member for St Ives (Andrew George) about on-call firefighters, but has the Minister considered options such as the allowances paid to councillors, which do not confer any employment rights and which allow people to do the role alongside their full-time employment?
Keir Mather
The hon. Lady is right to identify the fact that for CROs, remuneration is not the reason they volunteer, but it allows them to do that volunteering work. She points to a number of options around future models. I can confirm to her that a range of options has been considered. I have paused the meetings that are happening this week to create the space to allow CROs’ voices to be heard and for that conversation to continue.
Marie Goldman (Chelmsford) (LD)
Since October last year, I have been taking part in the parliamentary knowledge scheme that relates specifically to frontline services, under the auspices of Mr Speaker. As part of the scheme, we visited the MCA and met CROs. I took part in a training exercise about rescues from muddy situations, so I know at first hand the fabulous work they do. But they are not the only voluntary search and rescue organisation out there. I know that many other volunteer organisations are very worried about the implications for them. What assessment has the Minister made of the impact on other maritime search and rescue organisations, such as the Royal National Lifeboat Institution and other independent lifeboat associations?
Keir Mather
The full impact on search and rescue capability and operational capacity has been considered through this process, but the hon. Lady is absolutely right to point to the fact that it is critical that we continue to interpret what CROs are telling us about what the impact will be, and that we rationalise that with how we project demand to flow over the summer and into September.
I missed something in the previous question. On the very serious issue of whistleblowing, may I ask the hon. Member for Mid Dorset and North Poole (Vikki Slade) to please write to me about that specific instance? The hon. Member for Chelmsford (Marie Goldman), who I am currently answering, is right to raise these very important issues.
Madam Deputy Speaker (Caroline Nokes)
I thank the Minister for his answers this afternoon. I remind Members that large slogans are not appropriate and perhaps Members might do up their jacket so I cannot see any. If I had spotted the one he is wearing, I would not have called the right hon. Member for Beverley and Holderness (Graham Stuart).
Point of Order
(1 week ago)
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Freddie van Mierlo (Henley and Thame) (LD)
On a point of order, Madam Deputy Speaker. On 2 June, my hon. Friends the Members for Didcot and Wantage (Olly Glover), for Oxford West and Abingdon (Layla Moran), for Bicester and Woodstock (Calum Miller) and for Witney (Charlie Maynard) and I sent a letter to the Secretary of State for Health and Social Care concerning the decommissioning of important mental health services in Oxfordshire, including: the Infant-Parent Perinatal Service, the Child and Adolescent Harmful Behaviour Service, and the Family Assessment and Safeguarding Service. We invited the Secretary of State to exercise powers under the Health and Care Act 2022 to call in the decision. I am aware that there is a 20-day timeframe for ministerial responses to Members’ correspondence. However, that has passed. Normally when this occurs, I tend not to chase it, but this is a really important time-sensitive case, so I seek your guidance on how we may receive a response from the Department.
Madam Deputy Speaker (Caroline Nokes)
I thank the hon. Member for his point of order. This is a matter for Government Ministers rather than the Chair, but Ministers are expected to provide timely responses to correspondence from Members. I have no doubt that those on the Front Bench will be able to pass his concerns on to the relevant Minister, and the hon. Member will have the opportunity to raise the issue with the Leader of the House at business questions tomorrow.
Royal Assent
(1 week ago)
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Madam Deputy Speaker (Caroline Nokes)
I have to notify the House, in accordance with the Royal Assent Act 1967, that His Majesty has signified his Royal Assent to the following Act and Measure:
National Security (State Threats) Act 2026
Clergy Conduct Measure 2026.
Bill Presented
Public Procurement (British Goods and Services) Bill
Presentation and First Reading (Standing Order No. 57)
Sarah Champion presented a Bill to make provision about public procurement in respect of British goods and services in relation to social value and contract award notices; and for connected purposes.
Bill read the First time; to be read a Second time on Friday 4 September, and to be printed (Bill 112).
Mental Capacity (Duty to Assess)
Wednesday 8th July 2026
(1 week ago)
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A Ten Minute Rule Bill is a First Reading of a Private Members Bill, but with the sponsor permitted to make a ten minute speech outlining the reasons for the proposed legislation.
There is little chance of the Bill proceeding further unless there is unanimous consent for the Bill or the Government elects to support the Bill directly.
For more information see: Ten Minute Bills
This information is provided by Parallel Parliament and does not comprise part of the offical record
Chris Coghlan (Dorking and Horley) (LD)
I beg to move,
That leave be given to bring in a Bill to require persons discharging functions on behalf of certain other persons to assess the mental capacity of those persons in specified circumstances; and for connected purposes.
At issue is the devastating misuse of the Mental Capacity Act 2005, which has resulted in hundreds of preventable deaths. King’s College London found there were 160 of those deaths in 2023 alone.
The Bill is in honour of Christopher Laskaris, whose mum Fiona is here. Christopher was not unlike many autistic children; he was a sensitive and intelligent boy, who once asked his mum to stop on the way to school to rescue a lamb stuck in a fence. I first met Fiona when I was eight. I had stayed in my bedroom and ignored her, perhaps because I was angry that she was buying my home off my dad. My mum had died a few months after I was born, and I was a sensitive boy. Well, they moved in. Christopher grew up in my childhood bedroom, and he loved the house as much as I did.
As a young autistic man living alone in Leeds, Christopher was in danger. Despite Fiona raising credible doubts about his capacity on numerous occasions over eight years, she was never able to secure the mental capacity assessment that she needed to protect him. Horrifically, Christopher was exploited and murdered in his home by a man who had just been released from jail. Christopher was 24. Under this Bill, he would have been granted that mental capacity assessment, and he might still be with us.
I have been working with Fiona for over two years to close this loophole. We have worked on a cross-party basis, with the Government, and with ITV, which has mounted a national campaign to expose this injustice across the county. I am grateful for all of that and for the result: that the Government have committed to review and reform the Mental Capacity Act. This Bill offers an opportunity to realise that commitment.
The Mental Capacity Act states:
“A person must be assumed to have capacity unless it is established that he lacks capacity.”
Too often, public officials have used that presumption to not take action, failing vulnerable people, because if a person’s capacity is merely in doubt, but not yet established as lacking, then they are presumed to have capacity—and are too easily disregarded.
The Bill has been drafted by one of the most prominent mental capacity lawyers in the country, Alex Ruck Keene, honorary King’s counsel. It has two key clauses: a duty to assess capacity where a person is reasonably understood to have any impairment or disturbance in the functioning of their mind or brain; and a duty to assess capacity where a person properly interested in a person’s circumstances has raised a concern as to their capacity. Although those safeguards are in the existing code of practice, they are too often ignored. The Bill seeks to bring those existing safeguards into law in order to mandate compliance. It will enhance the presumption of capacity by ensuring that it is not used against people to their cost or to the cost of others.
Charlie Gooding’s mum Annabel is here in the Gallery. Charlie had Prader-Willi syndrome, which, in his case, gave him a genetic compulsion to overeat. Annabel repeatedly begged the authorities for help. They repeatedly ignored her. She locked the food cupboards but she could not prevent Charlie from buying food or going to food banks. Ultimately, his weight reached 30 stone, and he ate himself to death. Charlie was 35. Under this Bill, authorities would have had to grant Annabel that assessment, and Charlie might still be with us.
Harley Watson’s mum Jo is here too. Harley was 12 years old when he died, after paranoid schizophrenic Terence Glover drove a car into a crowd of schoolchildren. Glover had told the police beforehand repeatedly in 999 calls that he intended to run over and kill schoolchildren. The police knew about his paranoid schizophrenia diagnosis and his impaired judgment, yet they took no action. Under this Bill, the police would have had to refer Glover for a mental capacity assessment, which might have saved an innocent 12-year-old boy.
In 2014, a House of Lords Select Committee recognised the failures in the Mental Capacity Act. These past 12 years, Parliament has failed to act. The cost in lives lost is unimaginable. Among the hundreds of dead, Fiona lost her Christopher, Annabel lost her Charlie, and Jo lost her Harley. These three mums are here today not only in grief, but also with the highest of all hope: to save lives. I commend their courage and this Bill to the House.
Question put and agreed to.
Ordered,
That Chris Coghlan, Ed Davey, Dr Danny Chambers, Sir Jeremy Hunt, Andy Slaughter, Florence Eshalomi, John Grady, Wera Hobhouse, Liz Jarvis, Vikki Slade, Manuela Perteghella, and Ben Maguire present the Bill.
Chris Coghlan accordingly presented the Bill.
Bill read the First time; to be read a Second time on Friday 29 January, and to be printed (Bill 114).
Backbench Business
Rearmament and Warfighting Readiness
(1 week ago)
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Mike Martin (Tunbridge Wells) (LD)
I beg to move,
That this House recognises the danger that Russia’s renewed illegal invasion of Ukraine poses to European and British security; further recognises the threat to the international order and the UK posed by China; also recognises the increasing uncertainty surrounding the reliability of the US as an ally within NATO; acknowledges the current shortfalls in the UK’s ability to deploy a credible fighting force; further acknowledges that this lack of military capability is resulting in the coercion of Britain and its interests in the international sphere; and calls on the Government to begin a programme of rapid rearmament to strengthen the defence of the UK and its allies.
The key word of the motion on the Order Paper today is “rapid”—rapid rearmament, not eventual rearmament or rearmament with an asterisk. The reason it is the key word is that the clock is not ours to choose. Three weeks ago, before the defence investment plan came out, the Prime Minister said:
“it is our intelligence assessment, and the assessment of other countries in NATO, that there could be an attack by Russia on NATO as soon as 2030.”
The deadline is not contested. Intelligence confirms it, NATO proclaims it—they are speaking of this in Ankara today—and our Government accept it. We must be ready by 2030.
That is why the defence investment plan is so maddening. I have read it from cover to cover—I am that kind of guy—and I cannot wrap my head around it. It fails the test of its own threat assessment. It does not go far enough, and what it does do, it does too slowly. Large parts of it are also unfunded. It is too little, too late, and there is not enough cash.
It is worth considering how this plan came into being. Lord Robertson, the lead author of the strategic defence review, wanted to have the DIP—that is, the money bit—as an annexe to the SDR. That is really good practice when making strategy: set out a vision, which is the SDR, and then set out the resources, which are the DIP. If a Government do not have the resources to deliver their vision, they need either to downgrade the vision somewhat or to increase their resources. The decoupling of the two documents by a year, with the vision coming a year ago in the SDR, and the money and resources just recently in the DIP, is the greatest failure of statecraft committed by this Labour Government in the two years they have been in office.
First, allow me to speak about the money in some detail. Quite well ventilated in the media is the £4.7 billion that quite blatantly must be found in the next Budget, in the autumn. Although the right hon. Member for Makerfield (Andy Burnham) has said that he intends to fund defence seriously, he has not specifically said that he will find those sums in that Budget. As the Government repeatedly tell us, defence of the realm is the most important duty of any Government. So why is £5 billion of that sacred duty in the in-tray of the next Chancellor—a person unknown at this point?
Secondly, I would like to talk about these efficiency savings—£10.7 billion of them. Speaking in this Chamber, the Chair of the Public Accounts Committee, the hon. Member for North Cotswolds (Sir Geoffrey Clifton-Brown), called this the oldest accounting trick in the book. If we dig just one layer below, we can see the detail: £2.4 billion of that £10.7 billion is what the Ministry of Defence calls “high maturity initiatives”. I find that it is always worth really looking into what the MOD says, because the remaining £8.4 billion of that nearly £11 billion of efficiency savings is what the MOD calls “plans at lower maturity”. Lower-maturity plans, Madam Deputy Speaker, is MOD-speak for “we have not worked out how to deliver those savings yet.”
Thirdly, and most egregiously, is a theme that I will keep returning to: the fact that this is a DIP of two halves. The first period is from now until 2030, which is covered by the current spending review, subject to the caveats that I laid out earlier. However, the second part, which covers 2030 to 2035, has to be confirmed in the forthcoming spending review. If the future Chancellor or Prime Minister do not agree to those sums going into the next spending review—due, one assumes, in the spring of 2027—the DIP will then not exist. It will just be an unfunded piece of paper.
Ben Obese-Jecty (Huntingdon) (Con)
The hon. Gentleman is making an excellent speech. The first four years—the near-term investment period—covers the period until the next election. The second half—the longer-term investment period—covers the next five years, all the way up to 2035. However, the DIP is a 10-year plan, so it should in fact go beyond 2035, and beyond two elections’ time, to 2036, which it clearly does not, because the number “2036” does not appear once in the defence investment plan.
Mike Martin
This actually speaks to the delay. Had the DIP come out when it was meant to, in 2025, it would have been a 10-year plan, because it would have gone from 2025 to 2035. However, the Government were unable to get their ducks in a row and the DIP was delayed by a year. If we had waited for them to rejig the plan to go up until 2036, I think we might have waited until 2040 for the plan.
This is a DIP of two halves, and the really worrying bit is that most of the investment is in the second half, which is unfunded. Let me give the House some examples. In the air domain there is £27.8 billion before 2030, and £70 billion after—unfunded. In the maritime domain there is £18 billion before 2030, and £32 billion after—unfunded. In the land domain there is £19.2 billion before, and £36 billion after—unfunded. For weapons and munitions there is £11.1 billion before, and £20 billion after—unfunded. It beggars belief. Why bother publishing a plan when, by my calculations, almost two thirds of the investments that the Government seek to make are in the second half, which is unfunded?
One of the reasons that we have pulled this plan together is to give certainty to industry, so that they know how to invest.
Alan Gemmell (Central Ayrshire) (Lab)
My concern is that the only British company offering to build an advanced jet trainer replacement for the Red Arrows Hawk jet, AERALIS, has gone into receivership because of the delay in the DIP, which means it will not assemble those lovely British jets in my constituency.
Mike Martin
I think we have all heard stories of firms such as the one in the hon. Gentleman’s constituency, whether in our own constituencies or in the conversations we have as Members of Parliament who are interested in defence. It has been catastrophic for British industry, and rushing out an unfunded DIP, which is effectively what this is, has not helped. It has meant that some small capital investments, one third of the total pot for the next four years, can be made by firms. However, for anything that stretches beyond 2030, nobody can be sure enough to make that investment.
Mr Mark Francois (Rayleigh and Wickford) (Con)
The hon. Gentleman is making a very accurate critique. Is he aware that the Treasury Committee, led by the redoubtable hon. Member for Hackney South and Shoreditch (Dame Meg Hillier), was looking at defence funding at lunch time today, and that in that hearing, barely an hour ago, the Chief Secretary to the Treasury admitted under persistent questioning that the Government have done no work on how to get to 3.5% of GDP on defence?
Mike Martin
All I will say is that the defence of the realm is the most serious issue for any Government.
Dave Doogan (Angus and Perthshire Glens) (SNP)
The hon. Gentleman is very kind to give way again, as he is right in the middle of unpicking the DIP thread by thread. Does he agree that we need to look at the manifest, substantial disappointment that we and everyone in uniform see in the DIP now that it has been announced, and try to reconcile that with how delayed it was? What does he think the Government were doing, given that there are so many black holes and missing spaces in the DIP? What does he think they were debating over the 11 months that the DIP was delayed?
Mike Martin
The original sin is divorcing the strategic defence review from the DIP—divorcing the vision from the resources. For the past year, the Department has been arguing first with itself about whether it can downgrade some of the things in the strategic defence review—there are a couple of instances where that has happened, which I will come on to—and then with the Treasury to get more money to fill the gap. Effectively, it wrote a vision that was far too grand for the money that was ever going to be available.
Let me turn from the money to the metal and have a look at some of the capabilities. I could give a very long speech on military analysis about which capabilities should be in or out, but I will not do that. I think it would test—[Interruption.] I know that right hon. and hon. Members would like me to do that; perhaps I will set up a Substack or something.
Let us look at the Royal Navy—the senior service. At the turn of this century—as someone born in 1982, I still feel weird saying that—the UK had 20 frigates. By the end of this year, we will have five. Pre-DIP, they were scheduled to go out of service in 2035. In a little-noticed line in the DIP, we are bringing forward that date. All five frigates, which have well exceeded their service date, are going in 2033. Their replacements, the Type 26s and the Type 23s, will come into service—you guessed it—in 2030-35. We therefore have old ships retiring on a fixed schedule and new ships coming in on an unfunded one. My back-of-a-fag-packet maths—probably the same quality of analysis goes into the MOD under this Government—shows that we will have three frigates in 2030, the year, according to our intelligence assessments, of maximum Russian threat against NATO. We need a frigate to protect our cables, another to get the carrier group out to sea, and another for our deterrent. According to the rule of three—for every three ships, we have only one at sea at any one time—that is nine frigates. If anything kicks off in the middle east or anywhere else, there is no contingency plan. We can see straightaway that there is a huge gap—the frigate gap, as many call it—and the DIP has made it much worse.
The picture with our current Type 45 destroyers and their replacements is not much better. Our Type 45s primarily provide air defence. One was parked in the Thames estuary to defend the Olympics in 2012 because we do not have any other air defence. They go out of service from 2035. Their replacements are supposed to be crewed common combat vessels such as mother ships. Various autonomous ships, which provide missiles, sensors or underwater and above-water support, are meant to be arranged around them. A whole fleet of different ships is therefore meant to replace the destroyers and some other elements of our Navy. That is the hybrid Navy that was much touted last week in the media coverage of the DIP.
I am totally in favour of moving towards autonomy as fast as we can. However, it is worth saying that the maritime domain, particularly the High North, is the most difficult in which to do autonomy. I have spent a lot of time at sea and I can tell hon. Members that everything breaks all the time. There is a reason why the maritime domain is the last to be autonomised. We started with air because that is predictable and quite easy to do, although the aircraft still do not fly in bad weather. We then moved to the ground stuff for picking up casualties and dropping off ammunition. However, the new ships—the common combat vessels—are simply PowerPoints at the moment, yet we expect to move from PowerPoints to power projection on the high seas in nine years with not just one class, but several classes of ships that have to work together. That seems quite risky to me. If we take what is happening to the frigate fleet and what is happening to the destroyer fleet together, it is fair to say that the DIP spells the end of the Royal Navy as we know it.
Al Carns
Does the hon. Gentleman agree that, from sail to ironclad, ironclad to dreadnought, dreadnought to highly capable frigate, we need to make the next generational leap? If we find ourselves caught in programmes that deliver last year’s capability, we will remove any wriggle room or space to make that jump into autonomy and automation.
Mike Martin
I agree with everything that the hon. Member has just said, and I thank him. However, all I am highlighting is that, on past performance, going from PowerPoints to ships at sea in nine years with several classes of ship seems extremely risky. Moreover, the DIP sets aside only £1.3 billion in the first funded period to set up those ships. The remainder of the investment falls beyond 2030. I want to move to autonomy because it is the right thing to do, but that seems like an incredibly risky bet.
Mike Martin
I will make some progress because I am having eyes made at me by Madam Deputy Speaker.
The DIP commits £8.6 billion to the global combat air programme, which is the sixth-generation fighter jet that we are building with Italy and Japan. Realistically, we will get the jets in service sometime after 2040. They are manned fighter jets. I ask hon. Members to cast their minds forward to beyond Putin’s death—he will probably be buried by that point—and ask themselves whether, in 2040, humans will be flying fighter jets. I think the answer is no. The Minister is a former pilot, so he will always argue for humans in fighter jets, but I will present my argument.
When we dig into GCAP, we find that it is a crewed rather than an uncrewed system because that is what our Japanese partners wanted.
Mike Martin
I am afraid that I will not because I want to make progress.
We are privileging a good diplomatic relationship, which would weather the storm of our pulling out of GCAP, over military capability. We must consider whether we want manned fighter jets in 2040 or a Royal Navy right now. Do we want frigates and destroyers in the next four years? Do we want to transition effectively, in a funded way, to a hybrid Navy, or manned fighter jets in 2040?
The same story is repeated wherever we look: deep precision strike missiles are due in the early 2030s; nuclear-enabled F-35As are due in the early 2030s; putting 76,000 soldiers in the British Army to reverse the Tory cuts is an investment through to 2035. [Interruption.] I know that hon. Members were waiting for that—I had to get one little elbow in the ribs. Time and again, the capability that the threat demands by 2030 is scheduled for after 2030, funded by a spending review that has not happened and has been signed off by no one.
That leaves one final question: does the current Prime Minister believe his own threat assessment? If he does and he is not funding it—not putting his money, or our money, where his mouth is—that is highly negligent. Perhaps he does not believe his own intelligence chiefs’ assessments and those of his partners. In that case, he should tell us. I fear that future generations will look back at this Labour Government’s approach to defence with their heads in their hands.
Madam Deputy Speaker (Caroline Nokes)
I impose an immediate six-minute time limit.
Al Carns (Birmingham Selly Oak) (Lab)
Everyone in this debate will rightly speak about defence spending, procurement and ammunition, and those things all absolutely matter, but I want to ask a broader question: what does warfighting readiness actually mean in 2026? For too long, we have measured military strength by the number of ships afloat, aircraft we fly or tanks we field, and those capabilities will remain essential, but recent conflicts have reminded us that wars are rarely won by militaries alone; wars are won by nations. They are won by industries that can out-produce an adversary, economies that can absorb shocks, and societies resilient enough to sustain conflict over time.
I have seen this at first hand in Ukraine. Time and again, I have met individuals whose courage is beyond question, but courage alone is not enough. Success depends on whether ammunition arrives when it is needed, whether new technology can be adapted in weeks rather than years, and whether industry can keep pace with the demands of the battlefield. The side that learns, adapts and regenerates fastest gains the advantage, and that should challenge how we think about readiness.
Warfighting readiness is no longer simply the responsibility of the Ministry of Defence. It is an industrial strategy, an energy strategy and a technological strategy. Ultimately, it is a national resilience strategy. If our energy networks are vulnerable, if our communications can be disrupted, if our supply chains depend on hostile states, if our British industry cannot rapidly increase production when conflict begins, our armed forces will inherit those weaknesses from day one of any crisis. That is why resilience must sit at the heart of our national security.
We often talk about stockpiles, and rightly so, but I think the more important question is not how many missiles are sitting in a warehouse today; it is how many missiles British industry can produce every month after six months of sustained conflict. Modern warfare consumes munitions at a pace that few of us can comprehend or imagine, but Ukraine is teaching us lessons: 7,000 to 10,000 drones flying a day; 12,000 artillery rounds fired a day; and 1 million drones, in some cases, produced over two months.
Derek Twigg (Widnes and Halewood) (Lab)
I recently met a number of small and medium-sized enterprises and start-up companies that want to produce drones and autonomous systems and to integrate AI more, but they are concerned about the pace of change in the MOD. Does my hon. and gallant Friend believe that the MOD needs to start pacing up and getting on with the job of working with these companies to provide us with the sort of protection we need?
Al Carns
I could not agree more with my hon. Friend. Data is the new gunpowder. AI is absolutely critical in defence, and we should use all of our technological advantage to move faster and further than ever before. We should be bold and jump to the next generation of systems, and not wait for anyone else to lead—we should lead ourselves.
The lesson from my perspective is clear: stockpiles matter, but the ability to regenerate them matters even more. That is why I welcome the Government’s commitment to rebuild munition stockpiles, expand domestic production capacity and invest in British defence industry. Those are investments not just in military capability, but in national resilience.
The same is true for technology. Ukraine has demonstrated that innovation cycles measured in months can outperform procurement cycles measured in decades. Drones, autonomous systems, software and artificial intelligence are changing warfare at an extraordinary speed, and it will only ever get faster. Readiness, therefore, means building a procurement system that can adapt just as quickly, giving innovative British companies a route into defence and ensuring that our armed forces can evolve as rapidly as the threats they face. We have at present over 10,000 people in Defence Equipment and Support—that is, 10,000 people doing procurement. I am not saying that it is inefficient, but I am saying that bureaucracy sometimes gets in the way of speed.
Gordon McKee (Glasgow South) (Lab)
My hon. Friend is making an excellent speech. Does he agree that embedding that culture of innovation and iteration in the MOD is critical to ensuring that we can move as quickly as possible?
Al Carns
I completely agree with my hon. Friend. This is about cultural change as much as adopting technology. If we were to adopt even the very simplest AI models now in how we do procurement, and move on to the next generation, we would find that the system speeds up, efficiencies are made and the right kit gets into the right hands far quicker than it does now.
Ultimately, rearmament is not about preparing for war because we expect it; it is about ensuring that war never happens in the first place. The purpose of rearmament is deterrence, and deterrence rests on three foundations: capable armed forces, political resolve and the industrial capacity to sustain both. If any one of those is missing, deterrence becomes far less credible when faced with an autocratic nation with huge industrial resilience. As we discuss rearmament today, let us think beyond platforms, procurement and spending lines. The defining lesson of modern conflict is that warfighting readiness is not simply a military condition; it is a national condition.
Calum Miller
The hon. and gallant Gentleman is in a unique position to advise the House on his assessment of the DIP as published. Can he give us his view on whether the quantity of funds provided and the certainty of the period over which they will be provided are sufficient to achieve the kind of industrial step change that he is advocating in his excellent speech?
Al Carns
I have been clear, since several weeks ago, that I was not content with the funding for the DIP or the transformational nature of it. I have been really encouraged in the last couple of weeks by the speed at which it is moving. We need to move more, and I think the spending review in due course will round that off. My perspective is that we must not underestimate the level of change that is required. This is systemic within the Department and within the single services, and it has to move a quantum leap forward—no pun intended—if we are going to deliver the change that is required.
If Britain wants armed forces that are capable of fighting and winning, we must build a country that can endure, adapt and sustain them. In modern conflict, as Ukraine has taught us, the line between the military and civilian worlds has all but disappeared. That is what true readiness looks like, and that is the challenge before us.
Sir Bernard Jenkin (Harwich and North Essex) (Con)
It is an honour to succeed the hon. and gallant Member for Birmingham Selly Oak (Al Carns) in this debate. I congratulate the hon. Member for Tunbridge Wells (Mike Martin) who opened the debate—a very timely debate it is, too. I particularly commend the point that the former Minister for the Armed Forces, the hon. and gallant Member for Birmingham Selly Oak, made about this being a whole-of-nation approach, because we are preparing for war. We might actually be at war in some senses, because Russia is knowingly saying that it is conducting a war against NATO, and we are certainly subject to a hybrid war against our national infrastructure—hacking our hospitals, closing down Jaguar Land Rover and harassing our shipping. This is a very low level of war, but we have certainly been under attack from the way that Russia rations gas to western Europe as a weapon. Turning energy into a weapon, turning food into a weapon—Russia is doing the lot, and the writing is on the wall.
The Government still have not woken up to the fact that the head of NATO, and even the Prime Minister at Munich, has said that we have to be ready to fight a war—a shooting, kinetic war—against Russia by 2030. There is no sign in the implementation of policy that the Government understand the urgency of that. There are plenty of people in Government who get the urgency of this, and I met some of them with Lord Robertson earlier this week to be briefed on national resilience, but there is a deep reluctance in the Government to recognise that to mobilise for war is not about the armed forces and a few branches of Government. Armies may fight battles, but nations fight wars. If the whole nation is not galvanised to do what is necessary, to be ready for what is going to happen, and to make the sacrifices and suffer the pain of diverting resources to less popular things than the popular things that Governments tend to spend their money on, we are not ready for war.
Derek Twigg
The hon. Member is making a good and strong point. Does he agree that, frankly, it boils down to the fact that the Government must be much blunter with the British people about the nature of the threat we face?
Sir Bernard Jenkin
Yes, and I think the Government have plans for that, but they keep pulling back because it is a difficult thing to talk about. The spin doctors and spads will tell their political masters, “Oh no, don’t talk about that—the polling says it is terrible.” I am afraid that we have to confront the polling. We have to confront the population with the ugly truth: this country is at far greater risk than it has ever been since the height of the cold war.
Marie Goldman (Chelmsford) (LD)
On the point about communicating with the public, there is a way to do it. I visited Norway recently, and it has communicated with its population incredibly well, to the extent that it has this concept of total defence and civil preparedness, where everybody in the entire nation recognises that they have a role to play. Does the hon. Gentleman agree that we can learn a lot from some of our friends and allies?
Sir Bernard Jenkin
In this paper entitled “Understanding the UK’s Transition to Warfighting Readiness” that I am just about to explain briefly to the House, we refer to Norway’s concept. Norway’s total war concept is being embedded in its national life and embedded across Government policy through all branches of Government.
For example, we refer in the report to the need to galvanise our universities to be ready for war, so that research and development programmes are directed towards suitable and useful capability, creating sovereign national capability and protecting those research programmes from foreign infiltration. I love having foreign students in our universities—it is good for the economy and for our universities—but we cannot have Chinese nationals at the heart of chip manufacture and design, robotics or AI systems. We have to protect our national technology from being spied on by people sent to this country to go to our universities in order to collect that information, steal it and give it to our enemies.
The context of the document, which is almost old hat even though it is only a few months old, is the changing geopolitical situation, the withdrawal of America from European security, the collapse of the rules-based international order, the failure of democratic governance models to rise to the challenge, the unpreparedness of most western democracies to be ready to confront the hybrid warfare that we already face, and our lack of adaptability. I commend the point made by the former Armed Forces Minister: there is no point in ordering a whole lot of kit that will be out of date as soon as we get to the next war. If the next war starts in the Balkans, the Baltic states or Poland, it will be about drones. The Government are moving some way on that, but we are so slow. The Ukrainians were way ahead of us in helping to protect the Gulf states while we were still sending multimillion-pound aircraft that cost £25 million an hour to fly to shoot down a drone that cost £150,000. We must adapt our industry to produce cheap, numerous capability so that we have the scale to deal with that.
We need that whole-of-society mobilisation. We need much more adaptable governance.
Fred Thomas (Plymouth Moor View) (Lab)
On that point, will the hon. Member give way?
Sir Bernard Jenkin
We need resilient financial systems. We need sovereign defence capabilities and sovereign critical national infrastructure. I am glad that we have stopped handing over so much of our CNI to foreign owners, but an immediate, radical transformation is required.
This document is 19,000 words drafted for me and for my friend the hon. Member for Widnes and Halewood (Derek Twigg), who serves on the Defence Committee and is a renowned expert on defence in the House, by Chris Donnelly, who used to be a Soviet expert at NATO, worked in the Ministry of Defence and finished up teaching at Shrivenham. He is a wise defence guru. If hon. Members want to know how much really needs to be changed, they should just read through these 19,000 words of analysis and recommendations.
There is a huge task, but to carry it through we need to carry the people. The SDR promised a national conversation—where is that national conversation?
Sir Bernard Jenkin
There is a national conversation about who will be the next Prime Minister or whether there will be a by-election in Clacton, but there is no such national conversation about the existential threats to our freedom and democracy.
It is democracy across the western world that is failing this challenge. The autocracies are winning at the moment. We are facing circumstances where Russia may well be struggling in the Ukraine war, but that makes it more unpredictable. What will Putin do as he feels that his political support is slipping away and Russia’s vulnerability is increasing now that there are petrol queues in Moscow and explosions in Russian cities? There is a growing awareness—it has even been said in the last 24 hours by a serious propagandist for Mr Putin—that this is no longer a special military operation; it is a war.
The circumstances are changing as we speak, and I am afraid that a lack of urgency is being shown by the whole House, apart from, say, the Defence Committee and the Joint Committee on the National Security Strategy. This is how we get into wars—by being unprepared for them.
We need to change our whole concept of deterrence from the old concept that somehow just having a nuclear weapon keeps us safe. No, we must have a much more flexible ability to respond to changing circumstances. What will happen when the Russians move into a Russian-speaking town in one of the Balkan states? What will we do as our soldiers start being killed? Will we start letting off nuclear weapons or will we have analogous, appropriate, flexible military capability to be able to respond and escalate at pace? Our inability to escalate is the greatest danger at the moment.
Tim Roca (Macclesfield) (Lab)
I thank the hon. Member for Tunbridge Wells (Mike Martin) for securing the debate. I was proud to join him, the hon. Member for Spelthorne (Lincoln Jopp) and Field Marshal Lord Richards of Herstmonceux in creating the all-party parliamentary group on rearmament. We are discussing a topic that we all agree on: the threat that faces the country and the necessity for us to rearm.
I had hoped that the tone of the debate would have been slightly less political. I feel like we have had a little bit of amnesia as to how we have got to where we are. I do not intend to focus on that too much, but I am sure that others will make the point about the decline in the size of the Army over the past 14 years, the decline in the size of the Air Force, and about the frigate fleet—we talk about the frigate gap—and what happened to frigate and destroyer construction.
We should remember that the threat has not just arrived. There was not a meaningful increase in defence spending after the annexation of Crimea, and there was not a meaningful increase after Putin violated Minsk I or Minsk II. Indeed, there was not a significant increase in defence spending after the full-scale invasion of Ukraine in 2022. That context is really important.
Mr Francois
The hon. Member is right on the funding—I will mention that later—but one important thing that did happen after 2014 was under what was then called Operation Orbital. We began training Ukrainian soldiers on Salisbury plain, because they knew what was coming—and, I think, perhaps so did we. We will talk about the money in a minute, but the training of Ukrainian troops in Britain did start fairly shortly after 2014.
Tim Roca
I agree with the right hon. Member, but I am not sure whether his point is relevant to the one I was making about the broad context of defence procurement. There has been great cross-party consensus on what we are doing with Ukraine, and we should ensure that that continues.
I also want to comment on the defence nuclear enterprise. Under the DIP, we will be spending £45 billion over the forthcoming period on the incredibly important nuclear deterrent. It is right that we do that, but that amounts to 25% of the defence budget. The right hon. Member for New Forest East (Sir Julian Lewis) is in his place. The other week, I was reading his arguments at the time of the coalition Government, urging them to press ahead with the renewal of Trident, which they did not do. That cost us many years and has cost us many billions of pounds that we could be spending today on conventional forces. It means that we have tired Trident submarines heading out to sea beyond when they should be doing so, and we have crews on extended patrols of 150, 200 or 250 days. That is the cost of the decisions made at that time.
I want to talk a little about ensuring that we do not fall into Russia’s trap. Of course, there is a significant threat from Russia, which is both conventional and hybrid—
Sir Bernard Jenkin
I happen to agree with the hon. Member about the failure of the coalition Government to make progress with the deterrent, but there were many of us complaining about that at the time, including my right hon. Friend the Member for New Forest East (Sir Julian Lewis). Indeed, as shadow Defence Secretary in the early 2000s, I was complaining about the cuts in defence spending that were then being made as we went to war in Iraq and as we went to war in Afghanistan. I very much welcome the hon. Member’s bipartisan approach, but rather than pretending to be bipartisan, and making oblique references to what happened under previous Governments, he should be bipartisan, and then we would all get on much better.
Tim Roca
I thank the hon. Gentleman for his advice. If he gives me time, he may find that comes later in my speech.
We should not allow Russia to make us talk ourselves into a place of weakness. As the then Deputy Chief of the Defence Staff put it to the Defence Committee,
“If the British Army was asked to fight tonight, it would fight tonight.”
Our readiness is not where we would want it to be, but that is not the same as saying that Britain is defenceless. I am not trying to be complacent; I am just making the point that we have excellent armed services and excellent people in uniform, and we should not talk as if those things do not exist. What we are saying is that we need more.
In Ukraine, we have watched a country that is considerably smaller than our own, with far fewer resources, resist Russian aggression with extraordinary determination. We have to remember that Russia’s greatest weapon these days tends to be psychological. It wants us to believe that it cannot be beaten, that resistance is useless and that despite four years of attritional warfare and 1.4 million casualties, it somehow remains an unstoppable European military power that could overwhelm Britain and her allies, but it is not.
Chris Vince (Harlow) (Lab/Co-op)
My hon. Friend is making an excellent, well thought-out speech. He talks about the weapons that Russia is using. Will he also reflect on how we need to be alive to its use of disinformation on social media and the internet as weapons? We need to be alive to that. I look across to the right hon. Member for New Forest East (Sir Julian Lewis), who I talk to regularly about the importance of the BBC World Service. Does my hon. Friend appreciate that that service is vital to the defence of this country as well?
Tim Roca
My hon. Friend makes the point well. Indeed, in a recent interview my hon. Friend the Member for Birmingham Selly Oak (Al Carns) talked about how the recent attacks on Iran had destroyed a huge propaganda apparatus, which had contributed to 3% of total nationalist propaganda for Scottish separation from the United Kingdom. It is an important point.
Following on from that, my hon. Friend the Member for Birmingham Selly Oak made the important point about strength being a foundation of deterrence. We are trying to deter war, not just by having capable armed forces but by having industrial capacity, well-stocked armouries, cutting-edge technology and a properly funded plan—because the stronger we are, the less likely conflict becomes. Every capability we field, every production line we expand and every drone we manufacture add to our deterrence, and that is incredibly important.
At the beginning of the debate we talked about the credibility of getting to where we need to be. To be straightforward, it is my belief that we need to reach 3% of GDP by 2030. That is the minimum needed for us to show that we are committed to our plans and to our NATO allies in having the capabilities that we need. In fairness to the Government, they have made significant progress and we will be at 2.7% in 2027-28, which is the highest defence spend in three decades. The defence budget will also be 27% higher in real terms than it was at the start of the Parliament. Those are significant commitments that need to be recognised, but unfortunately, I am worried that they do not meet the strategic moment that we are at.
The pace at which Russia might reconstitute, the lessons that are emerging from Ukraine over technology, the threats in the far east to our allies and our interests, and the demands placed upon us by NATO to meet certain targets mean that we have to move faster than the Government currently say. A spending review published in 2027 could, in theory, postpone most of the increase until the final year of the period. That would technically fulfil the commitment, but it would not reflect the urgency of the moment. There is a significant difference between spending 2.8% in 2028, 2.9% in 2029 and 3% in 2030, and remaining broadly flat and trying to make a leap—if we can prove that we can do that—at the end of that spending period. The Government deserve credit for changing the direction of travel from what it was in the past, but events have accelerated and so we need to accelerate our rearmament beyond those plans.
There is no shortage of priorities, and the DIP was a significant document, as colleagues have described. I share their concerns about some of the autonomy in the Royal Navy. It is unlikely that we will have the new ships designed, tested and deployed within 10 years, and there will have to be service life extensions for the Type 45s. I worry about the lack or absence of—
Ben Obese-Jecty
The hon. Member is making a very important speech. I agree that there should be a life extension plan for the Type 45, but we know that there is not one. It is not costed, it is not in the DIP, and the plan is to take them out of service over several years from 2035. Does he agree that the common combat vessel would be better suited, in terms of putting that capability within the Type 31s that are being built, and that, indeed, that is what will likely happen?
Tim Roca
The hon. Gentleman makes a very good point and, eventually, we will have to look at the Type 31 hull as a possibility. Maybe the Minister will comment on contingency plans if continuous capability sustainment does not develop as it should.
On the lack of commitments around ballistic missile defence, we are now an outlier in Europe in terms of air defences. Many countries in Europe—Spain, Germany, France, and so on—have Patriot or SAMP/T—
Ian Roome (North Devon) (LD)
I thank my hon. and gallant Friend the Member for Tunbridge Wells (Mike Martin) for securing this debate. There are moments in politics when delay is not just a mistake, but a danger. This is one of those moments. The truth is that the world has become more dangerous much faster than Britain has become ready. The strategic defence review mattered because it stripped away comforting illusions. From the end of the cold war, we enjoyed a peace dividend that offered more security and more money for public services, but war has returned to Europe. Hostile states challenge us daily with cyber-attacks and sabotage, flouting international law and the liberal rules-based order. The absolute supremacy of the western alliance is no longer absolute.
The SDR set out the right ambition: a more integrated force, a more digital force and a more resilient Britain, ready to learn lessons from Ukraine and the middle east. The defence investment plan accepts that analysis, but next comes the hard part: not only recognising the problem but solving it. Does the plan move quickly enough to make Britain safer? I fear it does not.
We lost nearly a year waiting for the defence investment plan to be published. Months of hesitation when industry held its breath, investments stalled, contracts went unsigned and momentum was lost. The SDR talks of mobilising
“rapidly in the event of a crisis”.
If only that sense of urgency were reflected in government. Capability delayed is capability denied. The pace matters as much as the decision.
The review rightly placed at the heart of Britain’s future military capability the digital targeting web—the system that links sensors, commanders and weapons into one integrated force that can identify a threat and destroy it. The defence investment plan commits money for our armed forces to do more, but too much of that funding is still on the other side of 2030.
The Prime Minister has said that NATO could face an attack from Russia before 2030. Yesterday, Lord Robertson and General Sir Richard Barrons pointed out to the Defence Committee that many of the capabilities deemed urgently needed in the SDR are only due to arrive at the end of a nine-year investment cycle. An example is air and missile defence, where the scale of the £790 million investment falls short of what was planned and arrives years down the line.
Helen Maguire (Epsom and Ewell) (LD)
My hon. Friend highlights the dangers that threaten us with Putin on our continent, and the desperate need for us to rearm, and to rearm quickly, so we have the right warfighting equipment. The recent example of Ajax, and the 16 years it has taken to try to procure it, is a demonstration of how difficult and challenging MOD procurement is, and of how we need to improve on that. We could not wait 16 years if a sudden threat arrived on our doorstep tomorrow. Does my hon. Friend agree that we urgently need to work more with our European allies to ensure that we can develop joint capabilities together?
Ian Roome
I certainly do, and I will come that later in my speech. There are areas where the Government seem to have cut corners: munitions reserves, medical support, industrial resilience—all essential for enduring a longer crisis.
Professionals talk logistics. In 1940, Sir Winston Churchill appointed Lord Beaverbrook to rapidly streamline aircraft production. Lord Beaverbrook responded by throwing out all the old rules and doubling production output inside 12 months. His sayings have become famous, describing the factories as the frontlines of the war. He said:
“Organisation is the enemy of improvisation”,
“Committees take the punch out of war,”
and
“The need is great, the time is short, urgency must be the watchword.”
He sounds like a nightmare to work for, but he helped rescue this country in an hour of great crisis.
Al Carns
What the hon. Member says brings a huge historical relevance to today. Throughout history, whenever we have been moving towards crisis, we have got rid of almost all of our procurement rules and regulations to streamline capability and get it into the hands of warfighters. Does he agree that the procurement system and those 10,000 people in DE&S could use AI and some of the incoming quantum capabilities to streamline our whole procurement process?
Ian Roome
I agree with the hon. and gallant Gentleman, and I thank him for his distinguished service too. We are seeing that in how we are learning lessons from Ukraine. I have been out there and seen the systems, so I totally agree. Defence reform is a very important element that the MOD should look at, and I am sure the Minister will have something to say about that.
I cannot find that spirit of urgency that Lord Beaverbrook showed in 1940 in the defence investment plan. The purpose of rearmament is not to prepare for war; it is to prevent that disaster, to deter aggression and to bolster our allies. As Liberal Democrats, and I am sure across the House, we believe Britain’s security depends on our alliances. A stronger Britain means a stronger NATO. A safer Europe means a safer United Kingdom. We must preserve the peace previous generations sacrificed so much to secure. Let this House be remembered not as the House that scrambled in an emergency, but that saw the danger coming and acted.
Graeme Downie (Dunfermline and Dollar) (Lab)
I congratulate the hon. Member for Tunbridge Wells (Mike Martin) on helping to secure this debate. Others have already spoken about rearmament and the focus on budgets, procurement and force structures, and while those things definitely matter, there is another question that I believe we must confront as well. As touched on briefly by the hon. Member for Harwich and North Essex (Sir Bernard Jenkin), it is the question of whether we are honest enough with the British public about the nature of the threat that we face.
I have repeatedly argued in this place that the United Kingdom should regard itself as already being in a sustained confrontation with the Russian state—not a conventional shooting war, but a prolonged campaign of hostile activity directed against our people, our infrastructure, our economy and our democratic institutions—and that raises a fundamental question. We often hear the term “sub-threshold”, but what exactly is the threshold, and when are we going to give an indication to the British people of where that threshold is? The answer to that question matters, because it is the hard line in deterrence and absolutely key when we are considering rearmament.
I would not expect the Government ever to provide a precise answer to the question, but in a written answer this week, the Minister for the Armed Forces, my hon. Friend the Member for North East Derbyshire (Louise Sandher-Jones), said:
“We cannot provide detail on how the MOD would respond to certain activities versus others as this would assist our adversaries.”
Rather than burden the Department with a load of additional written questions, can I ask the Minister some very specific questions? Is using a cyber-attack to steal the electoral register sub-threshold? Is stealing the email addresses of Foreign Office diplomats sub-threshold? Is using ransomware to disrupt NHS patient care, contributing to the deaths of UK citizens, sub-threshold? Is using lasers to threaten the safety of RAF pilots sub-threshold? Is targeting a major UK business with a cyber-attack costing hundreds of millions of pounds and meaningfully impacting Bank of England interest decisions sub-threshold? One has to assume that the Government consider all of these to be sub-threshold, because Russia has undertaken all of these activities.
Let me go further. Is poisoning UK citizens on UK soil sub-threshold? Is firing shots near a civilian yacht in the English channel sub-threshold? Is launching drones from a shadow fleet vessel to monitor UK air bases and critical national infrastructure sub-threshold? Is recruiting activists on Signal and having them commit arson attacks against property sub-threshold? Is endangering a UK aircraft carrier by dropping sonar buoys in its immediate vicinity sub-threshold? Is attempting an arson attack against the British Prime Minister sub-threshold? Once again, Russia has undertaken all of these activities. We are not alone, and for anyone who wants to track this activity across Europe, Emma Burrows from AP News has a fantastic website with up-to-date information.
At what point do Governments say enough is enough, and at what point, crucially, do they tell the British people that a line has been crossed? The Kremlin does not view these kinds of activities in isolation. It sees them as different tools being used in the pursuit of the same objectives: to weaken our democracy, undermine confidence, gather intelligence, create division and test our resolve. While we may not be the only country this is happening to, I am concerned that our public might be the least aware of these co-ordinated actions and the effects they have on their daily lives. This is why warfighting readiness is about much more than what sits in the inventory of our armed forces; it is about national capability and public awareness.
In a recent article written with my hon. Friend the Member for East Thanet (Ms Billington), we argued that politics too often becomes obsessed with targets instead of capabilities. We must show Russia that we have the capability to effectively respond and to deter these kinds of attacks. The Government must begin to attribute these attacks directly to the ultimate perpetrator in the Kremlin, to trust the British people with that information and to ask for their help in building the necessary capabilities to defend against it.
Tom Hayes (Bournemouth East) (Lab)
My hon. Friend is giving a superb speech, and it is an honour to listen to it. I was at Bournemouth War Memorial Homes on Friday helping to open the new bungalows for our veterans, which my hon. and gallant Friend the Member for Birmingham Selly Oak (Al Carns) had toured when he was in post as a Minister. I was speaking with the veterans there, and they are under no illusions. They are aware of the threat posed by Russia. In talking with constituents, however, I understand their concern that we have been on a rollercoaster as a country since 2008 at a minimum. There is a feeling that because our psyche is somewhat low and that, spiritually, we feel somewhat deflated, to talk about the threat from Russia is to add to that feeling, but actually, as a constituent said to me on the doorstep, “It is fine to talk about the fear and talk about the plan. Talk about how you will meet the fear, and then we will come with you.”
Graeme Downie
My hon. Friend is absolutely right. One of the ways we can go about building trust in the Government and in how they respond to a crisis is by trusting the people with the information. The people will be the ones who can press us to take the action that they know requires to be taken, if we give them the information. We must use our secrets more effectively and bring the British people along with us.
The central question cannot just be whether we spend 3%, 3.5% or some other percentage of GDP. The real question must be: what capability are we creating? This is where I believe the Government deserve a lot of credit. Although the DIP was delayed, what we are seeing in it is a commitment to fighting the next war and not the last one. That includes the improvements in pay and support for serving personnel and their families and in housing, which is leading to increases in recruitment, retention and morale. That is all a vital part of rearmament and deterrence, showing our adversaries that our armed forces are ready to fight tonight, as was mentioned earlier.
Alongside the human infrastructure, the Government have also invested in physical infrastructure. I know that it is attracting some scepticism and questioning from across the House, but the leap to hybrid warfare is the right thing to do. That is why I welcome the decision to build six common combat vessels and ensure that we are building ships more quickly, to give us flexibility on the capabilities that we need. I hope we make progress on that very quickly indeed. It is something I have raised with the Department since the publication of the DIP.
On future infrastructure capability, I will be slightly parochial and ask the Minister to respond to a couple of questions around submarine infrastructure when he is winding up. First, we know that to bring Dreadnought into service as quickly as possible we need a contingent docking facility. The Royal Navy has said that that would have to be at Rosyth, and with time moving on to get that operational, can I ask the Minister for a progress update? Secondly, on the decommissioned nuclear-powered submarines that remain tied up at Devonport and Rosyth, occupying valuable dock space, can the Minister update the House on when the next part of this programme will commence, releasing capacity in both the dockyards and strengthening our sovereign capability?
Preparedness for war is not warmongering. Warfighting readiness begins long before the first shot is fired, but it must start with an honest assessment and acknowledgment of the threats that we face, and with making clear to the public and our adversaries what we mean by sub-threshold. Rearmament, preparedness and public clarity are the best way to ensure that Vladimir Putin and those around him never conclude that Britain lacks either the capability or the determination to defend itself.
Several hon. Members rose—
Madam Deputy Speaker (Caroline Nokes)
Order. The time limit will be reduced to five minutes after the next speaker.
Steve Barclay (North East Cambridgeshire) (Con)
The hon. Member for Dunfermline and Dollar (Graeme Downie) has highlighted a number of pertinent questions that collectively pointed to the increased threat that we face. I also very much agree with the hon. Member for Macclesfield (Tim Roca). There is a lot of common ground in the Chamber today. One example of that is that I agree fundamentally with the comment from the hon. Member for Birmingham Selly Oak (Al Carns) that we
“must not underestimate the level of change that is required.”
None of that detracts from the point that the hon. Member for Tunbridge Wells (Mike Martin) highlighted in his opening remarks on the structural flaws in the funding allocated through the defence investment plan. The hon. Gentleman elaborated in more depth but, for example, less than half the headline figure announced is new money. Of the £15 billion announced, £6.9 billion over four years is new money, with £4.7 billion for the next budget, and £3.4 billion from asset sales and moving liabilities around. As he said, that is in addition to £10.7 billion of efficiencies.
In addition to the hon. Gentleman’s remarks, I want to illustrate how the Government’s narrative contradicts itself with regard to the efficiencies; three Government documents, which the Government agree with, actually contradict each other. For example, on page 79 of the DIP we see the total resource departmental expenditure limit of £7 billion, from savings on staffing, and a capital departmental expenditure limit of £3.4 billion. Those are figures in the Government’s own annex, yet just last year on page 5 of the strategic defence review, the Secretary of State said, in no less than his own foreword:
“We will unlock nearly £6 billion of new savings”.
In a year we have gone from the Secretary of State saying, “We’re going to unlock £6 billion” to “We’re going to unlock over £10 billion.”
As the hon. Member for Tunbridge Wells alluded to, there is no clear plan and confidence is low. Confidence is not just low because the defence investment plan states that it is low, although indeed its working states
“of which remaining plans at lower maturity”
with £5 billion on RDEL and £3.4 billion on CDEL—£8.4 billion of low confidence. Let us look, too, at the independent findings of the National Audit Office. It is stated on page 10 of one of its most recent reports, from December 2025, that the accounts were qualified in a number of areas and that:
“Lack of effective departmental oversight of a number of these arrangements has meant that the MOD did not have appropriate information nor assurance to ensure that transactions and balances”—
blah-de-blah. In other words, the Department itself does not have a grip. Quite rightly, the hon. Member for Birmingham Selly Oak pointed to the scale of challenge, but we have a set of efficiencies in a 10-year plan that fundamentally contradict the Secretary of State’s own assurances just a year ago.
The main point I wish to highlight—I say this as someone who has spent time in the Treasury, and I keep raising this point with MOD colleagues—is that I continue to be baffled as to why the Department is not highlighting and prioritising the reserves more than it is. Again, I think an area of consensus is the value of the reserves in delivering scale, and the fact that they are value for money as an option. Page 61 of the DIP just states £4.2 billion for reserves over four years—there is no breakdown, no detail, and no information, and it is not even clear if the training days and reserve service days for this year are secured. Can the Minister give us an assurance? Can he say what equipment will be funded for the reserves over the next four years? Can he give any colour on that, and can he explain why the reserves are not being prioritised more than they are?
My next point speaks directly to the issue of national resilience that the hon. Member for Birmingham Selly Oak correctly identified. Looking at the Red Book, £310 million has just been agreed for a digital campus in Manchester, and there is £1.196 million—£1.2 billion—on boiler upgrades over four years. But that is not enough, so the Government are extending that by £400 million this year, £600 million next year, and over £600 million the year after. I am not saying that those programmes are not useful—I am sure they are—but if the Prime Minister’s Munich speech is correct, and given comments from colleagues in the House, is this really the priority? Is £4.7 billion over four years on cycling and walking really this Government’s priority if we are to boost national resilience?
Mr Francois
My right hon. Friend mentioned reserves. During the debate on the Armed Forces Bill, we talked a lot about enhancing the reserves. Is he aware that while there is some funding for the so-called active reserve, in the DIP there is hardly any funding at all for the strategic reserve, which the Government made a very big thing of for five months while we were debating the Bill? There is hardly any money for it.
Steve Barclay
My right hon. Friend is right to highlight the broader point, which is the lack of detail on reserves, other than to say that it is all being parked until the next Parliament. That is a wasted opportunity. Reservists also need clearer communication from the Government, including on the training days and reserve service days this year. I hope that when the Minister winds up the debate, he will say a bit more about that.
Finally, we know that a Government reshuffle is coming, and if issues such as national resilience are to be addressed, they quite rightly require an all-of-Government response. Yet there is very little detail. As the hon. Member for Dunfermline and Dollar said regarding the answer to his written question, the MOD is often reluctant to answer on national security grounds, and there is very little detail on how other Departments will prioritise their budgets and what the key performance indicators are, particularly when new Ministers are likely to be coming in. Will the Minister clarify whether there will be KPIs relating to the defence investment plan for those Departments, and if so, when will they be set out?
Madam Deputy Speaker (Judith Cummins)
With an immediate five-minute time limit, I call Kevin Bonavia.
Kevin Bonavia (Stevenage) (Lab)
I congratulate the hon. Member for Tunbridge Wells (Mike Martin) on securing this important debate.
We live at a time when our country is being targeted—not just threatened or tested, but actively targeted. We have already heard from many hon. Members that the reality is that hostile states are seeking to harm us every single day. Cyber-attacks batter our systems, malign actors push relentlessly at the seams of our national security and disinformation campaigns seek to warp our public debates, including in Clacton in the weeks ahead, where Russian bots will have to decide whether it is going to be the current outgoing Member for Clacton or Count Binface—that is the choice they face. More seriously, we know these threats in our day-to-day work as Members. They happen to us and to anybody who wants to speak out in public debate. And why is that? It is to undermine our common security.
We have had discussion today about whose fault it is that our defences have been run down in recent years. Let me be bipartisan: we all lived off the peace dividend from the end of the cold war—that is understandable and we get that—but in that time, we came together as a country and as a House to defend countries in need, not least Ukraine. We have done that, but now we need to look to our home defence, which is under threat in a way that it has never been since at least the second world war.
Catherine Fookes (Monmouthshire) (Lab)
Does my hon. Friend agree that it is incredibly important that the Prime Minister is at NATO right now, working to calmly and strongly ensure that we are right at the heart of that alliance? Will he join me in congratulating the Prime Minister and the rest of the EU on our agreement to invest £37 billion over the next 10 years with 11 other countries on a new long-range missile to protect Europe?
Kevin Bonavia
That is fantastic news for the future of NATO. I pay tribute to our Prime Minister for speaking up for NATO. This country has a NATO-first policy, and rightly so. We put our nuclear deterrent and our own taxpayers’ money to the service of NATO. We must come together as an alliance and we must recognise that our country’s contribution has been great, no matter what the debate about how we get to 3.5% of GDP in the years ahead. I thank my own Government—as a Labour MP, I should—for what they have done to support our armed forces by increasing pay and taking housing back into public ownership, so that the armed forces can have the morale that they deserve. But we need to keep doing more.
I thank our defence industry in this country too. I want to mention two defence firms in my constituency of Stevenage. Airbus helps to produce between a quarter and a third of all satellites in space, but the company cannot manufacture the satellites in my town alone; it collaborates with companies in sites across the country, including in Portsmouth—I see my hon. Friend the Member for Portsmouth North (Amanda Martin) is in her place. We need to come together and support our SMEs. Last week, I visited Astute, a defence logistics firm in my constituency that needs our support. This Government are and must do more to support such companies in the armed forces industries, but that is not enough if we are going to truly make our country safe.
My hon. Friend the Member for Dunfermline and Dollar (Graeme Downie) made an excellent point about how we have to face the threats from hostile actors around the world. It is not just about the hardware or about the people we need to recruit to our armed forces. As many hon. Members have said, it is about a whole-of-society approach.
My hon. and gallant Friend the Member for Birmingham Selly Oak (Al Carns) talked about national resilience, and this really has to be a national cause. The excellent strategic defence review finishes with that point and talks about a whole-of-society approach. Can we really do that? Members have said today that the public do not really feel that yet, but many Members and veterans do. The armed forces and our intelligence services see it. There are things that I do not even know about, but I do know—from what I am allowed to know—that this issue is serious and affecting us now. Russia’s grey-zone war is there, and it will not just be Russia in the years ahead—we know that there are others—so how do we take this approach?
Before the second world war, many people thought, “Never again. We cannot rearm; we cannot do all this.” There was a famous debate in the Oxford Union, where they voted not to fight for King or country—and that is said about our young people today, but I do not believe it. I see countries, such as Ukraine, Poland and the Baltic states, that feel and see the urgency. Maybe we do not feel it yet in this country, but it behoves all of us, in this place and beyond, to help people understand what is going on. That will be harder now. In the 1930s, we had the mainstream media, or whatever it was called back then; now, we are going to be dealing with disinformation. When we try to make our case, there will always be somebody out there to talk about poor, maligned Putin. I have that in my patch—only a few days ago, a Russian state broadcaster wanted Stevenage to be attacked with missiles. We must do better, and I am sure that we will.
Dr Neil Shastri-Hurst (Solihull West and Shirley) (Con)
I refer Members to my entries in the Register of Members’ Financial Interests, in particular my participation in a parliamentary delegation to Ukraine in February with the UK friends of the armed forces.
I want to build on some of the arguments made by the hon. Member for Dunfermline and Dollar (Graeme Downie). As I sat here listening to this thoughtful and valuable debate, the issue that really struck me above anything else was that, in many ways, we are preaching to the converted in this Chamber. Those of us who are here recognise the seriousness of the moment—we understand that defence is not an optional extra and that it cannot wait for a more convenient fiscal moment—but our responsibility goes much further than this Chamber, of course. Our responsibility is to the British public, and that means telling them the truth.
As we have heard repeatedly during the course of today, the truth is that the world has changed and the threats are very real. For far too long, we have risked treating defence as something done by someone else—something done by sailors under the waves, soldiers on distant deployments and pilots in the skies. However, modern deterrence asks us to do much more individually. It also requires government to be honest, and the public to understand what is really at stake.
As we have heard, the Government have clearly set out that Russia could be in a position to attack a NATO ally by as early as the end of this decade. The Chief of the Defence Staff has warned that we are not as ready as we need to be, and the noble Lord Robertson, a distinguished former Secretary-General of NATO, has gone even further; he has been really blunt in his assessment that we are simply not ready. Those are the judgments of people who have spent their entire lives defending our country.
We must not treat the British public like children. They do not need comforting slogans; they need searing honesty from people in public office. We cannot set out a case in which we say to them that Russia is probing our waters and hostile states are targeting our energy networks, satellites and cyber-systems, and then suggest that the answer to those dangers is promises that begin in the next decade. Quite simply, we cannot describe a 2030 threat and offer a 2035 solution. I believe that is the weakness at the heart of the Government’s approach to date.
Readiness is not simply about owning equipment. It is about having the people trained to use it, having the stockpiles behind it, and having reservists who are able to mobilise. It is about factories that can surge, ports that can receive and energy systems that can endure. A nation is not ready simply because a Minister declares that it is ready. A nation is ready when the whole system is ready to row in behind it, and the reality is that national security requires choices, discipline and—we have to be blunt—sacrifices. For the past 30 years or so, we enjoyed a peace dividend, and too often we behaved as though that would never end, but we forgot the simple truth that freedom is never free; there is always a cost to be paid. It is a different cost depending on the generation, and each has to deal with it in different ways. Our duty is to ensure that this generation pays in preparedness so that the next generation does not pay in blood. The British people will understand that if we level with them, which is why the arguments for spending 3% of GDP on defence in this Parliament are not an extravagant ambition, but the bare minimum response to what is a deteriorating world.
Britain is not a weak nation. We possess one of the most extraordinary armed forces in the world; we have outstanding intelligence services, world-class scientists and engineers, and above all, a people who have never failed this country when they have been told the truth. Therefore, if we want to defend the peace that we so cherish, we cannot have a resilience that starts after the crisis has begun. It is perhaps worth ending by remembering that the cost of preparedness will always be far less than the cost of war itself.
Brian Leishman (Alloa and Grangemouth) (Lab)
I took the underground to Westminster this morning, and at the bottom of the steps at the entrance into Parliament there was a homeless man sleeping against the wall, lying on the cold, dirty floor of the tube station. He was the last thing I saw before coming into this grand palace where we sit as legislators, taking decisions and making political choices that impact that man and everyone else in the country. Last week, £15 billion was found for weapons that will get us ready for a conflict that many politicians, much of the media, and various think-tanks and lobbyists say is imminent. That hawkish rhetoric is ramping up—of the 22 questions asked at Defence questions on Monday, three contained mention of Russia, and two were about defending the High North. A consistent theme ran throughout, pushing the narrative that we must spend on defence above all else.
Of course, I appreciate that the first duty of Government is to keep our citizens safe and to defend the realm, but what about that man at the bottom of the tube station steps? Who is keeping him safe? What about the children who are going to school with no food in their bellies—do they feel safe? Over 3 million people need a food bank to survive—people who, when the winter comes, will have to decide whether to eat a meal or put their heating on. How safe do they feel because of political choices that have seen other departmental budgets cut?
I do not think it needs to be this way. Tony Benn used to say regularly in this place that if we can find money to kill people, we can find money to help people. When I watch the news on television or scroll through my phone and I see conflict, ethnic cleansing, the displacement of millions, the destruction of Ukraine, Gaza and Sudan, and Trump and Netanyahu’s illegal war on Iran—remember, a girls’ school got bombed—I do not think, “You know what the world needs? We need more weapons. We need more death.” I think that what we need is obvious. We need diplomacy, we need the de-escalation of tensions abroad, and we need a domestic agenda not of war, but of prosperity and peace.
I want us to invest in health, education and public services—all the good stuff that keeps communities together. I want better wages, the reindustrialisation of forgotten heartlands across the country, and the redistribution of wealth and power to create equal opportunities for people. I want a social security system that is a genuine safety net, one that stops people from descending into poverty. We are at war right now with poverty and inequality, and our people are dying because of it, so I urge Members not to look the other way the next time they are in Westminster tube station.
Gideon Amos (Taunton and Wellington) (LD)
Given the important armed forces community in Taunton and Wellington, which includes 40 Commando Royal Marines, 675 Squadron Army Air Corps, our sea and air cadets and our army cadet force, I start by thanking all those who are serving and all the veterans in my community who have served.
At the weekend, I was pleased to have the opportunity to thank Ed Cullen and all the veterans who organised our superb Somerset Armed Forces Day event, drawing 49,000 people, which was a record attendance. I hope that the Minister will join me in congratulating them, as well as Terry Williams, who is fundraising to establish the “poppy of honour”, with 1.1 million named paper poppies for every individual lost in world war one. Indeed, I call on the Government to support that fundraising effort in a meaningful way. Speaking of those who have been on active service, I also congratulate my hon. and gallant Friend the Member for Tunbridge Wells (Mike Martin) on his service. He brings to these Benches the sharpest of insights on defence and rearmament, and great experience too.
How we treat our veterans is a vital component of how we will attract the men and women to serve in the forces and deliver the warfighting readiness that this debate is about. That is why the superb work of the NHS Somerset armed forces link team must not be cut back as a result of cuts to integrated care boards by the Department of Health and Social Care. Former Royal Marine Steven Summers has said to me that
“the support provided…has been life changing. They have helped bridge the gaps between the NHS, local GP surgeries, and the commitments made under the Armed Forces Covenant… Their work really does make a difference.”
The support that we give our veterans should also include those who served in Operation Banner in Northern Ireland. They should never have to face double jeopardy. That is why the Liberal Democrats voted against carrying over the Government’s Northern Ireland Troubles Bill.
Given the heat, I will spend a moment thanking soldiers on ceremonial duties. I am personally appalled by the way a minority of members of the public treat the guards and their horses, as is regularly shown on social media. Veterans in my constituency have asked me to raise that here today. I urge the Government to consider whether anything can be done to better prevent people from interfering with guards’ duties. Cadets are tomorrow’s servicemen and women, so I welcome that our cadet forces are set to keep growing, and the 30% target must be met as soon as possible.
A decent home for serving personnel matters, so I was proud as the Liberal Democrats housing spokesperson to take forward the work begun by my hon. Friend the Member for North Shropshire (Helen Morgan) and propose amendments to the Renters’ Rights Bill, which were eventually made by the Government, to bring service family accommodation up to a decent home standard by law. I am delighted that the amendments of my hon. Friend the Member for Lewes (James MacCleary) to the Armed Forces Bill would extend that to single living accommodation.
I welcome the £15 billion defence investment plan, but as my hon. Friend the Member for Tunbridge Wells said, it does not go nearly far enough. With £4.75 billion of that yet to be found, any raiding of the military housing budget would be a false economy and bitterly opposed by Liberal Democrats. If this defence investment is to be spent well, the promise made to our small businesses to properly integrate them into procurement must be kept. The current 5% procurement budget for SMEs is a pittance. An SME in my constituency—Coker Engineering in Taunton—needs reliable access to steel imports. I repeat the call for defence companies to be granted exclusions from steel import tariffs so that they can make the arms our forces need.
In conclusion, if the Government’s ambition falls short, the Liberal Democrats’ ambition does not. We call for: a new EU-UK defence pact providing the basis for negotiating UK entry into SAFE, or Security Action for Europe; decent homes for service families and single living accommodation; and a £20 billion programme of defence bonds to inject the capital that our forces urgently need to meet the challenges set out by my hon. Friend and the strategic defence review. That is the defence of our country that Liberal Democrats have been campaigning for, and that is what we would deliver.
Amanda Martin (Portsmouth North) (Lab)
We live in an increasingly unstable world. From Russia’s illegal invasion of Ukraine to the conflict in the middle east, the threats to our national security have grown, and families across the country have felt the consequences through higher bills and rising prices. We cannot afford to ignore the reality of the world we face, but as my hon. Friend the Member for Birmingham Selly Oak (Al Carns) so eloquently put it, the question we need to address is this: “What does warfighting readiness actually mean to this Government, to our forces and to our country?”
It is worth reminding the House and our constituents—as it would not have been thought from the opening speeches today—that this Government inherited armed forces that had been hollowed out by years of under-investment, overstretch and a failure to keep pace with modern warfare. Let me point out to the hon. Member for Tunbridge Wells (Mike Martin) that this destruction was a result of initiatives such as the coalition Government’s 2011 defence basing review, which reduced the number of times our Type 45s were serviced, thus giving us this challenge.
Ships, aircraft and tanks, and indeed personnel, are not built overnight, so I am proud that this Labour Government are beginning to put that right—and to put it right across Government, because this is not just the role of the Ministry of Defence. This Government deserve credit for changing course. Over the next four years, we will invest £298 billion in defence. The defence investment plan will help us to modernise our armed forces by investing in drones and autonomous systems, building at least six new warships, and strengthening the capabilities that our services need to respond to today’s security challenges. It reflects and learns from the lessons of recent conflicts, and ensures that our defence capabilities will keep pace with the changing nature of war. Although I do not agree with the hon. Member for Tunbridge Wells that this is too little too late, I do agree that we need to move and ensure that the sector is more rapidly equipped for national security and for growth.
We know that increasing defence spending alone is not enough. We also need stronger industrial bases and a system that allows for swift procurement, and that means backing British defence manufacturers and innovative small and medium-sized enterprises with better access to finance so that they can grow and create skilled jobs and apprenticeships and strengthen our national resilience. In my constituency, for instance, defence jobs and national security go hand in hand.
That is why I would like to ask the Minister whether the Government will look again at joining the Defence, Security and Resilience Bank. Spearheaded by Prime Minister Carney in Canada, the DSRB could help unlock private investment for the defence sector and support the industrial capacity that our armed forces really need. We should seize every opportunity to work with our allies to strengthen our defence industrial base, and we should seize every opportunity to ensure that we can not only have research and development here, but have the opportunity to scale up British companies so that they choose to invest and grow here and not abroad.
Defence is about far more than equipment and technology. Our greatest strength is the people who serve this country. That is why, as well as improving defence design and manufacturing, we must continue to improve the support that those people receive. When we extend the armed forces covenant across Government, we must ensure that our people know about it, and we must continue to deliver the £9 billion defence housing strategy to improve service homes. As I have constantly argued, we should also seek to improve paternity service leave for fathers and families. If we are serious about national security, we must also be serious about recruiting, retaining and supporting the people who keep our country safe.
Britain faces significant security challenges, and meeting them requires sustained investment, a strong defence industry, and a firm commitment to those who serve our country. It also requires—as my hon. Friend the Member for Dunfermline and Dollar (Graeme Downie) so brilliantly argued—an open and honest conversation with the public, so that citizens in the United Kingdom can really understand what warfighting readiness means; so that they can understand the challenges and the very real threats that we face in the UK, the priorities that we may need to make, and the misinformation and dangers that the cyber world holds out there. These are conversations that we know are happening in our allied countries, such as Norway and Finland—conversations that will make us all warfighting ready.
This Labour Government are rebuilding our armed forces, they are backing British defence jobs, and they are strengthening our national security for the future. Much has been done, and there is still much more to do, but I have every faith that we as a Labour Government will rise to the challenge.
Richard Foord (Honiton and Sidmouth) (LD)
I pay tribute to my hon. Friend the Member for Tunbridge Wells (Mike Martin) for making this debate happen. I have been to see his bookshelves and, trust me, the books on strategy and military affairs in his library are well thumbed. He knows what he is talking about, and he has done well to corral us all into talking about it today.
Let me begin by talking about defence spending. It is fair to say that others have covered it, but I will repeat the fact that we are not spending sufficiently on defence. I want to challenge the hon. Member for Alloa and Grangemouth (Brian Leishman). He did a bold thing in challenging the prevailing consensus, the mood of the House, and views that are now quite mainstream in the House, but while it is compelling to think about all the welfare need that exists in this country—and I acknowledge that there is a great deal—he has a crude oil refinery in his constituency.
Richard Foord
Forgive me, but I understood that Grangemouth was a crude oil refinery.
We need only look to Eurasia—we need only look at what has been happening in Ukraine and Russia—to see that war comes to those who do not really want it to come to them at all. Yes, that is a failure of diplomacy, but it is also a failure of preparedness. Today, I will focus my remarks on the business of readiness.
We are currently spending 2.5% of GDP on defence, and the target is 3.5% by 2035. We really ought to be getting midway between those two by 2030, yet we are projected to be at only 2.68% by then. Of course, the Prime Minister is currently at the NATO summit in Ankara. Nye Bevan said to the Labour conference in 1957 that his party members should not send him
“naked into the conference chamber”,
and I fear that the Prime Minister has been sent naked into the Ankara conference chamber. The defence investment plan is indeed a skinny dip.
The hon. Member for Stevenage (Kevin Bonavia) talked about the famous “King and country” debate at the Oxford Union in 1933. I completely agree with him that people who thought that they would not fight for King and country in 1933 found that, by 1939, they had no choice but to do so because of the circumstances. He knows a great deal about that from his time on the NATO Parliamentary Assembly.
Mr Francois
The university’s records do not show how every individual student voted, but we know that many of the students who were present at that famous debate in 1933 subsequently signed up in 1939 and 1940.
Richard Foord
The shadow Minister is exactly right. Of course, those people’s parents fought in the first world war. They were a generation who really did not want to meet war, but war came to them none the less.
Clausewitz, the philosopher of war, talked about government, military and people being the remarkable trinity concerned with war. A lot of today’s debate has centred on the military, on defence, on procurement, and perhaps a little on government as it pertains to policy. We have talked a bit less about people, although the hon. Member for Portsmouth North (Amanda Martin) did talk about our servicepeople. I want to add to that by talking about people in the country more broadly—the people we represent. We need to think about defence as a national endeavour that builds on everyone’s understanding of the threat and the need to defend the nation. When we discuss warfighting readiness, we are talking about not just platforms, ships, tanks and aircraft, but information.
The Foreign Affairs Committee published a report on disinformation. We talked about the use of military and non-military—overt and covert—methods to blur the lines between war and peace, to sow doubt in the minds of target populations, and to destabilise and undermine societies. Last year’s strategic defence review covers sub-threshold attacks, and it talks about how such attacks are difficult to attribute to a perpetrator with certainty due to the methods used and the frequent reliance on proxy actors. The focus has to be on countering Russia’s hostile activities in the information space, as well as thinking about preparing to fight a war and have war readiness, because that is the reality of modern conflict.
Conflict does not necessarily begin when a missile is fired or a border is crossed. It can begin when public trust is systemically eroded, when elections are manipulated, when information is weaponised or when hostile actors succeed in weakening a society’s confidence in its own institutions. The objective is often not mere propaganda or the spreading of false information, but to persuade societies that a particular lie is true. The aim is to persuade people that objective truth no longer exists. I want us to think about war readiness in the round, including in the information space.
Dave Doogan (Angus and Perthshire Glens) (SNP)
I thank the hon. Member for Tunbridge Wells (Mike Martin) for bringing such a prescient and timely debate to the House. I pay tribute to the right hon. Member for Rawmarsh and Conisbrough (John Healey) and the hon. and gallant Member for Birmingham Selly Oak (Al Carns) for the step they took against what, in their view, was clearly insufficient investment, resulting in insufficient protection for these islands and the people who live here.
The DIP manifestly writes cheques that the Treasury is ill-equipped or ill-prepared to cash. As many Members have said, there is no clear spending plan for how we get to 2030, much less for how we get to 2035. The projected expenditure on defence in the UK is not going to be incremental over those years. We are supposed to believe that, magically, in 2029 we will get to where we need to be in 2030, and the same again in 2034. A lot of us are long enough in the tooth to know that is a load of unbelievable rhetoric. Efficiency savings of £10.7 billion have never happened before, and there is a good reason: it does not happen. That is not how we fund any budget, whether CDEL or RDEL. We do not fund budgets with efficiency savings of that size.
This is serious: we have lost a Secretary of State for Defence and one of his Ministers. If we speak to men and women in uniform, as I and many other Members are privileged to do on a regular basis, we sense the palpable fog of dismay as they try—in vain, largely—to figure out what they are expected to do, how they are expected to do it and with what. The DIP generated such expectation, as did the SDR that precipitated it, but once they were finally published, they have generated more questions than answers.
Platforms matter. I hear all the time that we need to learn the lessons from Ukraine, and we do need to learn the lessons from those brave warriors defending their homeland in an existential fight with zero strategic depth. However, we are not Ukraine—this is not Ukraine—because we have access to platforms and systems that they do not. We have strategic depth in relation to the contemporary threat we face from Russia. I am not inviting Members to be complacent; I am inviting them to see beyond learning the lessons from Ukraine, and platforms and the replacement thereof do matter.
In a very brief summary, the UK just now is fielding clapped-out Vanguard nuclear bombers. When we see them coming back up the Clyde after 200 days under the waves, they look as though they have been raised from the bottom of the sea, not out patrolling for what should be 90 days, not 200 days. It is a dreadful way to treat sailors. Not one of the six completed Astute-class submarines is available for service, which is absolutely unbelievable. The new medium-lift helicopter has rumbled on for a decade, but finally got a grudging order half the size of the original. Ajax is now in its 17th year—it is absolutely incorrigible—and that is not a sophisticated novel system. It is a very good system, but it should not take 17 years. By the time it gets into service, it will be obsolete.
Those are just ordinary things that defence in the UK has demonstrated it cannot pull off, yet according to the DIP, we are going to start doing all this exquisite, novel stuff that nobody has done before, and we are going to be world leaders, which the UK always seems to think it has to be. I do not believe a word of it. I hope it is true and I am wrong, but if we cannot do ordinary, how can we be expected to believe that exquisite is just around the corner?
The Minister for Veterans and People (Mr Calvin Bailey)
Did the hon. Member just refer to the nuclear deterrent as “ordinary”?
Dave Doogan
It has been around for 50 years; it is not novel.
The hon. Member for Macclesfield (Tim Roca) referred to £45 billion for the nuclear enterprise. I think the figure in the DIP is £64 billion. That is an important point, because the Government and the one before it have refused to publish the rolling 10-year nuclear enterprise budget. If the Minister could clarify what the nuclear enterprise budget is over the rolling 10-year period, that would be helpful. I am a supporter of defence—there are a few people in here who will testify to that—but the MOD does have a case to answer. It increasingly looks like if we want £1 million of output, we need to put £2 million into the MOD pot. If we look at any Public Accounts Committee report on defence, we can see what a troubled enterprise it is. It needs root and branch reform.
I have heard people say quite a lot that we have not told the public about the threat we are under. I agree with that. I think that is a true and an honest assessment, but we need to see beyond the transmission of the threat and be prepared for the response that we might get back. I am not making a constitutional point; I am not talking about Scotland. I am talking about housing schemes and communities up and down these islands. If they are asked to put their families and their own lives on the line for the United Kingdom, they might well not be quite as enthusiastic as we might wish. They might think, “What has my country done for me?” If they are 25 years old and have grown up over the last 20 years they might think, “What has the UK done for me, because I see myself and my generation getting poorer than the generations that went before.” I might be wrong—I hope I am wrong—but we do not know it.
Madam Deputy Speaker (Judith Cummins)
I call the Liberal Democrat spokesperson.
James MacCleary (Lewes) (LD)
I congratulate my hon. and gallant Friend the Member for Tunbridge Wells (Mike Martin) on securing this extremely valuable debate.
Much has been said about rearmament and defence in this House in recent months. It is widely accepted that successive Governments have allowed our nation’s defences to decline to a perilous extent. This debate should therefore be an opportunity for the House to come together to address the first duty of any Government, the defence of the realm. It is a conversation that cannot be limited only to this building; it needs to be had in every corner of our great nation.
The Prime Minister and others tell us that the point of maximum threat from Russia is in 2030. That is just over three years away. If that is the case, we must show urgency and clarity. It is for that reason that the long delay in the publication of the defence investment plan was so serious and so damaging. That delay cost us precious time, which our adversaries have spent building their own forces and probing our vulnerabilities. The Public Accounts Committee has already told us what that delay cost us. It called the resulting bureaucratic drift damaging to Britain’s international credibility and warned that it has created deep uncertainty across our defence industrial base while sending a weak signal to allies and adversaries alike.
When the plan finally arrived, what did we find? The Secretary of State told the House that he had secured an extra £1 billion, yet it has come to light since then that most of that money has simply been taken from cancelled transport and energy projects or clawed back from funds that were meant to improve military housing. Worse still, £4.7 billion of the £15 billion promised increase is, in the Government’s own words, still to be “confirmed at the Budget”. That, I am afraid, is not a funding plan.
Defence chiefs have been explicit that anything below £28 billion would leave this country vulnerable and force Ministers into hard choices about capabilities that we simply cannot afford to lose. The figure the Prime Minister has now settled on falls well short of that warning. Nowhere is that more alarming than in air defence. The strategic defence review recommended that we spend at least £1 billion in this area. The people of this country rightly assume that they are safe from missile and drone attack. We must urgently work with our NATO allies to build up our collective integrated air defence. It is folly to spend billions on equipment if it can all just be destroyed in an instant by Russian ballistic missiles.
The SDR was also clear that we needed pace in investing in the capabilities needed to deter Russia. That is why the Liberal Democrats have argued for issuing defence bonds to make £20 billion available in the next two years—before 2030—to spend on plugging those gaps. We have also urged the Government to explore multilateral efforts to fund rearmament, such as the defence, security and resilience bank or leading on the establishment of a European rearmament bank.
The threat is real and the money is needed now, not years down the line, and we need to spend not only more, but better. Around 5% of the defence procurement budget currently reaches SMEs and 42% of contracts remain concentrated among the same 10 suppliers. These smaller firms are the source of much of the flexibility and innovation the sector needs, and they support skilled jobs in every part of the United Kingdom. The long delay to the DIP left them in limbo for over a year. Some went out of business in that time or even moved overseas, and with the £4.7 billion gap still to be resolved at the Budget, uncertainty has not been lifted from their shoulders. To make their funding numbers add up, the Government have also started chipping away at their previous commitment to fix mouldy military homes and crumbling barracks. The Liberal Democrats have supported the Government’s efforts to sort out that mess, so to hear that hundreds of millions have been trimmed is bitterly disappointing.
The Liberal Democrats changed the law so that service family accommodation must now be assessed against the decent homes standard—we forced the Government to concede that principle in the House of Lords. We went further still, and sought to extend that same standard to single living accommodation, so that no member of our armed forces is left living in substandard conditions, but the Government voted that down in Committee. If Ministers are serious about retention and persuading talented people to stay in uniform, they must reverse that decision and bring all military housing under a single, decent standard. They must also stop backsliding on their commitment to fully fund the recovery of our military housing stock.
We cannot meet this moment alone. Our security is bound up with that of our European neighbours, because geography has not changed, even if American commitment is growing less certain. The Liberal Democrats want the Government to show real ambition to restart negotiations for Britain to join the Security Action for Europe programme, to work with partners towards a European rearmament bank, and to help build a European security council that can co-ordinate our allies’ efforts to meet NATO’s requirements, even as Washington draws back.
Our alliances are one of our greatest strengths, and should the worst ever happen, we are far stronger standing with our friends than on our own. That is why squandering soft power through cuts to international development aid and the Foreign, Commonwealth and Development Office are an entirely false economy. Those cuts diminish our standing in the world and create issues for which we will have to pay far more down the line. It is always cheaper to prevent a war than to fight one, which is why our hard and soft power must go hand in hand.
I will end where I started: it is time that the Government and the new Prime Minister, when he takes office, lead a serious national conversation with the public. We hear endless rhetoric about tough choices, and those will not get any easier without public support. The parties represented in this Chamber will come up with different answers to the question—we can debate that here—but every party will find it harder to justify those choices unless they are part of a real national conversation on defence, and that conversation is simply not happening right now.
Just this week, the United States warned of a possible imminent attack by Russian forces on Poland to test NATO defences. The threat is not abstract; the threat is real, and it is to the safety of our children and our nation’s future. I urge Ministers and the incoming Prime Minister to be decisive, issue defence bonds, take the conversation on defence out into the real world, and show the urgency that the moment deserves before it is too late.
Mr Mark Francois (Rayleigh and Wickford) (Con)
I begin by congratulating the hon. Member for Tunbridge Wells (Mike Martin) and the Backbench Business Committee for scheduling this important and timely debate, which coincides with the NATO summit. I will make what is perhaps a point of consensus: yet again, when we debate the defence of the realm—the first duty of Government—the Reform Bench is empty; yet again, the plastic patriots have gone AWOL when we discuss the defence of this country. Count Binface clearly has them worried in Clacton.
As I am a historian by training, perhaps I can offer some historical context. Arguments about military readiness are not new. The Roman military theorist, Vegetius, some two millennia ago, coined the now-famous phrase, “Si vis pacem, para bellum”—he who desires peace should prepare for war, in order to deter it. There have been times in British history where we have disregarded Vegetius’s sage advice. For instance, in 1919, following the first world war, when Britain had fought at great cost—both human and financial—a Liberal-led Government introduced the concept of a 10-year rule: a pan-Whitehall edict that no major war was likely for at least a decade. That continued on a rolling basis into the 1930s. On 9 February 1933, just 10 days after Hitler became Chancellor of Germany, in the now famous Oxford Union debate, referred to several times already, the students resolved by more than two to one that:
“This House would, under no circumstances, fight for King and country.”
And yet, a few years later, we know that many of them did.
The 10-year rule was only finally rescinded in the mid-1930s. Nevertheless, as General Lord Dannatt pointed out in his excellent recent book “Victory to Defeat”, our armed forces still did not recover sufficiently in time to deter Hitler from launching what eventually became world war two, in which some 60 million people perished worldwide.
Sir Julian Lewis (New Forest East) (Con)
Having spoken on this very subject the week before last, I thought that I would, for once, sit and listen to what others have to say. Does my right hon. Friend agree that one of the reasons for the failure of deterrence at the beginning of both the second world war and the first world war was that the United States was detached from the future of security in Europe? The success of NATO has hinged on the knowledge that an attack on any NATO country would mean war with the United States from the outset. Does he share my concern that the United States is at present led by someone with insufficient regard for that history?
Mr Francois
NATO is the most successful defensive alliance in history, and article 5 is its absolute fulcrum. We must maintain our commitment to article 5 to keep all NATO nations safe.
In 1946 in Fulton, Missouri, Churchill said that an iron curtain had descended, leading us into the cold war. In the mid-1980s, under Conservative Prime Minister Margaret Thatcher, defence spending was gusting about 5% of gross domestic product. When the Berlin wall came down in 1989, countries across the west took a peace dividend. Francis Fukuyama wrote his famous book “The End of History” in 1992, and many in the west believed that the threat of world war had finally receded. When the Conservatives left office in 1997, we were spending around 3% of GDP on defence, and that downward trend continued under Tony Blair’s Government—although, in fairness, he was only doing what many other western democracies were also doing.
Today, we face a revanchist Russia led by Putin—
The Minister for Veterans and People (Mr Calvin Bailey)
Will the right hon. Gentleman give way?
Mr Francois
In a moment.
We face a revanchist Russian led by Putin, who launched an invasion of Crimea and the Donbas in 2014, and then an even more brutal, full-scale invasion of Ukraine in 2022. As someone who visited Ukraine in February of this year, I remind the House that the Ukrainians would argue that they have therefore been at war with Russia not for four years, but for 12 years—longer than the first and second world wars combined.
Against that rising threat, Labour produced its much-vaunted strategic defence review, and there was much good in it. However, it still contained echoes of the 10-year rule, declaring the Government’s intention, on page 43,
“to deter, fight and win—with allies—against states with advanced military forces by 2035.”
That is nine years away. The Chief of the General Staff has warned that we might have to fight Russia by 2027, the First Sea Lord said 2029, and even the outgoing Prime Minister said that this might happen by 2030. How are we supposed to deter Putin without a single attack submarine currently at sea, with no new AWACS aircraft in service in the Royal Air Force, still, and with Ajax almost a decade late and still not in operational service, despite Ministers previously promising us that it was fine? That really is corrosive complacency, is not it? The threat is now, and we need to rearm accordingly, including by spending 3% of GDP on defence by 2029 at the very latest, if not earlier.
The three co-authors of the SDR were adamant that the cost of implementing it was spending 3% of GDP on defence, and a year after the SDR was published, we finally received Labour’s plan for how to pay for it: the so-called defence investment plan. But that was not before Labour’s Defence Secretary and Armed Forces Minister—the hon. Member for Birmingham Selly Oak (Al Carns), who is in his place—both resigned on 11 June after months of frustration with the Treasury over the paucity of funding in the plan.
As the outgoing Defence Secretary powerfully wrote in his resignation letter to the Prime Minister,
“you have been unable, and the Treasury has been unwilling, to commit the resources the nation needs to defend the country at this time of rising threats.”
That is damning. The former Armed Forces Minister said in his letter:
“I have sat in the rooms, seen the assessments, and spoken to the commanders who will be asked to do more with less, and I cannot in good conscience stand at the dispatch box and defend a level of investment I know to be inadequate to the task.”
Moreover, the outgoing Defence Secretary revealed that he had been offered an increase in defence spending to only 2.68% of GDP by 2030—billions short of what the SDR authors required.
The new Defence Secretary has tried to argue that he has been given some additional funding—a bit more than £1 billion—but that takes defence spending to barely 2.69% of GDP by 2030, a difference that does not even touch the sides. Sadly, it is worse than that. The chiefs of staff have been urging the Prime Minister and the Chancellor to invest an additional £28 billion in defence over the next four years, partly to enable them to implement Labour’s SDR. They were offered barely £15 billion instead. On closer examination, even that sum unravels rapidly.
As we have heard, £10.7 billion relies on so-called efficiency savings, which is Whitehall code for cuts in MOD spending over the next four years, the bulk of which have not even been identified. On the day of publication, the Chairman of the Public Accounts Committee described that as an old accountant’s trick. It still does not disguise the fact that the MOD would have to make massive in-year spending cuts, including from operations and training, to recycle that money to fund the defence investment plan. The Chief of the Defence Staff warned of the implications of doing that only the other day.
The disastrous DIP also relies on a further £4.7 billion, which has not yet been cleared by the Treasury and will be subject to another public spending round. In other words, the two sums combined will be more than the £15 billion of extra money that was promised. There is practically no new money for defence at all. All we have been offered is Enron accounting and smoke and mirrors to try to pretend that there is a massive increase in defence spending—barely 0.01% of GDP over four years.
Mr Francois
No, I am summing up.
Lord Robertson, the lead author of the SDR, told the Defence Committee only yesterday that
“we are running out of years… the challenge is now bigger, more serious and earlier than we had anticipated, yet the defence investment plan does not come up to it.”
General Barrons, his co-author, told the same Committee that
“the Prime Minister is saying that Russia could attack NATO by 2030, and we essentially lost a year of mobilising for that.”
Incredibly, even the DIP says on page 78:
“The figures presented are indicative rather than precise cost estimates. They do not constitute binding commitments and are subject to the Government’s approval processes, affordability considerations and contracting procedures. Figures have been rounded and, therefore, may not sum.”
You can say that again. In other words, the document isn’t worth the paper it’s printed on. The plan relies on extra money that does not exist. We will not deter the likes of Vladimir Putin and Xi Jinping with such unfunded proposals. If Trotsky was right, and war is interested in us, we must rearm now to deter it.
I reluctantly find that the Labour Government are failing the people of this country in the first duty of Government: the defence of the realm. If the incoming Prime Minister cannot plug the £5 billion black hole that he is about to inherit, he should make way for people who can.
The Minister for Veterans and People (Mr Calvin Bailey)
I am pleased to have been a signatory to the application for this debate, and I congratulate the hon. Member for Tunbridge Wells (Mike Martin) on securing it. [Laughter.] Therein is a lesson.
The subject of the debate—rearmament and readiness—could hardly be of greater importance to our constituents, our military and the future security of our nation. I thank Members of all parties who have contributed to a compelling discussion, and I welcome the opportunity to respond to some of the points that have been raised. You can enjoy the confusion of my moving between my speech and the notes I have taken.
I will attempt to explain how the Ministry of Defence is working to get our armed forces warfighting ready as an urgent priority. However, I will start by responding to the principal criticism of the right hon. Member for Rayleigh and Wickford (Mr Francois) that there is no new money. I emphasise that £300 billion is new money; £15 billion is new money. I will never, ever let you forget the cold water that I endured in the messes of the bases on which I served—
Madam Deputy Speaker (Judith Cummins)
Order. Please can I remind you that saying “you” is not acceptable in this Chamber, because it refers to me?
Mr Bailey
The removal of funding specifically in 2010 resulted in the removal of Nimrod and the reduction of our shipyards and boatyards, which has led to the risks that are manifesting today. The Opposition cannot deny that is the reason that we are in the position we are in now.
Mr Bailey
In time.
Two years ago, this Government inherited a defence programme that was overcommitted, underfunded and fundamentally unsuited to countering the very real threats we now face. Since then, we have published a strategic defence review, the defence industrial strategy and, most recently, the defence investment plan. We are building a far more modern and lethal military, through massive increases in defence spending, radical reform of the armed forces and close collaboration with our NATO partners to protect Europe’s and Britain’s borders, showing Putin that the alliance remains as strong as ever.
As technology reshapes warfare at the fastest pace in history, and as the world becomes increasingly dangerous, our overwhelming focus at the Ministry of Defence is to get warfighting ready as fast as possible, and that was the critical tilt in the change between the two Defence Secretary’s DIPs. This DIP is a defining moment in that journey, committing, as I said, £298 billion for our armed forces over the next four years, ensuring that they have the kit and weapons they need. That is £15 billion more—more than significant—and £1.5 billion more than was announced just a few weeks ago.
The DIP means that UK defence spending will rise in real terms by 27% between 2023-24 and 2029-30—the largest sustained increase since the cold war. Indeed, the Ministry of Defence budget will grow faster over this Parliament than the budget of any other major Department. The £74 billion allocated next year—2027-28—is £20 billion more for our armed forces than the last year of the previous Government, and the budget will continue to grow in real terms for the rest of this Parliament.
Sir Julian Lewis
I congratulate the Minister on acceding to office, but he needs to appreciate that the cost of all Departments goes up in absolute financial numerical terms year on year, but the way in which we measure the investment in defence is by looking at it as a proportion of GDP. During the cold war, when the risk was almost as high as it is now, we were spending 4.5% to 5% of GDP. Vladimir Putin does not have nine years for us to spend 3.5% of GDP. Those are the measurements the Minister has to look at; we are nowhere near spending enough.
Mr Bailey
Twenty four years of serving this great nation means that I am acutely aware of the risks that the Opposition presented me and manifested during my time in service. That is why I am resolute in addressing these challenges and why I am backing the defence investment plan.
Let me make one point crystal clear: Britain has always met its NATO spending obligations in the past, and under this Government we always will. That begins with the early delivery of our first commitment to raise defence investment to 2.7% of GDP next year, compared with just 2.3%, which was missing from the Opposition’s analysis of the decline in our defence spending.
Alex Baker
The debate about percentages of GDP is slightly irrelevant, because even if defence spending were raised to 3%, we have no ability to spend that money within the industrial base, as we do not have the capacity. Does my hon. Friend agree that we need to look at a much more innovative approach to some of these things, with multilateral options? I have been campaigning for the UK to join the Defence, Security and Resilience Bank for over a year.
Mr Bailey
My hon. Friend has advocated for the Defence, Security and Resilience Bank and alternative finance methods for the past two years. It was pleasing to see the DSR Bank announcement from Canada over the last couple of days alongside the multilateral defence mechanism announcement from our Government, which, significantly, was joined by Poland. I hope that we will see the DSR and the MDM aligned as we go forward.
Mr Bailey
Not at the moment.
Let us jump forward to tech. It is not about how much we spend but about how we spend it, as we heard repeatedly in the debate. It is about how we rearm and get to warfighting readiness. The DIP will energise the transformation of our armed forces and target resources to reflect how war is waged today. We will sequence the delivery of a NATO-first transformed and integrated force powered by modern technology. Through the DIP, AI autonomy and uncrewed systems will receive the sustained increase in support that reflects their strategic importance.
I will pivot to the remarks made by the hon. Member for Tunbridge Wells about the hybrid Navy. The DIP speeds up the transition to the hybrid Navy. I have a great deal of respect for him, but it is incoherent to talk about future manned flight but talk down an autonomous fleet. On my visit to Portsmouth only last week, a member of our Royal Navy said “Never again” as we walked past a Type 45, and made it clear that the work on the Type 83 had stopped a significant time ago—it is an incoherent conversation. For the Type 23, every refurbishment takes two to three years and costs us £100 million, while £115 million has given our nation the autonomous capability that we are rolling out in the middle east. That is how incoherent the hon. Member’s argument is.
Mike Martin
I specifically said that I am fully in favour of moving to autonomy as fast as we can. All I questioned was whether we could go from a PowerPoint concept for multiple vessels to their being at sea on operations within nine years. That is all I questioned—not the idea that we need to move to autonomy.
Mr Bailey
I thank the hon. Member for his intervention. I agree that this will be testing, but we must take up the challenge, and we need people like him on the Defence Committee to ensure that we are held to account while we proceed with delivery.
The DIP also speeds up the transition to: a digitally enabled Army that is 10 times more lethal; the next generation of combat air, including a potent mix of crewed and uncrewed air power; a new uncrewed systems taskforce to rapidly develop and deliver field autonomous capabilities; and Europe’s biggest drone testing site in Swindon. I remind those who do down our nation and say, “We aren’t building enough” that at the moment we are providing 150,000 drones a year to Ukraine.
Steve Barclay
Could the Minister clarify why the efficiency target has gone up over 73% in a year compared with the strategic defence review? Was the SDR just too unambitious?
Mr Bailey
I thank the right hon. Member for his question. Perhaps we should have a discussion about it outside, because of its ambiguity—[Interruption.] The right hon. Member and I will speak afterwards.
The programme of rapid rearmament mentioned in the motion of this debate has not only begun; we are well on our way to delivering it, with significant and further increases in funding to come. That means an unprecedented investment in new technologies, new munitions, new factories and new jobs. It means creating a path to 3% and then 3.5% of GDP, and having honest public conversations about the very serious threats we face. As a fellow veteran, I know how committed the hon. Member for Tunbridge Wells is to strengthening UK defence. I hope we get behind this national endeavour, which represents an historic upturn in support for our military and for our brilliant service personnel who keep Britain safe in an increasingly uncertain world.
Madam Deputy Speaker (Judith Cummins)
I call Mike Martin to wind up very quickly.
Mike Martin (Tunbridge Wells) (LD)
I will not list the constituencies of all the hon. and right hon. Members who have contributed; they know who they are and I thank them very much.
Three themes came out of this debate that were interesting and bear repeating. First, we are already in a war and it is happening in different ways and it is happening below the threshold, but the threshold is moving about and we need to think about that. Secondly, there is the point about national resilience, the economy and the industrial base. In an age of drones that get depleted, with a cycle in which the drone model changes every six weeks, it is about how quickly we can build stuff. Nations win wars, and we need our economy to reflect that. Thirdly, we need to trust the public and tell them not just about the threat that we face but about the current state of our armed forces and where they need to get to.
Question put and agreed to.
Resolved,
That this House recognises the danger that Russia’s renewed illegal invasion of Ukraine poses to European and British security; further recognises the threat to the international order and the UK posed by China; also recognises the increasing uncertainty surrounding the reliability of the US as an ally within NATO; acknowledges the current shortfalls in the UK’s ability to deploy a credible fighting force; further acknowledges that this lack of military capability is resulting in the coercion of Britain and its interests in the international sphere; and calls on the Government to begin a programme of rapid rearmament to strengthen the defence of the UK and its allies.
NHS Corridor Care
(1 week ago)
Commons ChamberRead Full debate Read Hansard Text Watch Debate Read Debate Ministerial Extracts
Dr Rosena Allin-Khan (Tooting) (Lab)
I beg to move,
That this House has considered NHS corridor care.
I express my sincere thanks to the Backbench Business Committee for granting time to the important subject of corridor care, and I declare my interest as a proud serving NHS emergency doctor working in A&E at St George’s hospital in my Tooting constituency. In my 21 years as a doctor—I know; I can hear the audible gasp because I do not look old enough—I have never felt more proud to serve with a group of individuals such as those at St George’s hospital. The leadership team, to which we welcome a new CEO in Mat Shaw, and the team of nurses, doctors, reception staff, porters and healthcare assistants in my emergency department, make me proud to go and do every single shift that I do there, and it feels like a pleasure, not a chore.
Paul Waugh (Rochdale) (Lab/Co-op)
I thank my hon. Friend for her fantastic work in the NHS as a doctor; it is much appreciated. Like many NHS workers, she struggles against the odds and sees on a daily basis the impact of corridor care. Does she agree that NHS staff feel frustration with corridor care as much as patients do, and that they want to act and see it end as much as anyone else? Crucially, the key is more staff. Is that not, ultimately, what we all want?
Dr Allin-Khan
My hon. Friend and I are not performing a double act today, but he leads me on perfectly to the next part of my speech, as I go on to say that “corridor care” is something of a misnomer. Treatment in a corridor, far away from oxygen, proper equipment and emergency cords to pull, without privacy or dignity, without access to decent and appropriate toilet facilities, and without the highest standard of infection prevention and control, cannot be classified as care in any realistic sense. It is important to say that the staff go above and beyond with what they have. It is not the case that patients are suffering in pain because the staff do not care or do not provide a first-class service; it is because, quite simply, a corridor or any other space not built to serve and care for patients in is not the right place for a patient to be.
It is not just corridors, because patients across the NHS have been seen in antenatal rooms, store cupboards, waiting rooms and even car parks, filling every conceivable inch of a hospital. Members can imagine that people are coming in feeling particularly vulnerable, and they are happy to get the care wherever they can get it. I have never heard of any of my colleagues across the country say that they have had a patient who refused to be seen in a cupboard; they are just grateful to be seen. Even the official definition of so-called corridor care is problematic. NHS data relies on local clinical judgment about whether an environment is safe and whether patients’ privacy and dignity are being maintained. Trusts are applying these standards differently, and some feel the need, sadly, to game the system to artificially lower their corridor care statistics.
Irene Campbell (North Ayrshire and Arran) (Lab)
I would just like to highlight that the Scottish Government do not record or publish any statistics on the number of patients being treated in corridors. However, we know that it happens. The Crosshouse hospital, which serves my constituency, was recorded in January as having one of Scotland’s most under-pressure emergency departments. It exceeded capacity by 50% in December, revealing corridor care conditions in the hospital. Does my hon. Friend agree that it is important to record accurate data so that we can track improvement?
Dr Allin-Khan
My hon. Friend is absolutely right, and I am so sorry to hear of the situation in her community in Scotland. It is regrettable, and patients and their families deserve better. Absolutely, if we cannot accurately assess the issue in full, it is impossible to deal with, and I hope the Minister will talk today about how she will commit to revising this definition to make it more robust.
Iqbal Mohamed (Dewsbury and Batley) (Ind)
I thank the hon. Member for securing this debate and for allowing me to intervene. The Mid Yorkshire Teaching NHS trust published data about patients in corridors for the first time only in May, and in that month it recorded 121 patients per day being treated outside clinical rooms and areas. A constituent of mine, Catherine, wrote to me to describe seeing at first hand elderly people waiting in corridors for hours with no family members to support them. Does the hon. Member agree that corridor care has moved from being an exceptional problem to an everyday issue in many NHS trusts, and that the Government must act to address the root cause of this issue?
Dr Allin-Khan
The hon. Member is right, but I know that the Government care deeply about this. This is not something on which I am in tension with the Government in any way. I have spoken to the Ministers and the Secretary of State, and I know that they are committed to acting and ensuring that every single patient across our country gets the best possible care. Let us be really clear: the NHS should not be a political football. Safe and dignified healthcare should not be a political football. I hope that we are all in agreement on this issue today. I would have hoped to see more Members on the Opposition Benches today, and I hope that their absence is not a reflection of how much they care about the issue, because, quite frankly, we owe it to all our communities to get this right.
I know from my own experience, as will other hon. Friends in the Chamber, that when someone comes to A&E, it is often the worst day of their life. It could be the worst day of their life because of their experience as a patient, or it could be the worst day of their life because someone they love—their child, their partner, their mother or their father—is dying or has died. When we think about the dignity and care that we give, we have to look at it holistically—not simply as a set of symptoms that we are treating but as a family and the experience that they take away with them of what has happened on that day. People are in tears, people are in pain, and we owe it to them to get this right.
Helen Maguire (Epsom and Ewell) (LD)
Many people in my constituency have written about experiencing corridor care, and that loss of dignity when vulnerable and elderly patients are sitting in corridors. Does the hon. Member agree that we desperately need urgent action to ensure that dignity is prioritised wherever care is given?
Dr Allin-Khan
That is absolutely right—the hon. Member makes a valid point. People can be enduring a heart attack; they can be losing a baby; they can have had a road traffic accident and be lying on a trolley, blocked and collared, or lying on a board and looking up at the ceiling, wondering when they might make it into the scanner. People will definitely be having a time in hospital that will be etched on their memory, and sadly for many patients, and many loved ones, that is the last day they will ever see—the A&E will be the last place they know.
In the NHS we want that experience to be as comfortable and reassuring as possible. We want the best possible care, delivered in the fastest possible time, to patients who are treated fairly, efficiently, and with compassion and dignity. Frankly, that is impossible in a corridor, even with the greatest will in the world. In my A&E at St George’s hospital we have patients in corridors, as we do across the country, but we have nurses who are there and dedicated to check their observations, ask if they need pain relief, and try to deliver—and they do—the best possible gold-standard care. But there is no privacy in a corridor, or in a cupboard, or anywhere where there should be, and that simply is not right. In emergency departments across the country, regardless of data that some trusts try to put forward to show that it is in only a certain number of places, we know from our inboxes that corridor care is everywhere.
Anna Dixon (Shipley) (Lab)
I thank my hon. Friend for securing this debate. She has spoken about some of the impacts of this issue. My 80-odd-year-old mum was recently admitted to Airedale hospital with acute respiratory issues. She had to wait in a chair for over 12 hours, alongside my dad, in a very undignified way. Does my hon. Friend agree that ideally we should be preventing admissions for older and frail patients, and does she believe that the stronger proactive primary and community care services proposed by the Government with neighbourhood health teams could help to prevent some admissions for older and frail elderly people like my mum?
Dr Allin-Khan
I hope my hon. Friend’s mum is making a swift and healthy recovery, and I am sorry to hear that that was her family’s experience. I agree that prioritising care for the frailer, elder population can often be dealt with more effectively before someone comes to hospital. I also know that my hospital of St George’s in Tooting has a special dedicated frailty unit that goes a long way in speeding things up for people. Good pilots are going on across the country, where care can be taken to our elderly community before people come in. Tackling social care is something I am coming to in my speech, because we could not have a speech on corridor care without a huge nod—or an entire body bend—to social care and the need to fix it.
While this situation is extremely hard for patients and their families, the toll it takes on healthcare staff is huge. By healthcare staff I do not just mean doctors such as myself, but nurses, porters, healthcare assistants and cleaners—we are one big family in the NHS, and no one job is more important than any other. We are unable to do any of our roles without all the others, and for that we are truly grateful. Knowing that they might be caring for a patient in their mid-80s, who is trying to hold back tears because they do not want to upset anybody very publicly in a corridor, is absolutely heartbreaking and takes a toll on their mental health. Our nurses, doctors and all the staff I have mentioned are going home absolutely burnt out—this is not what they trained and studied for, and not what they go to work to deliver. They go to work to deliver the best possible gold-standard care for the community that they care about.
Perran Moon (Camborne and Redruth) (Lab)
On my hon. Friend’s point about burnout, we are entering what for many Cornish men and women is the dreaded tourist season, when our population doubles or trebles. My constituents in Camborne, Redruth and Hayle are concerned about the chronic capacity issues and the impact of the tourist season on patient safety at Treliske, our one general hospital that covers the whole of Cornwall. Does my hon. Friend agree that NHS workforce planning and funding for places like Cornwall need to reflect the additional pressures placed on healthcare services during periods of peak tourist activity?
Dr Allin-Khan
I remember meeting my hon. Friend before he became an MP when I visited a hospital in his community, and I know that he has been a powerful advocate from long before he came to this place. I thank him for that and for raising this issue. We often think about winter pressures and forget that different communities experience different pressures—it is not a one-size-fits-all situation. It is important to look at the tourist season in Cornwall, and I am hopeful that the Government take that into account in their planning.
Madam Deputy Speaker, you will be appalled, as we all are, to know that there are places up and down the country where bodies are being wheeled to the mortuary past living patients in corridors. People are spending hours in pain and distress, desperate for privacy, and exhausted staff are working while feeling that they have one arm tied behind their back.
Gordon McKee (Glasgow South) (Lab)
My hon. Friend is being generous in taking interventions. There are few Members of this House, if any, who know about this subject in more detail than her. In Scotland, where my own constituents are facing the problem of corridor care, the Royal College of Nursing said a few weeks ago that we are “trailing behind” even what is happening in England, partly because the NHS in England is publishing statistics on corridor care. Does she agree that the Scottish Government should do the same so that we can track corridor care and therefore help resolve it?
Dr Allin-Khan
My hon. Friend is a powerful advocate for the people of Scotland. Yes, of course those statistics should be published, because in order to have any understanding of the issue, we have to have the data. Quite frankly, without the data, it is “not happening”. We should keep pushing for that and I hope that he puts the clip of him asking this question on social media to spark a little fire under some boffins to make that happen.
The reality is that corridor care is happening in every corner of the country. The drivers of the issue of corridor care are multifaceted, but one key cause that we cannot escape is our failing social care system that forces medically fit patients to sit and wait in hospital beds, seemingly endlessly. Without a hospital back door that works efficiently, we simply cannot get people through the front door to treat them effectively and move them on appropriately. The social care sector must be empowered because that will prevent hospital admissions in the first place and support timely discharges.
All sorts of unappealing names are given to people who have to spend a long time in hospital waiting for appropriate social care. Our vulnerable elderly, our grandmas and grandpas, are called bed blockers because they cannot get the social care that they need to safely be in their own homes. This requires a complete change in thinking and approach, one that understands the inherent link between the NHS and social care. Most significantly, we need leadership that is willing to address the crisis with the urgency it deserves, so that people get the highest quality of care.
Adam Dance (Yeovil) (LD)
One of my relatives went into hospital to get intravenous antibiotics but later died in that hospital due to being stuck there. She was ready to move on to a community hospital, but she gave up because she was scared in the hospital—they did not keep an eye on her, she fell out of bed and cracked her head open, and she later passed away. Does the hon. Lady agree that we need a lot more investment in social care to ensure that does not happen and our relatives do not have to go into hospital in the first place?
Dr Allin-Khan
I am heartbroken to hear about the hon. Member’s relative. This is the point: anyone who works in a hospital understands that, just by being in an emergency department waiting room and accessing people who are unwell, it is possible to catch other illnesses.
One thing we try to do is prevent unnecessary admission, because we know that a vulnerable elderly person who comes to hospital and is admitted to a ward with people who are unwell is more at risk of catching illnesses. As in the case of the relative of the hon. Member for Yeovil (Adam Dance), people can be vulnerable and not in an appropriate bed. There may not be enough staff able to check on them appropriately. Without tackling social care, we will never get on top of that issue. I am truly sorry to hear about the hon. Member’s relative. Simply put, we cannot dither or delay; we need answers to the social care crisis, and we need them quickly.
Another group of people who are very often overlooked are mental health patients. They continue to spend extraordinary amounts of time waiting in A&E. People experiencing a mental health crisis are two-and-a-half times more likely to face long delays in A&E. Just for a moment, let me paint a picture of what that looks like. The patient could be somebody with auditory or visual hallucinations who feels extremely scared and vulnerable. They may need security to ensure that they do not leave their room. They may be wondering what they have done to deserve this. They may not have staff there who know about their usual medication. Very often, they are shouting very loudly, and other patients will be concerned, not understanding that they have a mental health issue.
As doctors and nurses, we are not allowed to talk about somebody else in the hospital, so we can have a very loud A&E department, with someone who is very vulnerable—screaming and shouting and really suffering—being completely in the wrong place for so long and with everyone confused about why they are there. That is not appropriate, safe or dignified for mental health patients.
We are as far away as ever from parity between mental and physical health in the NHS. As I have just outlined, we witness that daily in emergency departments across the country. We need to create more partnerships between our emergency departments and mental health trusts, where mental health patients can be triaged and seen by a mental health team in a more dignified and appropriate manner.
St George’s hospital, where all hon. Members will know by now that I work my A&E shifts, is exploring a partnership with South West London and St George’s Mental Health NHS Trust, which would set up an assessment unit to triage mental health patients outside the emergency department. That would be safer, more appropriate and more dignified, and a calmer and more pleasant environment in which those patients could be assessed by mental health professionals.
Amanda Martin (Portsmouth North) (Lab)
Does my hon. Friend agree that often this is compounded when somebody has been arrested and police officers are sitting for hours? I was recently in A&E, and there were two police officers there for the duration that a member of the public was there. They may also need somewhere else to deal with that situation.
Dr Allin-Khan
I think my hon. Friend has been on most of my last A&E shifts with me. [Laughter.] That is absolutely a common occurrence, and that is not the best, safest or most efficient place for any of our incredible teams of police officers and mental health nurses, who are trying to get on with their job. It is incredibly distressing. In parts of hospitals, colleagues tell me that they are waiting in relatives’ rooms with police officers and mentally unwell patients next to the resus area of an A&E department with bereaved families. None of that should be happening for anyone involved.
I am sure the Minister will agree that the best solution to this crisis will involve a holistic, multi-agency approach involving councils, social care providers and NHS trusts. As I have just outlined, this unacceptable and dangerous situation is shared not just by patients, but by their families and NHS staff, who are trying to do their best in a difficult situation.
Moving on to the professional bodies, corridor care has rightly been condemned by the Royal College of Nursing, the Royal College of Emergency Medicine—my royal college—the British Medical Association, and other professional bodies and trade unions. Some 65% of respondents to the Royal College of Emergency Medicine’s violence and aggression survey, which is due to be published later this year, said that care in inappropriate and non-clinical spaces contributes to the increase in violence and aggression towards staff and other patients. The impact of corridor care is clearly much more wide-reaching than we realise. It results in violence against our own NHS heroes—the very best of humanity—who, in a fractured and dangerous world, exemplify compassion, decency and selfless care for strangers. I can tell the House beyond a shadow of a doubt that staff in emergency settings are upset, traumatised and driven to tears of rage, and we know that NHS staff have to take a disproportionately large number of days off for the sake of their mental health.
Adam Dance
The hon. Member is making a fantastic speech. On the topic of staff, one of the biggest problems in Yeovil hospital is bullying culture, as we saw in the Baroness Amos report in relation to maternity. Does the hon. Member believe that staff should be free to speak up without the worry of losing their job?
Dr Allin-Khan
I thank the hon. Member for his intervention. Although it digresses from the debate about corridor care, I will happily answer his question. I think everybody in the NHS must be able to go to work free of intimidation, bullying and harassment. Wherever that happens, people should feel free to speak out—not to their direct line manager, because very often they are involved, but to a safe third party within the hospital, clinic or public setting where it happens, so that they will not be concerned about finding themselves moved or no longer in the job they love. I thank the hon. Member for raising that point; I have gone off topic, but it is an important point to acknowledge.
Madam Deputy Speaker (Judith Cummins)
I am sure the hon. Lady understands how much support there is in the Chamber for this debate, and will be coming to a conclusion shortly.
Dr Allin-Khan
Thank you very much for raising that, Madam Deputy Speaker—I am nothing if not a talker. I am sorry that I am taking such a long time, and I will move forward quickly with my speech.
The Royal College of Emergency Care and I, as the chair of the all-party parliamentary group on emergency care, have put together a number of recommendations. First, restore patient flow by reducing delayed discharges; secondly, focus equally on four-hour and 12-hour performance; thirdly, reform funding and incentives; fourthly, spread responsibility for patient flow across the hospital; and lastly, address inequalities in access and outcomes. We cannot have a debate like this without recognising the terrible inequalities that scar our healthcare service—we have to work to reduce the disproportionate burden of long waits on deprived communities, older patients and people with mental health needs. Those measures would make a real difference to hospital systems, patient experience, and the overall effectiveness of the NHS.
The founding principles of the NHS are stretched to breaking point every time someone waits for 10 hours, in terrible pain and sometimes in their own urine, under the harsh strip lights of a corridor, unable to feel that they can ask for help. It is completely undignified. The Minister will be very familiar with the stats we have sent to the Department, which show the disproportionate number of deaths in our country that are due to corridor care. The fact that we in the UK have people dying because they have been treated in a corridor is simply unacceptable to me and other Members of this House, so let us commit today to ending it once and for all, and ending corridor care forever.
Several hon. Members rose—
Madam Deputy Speaker (Judith Cummins)
We will start with an immediate five-minute time limit.
Alison Bennett (Mid Sussex) (LD)
I begin by thanking the hon. Member for Tooting (Dr Allin-Khan) for setting out so brilliantly, with her professional expertise and human touch, what it means for corridor care to be a normal habit across the NHS in all parts of the country—not just in the winter, with winter pressures, but throughout the year. She made many good points, and I hope I can add some context with the stories I have gathered in Mid Sussex, from constituents who have experienced corridor care first-hand, whether as patients or staff. They have shared some of the most frightening, painful and vulnerable moments of their lives with me. First, I thank them, and to those whose stories I cannot share today due to a lack of time, I apologise.
Many of those people wanted the House to be told one thing before anything else: the staff who cared for them were extraordinary. They spoke of nurses who never stopped smiling despite being exhausted, doctors who apologised because they knew patients deserved better, and paramedics who stayed compassionate under impossible pressure. One constituent arrived at the Princess Royal hospital in Haywards Heath after falling and breaking both a shoulder and a kneecap. It was a Friday night, and A&E was overflowing. After X-rays, they spent hours on a trolley in a corridor beside the nurses’ station because there was nowhere else for them to go. They told me that the nurses were attentive and kind throughout the night. They checked in constantly and did everything they could. However, kindness cannot create another treatment cubicle, compassion cannot magic up another doctor, and dedication cannot create a bed that is simply not there.
Another constituent, Chris Philpot, shared an experience that I found impossible to forget. Following a ruptured appendix and serious complications, he spent 19 hours on a trolley in the corridor at the Royal Sussex county hospital. During that time, he watched an elderly lady have her blood pressure taken while resting her arm on his leg because there was nowhere else to support it. No privacy, no dignity—that is not the standard of care patients should expect in modern Britain.
Dr Danny Chambers (Winchester) (LD)
My hon. Friend has just highlighted a point that was mentioned by the hon. Member for Tooting (Dr Allin-Khan). That kind of experience causes concern not only for its lack of dignity, but for infection control, antimicrobial resistance and hospital-acquired infections. That kind of treatment not only has a lack of dignity, but can be lethal. That is a huge public health issue, which my hon. Friend’s specific example highlights.
Alison Bennett
I agree with my hon. Friend. What we see time and again is that one problem becomes another until eventually the patient pays the price. My constituent, Catherine Jeater, has seen corridor care as a patient and as a relative of a patient. She watched her father being treated for appendicitis in an emergency department that was so overcrowded that patients were double-parked on trolleys, changing into hospital gowns in full view of strangers. Months later, while undergoing chemotherapy herself, she attended the Princess Royal hospital with a chest infection. Because she was immunocompromised, she should have been isolated. Instead, she received intravenous antibiotics sitting on a chair in a corridor, because no cubicles were available. She told me the staff were amazing, but she also made it clear that amazing staff should never have to work in those conditions
Perhaps the most difficult responses I have received were from the healthcare professionals themselves. One doctor told me that they regularly examine patients in corridors. Another said that corridor care is not just an A&E problem, and that it is now normal for people to be on trolleys in non-clinical areas throughout the hospital. That means there are no curtains to provide privacy, no piped oxygen and no name above the bed, and patient safety is inevitably compromised. A senior nurse described to me the moral injury that they and their colleagues face every day, having to try to deliver the best care possible in terrible conditions, all the while apologising for something that is beyond their power to fix. They have to do that every single day. I am not personally enjoying this third heat wave, but imagine A&E departments without air conditioning: they become furnaces. Imagine trying to treat incredibly frail patients when the temperature in a corridor is 40°C. Another clinician wrote something that stopped me in my tracks. They said that corridor care had become so common that they were teaching medical students and junior doctors how to provide it—and that is not just during winter pressures, but all year round.
This should trouble every single one of us. We are training the next generation of clinicians to adapt to something that should never have become normal in the first place. The real danger is not simply that corridor care exists, and not that we begin to accept it, but that we shrug our shoulders and tell ourselves that this is just how the NHS works now. The solutions are not easy—hospitals cannot fix this on their own—but we do need to get it right. We need to invest in capacity, in workforce, in social care, and in reducing waiting lists so that treatable conditions do not turn into emergencies.
Alison Bennett
I am sorry, but I will not, in the interests of time.
This is happening not because our NHS staff are failing, but because they are being asked to deliver excellent care in circumstances that make excellence almost impossible. My constituents have not shared these stories because they have lost faith in the NHS; they have shared them because they believe that the NHS can and should be better than this. Let me therefore end with a plea that we never describe corridor care as the “new normal”, because there is nothing normal about receiving intravenous antibiotics during chemo in a corridor. There is nothing normal about waiting 19 hours on a trolley. There is nothing normal about losing your privacy, your dignity, and sometimes even your safety, simply because there is nowhere else to go. The NHS was founded on the belief that every person matters. We need to make that happen once again.
Rebecca Long Bailey (Salford) (Lab)
Let me first offer huge thanks to my hon. Friend the Member for Tooting (Dr Allin-Khan) for her brilliant speech, and for the work that she does most weeks and about which, in my opinion, she does not speak loudly enough.
My mum has been rushed to A&E twice in the last two months, and I have been with her. The paramedics were amazing and the hospital staff were amazing, but nothing prepared me for what I witnessed: trolley after trolley backed up along corridors as hospital staff and family members visiting patients in A&E walked hurriedly up and down, trying to cause as little disruption as they possibly could. I saw staff trying to pull a curtain across halfway down the corridor to provide some semblance of dignity for vulnerable patients who were trying to use bedpans, but it was futile, given the number of people walking up and down. It was harrowing. I can only describe it as something that one would see in a war zone rather than in modern Britain.
When I asked the staff, “Is it always like this?” they said, “Yes. It comes and goes when it gets busy. It gets worse at weekends. But ultimately we do not have enough beds, and we do not have enough staff to be able to cope with this level of pressure.” I heard similar stories from my constituents, but I will give the House just one today. An 80-year-old who attended A&E with his frail wife spent 15 hours there, eight in a wheelchair and the rest on a trolley in a corridor.
This is not just a symptom of winter pressures; it is the visible sign of a healthcare system that has been stretched beyond breaking point by years of political decisions. For years we saw hospital beds disappear, staff vacancies grow, social care neglected, community health services hollowed out, and local authority budgets slashed, and the consequences were entirely predictable. Now we see patients who are well enough to leave hospital but have nowhere to go, emergency departments overflowing with wait times that no sick person should ever have to endure, and people being treated in places that were never designed to deliver healthcare.
No one should pretend that this can be fixed overnight, but if we are honest, we know that we have to act fast. Emergency departments are still operating beyond safe capacity, and people remain stuck in hospital because social care, community services, mental health support and general practice still do not have the necessary capacity. If we want to end corridor care, we must deal with its root causes, not just the consequences, because it does not just begin when someone arrives at A&E; it begins when they cannot get a GP appointment, when mental health support is not there, when local authorities cannot provide a care package. It begins when care cannot happen at home. Community nurses who should be visiting vulnerable patients regularly cannot do so, because they are stretched beyond breaking point.
There is a lot of talk about virtual wards providing hospital-grade care at home. That sounds brilliant, but the fact is that the system does not have the staff capacity to deliver it, so we need a properly funded long-term workforce plan that delivers fair pay, expands education and apprenticeships, improves retention, ensures that we have safe staffing standards, and gives frontline staff a real voice in how services are designed. It also means finally delivering a national care service that brings care back under public ownership and control, that delivers a universal entitlement to care based on need, not ability to pay, and that is publicly accountable, properly funded and built around people’s needs, not the fragmented marketised provision that we see at the moment. It also means investing in community nursing, neighbourhood health teams, rehabilitation services and mental health, so that fewer people reach crisis and more people can leave hospital safely when they are ready. It means taking prevention seriously too, because every £1 spent on improving housing, reducing child poverty, cleaning up our air, and supporting healthier communities strengthens public health and saves many more pounds further down the line.
Our NHS was founded on a simple principle—healthcare should be based on need, not the ability to pay—and corridor care betrays that principle. We need to see our Government restore the promise that when someone is at their most vulnerable, our national health service will be there for them—not in a corridor or on a trolley, but with the compassion, privacy and care that every person deserves.
Rebecca Paul (Reigate) (Con)
I thank the hon. Member for Tooting (Dr Allin-Khan) for securing the debate. This is a really important topic, and I do not think there has been enough focus on it in the last few years. Her speech was very powerful, and the hon. Member for Salford (Rebecca Long Bailey) made really important points about corridor care not happening in a silo. There is a wider system of things going on, so we need to look at this more broadly.
I feel strongly about this issue because I have seen the shocking reality for myself at East Surrey hospital, in my constituency, and at St Helier hospital, which is outside my constituency but serves some of my constituents. Patients are being cared for in spaces that were never designed for clinical treatment, and staff are trying their best to do their jobs in impossible circumstances. I cannot imagine how upsetting it must be to go into hospital with a serious medical problem, only to spend hours on a trolley, surrounded by noise and footfall and without any sort of privacy, and to be denied basic dignity. In fact, I saw one example of a patient who was near automatic doors, which opened and shut every time someone walked past them. That is not dignified or appropriate in any shape or form.
How can it be right that doctors are forced to discuss private medical matters with patients in public hallways, or even to attempt examinations and treatment without the facilities that they need being close at hand? Let me be clear: all the staff I met on my visits were doing the best they could in extremely difficult circumstances. The problem was not down to their lack of commitment or compassion; it was down to a system that is operating without enough physical space to meet the excessive demand placed upon it. The previous Secretary of State, the right hon. Member for Ilford North (Wes Streeting), promised to eliminate corridor care by the next general election in 2029, and we need to understand how it will be addressed. I think we all accept that this is not an easy thing to solve, but it would be good to know what steps will be taken to address this big issue.
The crux of the issue appears to be hospital flow. Emergency departments cannot move patients into wards when beds are full, and beds remain occupied when people who are medically fit to leave cannot access the care, rehabilitation or support that they need outside hospital. Delayed discharge therefore remains part of the problem. Without sufficient social care capacity, community service and intermediate care, hospitals cannot safely discharge patients.
At St Helier, there is another fundamental issue: physical space. The hospital is trying to offer a modern service in buildings that the trust says are no longer fit for purpose. Much of the estate is older than the NHS itself, and staff contend with leaking roofs, flooding, damp, mould and buildings that are difficult to keep at a suitable temperature. Those conditions make it harder to provide safe care, and place still more pressure on staff, who are already overstretched.
One example of the type of challenge is the women’s health block, which is currently a big issue. Routine testing has identified low levels of legionella and pseudomonas in the water supply. While filters have been installed and regular testing commenced, that highlights the fact that these measures are not a sustainable long-term solution, given the age and complexity of the building’s water system. This is hugely disappointing for patients and staff, particularly considering the hard work that has gone into improving the hospital’s women’s health services.
That is why I strongly support the planned new specialist emergency care hospital in Sutton to be delivered alongside significant investment to modernise both St Helier and Epsom hospitals. The new hospital would bring together major emergency care, acute medicine, critical care and emergency surgery in modern facilities designed around the needs of patients and staff, while crucially leaving 85% of services at the existing hospital sites. This is exactly the sort of investment urgently needed to reduce overcrowding and end the indignity of patients being treated in corridors, yet the start of construction has been delayed—pushed back to 2033. I urge the Government to reconsider that timeframe, as that would be important in helping to address the challenge we face with corridor care.
Several hon. Members rose—
Madam Deputy Speaker (Ms Nusrat Ghani)
Order. The speaking limit will drop to three minutes after the next speaker.
Naushabah Khan (Gillingham and Rainham) (Lab)
I thank my hon. Friend the Member for Tooting (Dr Allin-Khan) for bringing this important matter to the House, and for talking so eloquently about her experiences on the frontline.
Few issues speak to the state of our national health service more than this one. Since being elected, my inbox and advice surgeries have been inundated with heartbreaking and, frankly, harrowing stories from constituents who have either experienced care in a hospital corridor themselves or have witnessed the experiences of loved ones. May alone saw more than 90,000 instances of patients receiving care in clinically inappropriate settings, which is almost 3,000 people every day across our nation. In their most vulnerable hour, patients are being stripped of privacy and dignity, and left without a call bell or even sometimes access to a toilet.
I will give Members some examples of the cases that have been raised with me. One constituent wrote to say that their mother, who was on end-of-life care, was treated in a corridor. I cannot even begin to imagine how distressing that must have been. Another reported on how she was treated in a single patient cubicle that had been stripped of its bed and fitted with six chairs, and hearing other people’s medical history, watching their cannulas being inserted and, harrowingly, witnessing a confused elderly man beg for his daughter.
I look to Conservative Members—unfortunately, not many of them are here—when talking about this and about exactly how we got here, because the normalisation of these practices over 14 years of Conservative Government has brought us to this point. Indeed, it was under their watch that 12-hour waits in A&E rose twentyfold. Lord Darzi’s report laid it all bare. We inherited a health service in a critical condition and broken by over a decade of under-investment.
Matt Rodda (Reading Central) (Lab)
It is important to recognise this wider legacy. In my area of Reading, we are waiting for a new hospital to be built. One was promised by the last Government, but no funding was provided, and there are very real-world implications of continuing with old buildings in such a state, like our A&E. I appreciate my hon. Friend raising this matter, and I look forward to the Minister providing further details.
Naushabah Khan
I thank my hon. Friend for raising that very important issue.
Yet while corridor care was rising in our hospitals, the previous Government did not count the numbers. I pay tribute to my right hon. Friend the Member for Ilford North (Wes Streeting), who as Health Secretary chose to publish the official data, because how can we fix what we cannot measure? I also welcome the steps taken by the Government to turn the tide on the mess we inherited, such as the millions of extra appointments delivered, bringing waiting lists down from record highs, and the commitment to end corridor care by 2029.
However, corridor care does not begin in the corridor itself, as many Members have noted. It begins with the hospital bed that cannot be freed, as well as the lack of investment in the wider landscape and the lack of support in our communities. This January, the data suggested that one in 10 NHS beds were occupied by people who were medically fit to leave but had no safe place to go—a failure that costs the state £2.7 billion a year, and that costs some of our constituents their lives.
Monica Harding
My mother, who is 94 and fit and healthy, fell and fractured her collarbone. She went in and was medically discharged on the same day, but because there was no care support for her, she was then in hospital for a week, bed blocking. Because of the quality of care she received, when she came out she ended up with a very severe urinary tract infection and sepsis, and then had to stay in hospital for six weeks. Obviously that cost my mother a lot, but it also cost the NHS a huge amount of money. Does the hon. Lady agree that one of the problems is adult social care and that we need to fix it?
Naushabah Khan
The hon. Member makes a very powerful point. I will come to adult social care in a moment.
We simply cannot end corridor care at the front door of the hospital when the back door remains jammed shut. I welcome the steps taken to reform adult social care—a £3.7 billion funding boost for local authorities—but it is clear that we must go further. I eagerly await Baroness Casey’s independent commission on adult social care. However, I am concerned that the review’s terms of reference call for recommendations to be implemented in a phased way over a decade. That is simply not fast enough. Social care reform must work in lockstep with NHS reform. A commission reporting in 2026 and 2028, with implementation stretched over a decade and beyond, will not be able to enact the scale of change needed to meet our targets. I urge the Government to move at pace.
Naushabah Khan
No, I will not take any further interventions, thank you.
Lastly, I would like to pay tribute to the nurses, doctors and staff who keep Medway hospital in my constituency of Gillingham and Rainham running. In this House, we all receive correspondence from frustrated members of the public regarding the state of our NHS. However, it is the staff who carry the moral injury of apologising, shift after shift, for conditions that they did not create.
Several hon. Members rose—
Madam Deputy Speaker (Ms Nusrat Ghani)
I have a correction to make. Back Benchers are on a four-minute speaking limit. We have found some more time.
Iqbal Mohamed (Dewsbury and Batley) (Ind)
I congratulate the hon. Member for Tooting (Dr Allin-Khan) on securing this debate. Some very important points have been made. I am going to skip through some of those important points to reinforce the message, and bring forward issues raised directly with me by my constituents.
What we have heard is that what was once regarded as an exceptional state of affairs in the NHS has become so commonplace that Parliament is now debating it as a national issue in its own right. We have heard about the lack of investment and the redirection of resources, and about the issue being compounded over the many years of the previous Government. I acknowledge and recognise the efforts made by the current Government to try to address this, as well as many other challenges in the NHS. I congratulate them on their efforts to bring down waiting lists by many, many thousands; my constituents appreciate that.
We heard that more and more that patients are being treated away from clinical and sterile places: in corridors, cupboards and other places not designed for treatment. They are being denied their privacy, dignity and adequate support. One doctor described patients dying because they could not access appropriate clinical areas in time. That is not what we would class as a jewel-in-the-crown public service—but that is what the NHS is, and all of us across the House want to restore it back to being the world-class, free-at-the-point-of-need care service for every single person in our country.
For many years, hospitals under pressure often managed overcrowding by keeping patients and ambulances outside emergency departments while they waited to be handed over and moved into clinical areas. That resulted in ambulance waiting times going through the roof and many patients not receiving the emergency paramedic assistance they clearly required. Under the previous Government, that issue was displaced: from holding patients inside ambulances to moving them into the hospital building, freeing up ambulances to go and serve other patients.
I am not a medical doctor, but I am a scientist and an engineer, and what is obvious is that the 40 hospitals under the previous Government did not get delivered—not all of them were new, but that is also true of the ones that were to be refurbished and expanded. As with prison spaces, we lack the number of beds in our country that the NHS needs to provide safe and dignified care for every patient who seeks treatment.
Catherine, one of my constituents, wrote to me to say that she went into hospital with her husband. She waited in a corridor for five hours, but she saw many elderly patients with no relatives or friends with them, who had been waiting there for many hours before she arrived, and nobody was able to look after them or offer them water. They had to keep asking for water from other patients. That experience will exacerbate somebody’s medical condition and increase demand on the NHS. We have heard—
Sarah Hall (Warrington South) (Lab/Co-op)
Let us be clear from the beginning: corridor care is unacceptable. No patient should be treated in a corridor. No family should watch a loved one receive care without the privacy and dignity that they deserve. No member of our brilliant NHS staff should be put in the impossible position of delivering care in an environment that they know is not right. I know how deeply my constituents feel about this, and hardly a week goes by without someone contacting me about their experience of Warrington hospital. They tell me about the kindness of the staff despite incredibly difficult circumstances; others tell me about the length of time that their loved ones have waited to be seen, and those experiences are reflected in the figures.
In May this year, Warrington hospital recorded the second-worst 12-hour A&E performance in the entire country. Those figures are deeply concerning, and it would be wrong of me to pretend otherwise, but if we only talk about A&E waiting times, we miss the bigger picture. Corridor care does not begin in a corridor: it begins when patients are medically fit to leave hospital but the care or support that they need at home is not yet in place. It begins when patient flow slows down, leaving emergency departments carrying pressures that they were never designed to absorb. It begins when a town like Warrington grows significantly without its infrastructure keeping up.
Anna Dixon
I absolutely agree with my hon. Friend that it is not about fixing the problem at the front door; it is about fixing the problem at the back door. Does she agree that closer integration of health and social care is part of the answer to enable that flow through hospitals out into the community? During the summing up, I hope the Minister might carefully consider my amendment to the Health Bill on health and care integration—my hon. Friend might also look at that.
Sarah Hall
I absolutely agree; the NHS system as a whole is very fragmented, and the lack of connectivity is a big issue. Social care is a core component and it needs to be a priority going forward.
Peter Swallow (Bracknell) (Lab)
Of course, we must fix the back door and help people get out of hospital quicker, but there is also a challenge at the front door, with too many people feeling that they need to go to secondary care for health treatment. Is it not so important that we fix the foundations of the NHS by having a shift to community treatment, so that fewer people feel that they have to go to a hospital in the first place?
Sarah Hall
I agree with my hon. Friend and will touch on that point in a second, using Warrington as an example.
I am pleased that our local trust has already taken steps and is rightly treating corridor care and waiting times as a priority, but there is more to do. That is why I have been working closely with our local NHS, Ministers, and Cheshire and Merseyside ICB to move beyond talking about the problem, and to start changing how urgent and emergency care works in Warrington. Together with our local trust, I have developed a three-part pragmatic plan to improve health services for our town.
Given the pressure on A&E and waiting times, the first priority is clear: a new urgent treatment centre for Warrington. In April, I was pleased to announce that proposals had moved forwards, with architects beginning the initial design work. Since then, the proposal has moved forward again, and detailed design and site survey work is now under way.
An urgent treatment centre in Warrington means that families would not have to travel out of borough for things like minor injuries, sprains, cuts, burns or infections, or for a child with a fever who needs checking over. Such conditions can still be serious, but they do not need the full resources of an emergency department set up for life-threatening situations like heart attacks, strokes and major trauma. An urgent treatment centre would help to free up space in A&E for the sickest patients and improve the experience for others by helping them to get the right care in the right place.
Easing pressure in A&E is the first step, but it is not the whole answer. Part 2 of my plan is about moving routine appointments, diagnostics and planned care into the community so that people can be treated closer to home, and the hospital can focus on the patients who need the most specialist care.
However, there is one issue that none of us can ignore, and that is the hospital itself. People back home know that we need a new hospital. They see it when they go to A&E and when they visit relatives in hospital, and staff feel it every day. Much of the site was built in a different century for a different population and a very different NHS. We urgently need a new hospital—there is absolutely no question about that.
Much to our deep disappointment, Warrington was never included in the previous Government’s so-called new hospital programme, despite warm words hinting to the contrary. That brings me on to the third part of my plan: modernising and replacing outdated hospital facilities, built in phases while vital services continue to run.
When I was elected, I said that I would be honest about the challenges before us. Yes, Warrington needs a new hospital, but it also needs a proper plan and funding behind it, not just empty promises. My approach is a pragmatic one: we must ease the immediate pressures today, build better services around the hospital tomorrow, and put Warrington in the strongest possible position for investment in the years ahead. That is what I am fighting for. I will keep challenging where challenge is needed, keep working with our local NHS where partnership is needed, and keep putting Warrington South first until we get this right, because my residents in their time of need and our excellent NHS staff deserve better.
Dr Ellie Chowns (North Herefordshire) (Green)
I thank the hon. Member for Tooting (Dr Allin-Khan) for securing this incredibly important debate.
I have heard from literally dozens of my constituents about why this issue is so important. They have told me their individual stories about elderly relatives stuck in corridors and the terrible effect that has had on their treatment, care and health outcomes. I have heard from staff in my local hospitals, who have shared exactly the same concerns about the conditions in which they are forced to work.
Patients tell me universally how proud they are of the NHS and how much they value the incredible care they get at the hands of the people who keep it going, but they also tell me universally that corridor care is shameful and should not continue. I recently raised this matter directly with the chief executive of my local hospital, Hereford hospital, in our regular catch-up, and was delighted to hear that Hereford is not just aiming to meet the Government’s target of ending corridor care by 2029, but that locally, we have a target of ending corridor care by this autumn. I am really pleased that this is being prioritised so much locally, and I will be keeping a careful eye out to ensure that that happens.
I want to raise a particular issue that has been touched on by many colleagues across the House this afternoon, which is the integral relationship between the NHS—what happens in our hospitals—and the social care system. We simply cannot fix the problem of corridor care unless we fix the problem of social care. For too many years—for decades, in fact—social care has been a political football kicked down the road by Governments of all stripes because it is difficult, but we have to grasp this nettle. We simply cannot fix the NHS unless we fix social care. Lord Darzi said exactly that himself.
Sadly, however, we have not given the necessary attention to fixing social care. Yes, we have the Casey commission, which I value very much. I am very pleased with the work that has been done by Baroness Casey, but insufficient political effort is being put into this issue. It took nine months for us to have the first cross-party meeting that the previous Secretary of State for Health and Social Care said he was going to call, and we have only recently had the second. We must put our shoulders to the wheel collectively to fix the challenges of social care and to have the difficult conversations about how we will fund it, because it does need funding; we do need those political conversations, and we need to find consensus. Unless we address the issues at the back door, too many people will be stuck in hospital when they would be better cared for elsewhere—better for them and their health; better for the national budget, because it would be cheaper; and better for our overall outcomes. It is shocking to learn that the Royal College of Emergency Medicine calculates that there were 15,000 excess deaths last year because of corridor care. That should not happen in our country today.
I urge the Minister and her colleagues as strongly as possible to give the same attention to fixing social care as to fixing the NHS. Let every Member put in that effort too. It is notable that at Health and Social Care questions there is usually one question on social care and 19 on health. We must redress the balance collectively, put in the focus to fix social care, and thereby fix corridor care.
Dame Siobhain McDonagh (Mitcham and Morden) (Lab)
A number of
constituents who work as nurses in the A&E department at St Helier hospital asked me to come to see for myself what they were dealing with. They asked me to come late on a Monday morning, rather than a Saturday or Sunday night as I had anticipated. What I saw was deeply troubling. Around 250 patients were coming through the department every day. Elderly people were being cared for on trolleys out of nurse sight lines. However, what really struck me was that packs of staff were wandering around A&E, with nowhere to do their job. They could not do their paperwork, sit near their patients or monitor anything.
Corridor care does not begin in the corridor; it begins long before a patient reaches A&E. For years, community services and alternatives have gradually disappeared. The walk-in centre at the Wilson hospital in Mitcham, which once treated patients every day until midnight, even on Christmas day, has gone. Out-of-hours GP services have been reduced. Those patients have not disappeared; they now go to St Helier. If we want fewer people waiting in our overcrowded emergency departments, we must invest in the services that prevent them from needing to be there in the first place. That is particularly important in communities such as mine, where people are more likely to live with long-term health conditions and greater health inequalities.
An A&E department cannot function in isolation. It depends on having the services, capacity and infrastructure around it to keep patients flowing safely through the hospital. That is why I have spent years campaigning for St Helier. I am therefore delighted that NHS London announced up to £57 million to expand and modernise St Helier’s emergency department. However, that cannot be the end. St Helier needs renewal.
Only days later, there was an announcement that disrepair in the women’s services block meant that it would have to close. I am delighted that the chief executive of the hospital trust has said that those services will return. Nevertheless, the situation is a stark reminder of what happens when hospitals are expected to serve growing populations in ageing buildings that have been allowed to deteriorate for decades.
Corridor care should never become normal in our NHS. My constituents deserve a St Helier hospital that is properly equipped to care for them when they need it most. I am determined to continue to fight for that.
Madam Deputy Speaker (Ms Nusrat Ghani)
I will now announce the results of today’s deferred Divisions.
On the draft Children’s Wellbeing and Schools Act 2026 (Establishment of Schools) (Consequential Amendments) Regulations 2026, the Ayes were 369 and the Noes were 102, so the Ayes have it.
On the draft Supply of Machinery (Safety) (Amendment etc.) and the EU Machinery Regulation (Enforcement etc. in Northern Ireland) Regulations 2026, the Ayes were 317 and the Noes were 103, so the Ayes have it.
On the draft Town and Country Planning (Discharge of Local Planning Authority Functions) (England) Regulations 2026, the Ayes were 283 and the Noes were 182, so the Ayes have it.
[The Division lists are published at the end of today’s debates.]
Yasmin Qureshi (Bolton South and Walkden) (Lab)
I congratulate my hon. Friend the Member for Tooting (Dr Allin-Khan) on securing this debate and on her tremendous work in this area, both in this House and as an emergency doctor in the NHS.
I want to begin not with statistics, but with something that happened to me. Last year, at about 9 o’clock one evening, I stood up to go to watch a film with my family, but I suddenly felt faint and nauseous. A home blood pressure machine showed that my reading was over 200. I went to A&E and was seen, and a CT scan was arranged. I then had to sit on a chair in what was essentially a public waiting room, where I stayed for the entire day. I had my scans and blood tests there—everything was based in that room. It was only the next evening that I managed to get a bed on an acute unit, so I spent 24 hours in effectively what we would call a corridor. The next day I had an MRI scan and then went to see a neurologist and a stroke team.
Let me be absolutely clear: I do not blame the hospital or the staff. They were professional and compassionate throughout. But they are working under chronic pressure in a system that simply does not have the space or the beds to care for patients as they would wish.
The first official NHS England data on corridor care published last month showed that in the Royal Bolton hospital, an average of 13 patients a day were treated in corridor spaces in May. I welcome the honesty of the trust’s chief nursing officer, who said that even one patient cared for in this way is far too many, and I commend the trust’s commitment to eliminate the practice ahead of the national timescale.
Bolton is not an outlier; it reflects a national emergency across the United Kingdom. About 2,200 patients experienced corridor care on any day in the month of May, while many hundreds were treated in unsuitable spaces. Nearly 148,000 patients waited 12 hours or more in A&E in that month—the worst record in May. The Royal College of Emergency Medicine warns that the official figure may still understate the true scale. This is not just undignified; it is deadly. The Royal College estimates that in 2025 alone, over 15,800 excess deaths were associated with long waits in emergency departments. The Uncorked—Understanding escalation area and corridor care in UK emergency departments—study found that corridor care leads to longer hospital stays and a greater risk of death.
There are many reasons for the delay, and many of them have been mentioned. Bed occupancy is running at 93%, far above the safe level of 85%, while some 13,000 beds are occupied by patients who are medically fit to leave but cannot be discharged for want of social and community care.
I know that the Government have spent a lot of money on the NHS, such as ending the doctors’ dispute, but will they make a full commitment to ensure that corridor care does not occur in our country and that no patient in Bolton and Walkden, or anywhere else in the United Kingdom, spends a day of acute illness on a chair in a waiting room? The staff of our NHS deserve better, as do our constituents.
Dr Simon Opher (Stroud) (Lab)
I thank my hon. Friend the Member for Tooting (Dr Allin-Khan) for securing this debate and for her years of work in the A&E at St George’s. Emergency care is in crisis in the NHS, and corridor care is just an overspill because we cannot cope. That is because we are doing a few things wrong that we could remedy.
I work as a GP. I did a surgery last Friday and actually tried to admit someone. I rang up A&E and they said, “Well, I wouldn’t send them up at the moment, as we’ve got a six-hour wait.” I realised that, quite often, we do not have an operable emergency care service, and this is something we need to work on.
I will briefly go through a few causes and then a few remedies, and the remedies could be clinical as well as organisational. First, we have an ageing population. Frailty is increasing. In Stroud alone, in four years, the number of over 90-year-olds went up 29% in just that short period of time. We have an enormous cohort of very elderly and frail people. Secondly, as we have heard, we have a lack of beds due to delayed discharge—I will not say any more on that. Thirdly, we have a lack of care beds in the community to enable discharge. There is also a lack of capacity in GP surgeries for on-the-day appointments. In my surgery, 45% of our appointments are on the day, but we obviously need to increase that so we can absorb the demand in primary care.
James Naish (Rushcliffe) (Lab)
I have sat through the debate, and I do not believe that community pharmacy or independent prescribing have been mentioned. Does my hon. Friend, with his experience as a GP, endorse the changes that the Government are making to maximise the use of pharmacists to deal with some of the pressures that he mentioned GPs face?
Dr Opher
That is absolutely true. We need to look at all the ways of reducing demand on GPs and, therefore, on A&E departments—that is what my speech is totally involved in—and pharmacies have a really good role to play.
There is another thing here, which was noticed in the doctors’ strike. When we have senior clinicians on the front door of A&E, that makes the department much quieter, because they make decisions quickly and can take a bit more clinical risk as they are more experienced. Perhaps we need to rearrange how care works in A&E departments so that we do not get a backlog.
I turn to the remedies. We are beginning to turn the NHS around—that is clear from working in it and from what my patients say. Things are beginning to change. We need to do a lot more, but we are investing a lot of money in it. We must not say that things are getting worse, because I believe they are slowly getting better.
As so many have said, we need to fix social care. We could have a system whereby the community is responsible for a patient as soon as they are ready for discharge. Perhaps the community should have to pay for the patient to remain in hospital after that to encourage it to get them out of hospital.
We must stop agency working in social care, because that is causing a huge amount of stress to carers. We need care to be based on a community model so that carers cover small areas and do not have huge travel times. We also have to improve GP access. I think we should also make it so that A&E departments see only accidents and real, genuine medical emergencies.
So we need a little bit of an increase in funding for primary care. We also need GPs to be assessing emergencies up until 10 o’clock at night to relieve the pressure on A&Es. There are a couple of other things. I have said about getting more experienced doctors involved earlier in the process, but we also need to invest in scanners—so many people in A&E are waiting for tests before they go home. Also, as my hon. Friend the Member for Tooting (Dr Allin-Khan) said, it is not appropriate to have mental health assessments in A&E; we need mental health assessment units, which I do believe the Government are bringing in.
There are a few clinical factors. Perversely, we need not to be so risk-averse. For example, admitting a patient for risk of falling is ridiculous, because they are more likely to fall in hospital than in their own home. Dementia fluctuates, so just because someone has seen a slight increase in confusion, that does not mean that they need a whole batch of tests. We need to treat dementia more holistically. Polypharmacy—that is old people on loads of drugs—causes about 10% of admissions, so let us reduce that.
We need good end-of-life care. Some 50% of people with cancer die in hospital—many of them face corridor care—and we need to reduce that, because most of them want to die at home. Every older person needs an advance care plan so that, when they become ill, we know whether they want to go to hospital. That is incredibly important in pathways of care.
Corridor care did not appear overnight, and it will not disappear overnight. But, by rebuilding the NHS from the community upwards, fixing social care and investing where it matters most, we can ensure that no patient is left waiting for care in a hospital corridor ever again.
Madam Deputy Speaker (Ms Nusrat Ghani)
I now call another doctor—it is easier to see a doctor here than to get a GP appointment.
Dr Peter Prinsley (Bury St Edmunds and Stowmarket) (Lab)
It is true: I am another doctor. I qualified in 1982, probably long before my distinguished colleague, my hon. Friend the Member for Tooting (Dr Allin-Khan), was even born. I thank her very much for securing this important debate.
For context, when I was a registrar in 1988, the NHS had 300,000 beds, but by the time I was a senior consultant in 2020, we had 140,000 beds—less than half the beds we had when I was a registrar. I recall how the Northern general hospital in Sheffield had rows of Nightingale wards with crisp, white linen stretching as far as the eye could see down to the end of the ward. There were always beds. There was no such thing as corridor care.
To echo what the distinguished GP, my hon. Friend the Member for Stroud (Dr Opher) said, if an elderly woman goes off her legs at five o’clock on a Friday evening in February, the family will call the GP. The answerphone will say “Dial 111”, the call handler will triage her and advise ringing 999, and that woman will arrive at A&E at 9 o’clock in the evening, be seen at 1 in the morning and be admitted, because that is what happens if someone is seen at 1 in the morning.
If we had a functioning community health service, with more neighbourhood health services, the patient would probably have been visited by a GP, perhaps until 10 o’clock at night. The diagnosis of a urinary tract infection would have been made, the patient would have been given an antibiotic and somebody would have come to see them in the morning, and they would have been a lot better by then and would never have been admitted. We can definitely reduce admissions if we think more carefully about how we treat patients in the community.
“Corridor care” is an oxymoron. There should be no corridor care. As we have heard, it happens when patients arriving in A&E overwhelm the available cubicles and rooms and the wards have no beds, and we know that patients are sent to A&E because the GP system simply cannot cope. I understand that the APPG on emergency care found that 20% of major emergency departments had patients being cared for on trolleys or in chairs in corridors. Almost 80% of clinical leads also said that patients were being harmed by corridor care.
My son is an A&E doctor, who is presently in London. He texted me shortly after I was elected:
“Dad, bring the Health Secretary here right now so that he can see what is going on.”
There were queues of trollies and patients waiting in ambulances, and trollies in the car park. We know that many patients come to serious harm while waiting. As my hon. Friend the Member for Stroud said, A&E means accident and emergency; that is what it is for.
At West Suffolk hospital in my constituency, Dr Cameron, the chief executive, said that corridor care had been “sorted out” through a whole-hospital approach, with everyone thinking about patient flow, planning discharge early and involving social services, allied health professionals and pharmacy. West Suffolk hospital simply refused to accept that corridor care was inevitable. I believe that we should take the best of those ideas to the rest of the NHS.
Andy MacNae (Rossendale and Darwen) (Lab)
I thank my hon. Friend the Member for Tooting (Dr Allin-Khan) for securing this debate and all my esteemed colleagues for covering the issue so brilliantly and with such expertise. You will be glad to hear, Madam Deputy Speaker, that that allows me to be brief and to focus on Blackburn A&E.
Blackburn A&E is one of the busiest in the country, serving east Lancashire. It has been one of the starkest examples of corridor care, and I could tell so many stories of constituents suffering the indignities and poor care that are the inevitable consequence of that. There is the 70-year-old lady with spinal cancer who was stuck there for 72 hours; the young woman who was a historical sexual assault victim, physically shaking with fear at being left in a corridor surrounded by men; or the 90-year-old with dementia and double incontinence, reliant on her daughter to change and clean her, and desperate for privacy, comfort and reassurance. I too have been there, unable to walk after a fall, for 13 hours overnight in a corridor that felt like a war zone, next to an old lady who was in constant pain, fearful and alone, crying out for her family—just one voice among many.
Corridor care is at best undignified and at worst heartless, heartbreaking and cruel. Its normalisation is a scandal and is one of the starkest examples of a health system failed and broken by Tory austerity. We must end it, and I am pleased to say that in Blackburn we are finally seeing progress.
Liam Conlon (Beckenham and Penge) (Lab)
We talk about getting people out of hospital, but it is also about keeping them out of there. I spent years in and out of hospital as a teenager; I was one of the youngest people in Britain to have a hip replacement when I was in sixth form. The rehabilitation services that I relied on at the Royal London hospital were sadly closed by the last Government. Does my hon. Friend agree that it is important that we invest in those services for them to reopen, so that when people leave hospital, they stay out of hospital?
Andy MacNae
The investment in prevention and in repairing the massive damage done by the previous Government to our valued health system is crucial and fundamental.
We are finally seeing progress in Blackburn, and that is because of additional resources and support from NHS England and the Government’s getting it right first time initiative. East Lancashire Hospitals NHS trust and the leadership must be praised for that. They have been working hard and with real focus to address the underlying drivers of corridor care, such as safe and timely discharge, and the presence of senior clinicians. This is not about quick fixes but about looking to end the practice for good. So far, waits of 12 hours-plus have reduced by 18%. That means there is a long way to go, and myself and fellow east Lancashire MPs are working with the trust both to challenge progress and to argue for the resources needed to do the job.
Mr Adnan Hussain (Blackburn) (Ind)
The hon. Member and I share the same local authority and all our constituents are affected by the corridor care crisis at the Royal Blackburn hospital, which ranks seventh for A&E corridor care and fifth for ward corridor care, despite the management and the executive team working extremely hard. Does he agree that for places such as Blackburn with Darwen, which have the highest levels of deprivation and health inequalities, one solution is to have a targeted needs-based funding system?
Andy MacNae
The crucial thing is that we recognise the scale of the challenge and work together to solve it. This needs to be a shared mission on behalf of our residents, our friends and our families. In a year’s time, I intend to be standing here after we have together ended corridor care in Blackburn A&E for good, and I hope the Minister and the Department of Health continue to share this commitment. This is a moral imperative, and together we must deliver the care and dignity that our residents deserve.
Jayne Kirkham (Truro and Falmouth) (Lab/Co-op)
I thank my hon. Friend the Member for Tooting (Dr Allin-Khan) for organising this debate. It is really important and very timely. Corridor care is a visible symptom of the pressure our NHS is under. According to Age UK, the number of people experiencing corridor care has grown 563-fold since 2015. In Cornwall, where I am from, it is no longer a seasonal response to winter or summer pressures but happens all year round. This is true of the Royal Cornwall Hospitals NHS trust in my constituency, which includes Treliske, Cornwall’s only major acute hospital. On any given day in May, 31 patients in RCHT were receiving corridor care in the emergency department and 16 on the wards. One ex-clinician said to me that corridor care
“distresses patients, costs lives and demoralises staff”.
Patients treated in temporary escalation spaces face a lack of privacy and dignity and limited access to necessities such as food, water and toileting. They experience worse outcomes as well. The Royal College of Emergency Medicine has estimated that in 2024 there were 16,500-plus associated excess deaths related to stays of 12 hours or more before being admitted. We know that part of the root cause of the problem is a lack of bed space and staff in hospitals. While Treliske’s overall four-hour performance has averaged 45.8% so far this year, its performance for patients admitted to hospital averages 26.3%, so patients just are not moving through the system quickly enough.
Since this Government came to power, there have been some welcome improvements, particularly in ambulance handover times. Our local ambulance trust, the South Western Ambulance Service NHS foundation trust, has got much faster at moving patients from ambulances, so that the ambulances do not waste so much time sitting outside the emergency department, but of course, moving patients faster can increase the queue in ED and the need for corridor care there.
On any given day in May, 103 hospital beds were occupied by patients who were fit to leave, which represents over 15% of all general and acute beds within the trust. It is crucial that we address gaps in community and social care provision and strengthen the integration between hospitals and social care so that these patients can come out faster, reducing the pressure. The 10-year plan is committed to ending corridor care, and I welcome that emphasis. Part of that approach involves strengthening co-ordination between the NHS, social care and the voluntary sector. We have very good neighbourhood health teams in Cornwall. They are ahead of the game and their community health and wellbeing workers are proven to make a real impact on hospital admissions.
The NHS’s urgent and emergency care plan sets out a number of other important measures to reduce corridor care, including reducing internal discharge delays of more than 48 hours and investing £450 million in same-day emergency care. I welcome the expansion of same-day emergency care capacity at our community hospitals and the efforts that are being made by mobilising the third sector. However, that must be balanced with the fact that sending people home so early without proper rehab can increase the risk of them coming back and increase the demands on GP surgeries.
Kernow Health CIC runs out-of-hours GPs, a 111 advice service, and a line for clinicians to talk to paramedics. That has led to some people not having to go into hospital. We also have a specialist falls car that can help with nine callouts a day, and stop people going into hospital when they fall. So much more could be done and there have been many suggestions, but ultimately, corridor care needs to be treated as a system-wide problem. We must also look again at the way we treat people at weekends, because closure over a weekend can make such a difference.
Sojan Joseph (Ashford) (Lab)
We must continue to highlight corridor care, as it puts a spotlight on the pressures facing the NHS. One of the first visits I made after being elected to this House was to William Harvey hospital in my constituency. During my visit I was shown around an A&E department where 19 patients were being treated in corridors, even in the summer months, when emergency departments are typically under less pressure. That was deeply concerning, and demonstrated how under the previous Conservative Government corridor care became increasingly normalised. I have previously spoken in the House about the incident at William Harvey hospital last September, when a coffee shop had to be converted into an emergency ward to accommodate A&E patients because it ran out of corridor. That was not an isolated incident, but part of a wider pattern caused by years of under-investment and rising demand. NHS staff continue to provide outstanding care in difficult circumstances, often without the capacity, workforce or facilities that they need.
One lesson we must learn from the failures of the previous Conservative Government is that health infrastructure must keep pace with population growth. I recognise the need to build more homes to address the housing crisis that this Government inherited, but we must ensure sufficient capacity in GP surgeries, community health services and urgent care facilities. While schools and shops often come as part of a new housing development, healthcare infrastructure has too often been an afterthought. We need sufficient primary care capacity to prevent avoidable hospital visits and admissions that make corridor care more likely. Will the Minister set out what steps the Government are taking to ensure that, as new homes are built, health infrastructure planning and investment keep pace?
I welcome the Government’s commitment to end corridor care by the end of this Parliament. We should never accept a situation in which hospital corridors become makeshift wards. No patient should receive treatment without privacy and dignity, and no member of staff should have to provide care in an environment that falls below the standards they strive to uphold. Our constituents rightly expect to be treated in safe, appropriate and dignified settings.
I was pleased by the announcement a few months ago that East Kent hospitals NHS trust, which covers William Harvey hospital, will be part of the new intensive recovery programme. I am hopeful that such targeted support will help to tackle the significant challenges facing the trust, reducing waiting times, improving patient flow, and ensuring that people across east Kent receive the timely, high-quality care they deserve. I hope the programme will help to ease the pressures that have contributed to corridor care, and that the Minister will update the House on the new intensive recovery programmes.
I also welcome the forthcoming opening of an upgraded same-day emergency care unit at William Harvey hospital, which I recently had the opportunity to visit. Funded through the trust’s use of part of a £29 million investment from the Labour Government, the unit will increase capacity and help to relieve pressure across the hospital, enabling more patients to receive timely assessment and treatment. I also welcome the recent announcement by the local ICB about the single neighbourhood provider. GP services in my constituency are proactively reaching out to frail patients, which will help to avoid them going to A&E.
This Government have made important progress through additional investment, workforce expansion, improved discharge arrangements and targeted support for struggling trusts. Those steps should be welcomed, but there is more to do. If the Government are to fulfil their commitment to end corridor care, they must continue to pursue reform with urgency and determination—
Amanda Martin (Portsmouth North) (Lab)
I thank my hon. Friend the Member for Tooting (Dr Allin-Khan) for her service and for securing this debate.
There is no clearer sign of the failure of the NHS under the Conservatives than the fact that corridor care was allowed to become normal. Only a few weeks ago, I was in the Queen Alexandra hospital in my constituency watching my dad being cared for in a corridor. It brought home just how far standards have fallen and no family should have to experience that. Corridor care has real consequences. As we have heard, the Royal College of Emergency Medicine estimates that in 2025 alone there were more than 15,000 excess deaths associated with long waits in emergency departments. It is not just the physical impact on patients that is damaging, but the emotional impact on patients, loved ones and the NHS staff who come to work every day wanting to provide the care that their patients deserve, yet are too often forced to do so in impossible conditions. It is degrading, undignified and should never have become an acceptable norm.
Before I go further, I want to thank the incredible staff across Portsmouth’s NHS and care services. From those working at the Queen Alexandra hospital, to our ambulance crews, GPs, pharmacists, community teams and carers, they continue to deliver outstanding care despite extraordinary pressures. Last winter, it was an absolute privilege to spend a night shift with Nigel and Sam from our local ambulance service. Seeing at first hand their professionalism, compassion and resilience only strengthened my admiration for everything they do, often in incredibly difficult circumstances.
I recognise the work already being done across Portsmouth to help people access the right care. Strengthening general practice and supporting people who arrive at A&E with non-emergency conditions to receive care elsewhere helps to ensure our emergency department is there for those who need it most. That work matters and deserves recognition, so I thank Linda Stead and her team at the Portsmouth Primary Care Alliance Ltd, and the team at the Southern Hampshire Primary Care Alliance.
I welcome the decision of the previous Health Secretary, my right hon. Friend the Member for Ilford North (Wes Streeting), to ensure NHS England has finally introduced a clear definition of corridor care and begun publishing trust-level data. We cannot solve a problem if we refuse to see it and measure it. Sadly, the first set of figures makes difficult reading for Portsmouth. In May this year, Portsmouth hospitals university NHS trust ranked eighth worst for corridor care on hospital wards and ninth worst in emergency departments. That is simply not good enough.
I welcome the Government’s commitment to shift more care into communities. Preventing unnecessary admissions is essential if we are to reduce pressure on our hospitals, because corridor care starts with a lack of community services. However, I remain deeply concerned by my integrated care board’s approach and its failure to engage meaningfully with me. The initial discussions on health hubs focused on potential sites, yet astonishingly, although not surprisingly, the proposed locations were all in Portsmouth South. That is simply unacceptable. If we are serious about reducing health inequalities and improving access to care, these services must be available across the whole city. Yet, as with so many decisions affecting Portsmouth, residents in Portsmouth North are neglected and overlooked. To help me change that, will the Minister outline what expectations have been placed on integrated care boards to work constructively with local MPs?
Of course, reducing admissions is only one part of the answer. We must also improve patient flow through our hospitals, so I welcome today’s announcement about a 10-year capital plan for health and social care. Buildings and modern facilities are important if we are to move people from corridors to beds and from A&E to GPs, but too many people remain in hospital because the social care support they need is simply not available or because the pharmaceutical system is not fit for purpose. Will the Minister update the House on what further action is being taken to improve hospital discharge and tackle the pressures in social care and pharmaceutical services?
I am proud that this Government have already begun to turn our NHS around. We have seen the fastest ambulance response times in five years, the shortest A&E wait for four years, and the biggest fall in dissatisfaction in the NHS since 1998, but none of us should be satisfied while patients are still receiving treatment in corridors. People in Portsmouth deserve dignity when they need care, NHS staff deserve the resources and conditions to do their jobs, and together we must ensure that corridor care becomes not the accepted reality of our NHS, but a thing of the past.
Dr Beccy Cooper (Worthing West) (Lab)
I thank my hon. Friend the Member for Tooting (Dr Allin-Khan) for bringing this timely and important debate to the Chamber.
As we have heard, corridor care is one of the clearest signs of wider pressures across urgent and emergency care services, including rising demand, delayed discharge and constrained hospital capacity. As so much has already been said, I want to focus my remarks on a couple of areas. As an MP for a coastal community, I want to make it clear to the Minister that when we are looking at these pressures, we need to acknowledge the additional pressures facing specific communities. Coastal communities tend to have older populations and poorer health outcomes.
Worthing West sits within one of England’s coastal communities. Its population is older than average—even though I am not older than average—frailty is increasing, multiple long-term conditions are common, emergency admissions are correspondingly higher, recruitment is harder and deprivation exists alongside affluence. All these things contribute to the pressures that we have discussed during the debate.
University Hospitals Sussex NHS foundation trust is in my constituency. As we have discussed, NHS England’s data is not completely useful in many instances, but it is the best that we have. I have had a look and, on average, the four emergency departments in the trust are seeing 65 patients in their emergency department corridor care service each day. In their general and acute wards, they have corridor care for 39 patients each day. That is not insubstantial.
We have talked about the back door, but I really want to talk about the front door. Members will be unsurprised to hear that, as a public health doctor, I know that prevention is a corridor care policy. The Government need to ensure that investment in prevention and public health is recognised as part of the solution to reducing corridor care. We have to reduce the flow of avoidable illness into our hospitals in the first place, and that means tackling smoking, poor housing, air pollution, obesity, loneliness, poverty and delayed access to community care. Corridor care begins long before a patient reaches an accident and emergency department.
Jen Craft (Thurrock) (Lab)
My local hospital, Basildon university hospital, is in the 40th worst trust for delivering hospital care. Does my hon. Friend agree that not having the right community equipment, such as community disability aids and home adaptations, can quite often be a leading cause of delayed discharge? Will she urge the Minister to look at this issue when she commits to ending corridor care by the end of this Parliament?
Dr Cooper
I thank my hon. Friend for those excellent remarks, and I agree wholeheartedly.
As I have said, corridor care is a symptom, and our challenge is to identify the underlying causes, rather than simply measure the symptoms. It is what happens when demand, delayed discharge, workforce shortages, social care pressures and preventable ill health collide in one place. Stakeholders that I speak to—and, I am sure, stakeholders that colleagues across the House speak to—repeatedly call for public health investment, stronger community services, social care capacity and the prevention of avoidable admissions. Every prevented stroke, every smoking cessation intervention, every warm home, every child who grows up healthier and every patient supported earlier in the community means one less avoidable admission to an already overcrowded emergency department, such as that of my hon. Friend the Member for Tooting.
Matt Turmaine (Watford) (Lab)
I thank my hon. Friend the Member for Tooting (Dr Allin-Khan) for securing this important debate. The previous Government wreaked havoc on the NHS, with waiting times at an all-time high even before covid-19 hit a bruised and battered system. Under-investment and undelivered promises saw corridor care become commonplace, with its subsequent indignity and risk. It is a clear visual demonstration of a system on its knees.
This Labour Government are determined to act. The urgent and emergency care plan for 2025-26 provided more than £450 million of investment in urgent and emergency care. Additional millions of pounds of capital investment, reaching £1.9 billion over the next four years, will help to deliver it. Links between hospitals and social care are clear and critical, which is why the Government are working to implement a national care service and initiatives such as the first-ever fair pay agreement for adult social care staff.
Watford general hospital in my constituency is on the new hospitals programme, but it was previously delayed endlessly under the Conservative and Liberal Democrat coalition Government and subsequent Conservative Governments. However, under this Labour Government, it is seeing tangible action in preparation for the rebuild.
West Hertfordshire Teaching Hospitals NHS Trust has worked incredibly hard in my constituency to deal with corridor care, and I am delighted to say that corridor care has been eradicated altogether at Watford general hospital. It has not had a single incident of corridor care for six months. How has it managed that remarkable achievement?
First, the hospital has taken a whole-hospital approach to flow, making it everybody’s business and therefore everybody’s concern. The trust states:
“The simple rule is we don’t accept corridor care in our wards. We find other solutions.”
Secondly, the hospital has embraced data, embedding it into everything that it does to manage the flow of patients. It has real-time data tools such as electronic bed management, e-whiteboards and a digital command centre. Six key measures have been identified, which staff are using and which are easy to understand. Thirdly, the trust has engaged in partnership working—it could not tackle corridor care in A&E alone. There is a care co-ordination centre to reduce the number of ambulances coming into A&E for those who do not need emergency treatment; a multidisciplinary team to advise paramedics on where people should be treated; and close working with social care, treating people away from hospital, as is included in the NHS 10-year plan.
In conclusion, I place on record my thanks and admiration for the staff at the trust. Their hard work has paid off, and it demonstrates what can be achieved when working together as a team to deliver for their patients and population.
Madam Deputy Speaker (Ms Nusrat Ghani)
I call James Naish to make the final Back-Bench contribution.
James Naish (Rushcliffe) (Lab)
Thank you, Madam Deputy Speaker—I appreciate being called. Before I begin my speech, I note that my hon. Friend the Member for Worthing West (Dr Cooper) mentioned coastal communities. She was absolutely right to do so, and I will refer to rural communities, because there are equal challenges with delivering healthcare to that particular demographic.
I will start with some good news for my constituents. Last year, Nottingham University Hospitals NHS trust was named among the 10 most improved trusts in England for four-hour A&E performance, and sixth nationally for 12-hour waits. That is not a small thing; it reflects genuine hard graft by staff at Queen’s Medical Centre and Nottingham City hospital, and it earns the trust a share of a £3 million reinvestment fund from NHS England. That sounds good, but I would be doing my constituents a disservice if I stood in this place and pretended that the job was done, because just over a week ago, on 29 June, NUH declared a critical incident after the recent extreme heat drove demand across the trust far beyond what its emergency department could safely absorb. What is more, it was the fourth critical incident over the past year. At its worst, during the latest incident, there were 188 patients in the emergency department and 20 ambulances queuing outside. Patients were experiencing lengthy waits on corridors, and more people than expected were medically fit but unable to be discharged.
I recently asked the Government about this issue, and the Minister’s response was clear: corridor care was “unacceptable”, and should never become normal practice. That should not even need saying, and it is only after 14 years of drift that it did. What matters now is action, and the Government have published a national definition of corridor care for the first time and started daily reporting, so that neither trusts nor we in this place can hide the problem. Thankfully, that transparency is being backed by some new money: over £450 million is going into urgent and emergency care capacity this year alone, and £215 million of capital funding is delivering 40 new and expanded urgent care sites across England. For my constituents, this means two things locally that I genuinely welcome: confirmed funding for an expanded urgent treatment centre at QMC, and a trust-funded reconfiguration of the emergency department, because our chief executive has found the money internally to get on with that work now, rather than wait.
I was particularly pleased to be able to tell this to one of my constituents, Renee, after she contacted me to tell me about her experience in A&E. As a lady in her 70s with a long-established heart condition for which she has ongoing consultant care, after a heart attack, she found herself spending nine hours waiting for care in A&E for a condition that should have been treated immediately. Nationally, A&E waiting times are at their best level in five years, and elective waiting lists are at their lowest in three and a half years. That is progress, but it will ultimately count for nothing in Rushcliffe if a bad winter, a system failure or a staffing gap can still tip a good department into crisis extremely quickly. As such, my ask of the Minister is simple: keep funding urgent and emergency care, keep the pressure on trusts that are lagging behind, and keep listening to Back Benchers, who regularly hear about this issue from doctors and constituents at our surgeries.
Madam Deputy Speaker (Ms Nusrat Ghani)
I call the Liberal Democrat spokesperson.
Helen Morgan (North Shropshire) (LD)
I thank the hon. Member for Tooting (Dr Allin-Khan) for her excellent opening speech—it was what we expected, given her unparalleled experience and knowledge in this area. As we have heard over and over again, our A&E departments are at breaking point and ambulance services have been overwhelmed. The corridor care data, which was finally released last month, confirmed the extent of this crisis, well after the end of what we would consider to be the winter peak. Corridor care is no longer a phenomenon confined to the winter months; it is a year-round crisis. I have no doubt that the recent heatwaves will have put unbearable pressure on services yet again.
The scale of corridor care has a huge impact on patients. Some 36% of visitors to hospitals have seen care delivered in a corridor. A freedom of information request by the Liberal Democrats revealed that the average hospital trust now sees nearly 3,000 patients wait more than 24 hours in A&E each year. Corridor care is also extremely detrimental to staff. A 2025 Royal College of Physicians survey found that 78% of doctors had provided care in a temporary space. In testimonies collected by the Royal College of Nursing, nursing staff described patients deteriorating unnoticed and suffering avoidable harm. They expressed their anxiety and demoralisation at the level of care they were able to give and being unable to guarantee patient safety, because corridors are unsafe for patients and unsafe for staff, too.
Staff are losing hope, and corridor care has become so normalised that one hospital advertised for a dedicated corridor care nurse. Another, as we have heard, even created a makeshift ward in an on-site Costa Coffee. The Government owe it to patients and staff to make fixing this crisis an urgent priority. Even the release of corridor care data was a shambles, arriving late after months of the former Secretary of State, the right hon. Member for Ilford North (Wes Streeting), paying lip service to transparency and delaying its publication.
Concerns have already been raised over loopholes in the Government’s definition of corridor care, which anecdotal evidence suggests has encouraged trusts to hide the true extent of the crisis, with treatment being pushed back into ambulances to avoid incidents being labelled as corridor care. University Hospitals Coventry and Warwickshire NHS trust had no patients being treated in corridors, while ambulance crews were providing care in its car parks, according to a recent West Midlands ambulance service board paper. Increasing ambulance handover times will not tackle the indignity of corridor care, but will only compound it and prevent the release of those ambulances to people with potentially life-threatening conditions.
The corridor care data, which is the best we have got, revealed that May alone saw a shocking 90,000 incidents of corridor care. The Royal College of Emergency Medicine’s recent report estimated that long waits caused at least 15,860 excess deaths in England in 2025. All of the evidence is there. The royal colleges have been sounding the alarm for years. Data and reports demonstrate the huge scale of this scandal. Countless individual stories remind us of the personal tragedies behind the numbers.
One of my constituents, a carer for three adult sons, called after a truly awful experience last year. His eldest son had collapsed on the stairs in the middle of the night. After calling 999 and being told no ambulance was available for some time, my constituent drove his son to A&E himself with some difficulty, and only once his son had regained consciousness. They waited in A&E for 28 hours to then be put in a holding area for one and a half days before being transferred to a ward. Each of these numbers and cases involves a person. Madam Deputy Speaker, it could be your child, an elderly relative or a vulnerable friend—each experiencing no privacy, no dignity and suffering poor outcomes.
I look forward to hearing the Government’s plan to resolve this crisis. The Liberal Democrats have an action plan to fix corridor care. We believe that hospital capacity is a key issue, and that cannot be fixed without fixing social care. One of the biggest factors behind lack of capacity is the lack of social care. Baroness Casey’s final report is not due until 2028, and I hope that the Minister will be able to announce that the Secretary of State will bring that forward, so that we can solve the social care crisis. Without those beds, people are either held outside in ambulances or on corridors outside wards.
We would invest £1.5 billion to provide 6,000 more beds across the system. Those would be provided through new staffed hospital beds and investment in safety-net social care beds, proper step-down care packages and more support for carers and hospices, so that thousands more patients can leave hospital. To solve corridor care, we have to fix the front door and the back door, and invest in primary care as well as social care. That would include boosting recruitment and retention to provide 8,000 more GPs to reduce pressure on hospitals and save the NHS time and money in the first place. We would also place a duty on the Secretary of State to prevent 12-hour waits in A&E and ensure that they do not continue to happen year in, year out.
The Liberal Democrats have a plan to bring back the dignity and safety that patients deserve, and the working conditions that NHS staff deserve too. I hope that the Government will listen to our plan, and I look forward to hearing from the Minister.
Dr Caroline Johnson (Sleaford and North Hykeham) (Con)
I should begin by declaring my interests as a member of the British Medical Association, a member of the Royal College of Paediatrics and Child Health, and an NHS paediatric consultant.
I thank the hon. Member for Tooting (Dr Allin-Khan) for initiating the debate. I know that, as a practising doctor like me, and, in particular, as someone who works in an emergency department, she understands the importance of this subject. Let me also pay tribute to the staff who work throughout our health service, some of them in quite difficult circumstances.
I am glad to respond to this debate on what is a very important but very difficult issue. Every day in May, nearly 3,000 patients spent time in so-called clinically inappropriate spaces. These may be corridors, but as we have heard, they may also be cupboards or waiting areas. That is not good enough. Corridors are no place to provide clinical and nursing care. There is no privacy and dignity for people getting changed or being examined, and others may overhear what is said about their medical conditions. It is not safe. The hon. Member for Mid Sussex (Alison Bennett) pointed out the infection control risks. Availability of oxygen has also been mentioned. If someone has a cardiac arrest and collapses, where is the space for them to be looked after?
I wonder if the Minister can tell us whether the Government intend to support new clause 84 of the Health Bill when we discuss it in Committee, probably next week. The new clause requires the number of patients who have died when 12-hour waits in A&E departments were a contributory factor to be recorded.
We have heard upsetting stories this afternoon, and I have heard some myself in my constituency, including that of a gentleman who sat for more than 60 hours in a plastic chair while receiving intravenous antibiotics for sepsis. These are all examples of a much broader and more serious problem. Every day, patients, often frail and elderly, are kept for hours on trolleys in corridors or on chairs in waiting rooms. As we heard from the hon. Member for Stroud (Dr Opher), we have an ageing population, so this problem is applying more pressure. A&E attendances increased by 2.5% last year. The latest figures show that in May this year alone, 50,212 patients waited in A&E for more than 12 hours after a decision to admit them to hospital. That represents a 17.1% increase since last May.
Last year, the Government produced their urgent and emergency care plan, in which they set their targets, including the target for an absolute minimum of 78% of patients to be admitted, transferred or discharged within four hours. That target is well below the NHS constitutional standard, but, furthermore, the latest NHS data shows that the Government have missed it, with 25.7% of patients seen within four hours in May 2026, down from 76.9% in the previous month. Things are actually going in the wrong direction.
We need to consider why patients are being cared for in corridors. Essentially, it is a reflection of the lack of appropriate spaces, often spaces in an in-patient ward. We therefore need a structured plan. The hon. Members for Shipley (Anna Dixon) and for Worthing West (Dr Cooper) spoke about where we should start. We should start with prevention, care at home and virtual wards. We need to think about delivery in rural areas. The hon. Member for Bury St Edmunds and Stowmarket (Dr Prinsley) talked about care and treatment in the community, and others have talked about improved social care. I hope the Minister will tell us whether, when we debate the Health Bill in Committee, she will accept new clauses 105 and 106, which relate to how people can care for themselves, to education and to the safety and classification of prescription-only medicines, so that the more simple conditions can be managed closer to home by pharmacists.
Harriet Cross (Gordon and Buchan) (Con)
Community care, which my hon. Friend has just touched on, is still important, particularly in preventing the need for corridor care. Insch War Memorial hospital, in my constituency, has been earmarked for closure, which is completely wrong. The trustees have done an amazing job in raising money to keep this vital community asset open. Does my hon. Friend agree that such community hospitals are vital not just for rural communities, but in helping the larger hospitals to manage their own patient care?
Dr Johnson
I absolutely agree. The NHS is devolved in Scotland, but that sounds like a very unwise decision that it should certainly reconsider. I am sure my hon. Friend will be a doughty campaigner in ensuring that it does so.
That brings me to the next part of my speech, which is about the extra space in emergency departments and the importance of caring well for people in A&E. I ask the Minister for an update on the work that Dr Acheson and the Royal College of Emergency Medicine have been doing on on-time medication, as we need to make sure that patients do not suffer detriment in A&E because they are not given medication on time. An hon. Gentleman on the Labour Benches talked about the extra space on wards and the number of beds. The number of beds has reduced over time, partly because we do clinical care differently—for example, people now stay in hospital for a much shorter period after having a baby, and that is true of other operations too. However, my understanding is that the total number of beds has dropped further since Labour came into office. Can the Minister explain why that is?
It is fair to say that we did not get everything right when we were in office, but we did increase the number of emergency department doctors by 100% between 2010 and 2024, and we met our manifesto commitment to hire 50,000 new nurses. We developed a long-term workforce plan, but this Government did not want our plan; they wanted their own. They said that they would deliver it by the autumn, and then by the spring. It has now been “imminent” for quite some time, but how soon is imminent?
As many Members have said, we need to tackle corridor care, but we also need to tackle the back door: social care. Two years ago, this Government promised cross-party talks. As has been mentioned already, they took nine months to have the first meeting and have only recently had the second meeting. That is not tackling the problem with the urgency that it needs. The Casey report is not due till 2028, and this is being kicked into the long grass. We can only hope that the new Prime Minister will make a difference.
As my hon. Friend the Member for Reigate (Rebecca Paul) said, the Government need a plan. I hope the Minister will explain in detail how they intend to deliver on their plan, because delivery is key. We often hear of targets and aims, which are easy to set but hard to reach. What have we seen so far? Long A&E waits are up, and we have seen overall waiting lists increase by 112,000 on the previous months. The number of people waiting for operations and procedures is up on last year and last month. The Government have ditched their promise to deliver a doubling of medical school places, and delayed the workplace plan. The promise to roll out fracture liaison services is running behind schedule, and there is still no response to the Hughes report. I could go on, but the basic issue is that the Government seem keen to set targets—worthy and important goals—without knowing how to deliver them, leading inevitably to disappointment.
Can the Minister say how she will meet the target of abolishing corridor care? What will be the effect of reducing the capital budget, as announced in the defence investment plan? What does she think will be the effect of removing the social care voice from ICBs? Importantly, as we look forward to winter, what planning is being done now to make sure that patients are kept safe in the autumn and winter?
The Minister for Secondary Care (Karin Smyth)
The hon. Member for Sleaford and North Hykeham (Dr Johnson), the hon. Member for North Shropshire (Helen Morgan) and I are deep in the Health Bill Committee, and I have not seen them all day, so it is nice to have the opportunity to get back into the swing of our discussions. I am really grateful to my hon. Friend the Member for Tooting (Dr Allin-Khan) for securing this important debate. Her commitment, and her pride in St George’s hospital and all the staff who work there, is always so clear to see. She did a great job for them and the rest of the country again today. She has given us an opportunity to discuss something that matters so much to patients, their families, NHS staff, Members from across the House, and the staff who work here.
I recognise the important contribution of frontline clinicians, professional bodies and organisations such as the Royal College of Emergency Medicine and the Corridor Care Coalition. Their experience and expertise have helped shape our work to establish a consistent national definition of “corridor care” and strengthen national guidance. We share the same objective: to ensure that every patient receives safe, dignified care in an appropriate clinical setting. We will continue to work with these experts across NHS England and the Department of Health and Social Care.
Let me be absolutely clear: corridor care is not an acceptable standard of care, and it must not become normalised or, as the hon. Member for Mid Sussex (Alison Bennett) said, a habit. Wherever possible, patients should be assessed and treated in an appropriate clinical environment with dignity, privacy and the highest possible standards of care. Equally, NHS staff deserve to work in an environment that allows them to provide the compassionate care that they are trained to deliver. That is why tackling corridor care is a priority for this Government.
If we are to solve this problem, we have to be honest about why it occurs, and we have heard some of the reasons today. Corridor care is one of the clearest symptoms of pressure across the entire urgent and emergency care pathway—it is not simply an emergency department issue. As we heard from my hon. Friends the Members for Rushcliffe (James Naish) and for Worthing West (Dr Cooper), it also responds differently in different places, such as rural cities or coastal areas.
Historically, care in non-designated clinical areas was an exceptional escalation measure during periods of peak demand, but over time sustained increases in demand alongside capacity constraints across hospitals, community services and social care mean that what was once exceptional has become more routine in some places, and that is not acceptable. The hon. Member for Sleaford and North Hykeham might not remember exactly how and when that happened, but I know that when I worked in urgent and emergency care in Bristol, under the previous Labour Government, we eradicated such pressures in A&E, and they somehow crept back—not by magic, but by neglect—under the Conservatives’ stewardship.
We heard from my hon. Friend the Member for Salford (Rebecca Long Bailey) about her mother’s experience, and I do hope people are witnessing that. My hon. Friend the Member for Portsmouth North (Amanda Martin) talked about her father’s experience. My hon. Friend the Member for Bolton South and Walkden (Yasmin Qureshi) had a terrible experience of her own. My hon. Friend the Member for Ashford (Sojan Joseph)—again, he is on the Public Bill Committee and doing great work—went to observe his emergency department, as I know many hon. Members do. So we have direct experience of this in the House and have seen it for ourselves, and I have of course visited my local systems in Bristol.
Pressure in one part of the system affects other parts, and when patients who are medically fit cannot be discharged because appropriate support is unavailable, beds remain occupied, reducing hospitals’ ability to admit new patients from emergency departments, and the result is overcrowding, delayed patient flow and an increased risk of patients being cared for in temporary environments. We heard about that in detail from my hon. Friends the Members for Warrington South (Sarah Hall), for Stroud (Dr Opher) and for Truro and Falmouth (Jayne Kirkham), and that is why we are tackling it.
The first step was bringing in consistency and transparency about how corridor care is measured. For too long there has been no single national definition, making it really difficult to understand where the pressures were greatest or to compare performance across the NHS. We cannot improve what we do not measure, as was noted by my hon. Friend the Member for Gillingham and Rainham (Naushabah Khan). NHS England introduced a clear national definition of corridor care and began daily reporting in March 2026, and since June that data has been published, providing greater transparency and enabling targeted support for those organisations experiencing the greatest pressure.
Let me make it clear to the Liberal Democrat spokesperson, the hon. Member for North Shropshire, that part of getting the definition and the data right did mean that did not come out immediately. It is difficult to get this right, and we continue to work on doing so. I also make it really clear that, in overseeing this, I am not hiding the experience of things such as ambulance waits. We are absolutely monitoring those things as part of my overseeing of the wider system.
Alongside improved reporting, NHS England has strengthened the national guidance for trusts where temporary care environments cannot immediately be avoided. The guidance is clear that patients must continue to receive the same clinical standards of care wherever they are treated. They must be prioritised according to clinical urgency, supported by senior clinical oversight, named nursing responsibility and ongoing monitoring, with clear escalation arrangements, where required. I know that Members are rightly concerned by patient safety, and of course no patient should receive a lower standard of care because they are being treated in a temporary clinical environment, but the safest care is in the right clinical setting, and that is what we are aiming to do.
We have also ensured that, following the spending review, the Government allocated up to £1.9 billion of capital funding over the next four years to support improvements in urgent and emergency care to help restore the constitutional standards talked about by the hon. Member for Sleaford and North Hykeham. The Conservatives did not hit any constitutional standards for over 10 years, and we are determined to right that wrong.
Along with that investment, NHS England has published its model emergency department guidance, supporting faster clinical decision making, improved streaming of patients and stronger whole-system responsibility for performance. While there is much more to do, these reforms are already contributing to improvements, as we heard from my hon. Friend the Member for Stroud, including the shortest waiting times for four years and the fastest ambulance response times for about five years, despite continued and increasing high demand.
Targeted support is where we need to do the most work, and early national data shows that much corridor care is concentrated in some key places. The specialist “Getting it right first time” teams are therefore working directly with those trusts to help improve patient flows, strengthen the discharge process, make better use of data and share learning from organisations that have already made progress.
I commend my hon. Friend the Member for Bury St Edmunds and Stowmarket (Dr Prinsley), who highlighted the improvements at West Suffolk hospital, and my hon. Friend the Member for Rossendale and Darwen (Andy MacNae) for the great work happening at Blackburn and the work he is doing with other east Lancs MPs. My hon. Friend the Member for Watford (Matt Turmaine) talked about the improvements happening there. We heard about North Herefordshire and I am going to hold them to the autumn deadline raised by the hon. Member for North Herefordshire (Dr Chowns). There is nothing like putting it on the record for them, is there? Great work. As colleagues have said, we want to take the best to the rest and some people are doing amazing work in difficult circumstances.
Ultimately, as Members have said, eliminating corridor care means improving flow across the whole system. That requires: faster discharge; stronger community and neighbourhood services, as highlighted by my hon. Friend the Member for Mitcham and Morden (Dame Siobhain McDonagh); improved social care; and more people receiving care closer to home, so that hospitals can focus on those who need in-patient care. That ambition sits at the heart of our urgent and emergency care plan and our 10-year health plan, which of course includes more prevention, as mentioned by my hon. Friend the Member for Worthing West. The shift from hospital to community care will improve patient experience, reduce avoidable hospital attendance and create the capacity needed to restore urgent emergency care standards. This is about lasting reform, not a temporary response to seasonal pressures, whether they be the current heat or winter.
Before I conclude, I want to acknowledge the extraordinary professionalism of NHS staff: doctors, nurses, paramedics, health care assistants, porters, pharmacists and so many other people who continue to provide outstanding care under immense pressure. No member of staff comes to work expecting to treat patients in corridors, and many have spoken openly, rightly, about the moral distress it causes. They deserve not only our gratitude, but practical action to improve the conditions under which they work. Part of what we are doing—introducing the national definition, being transparent about the data, strengthening patient safety guidance, investing additional urgent care capacity, providing targeted support to the most challenged trusts and addressing the wider pressures that drive corridor care—is the start of doing just that.
Every patient deserves care delivered with dignity, compassion and respect. Every member of staff deserves a system that enables them to provide that care safely. Corridor care is not inevitable. It is the consequence of pressures that have built up across the health and care system, and it is a challenge that this Government are determined to overcome. By improving patient flow, increasing capacity, supporting frontline services and delivering long-term reform, we will restore urgent emergency care standards and end the routine use of corridor care before the end of this Parliament. That is our commitment to patients, NHS staff and this House.
Dr Allin-Khan
As I stand here now to give my closing remarks, I am filled with a sense of pride. There are very few occasions when we all come together across the House in unison on an issue. Today is an example of where Members from every party and those who sit as independents have come together to say: enough is enough, we all stand united against the scourge that is corridor care.
It would not be fair of me to single out individual contributions, because they were all worthy of accolades. Members have shared their own deeply personal experiences or those of their families. They have highlighted how important it is that we understand the geographical implications of how this is a challenge that does not require a one-size-fits-all approach.
I am really pleased to hear the commitments from the Minister, especially as we know that, according to the Royal College of Emergency Medicine, 1,300 excess deaths occur every month due to long A&E waits. That is the equivalent of a plane crash of people dying every single week. We cannot allow that to happen. I appreciate everything the Minister said, but my closing request is this. Can we please do everything we can to heed the remarks of everyone across the House today and speed up whatever we can to ensure there is not a single excess death attributed to something that could be avoided?
For every person who dies when it could have been prevented, we have a family in grief and a life taken too soon. If we know there are things we could be doing—money we could be spending, a social care system we could be fixing to ensure people have extra precious time with their loved ones and that people have dignity on what is, on many occasions, the last day of their lives—we must spend every ounce of energy in the Department of Health and Social Care to fix this problem.
I thank everyone who has taken part in this debate and I thank the Minister. Let us end corridor care for good.
Question put and agreed to.
Resolved,
That this House has considered NHS corridor care.
Point of Order
(1 week ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Minister for Housing and Planning (Matthew Pennycook)
On a point of order, Madam Deputy Speaker. I would like to correct an inadvertent error I made earlier today. During the Ninth Delegated Legislation Committee debate on the Greater Cambridge Development Corporation (Establishment) Order 2026, I inadvertently stated that a relevant powers and functions order would fall under the affirmative procedure, when it will actually be made under the negative procedure.
[Official Report, Ninth Delegated Legislation Committee, 8 July 2026; Vol. 789, c. 10.]
Madam Deputy Speaker (Ms Nusrat Ghani)
I thank the Minister for giving notice of his point of order, and for seeking to correct the record so quickly, which he has now done. Hopefully that draws a line under it.
Petitions
(1 week ago)
Commons ChamberRead Full debate Read Hansard Text Watch Debate
Helen Hayes (Dulwich and West Norwood) (Lab)
I rise to present a petition on behalf of residents of the Loughborough Estate in my constituency, I wish to say that the conditions in which the residents there are currently forced to live are shocking. The lack of a straightforward remedy to those conditions is completely unacceptable, and the need for change is urgent.
The petition states:
The petition of residents of the Loughborough Estate in Brixton,
Declares that the right to manage for residents of social housing is important and that tenant management organisations often deliver high quality services, but the Loughborough Estate is under the long-term control of a tenant management organisation which has lost its democratic mandate, and fails to deliver the essential services in respect of which it receives over £3 million per year of funds from the London Borough of Lambeth; and further declares that the current right to manage legislation is not fit for purpose, lacks essential safeguards, and enables rogue entities to retain control of council housing without democratic mandate and oversight.
The petitioners therefore request that the House of Commons considers this issue, and urges the Government to: (i) produce regulations amending the Housing (Right to Manage) (England) Regulations 2012, introducing essential changes to safeguard the democratic integrity of tenant management organisations; and (ii) publish updated guidance in relation to the application of any such regulations, including a new Modular Management Agreement.
And the petitioners remain, etc.
[P003218]
Sadik Al-Hassan (North Somerset) (Lab)
I would like to present a petition for a railway station in Long Ashton on behalf of North Somerset and the village of Long Ashton, which remains significantly underserved by public transport infrastructure, with no viable railway connection to Bristol and beyond.
The petitioners therefore request
“that the House of Commons urges the Government to undertake a feasibility study for the construction of a new railway station at Long Ashton, North Somerset, in order to serve the existing community and support the sustainable development of the forthcoming healthtech campus.”
Following is the full text of the petition:
[The petition of residents of Long Ashton, North Somerset and the surrounding areas,
Declares that the community of Long Ashton in North Somerset is significantly underserved by public transport infrastructure; further declares that the area is set to become home to a £1.25 billion healthtech campus which will bring substantial employment, economic growth, and inward investment to the region; further declares that the absence of a railway station serving this community places an unacceptable burden on residents who currently have no viable rail connection to Bristol and beyond; further declares that the provision of a new station in Long Ashton would reduce car dependency, ease congestion on local roads, support the region’s net zero ambitions, and ensure that the economic benefits of the incoming healthtech campus are accessible to a wide range of workers and residents; and further declares that failure to invest in this infrastructure risks undermining the full economic potential of one of the most significant development projects in the West of England.
The petitioners therefore request that the House of Commons urges the Government to undertake a feasibility study for the construction of a new railway station at Long Ashton, North Somerset, in order to serve the existing community and support the sustainable development of the forthcoming healthtech campus.
And the petitioners remain, etc.]
[P003220]
Adam Dance (Yeovil) (LD)
After amazing campaigners secured more than 900 signatures, I present this petition on the closure of the Hundredstone post office in Yeovil, which will leave locals with no in-person post office and banking services.
The petitioners therefore request
“that the House of Commons urges the Government to put pressure on the Post Office to ensure a replacement operator for the post office in the area is in place before the current site is closed; and to consider how to provide communities with more resilient in-person services.”
Following is the full text of the petition:
[The petition of residents of the United Kingdom,
Declares that an alternative operator for the Hundredstone Post Office site in the Morrisons Daily on Glenthorne Avenue in Yeovil must be provided before the store’s closure 29 July 2026; and further declares that the current model for local services, whereby bank services often operate in post offices and post offices often operate in shops, means that local people lose almost all of their in-person services when shops, as is often the case in the current business and regulatory environment, don’t survive.
The petitioners therefore request that the House of Commons urges the Government to put pressure on the Post Office to ensure a replacement operator for the post office in the area is in place before the current site is closed; and to consider how to provide communities with more resilient in-person services.
And the petitioners remain, etc.]
[P003221]
Greenhouse Gas Removals Sector
(1 week ago)
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Edward Morello (West Dorset) (LD)
I am extremely grateful for the opportunity to bring this Adjournment debate to the House and to make the case for greater Government support for the greenhouse gas removals sector. First, I thank the sector for engaging so openly with me about its businesses and concerns, the Minister for his continued co-operation on this issue and Dr Alan Whitehead for publishing his extremely important review.
Before entering this place, I spent almost a decade working in renewable energy, and before that on climate impact projects. I would certainly not claim to be an expert on greenhouse gas removals, but, through my work in the renewable energy sector, and now as chair of the all-party parliamentary group on climate technology and the co-chair of the net zero APPG, I have at least become a passionate advocate for the sector.
It has been encouraging to see a Secretary of State and Ministers who genuinely recognise the scale of the climate challenge. However, warm words must now become concrete action if Britain is not to miss yet another opportunity to become a world leader in one of the defining industries of the next century.
Climate change is here. It is happening now. We see it through rising temperatures and increasingly frequent heatwaves, flooding, drought and wildfires. The changing climate is already affecting our communities, businesses and public services. Much of the conversation has rightly focused on reducing our emissions, and let me be clear: decarbonisation must remain our first priority. Every tonne of carbon dioxide we avoid emitting now is better than having to remove it later. However, even if we achieve every single one of our net zero targets—and we absolutely must—we will still have a problem.
Net zero does not remove the carbon dioxide that is already sitting in our atmosphere, which is why this debate is not about carbon capture and storage, but about carbon removal. The Intergovernmental Panel on Climate Change has been absolutely clear that without greenhouse gas removals, keeping global warming within internationally agreed limits becomes effectively impossible.
Today, humanity removes only about 2 billion tonnes annually, 99.9% of which is done by trees and plants. Meanwhile, we continue adding more greenhouse gases to the atmosphere every single year. The scale of the challenge is enormous. Whenever I speak about this issue, someone invariably asks, “Why do we not just plant more trees?” I agree: trees are wonderful, and we should absolutely plant more of them. However, to keep global temperature increases below the 1.5% or 2% target, we would need to remove 10 billion tonnes of carbon dioxide from the atmosphere every single year, which would require us to plant roughly 50 million hectares of new forest annually. That is equivalent to covering the entirety of the UK with trees, twice, every single year. Even the most committed of environmentalists would accept that that approach has practical limitations.
Richard Foord (Honiton and Sidmouth) (LD)
In recognising the challenge of planting enough trees on the land, I wonder whether my hon. Friend has thought more about capturing carbon in the ocean. He and I share the Lyme Bay marine protected area in our constituencies. The Vision Group for Sidmouth was telling me that despite covering less than 1% of the ocean floor, seagrass beds are responsible for 15% of its total carbon capture. Does he agree that we can also look to the sea for the capture of carbon?
Edward Morello
My hon. Friend and neighbour is absolutely right. There are many exciting nature-based solutions for which I have high hopes. In my role as chair of the all-party parliamentary group on climate technology, my focus today is mainly on the engineered solutions, but we need to consider all solutions to meet the challenge ahead.
Jim Shannon (Strangford) (DUP)
I commend the hon. Member for securing the debate. I spoke to him today about this subject and I congratulate him on highlighting environmental issues. Does he agree that we must ensure that all areas of the United Kingdom, including Northern Ireland, receive a fair share of investment? Does he also agree that the Government must ensure that the GGR strategy supports our rural communities, utilising natural land-based solutions rather than just financing large industrial projects elsewhere? Above all, we must protect local jobs and ensure that common sense always prevails.
Edward Morello
I believe that we should back any and all solutions that help us face the challenge, and Northern Ireland is as well placed as any part of the UK to offer innovative solutions.
Technology such as direct air capture and engineered removal methods will become an essential part of moving beyond net zero towards net negative emissions. Those technologies are nascent. The businesses that will develop them need to be founded today and to scale over the next decade. They need investment, certainty and confidence if they are to become globally competitive and properly supported.
The encouraging news is that Britain already possesses almost everything needed to succeed. We have world-class universities that produce cutting-edge research, exceptional engineers, innovative start-ups and university spin-outs, globally respected financial services and investors, and advanced manufacturing capability.
The UK’s GGR sector already contributes about £1.2 billion to the UK economy. It has the potential to contribute between £7 billion and £9 billion to GDP by 2050 while supporting more than 100,000 skilled jobs. The countries that build those technologies first will not simply reduce emissions at home; they will be central to global emission reductions for decades to come. Britain should aspire to become the global centre of carbon removal innovation, the home of future climate tech unicorns and a leading exporter of GGR technologies.
Luke Myer (Middlesbrough South and East Cleveland) (Lab)
Does the hon. Gentleman agree that creating industrial clusters is the best route to bringing in some of the new companies that look to scale up and invest? I recently met UnionDAC, which is looking to invest in Teesside. That is partly because of the huge amount of investment that is coming to the east coast cluster carbon capture, utilisation and storage project, which is creating 3,000 construction jobs as we speak. Does he therefore agree that the Government must continue to maintain the momentum for those clusters and new ones in next year’s spending review to create skilled jobs across the UK?
Edward Morello
There is a lot of truth in what the hon. Member has outlined. We see the most rapid transformation and progress where innovation and expertise are clustered.
British innovators are already developing world-leading GGR technologies. The problem is that many of them struggle to raise the long-term investment needed to move from successful demonstrations to commercial deployment. British companies have told me that they will be European or American by the end of next year if the UK does not do more to support them.
The Whitehead review made that point very clearly. It recognised that the United Kingdom possesses many of the ingredients required to become a global leader, but that early-stage GGR companies continue to face significant barriers to scaling up. Many of those businesses require substantial upfront capital before they generate meaningful revenue. Private investors understandably look for long-term certainty and a return on their investment. Without that certainty, investment simply flows elsewhere.
UK start-ups struggle to access patient capital at precisely the moment they need it most. Of all climate tech early start-ups that failed, 62% fail at series A, the start of the so-called valley of death. Britain has repeatedly invented world-leading technologies only to watch other countries commercialise them. We cannot allow that to happen again.
If we get this right, GGRs could become one of Britain’s great industrial success stories. If we get it wrong, we will again become purchasers of technologies developed elsewhere. The Government can create the long-term policy framework that gives markets confidence.
The publication of the GGR business model alongside the Whitehead review was an important milestone. The commitment to integrating GGR into the UK emissions trading scheme is another positive step, but companies developing GGRs are making decisions today about where to build their first commercial facilities. Those decisions will determine where future supply chains develop, where highly skilled jobs are created and where intellectual property remains.
What the sector is calling out for are low or no cost policy changes that would make a real difference until the response to the Whitehead review finally stops gathering dust on the Minister’s desk. Solutions could be amending the sustainable aviation fuel mandate, improving access to finance from public finance bodies, voluntary carbon market changes, expanding UK GGR standards to wider methods or endorsing interim standards, a new UK buyers’ club, a regulations audit, departmental sandboxes and standards for the emissions performance standard. We must give the market the certainty it is asking for and the investors the confidence to unlock that potential.
That brings me to what I believe is the single most important proposal that the Government should consider. The answer lies in creating a British carbon bank, a Government-seeded revolving fund that will crowd in private finance. A British carbon bank would provide long-term advanced market commitments for verified GGRs. That would de-risk the purchase for the offtaker as the credits are certified, provide the capital that the GGR project needs to start capturing greenhouse gases and generating carbon credit, and improve investor confidence because there is a guaranteed purchaser. Rather than the Government attempting to fund every project themselves, a British carbon bank would create guaranteed demand for high-quality removals over many years, allowing businesses to secure investment and scale their technologies with confidence.
The Whitehead review recognises exactly this challenge. It concluded that demand certainty will be fundamental if GGRs are to develop at the pace required. Without reliable long-term demand, many technologies will simply struggle to reach commercial scale.
One particularly interesting example is Terraset, a US charity. Rather than relying solely on traditional grant funding, Terraset uses philanthropic finance to early pre-purchase commitments to vetted projects, giving those projects the capital to actually remove greenhouse gases. Those advanced commitments provide early demand, giving companies confidence to develop technologies while demonstrating to investors that a future market exists. These projects deliver verified carbon credits to Terraset, which it then sells to buyers. Any revenue generated is then returned to the fund and gets deployed into new projects. For every $1 it deploys, it unlocks $5 in private finance and achieves a 15% mark-up for credits under this de-risk model. As a result of this profit margin, it is now attracting interest from institutional investors, including pension funds.
A British carbon bank would take that principle and apply it at a national scale. It would provide a clear signal that Britain intends to become the best place in the world to develop, deploy and commercialise greenhouse gas removal. One strength of a British carbon bank model is that it addresses the greatest barrier currently facing the sector: risk. The bank would purchase future carbon removals in advance, holding those credits until they have been independently verified and certified. There is, of course, a risk for the Government that some projects may ultimately fail to deliver the promised removals or not achieve certification. However, that risk can be significantly reduced through robust due diligence and careful product selection, as organisations such as Terraset have already demonstrated successfully.
Importantly, the model also overcomes the current “chicken and egg” problem in the market. Today, many buyers are reluctant to pre-purchase carbon removals because they bear all the delivery risk. By contrast, a British carbon bank would offer only certified verified credits to the market, making them far more attractive to businesses seeking high-integrity carbon removals while simultaneously providing developers with the up-front certainty they need to secure investment and scale their technologies. The market will determine which solutions ultimately prove effective, whether nature-based approaches, direct air capture or entirely new technologies that are yet to emerge. With a relatively small Government investment, we could seed this market, crowding in five or 10 times more in private finance.
Terraset supported Graphyte, which needed early-stage capital to move from planning into commercial deployment. Private buyers recognised the value of the project, but were not yet ready to commit at the scale or speed required. Through its revolving fund, Terraset made an advance commitment of just over $100,000, providing the confidence and working capital that enabled the project to proceed. Once Graphyte had delivered independently verified carbon removals, those credits were purchased by a commercial buyer, with the proceeds going back into the revolving fund to support the next generation of projects.
I believe that a British carbon bank could replicate this revolving model at scale, helping promising British companies bridge the gap between innovation and commercial success. Net zero is today’s problem, and net negative is tomorrow’s, but if we do not start thinking about it now, we will not be ready to meet that challenge. We should be ambitious. We should not settle for participating in the market—we should aim to lead it.
Will the Minister confirm precisely when the Government intend to publish their full response to the Whitehead review, and whether that will be before the House rises for the summer recess? Will he confirm whether the Government are giving serious consideration to the proposal for a British carbon bank or revolving fund to provide the long-term market certainty the sector has consistently called for? If the Government are not yet in a position to introduce longer-term reforms, what interim measures will they take to ensure that promising new UK GGR businesses are supported and not lost overseas while policies are being developed? Finally, will the Minister commit to continuing to work closely with the sector over the coming months, listening to businesses, investors and researchers, so that the UK can seize the opportunity to become a global leader in greenhouse gas removals rather than watching others move ahead?
Carbon does not recognise borders or respect international treaties; it is a global challenge that demands world-leading solutions. I believe that those solutions should be developed here in the UK.
The Minister for Energy (Michael Shanks)
May I congratulate the hon. Member for West Dorset (Edward Morello) on securing a debate on this important topic? I thank him for all his engagement on this and many other issues, and for his leadership on the energy transition. In the rising noise in and outside this place against facts on the climate crisis in front of us today, it is genuinely a relief to have conversations with him about what we can do about the reality. On that, he makes a hugely important contribution to the House. In all my engagements with him, I come away having learned something new; I thank him for that.
I will start where the hon. Gentleman started: by recognising that we cannot put off our response to the climate crisis to tomorrow. We are now living through extremely hot weather caused in part by the action that we did not take to tackle the climate crisis. While this is one of the hottest summers that we have lived through, it is almost certainly one of the coldest summers that we will live through, so every single step we can take to tackle this crisis should be taken.
We absolutely need greenhouse gas removal technologies to reach net zero and to tackle the climate crisis. Such technologies give us a not just a huge opportunity to balance the residual emissions from hard-to-decarbonise sectors, but—as we have said throughout all of the work the Government are doing on the clean power mission and beyond—an exciting opportunity to grow our economy and secure new investment into the UK. When I say that, I mean all parts of the UK, including Northern Ireland, which the hon. Member for Strangford (Jim Shannon) rightly always challenges me on. This is not just the Government’s view; it is firmly the view of the Intergovernmental Panel on Climate Change and our own independent Climate Change Committee. That is why we are looking ahead and investing in these technologies.
Last year, in our carbon budget and growth delivery plan, we set out how the UK will continue to reduce emissions in a way that lowers bills and secures good jobs, including developing and deploying GGRs at scale. We forecast 0.7 megatonnes of engineered GGRs deployed in 2030, with that figure increasing exponentially to 21.8 megatonnes by 2035. We are laying the groundwork now to support the massive growth that we expect to see in the 2030s, because, as exciting as these technologies are, they are new, and it will take a comprehensive and holistic policy framework to get us to where we need to be.
I will set out six steps, many of which will respond to the points made by the hon. Gentleman. The first is providing support to incentivise private investment through a contractual revenue support mechanism. That is the GGR business model, designed to stimulate private investment in GGRs by providing revenue support under a contract for difference mechanism. It aims to capitalise on growing demand for high integrity GGRs in the voluntary carbon market and, in the longer term, in the UK emissions trading scheme, designed to enable the deployment of GGR projects at scale in the UK while ensuring at all times value for money for taxpayers.
We are employing similar approaches to support energy from waste, with carbon capture and storage through the waste industrial carbon capture business model and large-scale bioenergy with carbon capture and storage, or BECCS, through our power BECCS business model. We are also exploring the case for financing GGR technologies not reliant on CO2 transport and storage infrastructure, such as enhanced rock weathering and CO2 mineralisation in building materials, as we recognise that there are a number of benefits to a diverse portfolio of GGR technologies. No decisions have been made on the particular intervention or mechanism.
I want to reference the point that the hon. Gentleman has raised with me before and he raised today as well on the British carbon bank, or the idea of some kind of revolving fund. It is a serious idea that we will look at carefully, because we recognise that there is a real benefit to having that portfolio in place. We have already invested money, as I will come on to, but looking at interventions like that is important. We will continue to engage with him and the wider sector on how that could work.
Secondly, we are introducing a new standard to ensure that investors and the public have confidence in these technologies. To complement the business models, we have commissioned the British Standards Institution to develop methodologies under an official UK GGR standard, and that is expected to be published next year. This is about making sure that carbon removals are genuine and verifiable, and having a standard in place so that we can objectively assess the viability and suitability of projects applying to the business model.
The BSI development process generates high-integrity standards and benchmarks, bringing together industry specialists, academics and policymakers from across relevant sectors to produce a consensus-based final product. It is an example of a strong point made by the hon. Gentleman: everything we need to make this work is already here in Britain. The academics, the industry specialists, the skills and the capabilities are all here, and we just need to look at how we capitalise on those resources as quickly as possible.
Thirdly, we know that carbon capture, usage and storage infrastructure is critical for enabling some of these technologies, and we have been committed to deploying CCUS at scale. I agree with my hon. Friend the Member for Middlesbrough South and East Cleveland (Luke Myer) about the need to capitalise on investment that we have already made, and to continue down that path by investing in these projects. In October 2024, just a few months after we took office, we made a significant funding commitment of up to £21.7 billion over 25 years to kick-start the CCUS industry here in Britain. GGR projects have been able to apply to the expansion of the HyNet and East Coast clusters through the HyNet Track-1 expansion process, the Teesside selection process and the non-pipeline transport pathfinder process—all very catchy names. I can already confirm that the HyNet Track-1 expansion includes two GGR projects that are in the negotiation phase of that process.
Fourthly, we are investing in innovation. For many of these technologies, there is research that still needs to be undertaken and there are breakthroughs that are waiting to be made. We have already invested over £80 million through the direct air capture and greenhouse gas removal innovation programme and the UK Research and Innovation funded greenhouse gas removal demonstrator programme and its co-ordinating hub.
The carbon budget and growth delivery plan committed to launching a series of cleantech innovation challenges that target mission-critical innovation. These will set specific, measurable, time-bound goals for innovation, co-owned with industry, which will mobilise public and private sector investment and focus policy efforts on creating the necessary market pull for new technologies and, in the process, de-risking those investments into new innovations.
That leads me to the fifth point about how we stimulate market demand. We want to engineer GGR projects to generate high-quality carbon credits that can be sold on high-integrity negative emissions markets, and so we will maximise the opportunity for the voluntary carbon markets to channel private finance into those GGR projects. At COP29, we launched six principles for voluntary carbon and nature market integrity to guide organisations into taking voluntary action towards nature-positive and net zero goals.
When we consulted on those principles with stakeholders, they highlighted that, in order to unlock the full potential of the voluntary carbon market, there is a need for greater clarity on the definition of high-quality carbon credits and how credits could be used in corporate net zero claims. Alongside the Governments of Singapore and Kenya, we are leading development of the Coalition to Grow Carbon Markets to strengthen corporate demand for high-integrity carbon credits, and anyone and everyone is welcome to join that coalition.
Our long-term ambition is for a competitive negative emissions market, underpinned by demand in the carbon market and the UK emissions trading scheme. We have signalled our intention to include GGRs in the UK ETS. Last summer, the ETS authority published a response to the consultation on the inclusion of GGRs in the ETS, setting out further details on how we will do this.
Finally, we are considering the findings of the independent review into GGRs that we commissioned last year under my noble Friend and all-round GGR and general energy expert and nerd, Lord Whitehead, who did fantastic work. I can assure the hon. Member for West Dorset and the House that that review is certainly not gathering dust on my desk; I have been flicking through it far too much for it to be gathering dust. I can say to the hon. Gentleman that the review includes many interesting and useful conclusions. We are taking time to go through them in detail, but we aim to publish the response this month. I am sorry that that is not quite an exact date, but I hope it is close enough.
I hope that the steps that I have outlined today will reassure the House that this Government take the future of GGRs extremely seriously. We know that these technologies will be essential to reducing our emissions while growing the economy on the road to net zero by 2050, and that is why we are acting now. I want to conclude by coming back to the point where the hon. Gentleman started. It is absolutely critical that we rebuild, where we can, the consensus on acting on the most existential crisis that this planet faces. The climate crisis is not some future threat that we can have a theoretical debate about now and worry about later; it is a very real and pressing threat, and GGRs will play a really important part in addressing it. The Government are determined to make that happen, and there is an economic opportunity if we get this right as well. I absolutely commit to working with the wider industry, with the hon. Gentleman and with everyone else who has an interest in this fascinating subject in order to make this work.
Madam Deputy Speaker (Ms Nusrat Ghani)
Unless I am misunderstanding him, the Minister has committed to making a policy announcement this month. There are only a few more sitting days, and he will know that Mr Speaker does not take lightly policy announcements being made outside the House; this House is where those announcements should be made for scrutiny by Back-Bench MPs. No doubt the Minister’s staff will be scribbling that down.
Question put and agreed to.
Deferred Divisions
That the draft Children’s Wellbeing and School Act 2026 (Establishment of Schools) (Consequential Amendments) Regulations 2026, which were laid before this House on 20 May, be approved.
The House divided: - Ayes: 369 / Noes: 102 - Question accordingly agreed to.
That the draft Supply of Machinery (Safety) (Amendment etc.) and the EU Machinery Regulation (Enforcement etc. in Northern Ireland) Regulations 2026, which were laid before this House on 1 June, be approved.
The House divided: - Ayes: 317 / Noes: 103 - Question accordingly agreed to.
That the draft Town and Country Planning (Discharge of Local Planning Authority Functions) (England) Regulations 2026, which were laid before this House on 8 June, be approved.
The House divided: - Ayes: 283 / Noes: 182 - Question accordingly agreed to.
Draft Trade Unions (Permissible Means of Voting) and Employment Rights (Unfair Dismissal) (Amendment) Order 2026
Draft Code of Practice on Electronic and Workplace Ballots For Statutory Trafe Union Ballots
(1 week ago)
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The Committee divided: - Ayes: 11 / Noes: 4 - Question accordingly agreed to.
The Committee divided: - Ayes: 11 / Noes: 4 - Question accordingly agreed to.
The Parliamentary Under-Secretary of State for Business and Trade (Kate Dearden)
I beg to move,
That the Committee has considered the draft Trade Unions (Permissible Means of Voting) and Employment Rights (Unfair Dismissal) (Amendment) Order 2026.
The Chair
With this it will be convenient to consider the draft Code of Practice on Electronic and Workplace Ballots for Statutory Trade Union Ballots.
Kate Dearden
It is a pleasure to serve under your chairship, Ms Vaz. The draft order and the draft code of practice were laid before the House on 22 June 2026. The statutory instrument and the guidance that we are debating relate to statutory trade union ballots under the Trade Union and Labour Relations (Consolidation) Act 1992. The instrument also corrects a minor error in unfair dismissal legislation in section 105 of the Employment Rights Act 1996, to reflect changes made under the Employment Rights Act 2025.
At present, the law requires almost all statutory trade union ballots to be conducted solely by post. That approach has not kept pace with the way in which people live, work and participate in democratic processes. It makes holding a ballot unduly expensive and time-consuming, and it can act as an unnecessary barrier to democratic participation in a union. The statutory instrument addresses that directly. It will bring trade union balloting into line with modern secure voting practices that are already widely used in other contexts, including by political parties and listed companies. In so doing, it will deliver on a Government manifesto commitment to supporting greater participation in the democratic processes that shape working life.
The practical changes we are making are long overdue. They are about enabling trade union members to take part in union decisions in more accessible and convenient ways, while maintaining the high standards of fairness, secrecy and security that are set out in existing legislation. The statutory instrument will introduce three additional methods of voting, alongside post.
First, electronic voting will allow members to cast their votes online, using secure access credentials. That will be permitted only where a union member has provided a personal email or telephone number to their union.
Secondly, hybrid voting—in which members receive voting materials by post, but may choose to return their vote either by post or electronically—will enable workers to choose how they cast their vote, without requiring any voter to use online options if they would prefer not to.
Thirdly, in workplace voting, which is for industrial action ballots only, voting can take place in person, under the supervision of an independent scrutineer, at an appropriately secured location in the workplace. Importantly, the statutory instrument will expand the range of voting methods that can be used, but postal voting will remain an option for unions to use.
The Government are committed to bringing forward electronic and workplace balloting quickly, securely and in a way that works properly in practice. That is why we are taking a phased approach to delivery. In phase 1, the new methods will be made available across all statutory trade union ballots, with the exception of statutory recognition and derecognition ballots. In phase 2, we will extend the electronic and hybrid voting options in 2027 to recognition and derecognition ballots.
Alongside that, we will continue to work closely with key stakeholders to support implementation and oversee how those voting methods are operating in practice. As part of that, in the coming months we intend to launch a senior oversight board comprised of unions, businesses, scrutineers and cyber-security experts, who will share feedback on the operation of electronic balloting. By allowing those additional methods, unions will be able to reach their members in ways that are more convenient and inclusive for those members to participate, including members who may benefit from greater flexibility and accessibility in how they engage with ballots and their union democracy.
Alongside the draft order, we have laid a draft statutory code of practice on electronic and workplace ballots. The code will provide detailed, practical guidance on how electronic and workplace balloting should be conducted in practice, ensuring that those methods are used in a way that is secure, fair and accessible. The code will give clarity to unions, independent scrutineers and employers, and will support a consistent approach across ballots.
I turn now to the question of security and safeguards, which will be of interest to the Committee, to provide reassurance to Members that the security of the ballot process sits at the heart of this legislation. Modernisation must go hand in hand with maintaining confidence. That is why strong safeguards underpin our approach and are built into each of the balloting methods that we are providing for. Section 54 of the Employment Relations Act 2004—the enabling power under which we are making the changes—already sets clear standards. Any permitted method of voting must enable a ballot to meet those standards—namely, that those entitled to vote have the opportunity to do so, that votes are cast in secret, and that the risk of unfairness or malpractice is minimised.
The draft order and the draft code also set out detailed requirements covering the operation of electronic and workplace balloting. Those include independent oversight by scrutineers, clear requirements on ballot security, and measures to ensure the reliability and integrity of the voting systems used. For electronic and hybrid balloting, that includes requirements relating to the protection of voter information, the security of voting systems and detailed audit and monitoring arrangements, alongside mandatory independent cyber-security certification that must be held by scrutineers before they can provide those methods.
Similarly, clear requirements are built into the workplace option. Workplace voting is designed to operate in a limited and controlled way. It will be available only for industrial action ballots, reflecting the fact that those relate to workplace matters rather than to internal union processes. Workplace voting can be used only if the union and the employer agree and set out the terms of the voting in advance of any ballot. Where it is used, it must be independently supervised and conducted in line with detailed requirements, to ensure that the process remains secure and free of interference.
The statutory instrument is essential to bringing trade union ballots into the 21st century, and will ensure that workers are provided with accessible and straightforward processes to participate in the democracy of their union. It will remove the costly and bureaucratic requirement that forces all ballots to be held by post, thereby allowing the way in which unions ballot finally to reflect the technological progress of modern life, while holding firmly to the core principles of fairness, accessibility and security that have always underpinned them. This reform is measured, proportionate and long overdue.
This legislation sets out clear safeguards and technical standards to ensure the integrity and confidence of the ballot process, while making it meaningfully easier and more convenient for working people to take part in the decisions that affect them. I therefore commend the statutory instrument and the accompanying draft code of practice to the Committee. I trust that Members will support them.
Gareth Davies (Grantham and Bourne) (Con)
It is a great pleasure to serve on this Committee and, as always, to see you in the Chair, Ms Vaz. It is also a pleasure to see the Minister in her place. I thank her for the explanation that she offered of the Government’s intentions with the draft order.
It is important to make it clear from the outset that secondary legislation is always a balancing act. In this case, the balance is between modernising participation and trade union democracy, and ensuring that the safeguards protecting the integrity, security and fairness of statutory ballots keep pace with the methods used to conduct them. Those aims are not mutually exclusive, and it is our job to ensure that we get them right. To that end—this will be no surprise—I have a set of questions for the Minister, and I hope that she will be able to provide some answers.
First, parts 1 and 2 of the draft order will, for the first time, permit electronic, hybrid and workplace voting for statutory trade union ballots, as the Minister said. Paragraph 5.14 of the Minister’s explanatory memorandum explains the Government’s reasoning against the pilot for electronic balloting, but I could not see any equivalent justification for workplace balloting, which, as the impact assessment contained in the memorandum confirms, has not been costed. Will the Minister explain why workplace voting, an entirely new voting method, will be introduced by the draft order without a pilot or costed evidence?
Secondly, the Government confirm on page 2 that the trade union itself will be the responsible person determining which voting method or methods are used for its own statutory ballots. Will the Minister explain why the trade union has been designated the responsible person for its own ballots, rather than, for example, an independent scrutineer? How does she seek, under the proposed set-up, to avoid a conflict between the union’s interest in the ballot outcome and its judgment on the practicality and security of the method used?
Thirdly, paragraph 9.9 of the explanatory memorandum refers to a requirement for scrutineers’ electronic systems to be independently audited and certified. Will the Minister clarify which body is responsible for enforcing that standard and what happens if a system is found to be compromised or fails that certification process? Paragraph 9.2 gives an estimated annual savings range from
“£2.0 million to £8.2 million, depending on the level of take-up”,
which is confirmed in paragraph 9.3 as unknown. Why such a massive range from £2 million to £8 million, and why is there not a clearer estimate of the likely take-up of the new methods? As I said, the Government have said in their documentation that it is unknown. Paragraph 10.3 confirms that
“A statutory review clause is included in the instrument.”
When will that review take place, and what criteria will be used to judge whether the new voting methods have operated safely and fairly?
Finally, law firm Morgan Lewis has warned that this statutory instrument
“may reduce the scope for successful challenges based solely on procedural irregularities.”
What is the Minister’s reaction to that statement? Do the Government accept that the measures will narrow employers’ practical routes to challenge a ballot’s validity?
Overall, the draft order forms part of the wider Employment Rights Act 2025, which, as we in the official Opposition have consistently said, has damaged jobs and opportunity across our country. My party’s long-standing and long-held policy is therefore to oppose any parts of the legislation that we believe hand unions sweeping powers. As I have highlighted, real questions remain about the process used to bring this statutory instrument forward. For those clear reasons, we will vote against the measures.
Kate Dearden
I thank the shadow Minister for his remarks and questions.
The draft order addresses a simple issue: the current requirement to conduct statutory trade union ballots solely by post has not kept pace with how people engage today, and balloting has become an overly burdensome and expensive process. That is why the range of options I outlined—online, hybrid and workplace balloting—which the shadow Minister alluded to, are necessary. The requirement to conduct ballots by post was born out of the legitimate need to guarantee secrecy and protection from union, third-party or employer interference, but those principles will not be reduced by this statutory instrument; they will, in fact, be improved upon in many cases.
On the shadow Minister’s point about the chosen methods, electronic balloting has been a well-established option for businesses and political parties—including his own party—for many years. The Government will deliver modern and secure electronic workplace balloting, as we made clear in our manifesto and our wider Make Work Pay agenda. We are pleased to have progressed in that work and to have laid this legislation—it is a shame that the Opposition cannot support it. We have engaged with stakeholders, worked with experts and consulted on the draft code of practice to develop our approach to delivering the balloting methods for statutory union ballots. We are confident that our approach reduces bureaucracy and enables the increased participation of union members, while ensuring high security standards.
The shadow Minister reflected more widely on the varied options in the legislation and asked in particular about the review. We will, of course, keep him updated as we proceed with the wider scrutiny board and as the legislation comes into force. That is important, because we want to ensure that every measure in our Make Work Pay initiative and in the Employment Rights Act works in practice in workplaces across the country, particularly for trade unions.
That leads me to the shadow Minister’s second point, on the responsible person and the independent scrutineer. As he said, the responsible person will decide which voting method, or combination of methods, will be used to conduct a statutory ballot. When determining the method or combination of methods to be used for a ballot, the responsible person must apply the criteria and consider the factors specified in the legislation and the code of practice. Of course, if the union is acting on that ballot, it is best placed to decide what the combination of methods must be. That is why the responsible person is the trade union calling the ballot.
We are making the necessary legislation under section 54 of the Employment Relations Act 2004. Under that section, a new method may be permitted only if the Secretary of State considers that a ballot conducted by that method could meet the required standard. A method meets that standard
“if it is such that…those entitled to vote have an opportunity to do so…votes cast are secret…the risk of any unfairness or malpractice is minimised.”
Gareth Davies
The Minister has sought to address my question about the responsible person, but can she see the logic that I am trying to deploy? Why can a trade union be designated a responsible person, but an independent scrutineer cannot? Does she see how that opens up questions about the independence of the process, and did she think consider an independent scrutineer to avoid that criticism?
Kate Dearden
I was just getting to the powers that we are using for the statutory instrument. Trade unions will be required to be the responsible person because they are best placed to consider the factors and criteria before choosing the ballot method.
We have gone through the range of options that will be available. As I mentioned, the choice must include postal voting, even though that is not a new method. As I have mentioned, we have included in the legislation a presumption to reduce the factors and criteria to be considered for postal voting, to reflect the fact that it is a long-established method with which members will already be familiar and that trade unions know how best to approach it.
However, the responsible person must not be aware of
“any reason why it would not be possible to satisfy the requirements of the relevant legislation which relate to the means of voting which are to be used in the ballot or election.”
That has been made clear to trade unions, which will have been designated the responsible person, alongside the range of other options that they must consider. That communicates clearly to trade unions their roles and responsibilities as the responsible person. As the shadow Minister knows, the responsibilities of independent scrutineers will continue in their role under the legislation.
Independent scrutineers, which the shadow Minister asked about, are either named in or meet the requirements of the Trade Union Ballots and Elections (Independent Scrutineer Qualifications) Order 1993, which sets out clear requirements on who can be a scrutineer. The organisations named in that order have been independently conducting statutory ballots for many years, and we are confident in their independence. In the coming months, we will progress work on updating that order to expand the list of named permitted scrutineers. If he is interested, we will be happy to keep him updated on that particular work strand.
The shadow Minister asked about the impact assessment of the introduction of electronic balloting. The primary impacts include up to £70 million of net present social value. The introduction of new balloting methods for statutory trade union ballots simply brings them in line with modern voting practices used regularly by many other organisations, including political parties and private companies, as I said. Requiring them to pilot those balloting methods would unnecessarily restrict their ability to effectively engage with their members and ensure that their views are properly reflected.
We have no reliable evidence suggesting that electronic balloting will increase the frequency of participation. That is why a review will be important to our understanding of how the range of available balloting methods work out in different workplaces and trade unions. The range in savings estimates varies as it will depends on the uptake of the different balloting methods. As electronic ballots will require the use of personal email addresses or mobile numbers, unions will need to gather that information from their members before they commence.
The draft order details operational, audit and reporting requirements on electronic voting methods well beyond those required for postal voting, to ensure the security of the ballot and retain the confidence of the public in electronic voting. We have developed those clear, secure and proportionate approaches to enable statutory ballots to be conducted via means other than post. The draft order has been carefully considered, through engagement with stakeholders, to ensure that their legitimate concerns about security and interference are managed while ensuring that accessibility, democracy and ease of use remain central to the balloting process. The draft order requires stringent processes to be followed for the conduct of electronic balloting, to ensure that the integrity of the ballot remains unquestionable.
As I have mentioned, this change is long overdue. I am pleased we are the Government to finally introduce legislation to modernise these processes. I believe I have answered all the questions, and I look forward to the Committee’s support for the draft order and the associated draft code of practice.
Question put.
Draft Trade Unions (Permissible Means of Voting) and Employment Rights (Unfair Dismissal) (Amendment) Order 2026
Draft Code of Practice on Electronic and Workplace Ballots For Statutory Trade Union Ballots
(1 week ago)
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The Committee divided: - Ayes: 11 / Noes: 4 - Question accordingly agreed to.
The Committee divided: - Ayes: 11 / Noes: 4 - Question accordingly agreed to.
The Parliamentary Under-Secretary of State for Business and Trade (Kate Dearden)
I beg to move,
That the Committee has considered the draft Trade Unions (Permissible Means of Voting) and Employment Rights (Unfair Dismissal) (Amendment) Order 2026.
The Chair
With this it will be convenient to consider the draft Code of Practice on Electronic and Workplace Ballots for Statutory Trade Union Ballots.
Kate Dearden
It is a pleasure to serve under your chairship, Ms Vaz. The draft order and the draft code of practice were laid before the House on 22 June 2026. The statutory instrument and the guidance that we are debating relate to statutory trade union ballots under the Trade Union and Labour Relations (Consolidation) Act 1992. The instrument also corrects a minor error in unfair dismissal legislation in section 105 of the Employment Rights Act 1996, to reflect changes made under the Employment Rights Act 2025.
At present, the law requires almost all statutory trade union ballots to be conducted solely by post. That approach has not kept pace with the way in which people live, work and participate in democratic processes. It makes holding a ballot unduly expensive and time-consuming, and it can act as an unnecessary barrier to democratic participation in a union. The statutory instrument addresses that directly. It will bring trade union balloting into line with modern secure voting practices that are already widely used in other contexts, including by political parties and listed companies. In so doing, it will deliver on a Government manifesto commitment to supporting greater participation in the democratic processes that shape working life.
The practical changes we are making are long overdue. They are about enabling trade union members to take part in union decisions in more accessible and convenient ways, while maintaining the high standards of fairness, secrecy and security that are set out in existing legislation. The statutory instrument will introduce three additional methods of voting, alongside post.
First, electronic voting will allow members to cast their votes online, using secure access credentials. That will be permitted only where a union member has provided a personal email or telephone number to their union.
Secondly, hybrid voting—in which members receive voting materials by post, but may choose to return their vote either by post or electronically—will enable workers to choose how they cast their vote, without requiring any voter to use online options if they would prefer not to.
Thirdly, in workplace voting, which is for industrial action ballots only, voting can take place in person, under the supervision of an independent scrutineer, at an appropriately secured location in the workplace. Importantly, the statutory instrument will expand the range of voting methods that can be used, but postal voting will remain an option for unions to use.
The Government are committed to bringing forward electronic and workplace balloting quickly, securely and in a way that works properly in practice. That is why we are taking a phased approach to delivery. In phase 1, the new methods will be made available across all statutory trade union ballots, with the exception of statutory recognition and derecognition ballots. In phase 2, we will extend the electronic and hybrid voting options in 2027 to recognition and derecognition ballots.
Alongside that, we will continue to work closely with key stakeholders to support implementation and oversee how those voting methods are operating in practice. As part of that, in the coming months we intend to launch a senior oversight board comprised of unions, businesses, scrutineers and cyber-security experts, who will share feedback on the operation of electronic balloting. By allowing those additional methods, unions will be able to reach their members in ways that are more convenient and inclusive for those members to participate, including members who may benefit from greater flexibility and accessibility in how they engage with ballots and their union democracy.
Alongside the draft order, we have laid a draft statutory code of practice on electronic and workplace ballots. The code will provide detailed, practical guidance on how electronic and workplace balloting should be conducted in practice, ensuring that those methods are used in a way that is secure, fair and accessible. The code will give clarity to unions, independent scrutineers and employers, and will support a consistent approach across ballots.
I turn now to the question of security and safeguards, which will be of interest to the Committee, to provide reassurance to Members that the security of the ballot process sits at the heart of this legislation. Modernisation must go hand in hand with maintaining confidence. That is why strong safeguards underpin our approach and are built into each of the balloting methods that we are providing for. Section 54 of the Employment Relations Act 2004—the enabling power under which we are making the changes—already sets clear standards. Any permitted method of voting must enable a ballot to meet those standards—namely, that those entitled to vote have the opportunity to do so, that votes are cast in secret, and that the risk of unfairness or malpractice is minimised.
The draft order and the draft code also set out detailed requirements covering the operation of electronic and workplace balloting. Those include independent oversight by scrutineers, clear requirements on ballot security, and measures to ensure the reliability and integrity of the voting systems used. For electronic and hybrid balloting, that includes requirements relating to the protection of voter information, the security of voting systems and detailed audit and monitoring arrangements, alongside mandatory independent cyber-security certification that must be held by scrutineers before they can provide those methods.
Similarly, clear requirements are built into the workplace option. Workplace voting is designed to operate in a limited and controlled way. It will be available only for industrial action ballots, reflecting the fact that those relate to workplace matters rather than to internal union processes. Workplace voting can be used only if the union and the employer agree and set out the terms of the voting in advance of any ballot. Where it is used, it must be independently supervised and conducted in line with detailed requirements, to ensure that the process remains secure and free of interference.
The statutory instrument is essential to bringing trade union ballots into the 21st century, and will ensure that workers are provided with accessible and straightforward processes to participate in the democracy of their union. It will remove the costly and bureaucratic requirement that forces all ballots to be held by post, thereby allowing the way in which unions ballot finally to reflect the technological progress of modern life, while holding firmly to the core principles of fairness, accessibility and security that have always underpinned them. This reform is measured, proportionate and long overdue.
This legislation sets out clear safeguards and technical standards to ensure the integrity and confidence of the ballot process, while making it meaningfully easier and more convenient for working people to take part in the decisions that affect them. I therefore commend the statutory instrument and the accompanying draft code of practice to the Committee. I trust that Members will support them.
Gareth Davies (Grantham and Bourne) (Con)
It is a great pleasure to serve on this Committee and, as always, to see you in the Chair, Ms Vaz. It is also a pleasure to see the Minister in her place. I thank her for the explanation that she offered of the Government’s intentions with the draft order.
It is important to make it clear from the outset that secondary legislation is always a balancing act. In this case, the balance is between modernising participation and trade union democracy, and ensuring that the safeguards protecting the integrity, security and fairness of statutory ballots keep pace with the methods used to conduct them. Those aims are not mutually exclusive, and it is our job to ensure that we get them right. To that end—this will be no surprise—I have a set of questions for the Minister, and I hope that she will be able to provide some answers.
First, parts 1 and 2 of the draft order will, for the first time, permit electronic, hybrid and workplace voting for statutory trade union ballots, as the Minister said. Paragraph 5.14 of the Minister’s explanatory memorandum explains the Government’s reasoning against the pilot for electronic balloting, but I could not see any equivalent justification for workplace balloting, which, as the impact assessment contained in the memorandum confirms, has not been costed. Will the Minister explain why workplace voting, an entirely new voting method, will be introduced by the draft order without a pilot or costed evidence?
Secondly, the Government confirm on page 2 that the trade union itself will be the responsible person determining which voting method or methods are used for its own statutory ballots. Will the Minister explain why the trade union has been designated the responsible person for its own ballots, rather than, for example, an independent scrutineer? How does she seek, under the proposed set-up, to avoid a conflict between the union’s interest in the ballot outcome and its judgment on the practicality and security of the method used?
Thirdly, paragraph 9.9 of the explanatory memorandum refers to a requirement for scrutineers’ electronic systems to be independently audited and certified. Will the Minister clarify which body is responsible for enforcing that standard and what happens if a system is found to be compromised or fails that certification process? Paragraph 9.2 gives an estimated annual savings range from
“£2.0 million to £8.2 million, depending on the level of take-up”,
which is confirmed in paragraph 9.3 as unknown. Why such a massive range from £2 million to £8 million, and why is there not a clearer estimate of the likely take-up of the new methods? As I said, the Government have said in their documentation that it is unknown. Paragraph 10.3 confirms that
“A statutory review clause is included in the instrument.”
When will that review take place, and what criteria will be used to judge whether the new voting methods have operated safely and fairly?
Finally, law firm Morgan Lewis has warned that this statutory instrument
“may reduce the scope for successful challenges based solely on procedural irregularities.”
What is the Minister’s reaction to that statement? Do the Government accept that the measures will narrow employers’ practical routes to challenge a ballot’s validity?
Overall, the draft order forms part of the wider Employment Rights Act 2025, which, as we in the official Opposition have consistently said, has damaged jobs and opportunity across our country. My party’s long-standing and long-held policy is therefore to oppose any parts of the legislation that we believe hand unions sweeping powers. As I have highlighted, real questions remain about the process used to bring this statutory instrument forward. For those clear reasons, we will vote against the measures.
Kate Dearden
I thank the shadow Minister for his remarks and questions.
The draft order addresses a simple issue: the current requirement to conduct statutory trade union ballots solely by post has not kept pace with how people engage today, and balloting has become an overly burdensome and expensive process. That is why the range of options I outlined—online, hybrid and workplace balloting—which the shadow Minister alluded to, are necessary. The requirement to conduct ballots by post was born out of the legitimate need to guarantee secrecy and protection from union, third-party or employer interference, but those principles will not be reduced by this statutory instrument; they will, in fact, be improved upon in many cases.
On the shadow Minister’s point about the chosen methods, electronic balloting has been a well-established option for businesses and political parties—including his own party—for many years. The Government will deliver modern and secure electronic workplace balloting, as we made clear in our manifesto and our wider Make Work Pay agenda. We are pleased to have progressed in that work and to have laid this legislation—it is a shame that the Opposition cannot support it. We have engaged with stakeholders, worked with experts and consulted on the draft code of practice to develop our approach to delivering the balloting methods for statutory union ballots. We are confident that our approach reduces bureaucracy and enables the increased participation of union members, while ensuring high security standards.
The shadow Minister reflected more widely on the varied options in the legislation and asked in particular about the review. We will, of course, keep him updated as we proceed with the wider scrutiny board and as the legislation comes into force. That is important, because we want to ensure that every measure in our Make Work Pay initiative and in the Employment Rights Act works in practice in workplaces across the country, particularly for trade unions.
That leads me to the shadow Minister’s second point, on the responsible person and the independent scrutineer. As he said, the responsible person will decide which voting method, or combination of methods, will be used to conduct a statutory ballot. When determining the method or combination of methods to be used for a ballot, the responsible person must apply the criteria and consider the factors specified in the legislation and the code of practice. Of course, if the union is acting on that ballot, it is best placed to decide what the combination of methods must be. That is why the responsible person is the trade union calling the ballot.
We are making the necessary legislation under section 54 of the Employment Relations Act 2004. Under that section, a new method may be permitted only if the Secretary of State considers that a ballot conducted by that method could meet the required standard. A method meets that standard
“if it is such that…those entitled to vote have an opportunity to do so…votes cast are secret…the risk of any unfairness or malpractice is minimised.”
Gareth Davies
The Minister has sought to address my question about the responsible person, but can she see the logic that I am trying to deploy? Why can a trade union be designated a responsible person, but an independent scrutineer cannot? Does she see how that opens up questions about the independence of the process, and did she think consider an independent scrutineer to avoid that criticism?
Kate Dearden
I was just getting to the powers that we are using for the statutory instrument. Trade unions will be required to be the responsible person because they are best placed to consider the factors and criteria before choosing the ballot method.
We have gone through the range of options that will be available. As I mentioned, the choice must include postal voting, even though that is not a new method. As I have mentioned, we have included in the legislation a presumption to reduce the factors and criteria to be considered for postal voting, to reflect the fact that it is a long-established method with which members will already be familiar and that trade unions know how best to approach it.
However, the responsible person must not be aware of
“any reason why it would not be possible to satisfy the requirements of the relevant legislation which relate to the means of voting which are to be used in the ballot or election.”
That has been made clear to trade unions, which will have been designated the responsible person, alongside the range of other options that they must consider. That communicates clearly to trade unions their roles and responsibilities as the responsible person. As the shadow Minister knows, the responsibilities of independent scrutineers will continue in their role under the legislation.
Independent scrutineers, which the shadow Minister asked about, are either named in or meet the requirements of the Trade Union Ballots and Elections (Independent Scrutineer Qualifications) Order 1993, which sets out clear requirements on who can be a scrutineer. The organisations named in that order have been independently conducting statutory ballots for many years, and we are confident in their independence. In the coming months, we will progress work on updating that order to expand the list of named permitted scrutineers. If he is interested, we will be happy to keep him updated on that particular work strand.
The shadow Minister asked about the impact assessment of the introduction of electronic balloting. The primary impacts include up to £70 million of net present social value. The introduction of new balloting methods for statutory trade union ballots simply brings them in line with modern voting practices used regularly by many other organisations, including political parties and private companies, as I said. Requiring them to pilot those balloting methods would unnecessarily restrict their ability to effectively engage with their members and ensure that their views are properly reflected.
We have no reliable evidence suggesting that electronic balloting will increase the frequency of participation. That is why a review will be important to our understanding of how the range of available balloting methods work out in different workplaces and trade unions. The range in savings estimates varies as it will depends on the uptake of the different balloting methods. As electronic ballots will require the use of personal email addresses or mobile numbers, unions will need to gather that information from their members before they commence.
The draft order details operational, audit and reporting requirements on electronic voting methods well beyond those required for postal voting, to ensure the security of the ballot and retain the confidence of the public in electronic voting. We have developed those clear, secure and proportionate approaches to enable statutory ballots to be conducted via means other than post. The draft order has been carefully considered, through engagement with stakeholders, to ensure that their legitimate concerns about security and interference are managed while ensuring that accessibility, democracy and ease of use remain central to the balloting process. The draft order requires stringent processes to be followed for the conduct of electronic balloting, to ensure that the integrity of the ballot remains unquestionable.
As I have mentioned, this change is long overdue. I am pleased we are the Government to finally introduce legislation to modernise these processes. I believe I have answered all the questions, and I look forward to the Committee’s support for the draft order and the associated draft code of practice.
Question put.
Draft Batteries (Placing on the Market) (Northern Ireland) Regulations 2026
(1 week ago)
General CommitteesRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Chair
Before we start, just a quick domestic. If we open the windows, the heat will probably get worse, and the doors have to be closed, so please feel free to divest yourselves of clothing within reason.
The Parliamentary Under-Secretary of State for Environment, Food and Rural Affairs (Mary Creagh)
I beg to move,
That the Committee has considered the draft Batteries (Placing on the Market) (Northern Ireland) Regulations 2026.
It is a pleasure to serve under your chairmanship, Dr Murrison. I have immediately availed myself of your generous offer to take some clothes off; it is always a good way to start the afternoon. If anyone has had the scampi and chips in the Members’ Tea Room, that will keep us powering through.
These draft regulations were laid before the House on 4 June. In 2023, the European Union replaced its 2006 batteries directive with a new batteries regulation, which introduced updated “placing on the market” requirements for batteries, including design, information and labelling specifications. The EU regulation achieves several objectives. By introducing new requirements relating to carbon footprint, performance, durability and recycled content, and by updating the requirements for the removability and replaceability of batteries from containing devices, it addresses the environmental and safety performance of batteries.
The EU regulation introduces specific safety requirements for stationary battery energy storage systems and updates information requirements, including on batteries’ state of health and expected lifetime. The EU regulation introduces a digital battery passport and supply chain due diligence policies for larger businesses that are placing batteries on the market. Previous requirements relating to the restriction of certain substances in batteries are also carried forward. The EU regulation introduces conformity assessments with the CE mark to demonstrate compliance with the requirements that I have just listed.
Those changes reflect the rapid growth in sectors such as electric vehicles—including cars, vans and e-bikes—portable electronics and energy storage, alongside the increasing volume and complexity of batteries now in circulation. Those requirements apply directly in Northern Ireland, as they do in EU member states. They phase in over time, meaning that some requirements are already in force, and others are due to come into force on future dates specified by the EU regulation.
Sir Alec Shelbrooke (Wetherby and Easingwold) (Con)
I am listening very carefully, and this is about assuring the battery manufacturing process. Is it just these draft regulations or is research being done into thermal runaway and how toxic fallout from the vapourisation of heavy metals can fall on to farmland? A big concern in my constituency is that thermal runaway in battery storage at solar sites could poison land through the vapourisation of heavy metals. Is there any research into that safety concern?
Mary Creagh
I am not aware of any research, but there is work going on through our circular economy strategy, which we have co-designed with industry. As part of that, we have looked at transport and waste electricals, and I am certain that there are transport experts in those working groups. We have to get to a circular economy, not just for batteries but for tyres, which also have a habit of miraculously catching fire after being collected. We need to consider that as part of our circular economy work, but I am happy to take a note and write further to the right hon. Gentleman on that. It is mostly a matter for the Department for Energy Security and Net Zero, but as I said, the complexity and location of batteries are changing, and we do not want to end up with contaminants and pollutants.
Sir Alec Shelbrooke
I thank the Minister for that answer. That is something I have been pushing on. It is an important aspect of battery storage in a rural constituency, so I very much accept her offer to write to me with any information she may have.
Mary Creagh
I will undertake to do that. If I cannot do it myself, I will pass it on to my DESNZ colleagues.
Mary Creagh
I will make a little progress, if I may. The changes will apply directly in Northern Ireland and will phase in over time. They apply in Northern Ireland under the Windsor framework. As an EU regulation, the obligations within it apply directly, without the need for transposition. The draft instrument, in a reserved policy area, is the domestic legislation required to enable effective enforcement of these obligations in Northern Ireland.
Implementing the measures helps Northern Ireland to maintain its dual market access. It does so by establishing a proportionate enforcement, offences and penalties regime in Northern Ireland for the EU regulation. Offences are put in one of three penalty groups: summary-only offences, such as those subject to a fine, which can be unlimited; either-way offences; or imprisonment for up to 12 months and/or an unlimited fine for the most serious indictable-only offences. Offences include failure to keep appropriate due-diligence documentation; failure of a supplier of battery cells and modules to provide documentation to manufacturers; and failure by an importer to comply with certain battery safety-related obligations. Those fall into penalty groups 1, 2 and 3, respectively.
The Office for Product Safety and Standards enforces the existing “placing on the market” requirement across the UK and will act as the market surveillance and enforcement authority for “placing on the market” matters set out in this draft instrument in Northern Ireland. The SI also includes supplementary measures arising from the EU regulation, relating to conformity assessment. That includes a requirement for the NI indication to accompany the CE mark in certain circumstances, making the Secretary of State the designated authority for notified bodies and putting in place an appeals process for decisions made by notified bodies.
The draft SI also consequentially amends the Batteries and Accumulators (Placing on the Market) Regulations 2008 by revoking them in respect of Northern Ireland, so that they now apply only in Great Britain. To be clear, the instrument does not introduce new policy objectives or regulatory standards beyond those arising from the EU batteries regulation. The batteries regulation required the penalty regime to be in place by 18 August 2025. Further parts of the EU regulation remain to be implemented in Northern Ireland, after that 18 August 2025 date. They include changes to waste and to extended producer responsibility requirements. Those matters are not covered here.
I will now respond to the submission noted by the Secondary Legislation Scrutiny Committee regarding the impact on the UK internal market and the costs arising from the draft instrument. The UK has had an integrated UK-wide approach to batteries and waste batteries for many years. Let me be clear that we will take any steps necessary to continue to meet the Government’s commitment to protect the UK’s internal market. That is why we will consult in the autumn on an aligned regime in Great Britain that is consistent with the EU’s 2023 batteries regulation. The consultation will be UK-wide and conducted with the Department of Agriculture, Environment and Rural Affairs in Northern Ireland and with the other devolved Governments as a four-nation approach. Such an approach will avoid duplicative administrative burdens and provide a unified framework across the UK and EU for batteries. Crucially, it will also deliver against our environmental objectives.
Battery manufacturing is a highly sophisticated global sector, and major manufacturers are already adjusting to the new standards. A unified approach is what businesses are asking for, so the autumn consultation will seek views not only on the application of the “placing on the market” regulations in Great Britain, but on the outstanding waste and producer responsibility provisions. We believe that pursuing this approach provides the best outcome for the UK.
I welcome the collaborative approach taken in the development of this draft SI, which has drawn constructively on expertise in industry and the relevant Departments. The provisions set out on enforcement in this SI meaningfully strengthen the application of the EU batteries regulation in Northern Ireland, where it has been law since its publication in 2023. By improving compliance in key areas such as battery safety, hazardous substances and environmental performance, I expect positive environmental and human outcomes through the reduced risk of unsafe or environmentally harmful batteries being placed on the market.
I am also reassured by the de minimis assessment undertaken in respect of this draft instrument. Given that the associated costs are minimal, and that the draft instrument introduces no contentious or disproportionate impacts, the approach is both reasonable and appropriate. I am satisfied that the instrument falls within the scope of the parent Act and represents an appropriate use of those powers. For that reason, I commend the draft regulations to the Committee.
Dr Neil Hudson (Epping Forest) (Con)
It is a great pleasure to serve under your chairmanship, Dr Murrison. I thank the Minister for outlining the draft regulations to the Committee. Among other things, they establish the offences and penalties regime for breaches of “placing on the market” obligations under the EU batteries regulation. That regulation has applied in Northern Ireland since February 2024, under the terms of the Windsor framework. The two-year gap between the regulation taking effect and the arrival of the enforcement regime was flagged by the Secondary Legislation Scrutiny Committee. It leads to a question: why have the current Government not brought this instrument forward sooner?
In addition, can the Minister clarify how the EU regulation has been enforced in the interim, in the absence of a functioning offences and penalties regime? Furthermore, what assessment have the Government made of businesses that have continued operating under the previous rules throughout this period? Can the Minister confirm whether the Government’s impact assessment accounted for those businesses specifically, or only for those transitioning from this point forward?
I also note the concerns expressed by the hon. and learned Member for North Antrim (Jim Allister) regarding the effect of the rules on the UK internal market and on the competitiveness of Northern Ireland-based businesses. I am sure that the Committee would like to hear the Minister respond directly to some of those concerns. Specifically, can she confirm that supply chains will not be disrupted, that Northern Ireland-based businesses will not be placed at a competitive disadvantage relative to their English counterparts, and that the draft instrument will not impose additional costs on them?
Jim Allister (North Antrim) (TUV)
Once more a Committee—and therefore this Parliament—has been asked to approve a regulation that has the effect of departing Northern Ireland from the UK legal framework governing the subject matter. Let us be clear: this Committee is being asked to nod through a regulation imposing a law that no parliamentarian in this United Kingdom made, scrutinised or had any hand in drafting. This Committee is being asked to nod through the imposition of a foreign rule—made by the European Parliament, not this Parliament—and to nod it through so that it is enforced with criminal sanction in a part of the United Kingdom, of which this is meant to be the sovereign Parliament that makes the laws and decides the criminal penalties. But no, we are here obeisantly to nod through a regulation to enforce foreign law on a part of the United Kingdom.
The narrative is quite clear: the 2006 EU regulation historically applied to all parts of the United Kingdom. After Brexit, however, when the EU amended the regulation in 2023, it ceased to apply to GB, where it has been revoked. But a part of this United Kingdom, namely Northern Ireland, is to continue to be subjected to foreign-made, unfiltered, unchecked law made by the EU. And the consequence is that my consumers in Northern Ireland can now only use and be supplied with batteries that meet that foreign diktat.
Of course, the EU is infamous for micromanaging everyone’s economy if it can. We can now only use, import and deploy batteries made not to United Kingdom standards. In fact, batteries made to United Kingdom standards will become illegal in a part of this United Kingdom, to the extent that a criminal sanction of imprisonment could be imposed for using a battery that meets UK standards. How absurd is it that in a part of this United Kingdom we are going to impose penalties on anyone daring to use a battery produced to UK standards? I am very disappointed that the primary concern of the Opposition spokesman, the hon. Member for Epping Forest, is why it took so long to enforce foreign jurisdiction on a part of the United Kingdom. That is a quite shocking observation.
When my consumers buy an e-bike, an electric car or a simple battery, the Government say they cannot buy one that meets United Kingdom standards. That is what we are doing here. I ask each Member whether they would do that to their constituents. Just think about that. Would members of this Committee impose on their constituents a foreign-drafted, designed and implemented law that means they cannot buy batteries made to the standard of their own country? That is the question.
Jayne Kirkham (Truro and Falmouth) (Lab/Co-op)
Does the hon. and learned Member agree that we will be aligning ourselves with this regulation? We will consult on aligning with it in the autumn. I understand that these regulations will make batteries safer and easier to recycle. In the long term, we need to do this anyway.
Jim Allister
I certainly recognise that, once again, Northern Ireland is being used in the reset as a cover to realign the whole United Kingdom with the EU. That, of course, is the gameplan of this Government, and this is but a small example of how they are going to deploy it. They hide behind Northern Ireland and say, “Oh, well, we are doing it in this part of the United Kingdom, so we will all simply align ourselves to laws we do not make—laws we cannot change. We will impose upon the whole United Kingdom the disenfranchisement we have already imposed upon Northern Ireland, which cannot make laws on this because it is subject to foreign jurisdiction. We are now going to say to the whole United Kingdom, ‘You do the same. You subject yourself to a similar disenfranchisement of your own electorate so that they do not elect the people who make the laws that govern them.’” That will be the ultimate outcome.
On the laws governing the type and use of batteries, which is one of a vast number of areas where this is going to happen, the Government will say, “You, the electorate, are not worthy of electing people to make those laws. No, we are going to be colony-like, subjecting you to laws that someone else makes.” The hon. Member for Truro and Falmouth might think that is a good way forward, but I certainly do not.
I remind the Government that section 46 of the United Kingdom Internal Market Act 2020 is very clear. It requires that in developing any regulations, these draft regulations included, the Government should have special regard to
“the need to maintain Northern Ireland’s integral place in the…internal market”.
They are not maintaining an integral place if they are applying different rules—foreign rules—to a part of the United Kingdom. Section 46 also states
“the need to respect Northern Ireland’s place as part of the customs territory of the United Kingdom; and…the need to facilitate the free flow of goods between Great Britain and Northern Ireland, with the aim of…streamlining trade between Great Britain and Northern Ireland”.
That is the very opposite of what these draft regulations will do. They will impede trade so that a battery cannot be bought from Great Britain. Another aim in section 46 is
“maintaining and strengthening the integrity and smooth operation of the internal market”.
Therefore, even under the statutory test of section 46 of the Internal Market Act, these regulations fail, and they fail lamentably.
I ask every self-respecting Member of this House simply to apply the test they would apply if this was being done to their constituents. They know that they would not do this to their constituents, so why do it to mine?
Sammy Wilson (East Antrim) (DUP)
A lot of my points have already been made by my colleague, the hon. and learned Member for North Antrim. Once again, we have regulations going through this House that drive a wedge between Northern Ireland and the rest of the United Kingdom.
The law for batteries already applies, and these regulations will simply make sure that it is possible to enforce that law. The law, as has been pointed out, covers a wide range of businesses that sell to Northern Ireland. The Minister made mention of cars, vans and e-bikes, but if we look at the assessment prepared for this, the law covers much more than that. It covers businesses that manufacture: computers; consumer electronics; watches and clocks; motors, generators and transformers; electric lighting equipment; domestic appliances; electrical equipment; motor vehicles; repair of electrical equipment; motor vehicle parts; waste and scrap—the list goes on. In Northern Ireland, the law covers 776 businesses. In the rest of the United Kingdom, it covers 26,268 businesses.
Although the Minister said that the cost will be very little, the fact is that businesses will have to think, “Do we have certificates of conformity? Have we fulfilled all the regulations? Have we scrutinised all the parts we bring in, and are we sure that they have all the markings required?” Under the batteries regulation, it is not just what the products contain but how they are labelled that has to be considered. Even inadvertently, businesses may find themselves in a situation where they are breaking the law. The costs are not de minimis. It is estimated that the initial set-up costs will be £35,000 per business—maybe the Minister will confirm that—and the annual running costs over a 10-year period will amount to £33,820. What impact will that have on internal trade?
As the Minister said, the set-up costs may not be expensive for large motor manufacturers selling high-value battery cars. However, for small businesses, it will be yet another reason not to bother supplying to Northern Ireland, because the costs of doing so will be outweighed by the revenue—Northern Ireland may only be 1% or 2% of the market of many small businesses. If additional costs are imposed, including the paperwork and so on, it does not make sense to supply to Northern Ireland. That has already happened. The fact that many transport companies are now taking container-loads of goods to England and bringing empty containers back, adding to transport costs, is a direct result of the drip-feed of EU laws applying to Northern Ireland but not to the rest of the United Kingdom. They make it not worth while to comply with regulations in order to supply to Northern Ireland. Businesses simply say, “Well, we are not supplying any more.”
The Minister has tried to make the case that the EU regulation will make batteries safer and more environmentally friendly. If that is true, does it mean that because of the delay in regulations being changed in the rest of the United Kingdom, people in the rest of the United Kingdom are using batteries that are less safe and less environmentally friendly? It seems from her speech that her answer is that businesses want uniformity, and eventually the Government will seek uniformity.
If we are going to have different laws from the EU, there must be good reasons for that. If we are going to have the same laws as the EU, they at least ought to be properly debated here so that we can make a decision. Do we want to use the freedoms that being out of the EU grants us, or do we simply want to slavishly implement EU regulations in the United Kingdom without any discussion or debate? That is certainly what is happening in Northern Ireland. I have pointed out that it means that Northern Ireland businesses now need to be doubly sure of the decisions that they make and the supply chains that they use, and very often they find that they are placed at a disadvantage.
If I were to say, “Northern Ireland has been used as a guinea pig, and EU laws have been introduced without any debate or discussion as to whether they are desirable and will improve the situation or whether they will have an adverse impact on the economy”, some members of this Committee would say, “If Northern Ireland is used as the foot in the door, that is well and good because we want to have the great reset that gets us back as close to the EU as possible.” There are others, especially on the Opposition Benches, who have made it clear that Brexit gives us freedoms and that we should use those freedoms.
There should be a warning in what the Minister has said today. These regulations will be the first step to having these regulations in place across the United Kingdom. I want to have uniformity of law across the United Kingdom, and as someone who fought to leave the EU, I want that uniformity to be based on discussions that elected representatives in the United Kingdom have and the decisions that they make. I do not advocate that we resolve the problem of having two different sets of laws—one that applies in Northern Ireland but not in the rest of the United Kingdom—simply by going down the same undemocratic route as we in Northern Ireland have experienced.
In light of the injustice of different laws applying in Northern Ireland, severe sanctions are now being imposed on those who either inadvertently or indirectly break the law, and there will be costs that affect businesses in Northern Ireland and distract people from selling in Northern Ireland. I do not have a vote in this Committee, so I say this to those who do: vote against the regulations.
Pamela Nash (Motherwell, Wishaw and Carluke) (Lab)
I appreciate that the right hon. Gentleman wants to make a political point about the Windsor framework, but does he accept that wide consultation was carried out by the Government in Northern Ireland ahead of these regulations? The explanatory memorandum in front of him shows that out of 182 stakeholders, only one replied to the consultation. That seems to me to show that there is not wide concern about this piece of legislation. Does he accept that?
Sammy Wilson
I was elected to this Parliament, and the concern I have expressed is my concern as a parliamentarian. On the consultations, let us not forget that people are not fully aware of the impact of proposals until after it has all happened.
My main concern, which all Members should share, is that we are elected to this place to make laws, and this is where the laws should be made; they should not be made elsewhere. We are not discussing the making of the law in this Committee; we are only discussing its enforcement, because the law has already been made. It was automatically applied in Northern Ireland. We are now discussing how we make sure that that law, which was made elsewhere, is imposed in Northern Ireland, how we penalise people in Northern Ireland who break the law—either directly or indirectly, advertently or inadvertently—how we impose penalties on those people, who imposes the penalties and who carries out the inspections to ensure that the penalties can be imposed. Let us be under no illusions: we are not discussing the merits of the law. It has already been introduced in Northern Ireland, and it was introduced by another lawmaking body, not this House.
Mary Creagh
What a peach of a debate! On the one hand, the Conservative party gave us gentle encouragement and asked questions about how the policy has been enforced in the interim. Once again, I was questioned about the previous Government’s inaction and inability to take any steps to bring in this law before they left office. On the other hand, two parliamentarians from the Democratic Unionist party reopened the debates on Brexit—
Sammy Wilson
Will the Minister give way? She has just insulted my colleague.
Mary Creagh
No, I will not give way; I am replying to the debate.
They reopened the debates on Brexit, which detained this House from 2016 until I left in 2019 and much beyond. When the former leader of the Conservatives said that we should “Get Brexit done” in 2019, little did he know that Brexit would never be done. This issue is the perfect example of why Brexit will never be done and of the difficulties it brought to this Parliament and Northern Ireland, with its unique protected status under the Windsor framework. It demonstrates the difficulties and the bureaucracy faced by every single business and householder trying to do the right thing and stay safe.
We have had a long and abstract debate about laws and who votes for them. This Committee is our chance to scrutinise the law—I feel scrutinised—and our chance to vote. We will vote later.
Mary Creagh
Let me tell the hon. and learned Gentleman a little about what Northern Ireland thinks. I am going to make my point, and then I hope we can get into a much longer debate.
Translink in Northern Ireland bans e-batteries, e-bikes and e-scooters from its networks because of the risk of fire. Antrim and Newtownabbey borough council has a “Buy Safe, Be Safe” campaign because of the risks of electric batteries. Waste management organisations all the way across Northern Ireland, including Newtownards, have all made complaints about the proliferating risk of batteries, battery waste and illegal batteries.
I want to talk about a couple of my constituents, Karlo Bogdan and Natasha Johnson-Mall. Karlo was 24 and Natasha was 27 when they died in a fire caused by an unsafe e-battery in my Coventry East constituency. That is not an uncommon occurrence because lithium battery fires spread incredibly quickly, and those two hard-working young people, lost their lives unnecessarily in part because these regulations and protections—which we are bringing in, yes, first in Northern Ireland, but later in our own country—were not in place to protect them from the dodgy salespeople and resellers on Amazon and all the dumping that has happened as a result of the great Brexit deal. I am very happy to give way if the hon. and learned Gentleman wants to come back on any of that.
Jim Allister
May I first correct the Minister? I am not a DUP Member, and I am surprised she does not know that. Secondly, she is also wrong to say that we are debating the merits of this law, as we are not. This already is the law in Northern Ireland, courtesy not of this House but of the EU through sections 7 and 8 of the 2020 Act. It already is the law, so all we are discussing now is how far we are going to penalise people if they breach this foreign law. We are not discussing its merits. If the Government wanted to tackle unsafe batteries, they should have done so across the whole United Kingdom, and they have not—they are hiding behind Northern Ireland.
Mary Creagh
Let me begin by apologising to the hon. and learned Gentleman. I understand that he is a member of Traditional Unionist Voice. I did know that, but I forgot it in the heat. We are in the process of doing exactly what he is exhorting us to do, which is to make sure that we have a complete internal market across the United Kingdom while also protecting Northern Ireland’s unique protected status under the Windsor framework.
I draw the Committee’s attention to the fact that it is a model. Brexit has not delivered the freedoms it was supposed to deliver. In the end, the e-bikes, e-cars and e-batteries we buy are not made in Great Britain; most are made by Bosch in Germany and elsewhere in Europe. As the hon. and learned Gentleman says, the regulation applies in Northern Ireland, and there is what I would consider a halo effect because most people placing batteries on the market are abiding by it. What we are doing today is beginning a clampdown on rogue merchants who may be competing unfairly and whose products may not meet that new European standard.
I wanted to put my constituents’ deaths on the record, because while we talk about the abstract principles and ideals of subsidiarity and sovereignty, sovereignty was not able to save their lives. My mission is to save lives, not least the lives of waste transfer station staff—the most invisible and neglected sector in our country—who are dealing with batteries on a weekly basis, especially in temperatures such as those we are enduring at the moment.
On interim enforcement, as the hon. Member for Epping Forest asked—it is not on me to defend him from attacks by other Members, but I have some sympathy, because it is a totally reasonable question to ask. The Office for Product Safety and Standards tried to enforce the pre-2023 EU battery regulation on a UK-wide basis, including in Northern Ireland, but of course it does not apply here. The OPSS is not set up as the enforcement authority until this mechanism goes through, so it cannot enforce it. That is the simple answer, and it is why we are here today.
On why we did not introduce the regulations sooner, we brought forward the legislation to support “placing on the market” requirements as soon as was reasonably practicable, taking into account the need for stakeholder engagement. We have consulted stakeholders and, as my hon. Friend the Member for Motherwell, Wishaw and Carluke mentioned, we wrote to all the trade associations and got one reply back.
Most businesses are already doing this because they are placing products on the European Union market, and this is just stuff we are doing. The right hon. Member for East Antrim says the cost is £30,000, but that is the total cost across all those businesses, not for one. It is the cost of a couple of hours of someone’s time to familiarise themselves with the new regulations. It is not the cost for each business, so my understanding is that it does not affect small and medium-sized enterprises in that way—I gently correct him on that.
We engaged with stakeholders, we appointed a market surveillance authority and we did quite a lot of complex policy work on what this means for our existing regulation. We will do a wider review of the existing battery producer responsibility regulations. We hope to bring that in on a GB and UK-wide basis.
On the figure of £35,017, that is across all affected businesses. Another question was, how does this affect the UK internal market? In a limited way—the majority of batteries are manufactured to meet Northern Ireland and EU standards already, whether they are physically placed on the market in Europe, Northern Ireland or GB. That is the halo effect I was talking about—they have raised their standards, and we are passive beneficiaries. Batteries meeting Northern Ireland requirements can be placed on the GB market, so there is no border down the Irish sea, which was of great concern to everyone here. This autumn, we will consult on an aligned regime across the whole UK that is consistent and will provide a unified regulatory framework across the UK and the EU.
The draft regulations do not introduce new policy, nor does it impose any significant new regulatory burdens on businesses. Without them, we would have rules but no means to uphold them, which is the point made by the hon. Member for Epping Forest. That is not an acceptable position to be in, so the instrument provides clarity, certainty and, crucially, enforceability. It equips the enforcement authorities with the powers they need to make sure that batteries placed on the NI market meet required standards.
On the divergence questions, the reality is that most of these batteries are standardised right across the EU. As I said, this is not the end; we are consulting on an aligned regime, but this is the essential first step to ensure that existing “placing on the market” requirements are properly enforced and support compliance with our Windsor framework obligations while broader work continues.
This is a very low-cost and proportionate measure. It did not require an impact assessment, because it was way under the de minimis requirement of a £10 million extra burden on businesses. It does not change the underlying requirements that businesses must meet and it imposes nominal familiarisation costs, so compliant businesses will not see any change in their day-to-day operations.
To come back to the issue of battery safety, we already have some of the strongest consumer product safety protections in the world, requiring that only safe products, including batteries, are placed on the market. These draft regulations help to ensure that unsafe batteries are identified and removed from the market by more effectively enabling enforcement of safety, labelling and performance requirements. Through our Product Regulation and Metrology Act 2025, we retain the ability to go further, if needed, to strengthen protections for consumers throughout the UK.
As I said, we are not complacent, and those two young people who lost their lives in Coventry are very much front and centre of my mind. We recognise the real risks to life and limb posed by faulty or non-compliant products. That is why we are taking action across the board with regulators and industry to understand and address the causes of battery-related fires. It does not matter how small the battery is, whether it is a tiny battery in a hearing aid or a vape battery, it must go back to a battery WEEE—waste electrical and electronic equipment—provider. Every store that sells a vape, including the regular high street supermarkets, has a vape take-back scheme.
Batteries, when compressed and baled, become incredibly heated and really dangerous. We could end up taking out our municipal recycling facilities in extremely dangerous and complex fires if we do not dispose of batteries properly, so we have already acted to reduce one major source of battery-related fire risk by banning the use of single-use vapes in 2025, and by supporting their collection and recycling through a dedicated WEEE category. Before we introduced that category, vapes were classed as toys. That is what was done—they were classed as toys under the regulations, which is absolutely incredible.
The early signs are encouraging, because 8 million vapes were sold in 2023-24, but the figures for ’24-25 show that it has already gone down to 6 million, which is accounted for by the regulations coming into effect in June ’25—so that is only a half-year reduction. I am therefore optimistic that sales will come down even lower from that 8 million.
We are working with industry and standards bodies to improve the safety of e-bike and personal electric vehicles through the development of a new publicly available specification. DEFRA has strengthened its capability by bringing in specialist expertise from industry to help ensure that the work to tackle these risks is informed by real-world experience and, crucially, technical knowledge. The draft instrument supports environmental protection, ensuring standards on hazardous substances are upheld—to go back to the question of the right hon. Member for Wetherby and Easingwold about batteries, hazardous substances and forever chemicals.
These measures have been developed across Governments and with industry, and concerns have simply not been raised by stakeholders. I hear the comments and concerns of the hon. and learned Member for North Antrim and the right hon. Member for East Antrim, but this is a practical, proportionate and necessary instrument. It will ensure that the law operates as intended and that our obligations are met as Members who were sent to this place to protect the life and limb of the people we represent, while facilitating consumer, business and environmental protection and our obligations under the Windsor framework.
I commend the draft regulations to the Committee.
Question put and agreed to.
Resolved,
That the Committee has considered the draft Batteries (Placing on the Market) (Northern Ireland) Regulations 2026.
Draft Trade (Mobile Roaming) (Amendment) Regulations 2026
(1 week ago)
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The Minister for Digital Government and Data (Ian Murray)
I beg to move,
That the Committee has considered the draft Trade (Mobile Roaming) (Amendment) Regulations 2026.
It is great to see a fellow Edinburgher in the Chair, Ms Jardine. [Interruption.] I will not divide the Committee on the pronunciation of “Jardine”.
The draft regulations are required in order to amend the Trade (Mobile Roaming) Regulations 2023 by updating the international mobile roaming wholesale rates that they set. Wholesale rates are those that mobile operators charge other mobile operators, as opposed to retail customers. The amendments will give effect in domestic law to a November 2025 decision of the EEA EFTA-UK free trade agreement joint committee, the governing body of the agreement, on which each party has a seat. I note, however, that one EEA EFTA member, Liechtenstein, has opted out of the international mobile roaming provisions in the free trade agreement.
The amendments to the international mobile roaming wholesale rates are being made to ensure that they continue to reflect current international benchmarks, which reflect market conditions. This is consistent with and necessary under the terms of the free trade agreement.
Let me provide some background for the Committee. In 2021, the UK and the EEA EFTA signed a free trade agreement. Its core terms included provisions on industrial goods, digital trade, services and investment and, of course, fisheries and agriculture. Under digital trade, in a telecoms chapter, it contained provisions on international mobile roaming. These provisions set a wholesale cap, which limits what mobile operators can charge each other. In 2023, the UK introduced the Trade (Mobile Roaming) Regulations to implement these provisions in UK legislation. The draft regulations will amend those regulations.
As per the free trade agreement, the Trade (Mobile Roaming) Regulations covered wholesale charges only. The free trade agreement contains a review clause, under which the wholesale rates should be reviewed by all affected parties every two years
“with a view to determining whether those rates are still appropriate”.
The UK is one of the affected parties, along with Norway and Iceland.
The rate set under the agreement has now diverged from the “relevant international benchmarks” that the agreement states should be considered. The benchmark relevant to EEA EFTA-UK is the European Union-set international mobile roaming wholesale rate, called the Euro rate. EEA EFTA adheres to the Euro rate as part of its access to the EU single market. The UK adhered to the Euro rate until 2021, with the end of the Brexit transition period at the end of 2020. The EU benchmark is based on the principle that the wholesale cap must be high enough to allow operators fully to recover reasonably incurred costs involved in building, maintaining and operating their networks. This principle, based on market conditions, is supported by the United Kingdom.
In 2025, Norway, supported by Iceland, requested a move to reflect the Euro rate. The reason was that the wholesale cap in the UK-EEA EFTA agreement should reflect international benchmarks and current market conditions. Ministers agreed to proceed with legislation for these new rates to demonstrate the UK’s willingness to align with the provisions of the free trade agreement. In November 2025, the governing body of the agreement, the UK-EEA EFTA joint committee, made Decision No. 1/2025, which agreed that the wholesale rates should be changed. The draft regulations will amend the Trade (Mobile Roaming) Regulations 2023 to give effect in domestic law to the commitments that the UK has made to the joint committee.
I should start asking questions, to see whether people are still keeping up with all this. I think I am.
The draft regulations are strictly about amending the wholesale rate set out in the Trade (Mobile Roaming) Regulations. It is a very technical amendment. However, I believe that it would be helpful to conclude by setting the context for the wholesale cap in the free trade agreement.
Peter Fortune (Bromley and Biggin Hill) (Con)
What reassurance do we have that these savings will be passed on to customers, rather than just going towards the companies’ bottom line?
Ian Murray
That is an incredibly good question. That is why we are making the draft regulations, because the wholesale rates, or the Euro rates, are much lower than the rates currently in operation. For example, a voice call, which is €0.032, will go down to €0.019; an SMS, which is €0.01, will go down to €0.003; and data, which is €2.50 per gigabyte, will go down to €1.30 per gigabyte. The Euro rate is €1 per gigabyte. One would hope that if wholesale prices are being lowered, the savings will be passed on to consumers, as I am sure the Committee agrees they should be. Although the hon. Gentleman’s question was not strictly about the draft regulations, it was a great question to which I am delighted to have the answer.
Mark Sewards (Leeds South West and Morley) (Lab)
The Minister talks about the price reductions for the three countries. By my maths, that is a 70% reduction in the price of sending SMS texts, which is incredibly welcome, although I am not sure who sends those any more. Is he working on similar agreements with other countries not covered by the changes that we are making today?
Ian Murray
That is a good question. Actually, yes. This is purely about the EEA EFTA-UK agreement countries, Norway, Iceland and Liechtenstein, although Liechtenstein is outside it at the moment because of its relationship with the European Union. On the prices, we are looking to align with the Euro rate, which the European Union uses, so the answer to my hon. Friend’s question, by default of the technicalities of the measure, is yes.
I can confirm that surcharge-free roaming has not been delivered for all UK travellers to Norway and Iceland. Mobile network operators EE and Three continue to surcharge their customers roaming in Norway and Iceland, so they should be passing that on. It is welcome that Vodafone removed the surcharges as a result of the change, and VMO2 did not reintroduce roaming charges to the EU and EEA EFTA post Brexit—post the transition period, in any case.
The Government have continued to review options for delivering surcharge-free roaming for UK travellers to Norway and Iceland, in line with the aspirations of the free trade agreement. I fully agree with hon. Members that if there are wholesale rate savings, companies that have not yet taken off surcharging for Norway and Iceland should do so. I stress that the draft regulations are strictly about amending the wholesale rates contained in the Trade (Mobile Roaming) Regulations and fulfilling the commitments that the UK made under the international treaty. I commend the draft regulations to the Committee.
Dr Ben Spencer (Runnymede and Weybridge) (Con)
It is a pleasure to serve under your chairmanship, Ms Jardine. I have three questions about this statutory instrument. The first is a request for clarity from the Minister, because I was a bit confused by some of his comments about the caps that are being updated by this SI. On my reading of the explanatory memorandum, the reciprocal arrangements with caps of EEA operators in Norway were already below the proposed caps, in fact quite substantially so: about 50% on voice, between 33% and 66% on SMS, and between 50% on data. That demonstrates to me the success of the free market.
The impact assessment says very clearly that the impact of this SI is zero, given that the market has already found a solution. Will the Minister clarify that a bit further in case I have read that wrong? Will he celebrate the impact of the free market? Will he also update the House on the work that is being done to reduce barriers to other roaming charges, particularly in jurisdictions such as Canada, the US and Mexico, which are of particular interest to many of our citizens at this moment in time?
I see that the agreement was made in November 2025. Why has it taken seven months to bring this SI to us? Is that indicative of the performance of the Department for Science, Innovation and Technology in turning around SIs? Finally, given that the impact assessment says that this SI has no impact, can the Minister tell us the cost of drawing it up and putting it in front of us today?
Ian Murray
The shadow Minister is correct that we should be doing things at a greater pace, but I disagree with him about the value of the wholesale rates. The voice call rate is already higher. As I said to the hon. Member for Bromley and Biggin Hill, it is going from €0.032 to €0.019, and SMS is going from €0.01 to €0.003. That is a reduction. Data is going from €2.50 to €1.30 per gigabyte, and then €1 on the Euro rate. That is about formalising in the SI what was in the EEA EFTA agreement to reflect the wholesale prices at these international benchmarks. The international benchmark used by EFTA in this agreement is the Euro rate, which is the rate that will come into effect for the wholesale charges. I hope that that answers the shadow Minister’s question.
The reason that there is no impact on consumers is that this measure does not directly affect consumers at this moment in time. As I say, some mobile operators have already reduced their surcharges regardless. In fact, VMO2 did not reintroduce any roaming surcharges at all to EEA EFTA countries post the Brexit transition period. Operators EE and Three continue to surcharge their customers roaming in Norway and Iceland, and Vodafone removed its surcharges as a result of the agreement, so this instrument will have no impact on consumer prices, because it is a wholesale issue, not a consumer issue.
On the time and the cost that it has taken to get here, I may have to come back to the shadow Minister. The cost of bringing this SI to the House is the cost of doing parliamentary democracy. It is a price worth paying for the hon. Gentleman to have his voice heard.
Victoria Collins (Harpenden and Berkhamsted) (LD)
It is a pleasure to serve under your chairmanship, Ms Jardine. The Liberal Democrats support this SI. This is about working with EEA and EFTA, and it is a reminder of the benefits to consumers when we work together with our European partners, whether that is working on our phone bills or on defence. Does the Minister agree, in relation to the Liberal Democrats’ proposals for a new growth and defence partnership with the EU, looking at the single market and a new customs union, that this is a strong reminder that working together would make us richer, safer and stronger?
Dr Al Pinkerton (Surrey Heath) (LD)
It is a pleasure to serve under your chairmanship, Ms Jardine. I was recently in Iceland and have just been reviewing the text messages I received there. I am a customer of EE, which the Minister mentioned; I was told that I could enjoy up to 14 gigabytes of data abroad this month, in line with its fair usage policy. I take the Minister’s point that this is about wholesale charges, but as the hon. Member for Runnymede and Weybridge made clear, the consumer experience is already ahead of the wholesale cost in many ways. Although this change is incredibly welcome, I do not think that it will necessarily have a transformative effect on consumers, who have already experienced many of the benefits that the Minister talked about.
I wonder whether this SI is indicative of a broader ambition to do more on roaming charges, and not just with EEA EFTA countries. I would like to hear a little more, if possible, about the Liechtenstein challenge, and about whether this approach may represent a model for wider expansion across the European Union.
Ian Murray
Let me start by answering the hon. Member for Surrey Heath. It will depend on which package he is on, of course. I have a worldwide roaming package, which means that I take my package with me wherever I go, but that is the package that I purchased; it is not necessarily open to everyone who has a mobile phone.
On the challenge with Canada, Mexico and the US, there will be many fans over there at the moment—maybe not many Scotland fans, but a lot of England fans. Some will be racking up huge bills, while some will not; it will depend on which package they are on. That is why I am very clear that this is about wholesale prices and implementing the provisions in the agreement, not about the charges to the consumer. That explains my answer to the hon. Member for Bromley and Biggin Hill about the consequences and whether we should be passing the savings on. The answer to that is, of course, yes, but they do not need to be passed on to the hon. Member for Surrey Heath, because he has a package already and is paying in other ways to cover these kinds of issue.
I say to the Liberal Democrat spokesperson, the hon. Member for Harpenden and Berkhamsted, that this Government’s manifesto was perfectly clear about what we want to achieve with the EU. The current Prime Minister has been very clear about resetting the relationship with the European Union. The EU-UK summit agreement from last May is coming into effect; that is deepening our relationship in a whole host of ways, from defence to trade in goods, digital and things like EU touring, which the Department for Culture, Media and Sport looks after closely. That will be renewed every year; there is a summit every year now, deepening that relationship even further.
The direction of travel from this Government is very clearly to get closer to our allies in the European Union. The Prime Minister has led the charge on defence spending through NATO and with our European partners, and that has been recognised, particularly by the NATO Secretary-General. There is no doubt at all that we are deepening that relationship, because it is right for our economy, it is right for our people and it is right for issues like this.
Question put and agreed to.
The Greater Cambridge Development Corporation (Establishment) Order 2026
(1 week ago)
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The Committee divided: - Ayes: 11 / Noes: 1 - Question accordingly agreed to.
The Chair
Given the heatwave that we are experiencing, I am happy to give blanket dispensation on the jacket rule, so Members can take them off if they so wish.
The Minister for Housing and Planning (Matthew Pennycook)
I beg to move,
That the Committee has considered the Greater Cambridge Development Corporation (Establishment) Order 2026.
It is a pleasure to serve with you in the Chair, Dr Huq. The order was laid before the House on 4 June. It will establish a centrally led urban development corporation in greater Cambridge, pursuant to the Local Government, Planning and Land Act 1980, which provides that the Secretary of State may designate an urban development area only when they are of the opinion that it is expedient and in the national interest, and following a public consultation.
As the Committee will be aware, the economic growth of Cambridge over recent years has been a phenomenal success. It now has arguably the most intensive and innovative science and technology cluster in the world, with more than 5,000 knowledge-intensive firms based in and around the city, employing tens of thousands of skilled workers and generating in excess of £18 billion in annual turnover. However, the supply-side constraints that are evident across the Oxford-Cambridge corridor, from infrastructure deficiencies to housing affordability, are particularly acute in greater Cambridge. Its continued position as a world-leading centre of innovation, its ability to make an even greater contribution to the UK economy, and the quality of life experienced by its existing residents are all dependent on removing those constraints.
Local institutions and leaders have worked hard to support the rapid growth of greater Cambridge over recent years. Over the past two years, the Government have intervened alongside local authorities and the greater Cambridge shared planning service to address pressing constraints such as water scarcity. Such action has helped to unlock more than 9,000 homes, 500,000 square feet of commercial space, and a new cancer research hospital.
It is widely accepted, however, that delivering development at the scale and pace necessary to realise the full potential of greater Cambridge is beyond the capacity and powers of existing institutions. It was for that reason that, between 4 February and 1 April this year, we consulted on proposals to establish the Greater Cambridge Development Corporation—a centrally led urban development corporation with the legislative powers, focus and resources to unlock the area’s full potential. I once again thank all the organisations and individuals who took the time to engage with the process.
The prevailing theme among responses was that infrastructure delivery in greater Cambridge has been slow and piecemeal, or has failed to keep pace with historical population and employment growth, and that that was having a detrimental impact on residents’ quality of life, constraining the region’s ability to scale its globally significant innovation economy, and reducing business and investor confidence. Individuals and organisations widely reported that greater Cambridge has lacked a strategic, co-ordinated and long-term approach to the rapid delivery of primary infrastructure. Complex governance, fragmented decision making and uncertain long-term funding were identified as obstacles to delivering at the scale and pace required.
While fully acknowledging the strong local efforts that have been made and the excellent performance of the greater Cambridge shared planning service, the consultation confirmed the Government’s belief that the scale and complexity of the development challenges faced by greater Cambridge required a bold and long-term approach, and a genuine step change in how infrastructure is planned, co-ordinated and delivered; and that the establishment of a centrally led development corporation, combining responsiveness to local priorities with national leadership and influence, would be the most effective way to unlock nationally significant growth at the pace and scale required.
The development corporation established by the order will unleash ambitious and high-quality sustainable growth in greater Cambridge to the benefit of its existing communities and the country as a whole. Once established, the corporation’s boundary will align with the current combined administrative areas of Cambridge city council and South Cambridgeshire district council. This broad development area will underpin the corporation’s ability to deliver its objectives and make effective use of its powers, enabling the scale of growth necessary to deliver on both local and national interests.
Lewis Cocking (Broxbourne) (Con)
The Minister is always very generous with his time. He has just explained the boundaries of the development corporation. Cambridge is going through local government reorganisation. How will that affect the order and the boundaries that he has just described?
Matthew Pennycook
That is a very good question. In short, although I am more than happy to expand on this response, the development corporation’s boundary does not pre-empt or prejudice the outcome of the recent consultation on local government reorganisation. The Government would, of course, consider, through due process, any changes to the development area that are deemed necessary as a result of any local government reorganisation but, as I say, that does not pre-empt or prejudice what we are taking through by dint of this order.
The Government have worked hard to sustain a constructive relationship with local leaders and key partners. We want the development corporation to be a joint national and local endeavour that combines local insight and input from local democratically elected representatives with national leadership powers and investment. As such, the democratically elected leaders of Cambridge city council, South Cambridgeshire district council and Cambridgeshire county council, as well as the democratically elected Mayor of Cambridgeshire and Peterborough, will be invited to join the board. The Government also recognise that input from residents and communities will be integral to the success of the development corporation. That is why it will be asked to create exemplary engagement structures to enable broader community participation, including from residents, community representatives, and town and parish councillors.
The order will establish the Greater Cambridge Development Corporation as an independent corporate entity, allowing it to be granted infrastructure, financial and land assembly powers in due course. The powers and functions order, which my officials are preparing for consideration later this year, will equip the development corporation with planning powers, including the ability to determine planning applications above a minimum threshold of 250 homes, and non-residential applications above 5,000 square metres. Our intention is that the development corporation will eventually take on plan-making powers. However, we believe the optimal way to kick-start growth in the plan-led system is to take a phased approach. As such, the development corporation will exercise plan-making powers only once the draft local plan has been adopted. The Government are clear that adoption of the draft local plan should not limit or delay future ambition for growth and, subject to its adoption, successor plans will be expected to build positively on the draft local plan’s foundations to support continued growth.
The development corporation will also be granted development management powers for strategic sites within its boundary. Only applications for sites of strategic importance will be determined by the development corporation. The vast majority of planning applications will continue to be determined by the greater Cambridge shared planning service. The Government recognise and accept that almost all strategic residential developments will be of over 1,000 houses, flats, or houses and flats. However, to account for the possibility of residential development prejudicing the delivery of sites of strategic importance, residential thresholds will be set at a minimum of 250 houses, flats, or houses and flats. Any application that is determined by the development corporation will still be considered against national and local policy, and subject to public consultation as normal. That combination of powers will provide the development corporation with the tools, certainty and investment needed for sustainable infrastructure-first growth. The model will form an exemplar for integrated powers and funding, and set the standard for housing development elsewhere in the country.
The order will establish the Greater Cambridge Development Corporation as an entity accountable to the Secretary of State and set out the geographical boundary in which it may operate. The Greater Cambridge Development Corporation will focus on the delivery of strategic, nationally significant growth within its boundary. It will work collaboratively with local authorities both within and bordering its development area, as well as with transport bodies and utility providers, to unlock development opportunities and boost economic growth.
I extend my sincere thanks to local leaders and their officers in greater Cambridge for their hard work and ongoing constructive collaboration in pursuit of our shared objective of supporting ambitious and high-quality sustainable growth in Cambridge and its environs. I also thank Peter Freeman for his continued leadership of the Cambridge Growth Company and commend the CGC for everything it has done to date to help to facilitate the delivery of new homes, infrastructure, and commercial and laboratory space. I hope that hon. Members agree on the value of establishing the development corporation. I commend the order to the Committee.
David Simmonds (Ruislip, Northwood and Pinner) (Con)
It is a pleasure to serve under your chairmanship, Dr Huq. I am sure that Members will be pleased to know that, because the Opposition agree with the principle underlying the statutory instrument, we will not seek to divide the Committee.
The Minister has brought his usual clarity to introducing the order. Although I am sure that there are many questions that could be hotly debated, because there is always discussion about whether measures have the correct boundaries and powers, I would simply like to ask him a few questions that my colleagues have raised.
My hon. Friend the Member for Broxbourne touched on the impact of local government reorganisation on the proposed development corporation. One issue is that the English Devolution and Community Empowerment Act 2026 envisages that new mayors will take on many of these development powers. Given that a decision on local government reorganisation structures in greater Cambridge and many other areas is likely to be imminent, what thinking has there been about how the powers of the corporation will be transferred to the new mayoral or combined authority once it comes into being, if at all? The Minister might have already decided that that is not going to happen, but it would be helpful if he clarified how that will work.
As the instrument establishes a new development corporation that transfers planning powers that currently sit with two district-level authorities, how does that sit alongside the amended planning regulations that the Minister set out to a Delegated Legislation Committee last week, and on which a deferred Division took place earlier today? In particular, what impact will the changed numbers and the changed responsibility for members have, given that the instrument will aggregate planning responsibilities that are covered by legislation on political balance in each of the constituent authorities? How will that democratic capacity be carried through so that the new authority reflects that legislative requirement?
How will the new planning authority that the instrument brings into being handle accumulated section 106 balances? As greater Cambridge is a very economically vibrant part of the world, a significant number of housing, economic development and transport projects are already in train. Many of those involve existing legal agreements that determine if a section 106 or community infrastructure levy contribution will be paid. Some of that will be paid at commencement, and some at milestones during those projects. Given that there will be residents’ expectations about what those contributions will fund, how will the process operate?
Excellent as he is, the Minister is not the Minister responsible for local government reorganisation. A brief glance at the map reminds us that greater Cambridge sits at the boundary with numerous authorities, including Bedfordshire, Hertfordshire, Essex and Suffolk, that either envisage or have recently gone through a process of local government reorganisation. A good many politicians, including some involved in that, hold the view that the boundaries of the zone will need to be larger if the process is to achieve its potential, particularly given the zone’s location in the Oxford-Cambridge arc. Will the Minister set out his thinking on the future of the zone? How can we provide a sense of certainty to those who have that concern, and to investors who may be wondering about the contribution to the development of new transport links that would attract their business to invest in this location? What is the timeline for that?
Ian Sollom (St Neots and Mid Cambridgeshire) (LD)
It is a pleasure to serve under your chairmanship, Dr Huq. I would like to be clear at the outset that the diagnosis behind the idea of the corporation is one that I and many in the area broadly share. Cambridge’s growth is constrained by water supply, wastewater capacity, and transport and energy infrastructure. They are real problems with real consequences, and not just for the current residents that I and others in the area represent, but for future residents. Nobody disputes that.
However, the Lib Dems cannot support establishing a corporation whose purpose remains undefined at the point at which we are being asked to approve it. This order does one thing: it creates the Greater Cambridge Development Corporation in name. The powers and functions order, which will determine what it actually does, including any planning powers, comes later in the autumn. We are being asked to vote on an institution before we know what it will be for. That is not just a procedural quibble; it goes to the heart of whether development corporations actually work.
The historical cases that genuinely justify optimism—London Docklands and the Olympic Delivery Authority are really good examples of development corporations working—succeeded because they had a clearly defined task, a timeline and a funding commitment to match that ambition. That clarity is what gave them the authority and legitimacy that made the democratic trade-off arguable, at the very least, and worthwhile for those who agreed.
When I asked the Minister recently at departmental questions what infrastructure the corporation would have responsibility for delivering, and by when, he replied that further details would be set out in due course. I do not highlight that as a criticism of him; he has been very constructive in his engagement with my area, and I really appreciate that. In fact, I think one of his first acts as a Minister was to give me a call on the Sunday night after the election to tell me about an intervention in Northstowe in my constituency. However, his answer to my question was telling. We are establishing what will be the largest urban development corporation of its type, covering an area almost double that of all 17 previous urban development corporations combined, and the specific infrastructure it will deliver has not yet even been outlined, never mind detailed.
The powers and functions order will also bring forward planning powers for which I find it difficult to see the justification. In the medium term, the corporation is expected to take over determination of planning applications above 250 dwellings, as the Minister said, and in time it will replace the local plan process entirely. I heard what the Minister had to say, but I would argue that 250 dwellings is not a strategic site; it is a medium-sized development. The greater Cambridge area already has planning permission for 37,000 homes that have not yet been built. The evidence is clear that planning is not the barrier at that level. Water, sewerage and transport—those are the barriers, and none of them is fixed by changing who determines a 250-home planning application.
I am also concerned about the boundary. We have had some discussion about that already. Lord Lansley has tabled a regret motion in the Lords specifically on this point, arguing that the geographic scope should correspond to the functional economic geography of the Cambridge economy and that any planning powers should be focused on very large new sites rather than applications on the 250 scale. I share both his concerns. The functional economic geography of Cambridge extends well beyond Cambridge city and South Cambridgeshire district, as the Cambridgeshire and Peterborough independent economic review established back in 2018. The boundary drawn here does not follow the task; it follows two administrative areas.
If the Government intend to proceed with planning powers in the autumn, as I am sure they do, will the Minister make four specific commitments? First, will he publish a clear, evidenced rationale for why removing local plan-making powers is necessary—something that I do not think has yet been provided? Secondly—I think he said this in his opening remarks, so this is more for clarification—will he commit that those powers will not be transferred until the existing draft greater Cambridge local plan has been adopted? That work has been years in development and is already at an advanced stage. Thirdly, will he guarantee that any decision to activate those powers will be accompanied by published reasons and an opportunity for further representations before it takes effect? Fourthly, can he confirm that the powers and functions order will be subject to the same affirmative procedure as the order we are considering today, giving Parliament a proper opportunity to scrutinise the planning powers before they come into force, rather than having them take effect without oversight?
I will be voting against the order today, not because I oppose growth in Cambridge or the principle of strategic intervention where it is justified—I hope the Minister appreciates that I try to engage constructively with him on growth and infrastructure in my constituency; there are lots of brilliant opportunities there and it is a great part of the country to grow—but because establishing a body of this scale and duration, at 25 years, with this level of democratic cost before the purpose has been defined is the wrong way to proceed. I hope that at the very least the Government come back with a powers and functions order that sets out what the corporation will actually build, where and by when, and a clear, evidenced rationale for why planning powers are necessary to deliver it.
Matthew Pennycook
That was a long list of perfectly reasonable and fair questions, which I will seek to answer in turn. If I miss any, hon. Members are more than welcome to intervene on me.
I will begin with the questions from the shadow Minister, the hon. Member for Ruislip, Northwood and Pinner. The order establishes, as a corporate body, a centrally led urban development corporation, not a mayoral development corporation. The sitting Mayor of Cambridgeshire and Peterborough will have representation, with a seat on the board, but the mayor and his area will not be controlling this development corporation; it is very different from the mayoral development corporation model. I think the Mayor of Cambridgeshire and Peterborough has designs on a mayoral development corporation for Peterborough, but that would be a delivery vehicle very different from the one we are establishing here. The mayor will, however, have representation on the board along with other local authority leaders.
The shadow Minister asked me about the planning committee modernisation statutory instrument that we voted on today. That will apply to local authority committees in the ways we discussed when we considered that instrument in Committee. As I said in my opening remarks, we expect the vast majority of planning applications still to be determined by the greater Cambridge shared planning service. I will come on to why we have taken the development management powers we propose to in the functions order that will follow in the months to come, and why we have chosen the 250-home threshold, but planning committees are a local planning authority designation. The development corporation, as an entity and delivery vehicle in itself, will take particular development management powers to determine specific sites, which I will come on to in a moment. The same goes for conditions that would be associated with a planning permission.
We think those development management powers are important to accelerate strategic growth in an integrated and co-ordinated way. The decision to grant development management powers to the development corporation for strategic sites reflects the need to balance local and national planning merits to facilitate nationally significant growth in the area. I bring us back to the objective of the development corporation to facilitate nationally significant growth, which local leaders—they have made great efforts over recent years—are quite clear that they are not able to do. When it comes to some very serious constraints—the hon. Member for St Neots and Mid Cambridgeshire mentioned water scarcity—local leaders have not been able on their own to remove some of these barriers. That is what the development corporation is for.
Development management powers will be granted for sites of strategic importance. We will define what “strategic importance” means at a later date, but as a proxy for a definition of strategic sites, the development corporation will use the minimum thresholds that we outlined in the Government response to the consultation on 3 June. We gave a flavour in the consultation of the type of sites we have in mind. I think we listed seven sites, which are major sites already identified in the local plan. I hope that gives the hon. Member for St Neots and Mid Cambridgeshire a sense of the type of strategic sites that we are talking about.
We need the threshold because the development corporation can delegate decision making to the greater Cambridge shared planning service, but that service is unable to reverse-delegate the determination of planning applications to the development corporation. As such, we judge that if the threshold for residential development were set at a level higher than 250 homes, the development corporation would be unable to exercise development management powers for any application that fell below that threshold, even if the application could prejudice the delivery of a strategic site.
That is the central objective of the 250-home threshold. We do need the development corporation to have the ability to move in and determine an application on a site that might impact the delivery of a strategic site. As I said to the hon. Member for St Neots and Mid Cambridgeshire and the Committee, we will come back and define a “strategic site” in more detail as we take forward the functions order later this year. To reassure him, that functions order will be subject to the affirmative resolution procedure; we will have a chance to debate and vote on it in the House. [Official Report, 8 July 2026; Vol. 789, c. 422.] (Correction.)
The shadow Minister raised a point about boundaries. Again, this is all outlined in the 3 June Government response to the consultation: 42% of respondents to the consultation agreed with our proposed boundaries—the Cambridge city council and South Cambridgeshire district council administrative areas—23% felt they were too small, and 33% felt they were too wide. We recognise that there is a wide range of views about what the precise boundaries should be, but we judge that the boundaries as consulted on are a broad development area that will allow and underpin the development corporation’s ability to deliver its objectives and make effective use of its powers, enabling the scale of growth that is necessary to deliver on both local and national interests.
As set out in the consultation, the proposed boundary encompasses the land required to support strategic infrastructure, providing a sufficiently broad geography to maximise funding opportunities and enable land value capture to support social and environmental projects. Aligning the boundaries with those of Cambridge city council and South Cambridgeshire district council will simplify the governance arrangements in this area—that has been a real source of challenge over recent years—and enable the development corporation to support the delivery of the draft local plan.
I am glad that the hon. Member for St Neots and Mid Cambridgeshire mentioned the draft local plan. We are working very closely with the shared planning service and democratically elected local leaders. We want to see that draft plan adopted. On the Secretary of State’s powers as they apply to the development corporation and its ability to take planning powers in the future, we do want it to have those powers; we think that is absolutely necessary to set out a spatial plan for the years to come. This development corporation will exist for at least 25 years, perhaps longer, but we want to see that local plan in place in the first instance, and the Government are doing what we can to support that process and help the authority get the plan in place.
On local government reorganisation, to add briefly to what I said in response to the intervention from the hon. Member for Broxbourne, proposals for reorganisation in Cambridgeshire and Peterborough were received in November 2025 and recently went out to consultation. As I said, the development corporation’s boundary, established by this order, does not pre-empt or prejudice the outcome of LGR in that regard.
I push back quite strongly on the challenge from the hon. Member for St Neots and Mid Cambridgeshire that we have not outlined in any way the objectives of the development corporation. If he reads the Government response to the consultation, published on 3 June, he will see exhaustive explanations of why we think the development corporation is necessary and the sort of capacity, powers and ability it can leverage in on private finance, land assembly and all these matters to meet the shared objectives for the area. We will build on that with the functions order—we will detail precisely how the planning powers and the development management powers will come through—but to assure him, the development corporation will have powers to directly plan, fund and deliver essential infrastructure to support regeneration, including utilities such as water. Targets for the development corporation’s objectives will be set across the development corporation’s corporate plan, framework document and development plan, and in individual business plans for all projects. We will have a chance to scrutinise those documents, among others.
I hope that I have responded to all the points raised by hon. Members. I think this is a fairly straightforward and simple instrument, which establishes the Greater Cambridge Development Corporation as a legal body and sets the geographical boundaries in which that development corporation will operate. I commend the order to the Committee.
Question put.
Road safety in Wetheral
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Draft UK-EU Agreement on Gibraltar
(1 week ago)
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Martin Vickers (Brigg and Immingham) (Con)
I beg to move,
That this House has considered the draft UK-EU Agreement on Gibraltar.
It is a pleasure to see you in the Chair, Sir John, for what I hope will be an interesting and constructive debate about the future of Gibraltar. I am delighted to be joined by the chair of the all-party parliamentary group on Gibraltar—the hon. Member for Portsmouth North (Amanda Martin)—on which I serve as the vice-chairman.
As the result of a discussion between me and the Gibraltar Government representative, who is in the Gallery, we thought it would be useful to have a fact-finding trip to Gibraltar, so that when the treaty on the future of the Rock was up for discussion, we could have one from an informed position. Two or three people who were hoping to go on the trip were unable to, but I was delighted that Baroness Butler-Sloss, the Cross-Bench peer, accompanied me, and we were also joined for one or two of the meetings by Lord James Wharton, from the upper House.
Following discussions with the Gibraltar office here in London, we put together a programme that was pretty comprehensive and gave us a good overview of the views of the local population, the business community and, of course, the politicians in Gibraltar. We had a meeting with His Excellency the Governor, which was just a courtesy call, but it is always a pleasure to meet up with him and other senior diplomats to hear how they approach the issues. I should point out that we went at our own expense, so we were independent of the Government of Gibraltar.
After we had seen the Governor, we were delighted to go to the airport and be joined by the Chief Minister, who delighted in giving us a tour of the airport. He has clearly devoted a great deal of time and effort to the arrangements that are necessary to ensure that all sides are content and, importantly, that the sovereignty of Gibraltar is maintained. We all know the long history of Spanish claims on the Rock, but that is definitely not in any way part of the treaty; sovereignty is absolute.
The Minister of State, Foreign, Commonwealth and Development Office (Stephen Doughty)
indicated assent.
Martin Vickers
I can see the Minister nodding; no doubt he will confirm that later.
On our trip to the airport, the concerns about Spanish officials operating on the Rock were, to some extent, assuaged. I was delighted that we were able to receive reassurance from not just the Chief Minister but his senior officials who accompanied us on the tour of the airport. I know there have been certain concerns about Spanish officials, police and the like operating within British territory, but the arrangements that have been made mean that, to a great extent, our fears can be assuaged.
Next we visited the commander at the British base. He assured us that there is co-operation with the Spanish authorities, which is only beneficial to both sides. There is no interference in the operations of the base, and the military is content with the arrangements. The American navy had been in the port only a day or two before our visit. It was encouraging, particularly in view of the current world situation and some of the noises coming from the American Administration, that work and co-operation are continuing at a purely operational level.
There was one visit on which we heard some discontent. We walked along Main Street and called in to see a number of retailers, purely at random, and they raised some concerns. As we know, the retail sector is struggling in many countries, and Gibraltar is no exception. Interestingly enough, one of the shops we went into dealt in ceramics, and the owner imported most of his products from the UK. He pointed out that because of various impositions on the ceramics sector, the costs were rising in the UK so much that it was becoming unprofitable to operate. With the proposed taxation arrangements in Gibraltar affecting retailers, he was going to cease operations in the not-too-distant future after being in business for about 25 years. It was very sad to hear that. But on the whole, although many of the retailers were not particularly happy, they recognised the overall benefits to Gibraltar of the operations.
I have mentioned the concerns about security and so on. One of our meetings was with the chief commissioner of the police, who recognised that there are a number of issues that need what he described as “further consideration”. Having said that, when we left the meeting we felt that, on the whole, his concerns could be worked through. I am sure the Minister is well aware of them, but I would be more than happy to discuss them with him if that would be beneficial.
We then had a lunchtime meeting with the Chief Minister, the Attorney General and the Health, Care and Business Minister. It is important to stress that we had full co-operation from the Chief Minister and his Ministers during our visit, bearing in mind that we had no official standing and were merely there as representatives of the all-party group. I want to put on the record our sincere thanks to the Gibraltar representative for assisting us in making the arrangements for the visit.
In the course of the lunch with the Chief Minister, once we had dealt with the routine matters we were there to discuss, we had a very useful political discussion. It is always interesting to hear an outside politician’s views of what is happening over here in the UK. I am not entirely sure what they would make of it today, but a couple of months ago we had a fascinating discussion, mainly about whether there were concerns about the treaty across the political spectrum here in the UK. We were able to give reassurance, based on the meetings we had and knowing the views of colleagues from the all-party parliamentary group, that there would be all-party support from Westminster.
According to the report we put together, we discussed the evolving UK-EU relationship, and on the whole the direction of travel was greatly supported. We also discussed a number of the issues that were causing concern, including—if I can remember the ins and outs of it—people taking advantage of the arrangements that were being put in place. It is probably not something we need to cover today, but it is worth recording that there were some concerns about people trying to take advantage of the health services provided in Gibraltar. We also had a constructive meeting with the vice-chancellor of the university, whom we had met on previous occasions. It was interesting to receive an update on how things were progressing there.
We had an interesting meeting with Keith Azopardi, the leader of the opposition in Gibraltar, because we wanted to ensure that we received views on the treaty from across the political spectrum. He pointed out that the opposition had imposed a number of red lines in their discussions, but as Members will know, the draft treaty was eventually approved unanimously by the Gibraltarian Parliament. The leader of the opposition quite understandably pointed out his party’s concerns. As opposition parties do, it obviously wanted to carve out a position whereby if something went wrong, he would be able to say, “I told you so.” I can see Government Members smiling at that, because they have been in opposition—my party is in opposition now, and the shadow minister, my right hon. Friend the Member for Aldridge-Brownhills (Wendy Morton), may point out one or two of our concerns in that respect.
Mr Azopardi expressed genuine concerns but—he will probably not thank me for saying this—in all honesty I think he was struggling to find reasons why he would have been tempted to vote against the treaty. It is important to recognise that political parties across Gibraltar have supported the treaty and feel on balance that it would be beneficial for it to be ratified.
Mr Gregory Campbell (East Londonderry) (DUP)
I congratulate the hon. Member on securing the debate. He mentioned cross-party support; does he agree that, as far as we are able to ascertain, the people of Gibraltar are glad that there is cross-party support for their position in this House, and that we must try to maintain that to ensure the safety and security of the people on the Rock of Gibraltar?
Martin Vickers
I entirely agree with the hon. Gentleman.
Following our meeting with the leader of the opposition, we met with Eva Wallace, who is a store manager at Morrisons. Those who know Gibraltar well will know that Morrisons is not just a key part of the retail scene there but a big business operation. Ms Wallace outlined what she described as the significant complexities that arose following Brexit, and the different but equally substantial complexities—such as labelling requirements—that will follow the treaty’s implementation. She pointed out that there would certainly be a reduction in the range of stock the store could offer. Having said that, it currently carries 20,000 different products, so I suspect most customers will not notice if that goes down to 17,000 or 18,000. Morrisons does business with Morocco, from where it gets tomatoes, and there had been problems with labelling. The store has a loyal customer base in Gibraltar, but felt that the ease of crossing the border would increase the footfall coming from Spain, for which bus trips were being arranged. The business is well established there and knows how to continue and hopefully increase footfall.
The university vice-chancellor referred to the new immigration rules, and we noted in our report that the university would closely assess their impact on its attractiveness to prospective students from around the world. Research funding had been difficult to secure since Brexit, and the vice-Chancellor hoped that that might ease with the conclusion of the treaty.
I will draw my comments to a close and allow other Members to take part. On balance, we came away with the overwhelming view that the treaty negotiations had been a success and that the final version of the treaty should be approved. It has cross-party support in Gibraltar and it would be regrettable if that were not reflected here at Westminster. I am interested to hear contributions from other Members. Having in a sense imposed problems on Gibraltar as a result of our leaving the EU, it is important that we have reached a satisfactory conclusion. We should congratulate our negotiating team, and the Chief Minister, the Deputy Chief Minister and their colleagues in Gibraltar. I know from several visits over recent years that they have worked tirelessly to achieve the treaty, which is, on balance, welcome. I hope that, as it passes through the various stages in Westminster, we are able to finalise it in the very near future.
Amanda Martin (Portsmouth North) (Lab)
It is a pleasure to serve under your chairmanship, Sir John, in this important debate.
For more than six years, the people of Gibraltar have lived with uncertainty. As chair of the all-party parliamentary group on Gibraltar, I have had the enormous privilege of visiting the Rock several times since Brexit. I have met businesses, politicians, officials and residents. Wherever I have gone, I have heard the same message: people want certainty, so that they can get on with their lives, grow their businesses and plan for the future.
I want to put on record my thanks to the hon. Member for Brigg and Immingham (Martin Vickers) for not only securing this debate but producing a full and thorough report, alongside Baroness Elizabeth Butler-Sloss, after their visit in May. As he noted, after years of determined negotiations we finally have an agreement that delivers certainty. I congratulate the Minister and his team on that, and I pay tribute to the Government of Gibraltar, whose steadfast commitment was instrumental in securing this outcome. I also recognise the constructive engagement of Spain and the European Union. Agreements of such significance are only possible through patience, dialogue and a shared determination to find a way forward.
This matters because every day more than 15,000 people cross the frontier to work, trade and support their families. Removing unnecessary barriers will make a real difference to people’s lives, give businesses greater certainty and confidence, and help Gibraltar look to the future with certainty. However, the practical benefits need to be seen and felt, so I would be grateful if the Minister could say a little more about when people can expect to begin seeing them.
The economic case is compelling. Gibraltar estimates that the agreement could unlock around £200 million a year for its economy, without costing the UK taxpayer a penny. The agreement is good for Gibraltar, good for British business and good for our wider economy. More importantly, it changes nothing about sovereignty. Gibraltar remains British. The treaty is clear, the Government of Gibraltar’s independent legal advice is clear, and the right of the people of Gibraltar to determine their own future remains untouched.
Chief Minister Fabian Picardo said in one of his national day addresses:
“We are an integral part of the British family of Nations. And no one can or should try to untie the knot that binds us and Britain.”
Those words capture exactly what the treaty has achieved. It provides certainty for Gibraltar’s future while protecting the enduring bond between Gibraltar and the United Kingdom.
It is also important to remember that this is the agreement the people of Gibraltar wanted. It was backed by a Government elected on a mandate to deliver, approved unanimously by the Gibraltar Parliament and supported by every former Chief Minister. As we heard from the hon. Member for Brigg and Immingham, it was backed by the many stakeholders that he met during his visit in May.
Alongside the constitutional protections come real practical benefits: easier movement across the frontier, improved trading opportunities for Gibraltar businesses, and simpler travel for British and potentially European visitors. The agreement gives Gibraltar the opportunity to thrive while remaining proudly British. However, I hear the concerns that have been raised with regard to the retail sector, security, health and access to the university. Along with the Gibraltar APPG, I look forward to supporting and raising any concerns where possible with our Government.
As the Member of Parliament for Portsmouth North, I also welcome the protections for our national security. Gibraltar has stood alongside Britain for more than 300 years and remains one of our most strategically important overseas territories. The strait of Gibraltar is one of the world’s most important maritime gateways, and the ability of the United Kingdom to operate freely from the Rock is fundamental to our national security. I particularly welcome the clear guidance that the movement of UK military personnel and equipment will not be impeded. That was an essential principle throughout the negotiations and I am pleased to see it so very clearly protected. National security is the first priority of any Government, so I would welcome anything the Minister can say about how those defence interests were protected throughout the negotiations and the close work undertaken across Government to secure that outcome.
The agreement is about more than protecting and resolving the legacy of Brexit. It gives Gibraltar certainty, protects sovereignty, strengthens our security and creates the conditions for long-term prosperity. For generations, Gibraltarians have shown extraordinary loyalty to the United Kingdom, and the United Kingdom has stood firmly with Gibraltar. The treaty honours that relationship, safeguards its future and allows Gibraltar to look ahead with confidence. As the chair of the Gibraltar APPG, I warmly welcome it.
Edward Morello (West Dorset) (LD)
It is a pleasure to serve with you in the Chair, Sir John. I congratulate the hon. Member for Brigg and Immingham (Martin Vickers) on securing this important debate. Before I begin, I refer Members to my entry in the Register of Members’ Financial Interests. It was my privilege to represent the Liberal Democrats at the Gibraltar national day celebrations last year as a guest of His Majesty’s Government of Gibraltar. That visit, and my work on the Foreign Affairs Committee, gave me the opportunity to question Ministers, the Chief Minister of Gibraltar, opposition politicians and business leaders about the treaty. Those discussions made it clear that the agreement has been shaped by the priorities of Gibraltar itself.
The Brexit deal left Gibraltar in a state of limbo for years. The treaty finally resolves one of the last outstanding Brexit issues and provides Gibraltar with the certainty it has been seeking ever since the United Kingdom left the European Union. In 2016, 96% of Gibraltarians voted to remain in the European Union; they have had to live with the consequences of a Brexit that they did not vote for. This agreement is about undoing some of the damage caused by a Brexit deal that Boris Johnson called “oven-ready” but in reality was always destined for the bin.
The Chief Minister made it clear to the Foreign Affairs Committee that the single most important priority was ensuring that people who live in Spain but work in Gibraltar, particularly in the financial services and gaming sectors, could continue to cross the frontier every day without excessive delays. Without an agreement, Gibraltar would have been required to implement the full Schengen border code, and travellers would have faced European entry and exit systems and, in the future, the ETIAS—European travel information and authorisation system—digital travel authority. Those additional checks would have created significant delays, threatening Gibraltar’s competitiveness and potentially encouraging businesses to relocate. Instead, eligible travellers will enjoy fluid movement comparable with travelling between Schengen countries. Their ability to continue doing so quickly and efficiently underpins Gibraltar’s economy and the public services that Gibraltarians rely on.
But this deal is about more than economics. The Chief Minister reminded the Foreign Affairs Committee that Gibraltar and the surrounding Campo de Gibraltar are communities bound together by families, friendship and shared history. During the closure of the frontier between 1969 and 1982, families were physically separated, forced to wave to one another across a closed border. Nobody wants a future resembling that painful past.
This agreement protects the everyday relationships that exist across the frontier for work, family, education and leisure, and allows those connections to continue. Approximately 96% of Gibraltarian goods arrive through the land frontier with Spain. After Brexit, sanitary and phytosanitary barriers made importing fresh British food significantly more difficult, with products even requiring air freighting during the Christmas period. This treaty offers businesses the certainty they need. Essential food products will be zero-rated under a new transactions tax, and there will be reduced rates on other essential goods.
The Chief Minister also made it clear that Gibraltar rejected any “freedom of establishment” in the treaty. Gibraltar is home to about 38,000 people living within approximately 2.5 square miles; it was never the intention to create unrestricted rights of establishment across a bloc of approximately 480 million people. Instead, the agreement focuses on facilitating movement across the frontier while preserving Gibraltar’s own immigration rules.
Perhaps the greatest misconception about the treaty concerns sovereignty. The Government of Gibraltar state that there are no sovereignty concessions. The British Government state that sovereignty was never on the negotiating table. Article 2 explicitly preserves the position of both the UK and Spain on sovereignty and jurisdiction. Three independent legal opinions commissioned by the Government of Gibraltar conclude unequivocally that the treaty makes no concessions whatsoever to Spain or the European Union.
The agreement also protects Britain’s strategic interests. The operational autonomy of the military base remains entirely unaffected. Protecting unrestricted military access was a red line throughout negotiations, supported fully by the Ministry of Defence and the Defence Secretary. In the highly unlikely event that Spain should ever seek to terminate the agreement, it cannot do so unilaterally. Under article 66, termination would require a qualified majority among European Union member states followed by action by the European Commission. That provides important legal certainty for Gibraltar’s future.
I want to say something briefly about the wider UK-EU relationship. Gibraltar demonstrates something important: where the UK and the EU work together pragmatically, solutions can be found that benefit everyone. It shows that close co-operation with our European neighbours delivers tangible benefits. Britain’s long-term future should lie at the heart of Europe, because our economy, our security and our young people’s opportunities are stronger when we work alongside our closest neighbour and ally.
I praise those who made this agreement possible. Officials from the Foreign, Commonwealth and Development Office, Ministers, the Governor’s Office, His Majesty’s Government of Gibraltar, the European Commission and Spain have spent many years negotiating what the Minister has rightly described as a practical and lasting solution. This treaty will protect Gibraltar’s economy, safeguard British sovereignty, preserve military interests, strengthen regional stability and, above all, respect the democratic wishes of the Gibraltarian people.
Mark Sewards (Leeds South West and Morley) (Lab)
It is a pleasure to serve under your chairship once again, Sir John. I thank the hon. Member for Brigg and Immingham (Martin Vickers) for securing this timely debate, and for his comprehensive report on his visit to Gibraltar. His experiences there closely match my own.
On that note, I draw attention to my entry in the Register of Members’ Financial Interests. In June last year, I had the pleasure of going to Gibraltar at the invitation of the Government of Gibraltar. While I was there, Guy Dumas, an employee of the Government of Gibraltar, showed us around, and he and I got on so well that I ended up recruiting him as my parliamentary assistant. He has provided enormous assistance with my speech for the debate, for which I am very grateful. He is flying back to Gibraltar in just over a week’s time to marry the love of his life, Holly, and I am sure we all wish them well in their marriage.
There has been one cloud—the levanter cloud, as it is known in Gibraltar—hanging over the Rock since 2016. As has already been mentioned, Gibraltar did not vote for Brexit; 96% of Gibraltarians voted to remain in the EU, but they have had to deal with the consequences. And rightly so, because they are part of the British family. After a decade of uncertainty since the referendum, a positive future is finally beginning to shine through those clouds.
Much of the focus in the lead-up to the agreement was on the key issue of sovereignty, which is completely understandable. Gibraltarians are proudly British. They have reaffirmed that in two referendums, in which 99% voted to remain part of the United Kingdom. Thankfully, as has already been stated, article 2 of the draft agreement says that the agreement is “without prejudice to” the legal positions of the UK and Spain regarding sovereignty over Gibraltar. The House of Commons Library notes that the agreement includes that term and that the Government of Gibraltar have obtained legal opinions confirming that the agreement makes no concessions over the issue of sovereignty. From an entirely legal perspective, an important box has been ticked.
I will focus my remarks on a different principle: Gibraltar’s right to self-determination and the democratic will of its people and its elected Government. My visit to Gibraltar last year began with an unexpected detour. As anyone who has visited will know, the mile-long runway, combined with the strong winds across it, means that planes often cannot land and have to take a detour to Málaga. That was my experience, too.
That meant I had to enter Gibraltar via the land border, which is a routine experience for everybody living on the Rock and the surrounding area. Thankfully, I did not experience a particularly long queue to cross from Spain into Gibraltar, but I know that is not always the case. There are over 15,000 cross-frontier workers in Gibraltar, and that border is the only land entry point into Gibraltar. Delays of minutes can quickly become hours, and those hours are taken away from time with family or time at work. With this agreement, the routine passport checks that have caused those queues will come to an end. The agreement is intended to ensure that the free circulation of people and goods continues, and it removes those physical barriers at the border. As a Labour MP, I welcome any agreement that improves the lives of working people.
During my visit, I met Gibraltarian Government Ministers, the chamber of commerce and the Federation of Small Businesses. I spoke with businesses, just as the hon. Member for Brigg and Immingham described, and with many others. At that point, the agreement had not been announced—it was announced a few days later—but they all spoke about the implications of any potential agreement. They also spoke about Gibraltar’s turbulent history, with Spain being a factor. Their feelings were definitely mixed. There was a mix of hope and anxiety, and there was an acceptance of the reality facing them. There was anxiety among the business community about the effects that new tax arrangements might have on their businesses.
The controlled border, while frustrating in the way I described, provided a sense of security, and some worried that removing those routine checks could affect crime on what is a very peaceful peninsula. They also acknowledged that the alternative to the agreement is a hard border. Some of the people I spoke to had lived through the closed frontier years of 1969 to 1985. They did not have to imagine what a no-deal outcome would look like, because they had already lived through it, and they were cautioning me and the people I was with against it.
What struck me was that there is both a passion for their home and a practical approach to the reality they face. I remember speaking to one of our drivers during the visit. We discussed the agreement, and although he had concerns—the ones I have set out—he was very practical. He told me that he crosses into Spain every single weekend and that if the agreement would make that easier and save him hours of queuing, then he was all for it.
Gibraltarians are a thoughtful and politically minded people. I know that because I am pleased to be a member—a secret member—of the “Speak Freely” Facebook group. I hope they do not kick me out after that declaration, especially as I am not a resident of Gibraltar, but it has been wonderful to follow the political discussions. I have no doubt that some of that political awareness comes as a result of years of vigilance with a neighbour that claims sovereignty over their Rock. The visit left me in no doubt that while Westminster scrutiny is absolutely valid and welcome, and while we have to ratify treaties here, it should not override the wishes of the people of Gibraltar.
The UK, the EU, Spain and Gibraltar announced the political agreement days after my visit, and the draft agreement was published this February. Gibraltar’s Parliament subsequently passed a motion supporting ratification. Every single one of its 17 Members voted in favour of ratification—that is the kind of consensus we can only dream of in this place. There can be no doubt that the agreement has democratic legitimacy from the Government of Gibraltar.
I recognise the desire of Members, who no doubt have the interests of the Gibraltarian people in mind, to scrutinise the agreement to the fullest. The UK has a constitutional duty towards Gibraltar, even though Gibraltar is almost entirely self-governing, but if the agreement commands the support of Gibraltar’s elected Government and every single Member of its Parliament, we must give considerable weight to that democratic judgment. Our Parliament can and should scrutinise, but it should not substitute its own judgment for the democratic will of Gibraltar, particularly when the agreement protects sovereignty and military autonomy.
I want to say a word on military autonomy. Gibraltar continues to play a key strategic military role. Defence is one of the United Kingdom’s reserved constitutional responsibilities, so I fully understand why Parliament must carefully scrutinise that aspect of any agreement, but here, too, a very important box has been ticked. The UK military base is not affected by the agreement, and those are not my words; they are the words of the outgoing commander of the British forces in Gibraltar, Commodore Tom Guy, who said that the agreement is positive from a military perspective because it protects the key principle of “military autonomy”, and our armed forces will
“continue to operate to, through and from Gibraltar unhindered”.
Under the Constitutional Reform and Governance Act 2010, treaties must be laid before Parliament before ratification, but the political principle, I hope, is clear: the power to decide Gibraltar’s future should rest with the people of Gibraltar. Our Government and Parliament should respect their wishes.
I have only two questions for the Minister, who I know is very highly regarded on the Rock. Can he confirm to the House and to the Gibraltarian people that there will be a legally binding mechanism to ensure that no UK Government will be able to withdraw from the agreement without Gibraltar’s consent? In a similar vein, can he confirm that no future UK Government will be able to block Gibraltar from withdrawing from the agreement if it is the democratically expressed will of the Gibraltarian people? That would be the strongest way to ensure that Gibraltar continues to control its own future.
Next week, the levanter cloud over the Rock may finally begin to lift. Gibraltar may feel different, but British sovereignty has been protected, and military autonomy is completely unchanged. Now it should be the Gibraltarians who determine their future in accordance with the principle of self-determination.
Jim Shannon (Strangford) (DUP)
It is a real pleasure to serve under your chairship, Sir John. I thank the hon. Member for Brigg and Immingham (Martin Vickers) for securing this incredibly timely and crucial debate. It is nice to see some representatives of Gibraltar in the Public Gallery, as well as one of our old friends from this House. It is good to see the Minister in his place, and I wish him well in his job. He always gives us encouragement, and he will no doubt do the same today.
When the Minister stood up in the main Chamber back in February to outline the massive 1,000-page document, I was reminded of a wise old saying that my dear mother used to repeat when I was a wee lad with black, curly hair—I had hair at one time, believe it or not. That saying was, “Once bitten, twice shy.” The hair is long gone, but the wisdom of that saying firmly remains. My mother is 94 years of age and next Tuesday, 14 July, she will be 95 if God spares her until that time. The people of Northern Ireland have been bitten hard, which is why “once bitten, twice shy” comes to mind.
I should have said that it is a real pleasure to follow the hon. Member for Leeds South West and Morley (Mark Sewards). We might be on different sides of the Chamber, but it is remarkable how much he and I agree on. If there was a party somewhere between Labour and Conservative, I think we might find ourselves in it, or maybe we will just be in both—well, he cannot be, but that is by the way.
As I said, the people of Northern Ireland have been bitten hard. We have seen what happens when the United Kingdom signs a treaty with the European Union in good faith, only to find ourselves a slave to foreign diktats, with our internal trade disrupted, our state aid hampered and our constitutional place in this great Union of Great Britain and Northern Ireland chipped away.
I have been to Gibraltar only once in my life, and that was with the armed forces parliamentary scheme. I remember that Gibraltar drips Britishness, and I mean that constructively and positively. We were encouraged to meet the Royal Gibraltar Regiment and to know that we are a part of them. There is a bit of England, Scotland, Wales and Northern Ireland in Gibraltar. It is all there, and Gibraltar is very close to our hearts.
When I look across the water at our loyal, steadfast fellow Brits on the Rock of Gibraltar, I do so with an eye of deep caution. I will make my point constructively and respectfully to the Minister. He knows I am very fond of him; in fact, we all are. In the past, he has reassured us that the agreement will bring “fluid” borders. He told us that it will boost the economy, eliminate long queues and align import duties so that ordinary people can do their daily shopping without a mountain of paperwork.
I do not doubt the good intentions of the Government and of the Minister in particular. The Chief Minister of Gibraltar and his Parliament have worked tirelessly, and they have even asked for a referendum on the final text to let the people have their democratic say. I praise them for that, and I thank them for all they have constructively done to try to find a way forward that protects them. We want to protect them as well.
We must look at the fine print of these 1,000 pages. The treaty proposes a hybrid governance model. It pulls Gibraltar into the Schengen area and places it under significant levels of EU law. We are talking about dual border control checks at Gibraltar airport, involving not just Gibraltarian officials but Spanish officials having their way on British territory, which concerns me.
What real safeguards do we have? If the European Court of Justice is given the final say on the interpretation of these laws, as I understand it will, how can we truly look the people of Gibraltar in the eye and say that their British sovereignty is uncompromised? That is the question. We cannot allow Spain to use the European Union’s legal machinery to slowly strangle the Rock’s independence and British identity, just as the Northern Ireland protocol attempted to separate my Strangford constituency and Northern Ireland from the rest of Great Britain.
The people of Gibraltar are fiercely, proudly and unapologetically British. Over the years, they rejected joint sovereignty by almost 99% in two separate referendums. That is the sort of election result we all need, and what encouragement it would be if it were to happen. They fly the Union Jack with a pride that matches any town or village in my constituency. I put up my Union flag over the weekend, as it is a special occasion with 12 July coming up—we always have it in place at this time of year.
Gibraltarians have stood by the United Kingdom through thick and thin. Their strategic military base remains a vital asset for NATO and the defence of the realm. The Rock, by its nature, conveys strength. When I was there with the armed forces parliamentary scheme we had the opportunity to go through some of the tunnels in the rock, and I can understand why it is a bastion of military strength.
While the treaty moves towards formal signature and parliamentary ratification under the CRaG process, I urge the Government not to rush this. Examine the treaty line by line and listen to the community’s concerns. I am a man of Scripture, as I know you and many others in the House are, Sir John. Psalm 62 says:
“He only is my rock and my salvation, my fortress; I shall not be…shaken.”
The Rock of Gibraltar is that very place; it stands firm and will not be shaken. We must stand steadfast and ensure that the United Kingdom’s sovereignty over Gibraltar is not just a symbolic phrase written on a piece of paper to save face, but a practical, iron-clad reality on the ground. Let us not make the same mistake twice; let us protect the Rock, its people and our great United Kingdom of Great Britain and Northern Ireland.
Dr Al Pinkerton (Surrey Heath) (LD)
It is a great pleasure to serve with you in the Chair, Sir John. I congratulate the hon. Member for Brigg and Immingham (Martin Vickers) on securing this important debate. I draw Members’ attention to my entry in the Register of Members’ Financial Interests. I had the great pleasure of visiting Gibraltar in July last summer, perhaps shortly before the hon. Member for Leeds South West and Morley (Mark Sewards), and, like him, I got to experience the new border control operations that will be in place. I had the great pleasure of meeting multiple representatives, who spoke positively about the experience and the way in which the United Kingdom Government had ensured that, at every single stage of the negotiation that led to the agreement, Gibraltarians were present and gave their consent.
The Liberal Democrats welcome this agreement. It achieves the objective that matters above all others: preserving British sovereignty over Gibraltar while providing a practical solution to the problems that have hung over the territory since Brexit. I spent much of my academic career—I am a recovering academic—researching borders, sovereignty and contested territories, and I have spent time in Gibraltar recently and in the past and spoken to people who live with the consequences of the treaty, so I know all too well that borders are rarely just lines on a map. They are systems for managing movement, trade and security. When those systems fail, ordinary people end up paying the price.
That is precisely what happened after Brexit. Gibraltar found itself excluded from the trade and co-operation agreement, leaving 38,000 people living with years of uncertainty. As we have heard, the people of Gibraltar did not choose that outcome. Not only have they repeatedly rejected the prospect of joint sovereignty, as they did in 2002, but they overwhelmingly voted to remain in the European Union in 2016. Whatever our views on Brexit, we should recognise that Gibraltar has spent the past six years managing the consequences of decisions that it did not participate in making.
The treaty reflects one of the oldest truths in geopolitics: geography cannot be wished away. Gibraltar is politically British, geographically Iberian and economically dependent on the daily movement of people across the frontier. Good statecraft—of which these proposals are an example—reconciles those realities, rather than pretending that we can override them. The treaty deserves support—albeit not uncritical support—because it starts from the correct constitutional principle, which is that the freely expressed wishes of the people of Gibraltar are paramount.
That principle is reflected in the agreement. Article 2 contains what many legal experts have described as the strongest “without prejudice” sovereignty clause ever included in an EU agreement relating to Gibraltar. Three independent KCs have concluded that the treaty makes no concession whatsoever on sovereignty. That legal certainty matters for all the reasons that the hon. Member for Strangford (Jim Shannon) outlined. That is why the agreement enjoys such strong unilateral support from Gibraltar’s Chief Minister and other representatives in the Parliament. Gibraltar’s Parliament and all three living former Chief Ministers agree that this is an appropriate deal. That consensus is highly unusual—Westminster might take note.
The agreement is equally clear on defence. The MOD has confirmed that the UK retains full freedom to operate from Gibraltar. British military capabilities remain sovereign and unconstrained, with Spain unable to impede British personnel or equipment. At a time of growing geopolitical instability across Europe and the Mediterranean, preserving Gibraltar’s strategic role in NATO is essential.
However, the possession and preservation of sovereignty alone is not enough. Sovereignty must also work—it must be practical. We have heard observations today not only about Gibraltar’s strategic importance, but about the sheer intensity of everyday cross-border movement: 15,500 people cross the frontier every single day. Those people staff Gibraltar’s hospitals, restaurants, financial services, construction industry and public services. Almost all food and medicines arrive in Gibraltar by road through Spain. That is why a functioning border is not just a convenience but an economic necessity. Gibraltarians understand better than most what happens when borders cease to function. Many have spoken to me about their recollections of the years after 1969, when the Spain frontier was closed, severing families, disrupting livelihoods and isolating Gibraltar economically and politically.
Even after that frontier fully reopened in 1985, political tensions have, at times, caused lengthy queues and disruption at the crossing. I have waited in those queues at various times. Gibraltar endured them for years, but its economy today is very different from the economy of the past. Thousands of workers now cross that frontier every day to sustain its economy and public services, which is precisely why this agreement matters so much.
The treaty has become even more necessary because Europe itself is changing the way its borders operate. The EU entry/exit system requires biometric registration of third-country nationals entering the Schengen area. That may work tolerably at airports—actually, I am not sure that it does, given the words of the chief executive of Aeroporti di Roma this week—but at one of Europe’s busiest land borders, it risks creating queues measured not in minutes but in hours.
Had this been left unresolved, Gibraltar would have faced severe disruption through no fault of its own. The agreement prevents that outcome and removes routine immigration and customs checks at the land frontier while keeping Gibraltar outside of the Schengen area. Gibraltar retains its own immigration laws and authorities. At Gibraltar international airport, British immigration controls will be carried out by Gibraltar officials before a Schengen check under the agreed arrangements. Spain has no unilateral power to refuse entry.
Equally important are the safeguards for Gibraltarians. Residents and Gibraltar identity card holders cannot be refused entry into Gibraltar, detained under those arrangements or subject to the EES or ETIAS systems. Those guarantees are practical expressions of sovereignty. The economic benefits are also equally significant. Without an agreement, Gibraltar faces prolonged uncertainty and significant economic harm. With the agreement, estimates suggest about £200 million could be added annually to Gibraltar’s economy—that is about 6% of its GDP—while boosting investment and confidence at no additional cost to the UK taxpayer.
The agreement also creates opportunities beyond the land frontier. Direct air services between Gibraltar and European destinations could strengthen tourism and economic connectivity. With more than 9.4 million visitors entering Gibraltar annually across the border, compared with around 184,000 by air, smoother movement would benefit Gibraltar’s economy while reducing friction for communities on both sides of the frontier.
Concerns have understandably been raised about the Schengen 90/180-day rule for air arrivals. However, it is worth saying that visitors stay on average just 3.4 days in Gibraltar—a small fraction of the 90-day allowance—and many already continue into Spain and use part of that allowance there. For most travellers the practical impact is therefore likely to be minimal. There are, however, still issues that deserve scrutiny.
Will the Minister clarify precisely how the Schengen 90/180-day rule will apply to British citizens spending time in Gibraltar? It is important that we avoid creating constitutional tests that have never existed elsewhere in the British family of overseas territories and Crown dependencies, with which the United Kingdom has never operated unrestricted freedom of movement. Territories such as the Falklands—as I know all too well—have long maintained their own immigration laws and entry requirements, reflecting their distinct constitutional status and circumstances. Gibraltar has likewise always controlled its immigration arrangements.
The question is therefore not whether Gibraltar should have border controls, but whether those controls serve Gibraltar’s interests while fully preserving British sovereignty. Notwithstanding the clarification that I just sought from the Minister, the treaty strikes that balance. Implementation must be undertaken in close co-operation and partnership with Gibraltar’s Government and its business community. Ultimately, this agreement will be judged by whether the borders work smoothly for those who depend on it every day.
Gibraltar illustrates a wider truth about Brexit. Like the Windsor framework, this agreement is an intelligent and pragmatic attempt to solve problems that Brexit created. Geography has not changed—Gibraltar remains politically British while being physically connected to the European continent, and good diplomacy recognises both those realities—but we cannot continue to resolve the consequences of Brexit one border at a time. I contend that the United Kingdom needs a broader reset with our European colleagues.
If I may be so bold, I suggest a growth and defence partnership with our European neighbours—something I have spent a lot of time trying to fashion over the past few months. That would involve entry into the single market and a relationship with the EU’s customs union, which would restore and revive our relationship and solve many of the challenges that we have spoken about in the debate. I welcome this agreement, which protects sovereignty, Gibraltar’s economy and British strategic interests, and, above all, respects the wishes of the people of Gibraltar.
Wendy Morton (Aldridge-Brownhills) (Con)
It is a pleasure to serve under your chairmanship, Sir John. I draw the House’s attention to my entry in the Register of Members’ Financial Interests: I visited Gibraltar as a guest of the Government of Gibraltar.
I am very grateful to my hon. Friend the Member for Brigg and Immingham (Martin Vickers) for securing this important debate at a pivotal moment for Gibraltar. It is somewhat extraordinary that, although the provisional application of the UK-EU Gibraltar treaty is expected in a little more than a week’s time, Parliament has still not been afforded a meaningful opportunity to scrutinise an agreement of such significance.
Let me begin by making one thing absolutely clear: we welcome the fact that a deal has been reached. Businesses in Gibraltar and across the UK, frontier workers, and British citizens travelling to Gibraltar need certainty. Above all, Gibraltar deserves certainty about its future. This agreement helps to provide that by giving businesses, residents and those who rely on the frontier a clearer framework for the future. I am also proud of the work undertaken by the previous Conservative Government. Those negations were never straightforward, as I know from personal experience. They sought to balance Gibraltar’s prosperity with the practical realities of the frontier, our constitutional responsibilities as a sovereign power and our unwavering commitment to Gibraltar remaining British for as long as the people of Gibraltar wish.
Welcoming a treaty does not mean dispensing with scrutiny, however. On 23 April, the Government of Gibraltar confirmed that the treaty had received unanimous approval from all EU member states, and that provisional application is expected to begin on 15 July. We know, because the Government of Gibraltar have helpfully kept parliamentarians informed, that the treaty will be formally signed before then, although even now no date has been publicly confirmed. We also know that the final sections of the frontier fence will be removed on 15 July, allowing fluid movement across the land border for frontier workers, residents and visitors, before the treaty proceeds towards full ratification in the following months.
Those are constitutional, economic and practical developments of huge significance, yet it has been the Government of Gibraltar, rather than His Majesty’s Government, who have kept Parliament involved as events have unfolded. That should concern every Member of this House, regardless of their party, because Ministers are accountable to this Parliament for United Kingdom treaty obligations. Since the agreement was announced, Members of both Houses have had to rely on urgent questions, oral questions and written parliamentary questions simply to establish the Government’s intentions. I know that the Minister is aware of that.
When the draft treaty was published on 26 February, the Minister assured the House that the Government welcome scrutiny, but the answers that we have received have too often amounted to little more than references to previous statements or generic replies that fail to engage with the substance of the questions being asked. That is not meaningful scrutiny, and it is not how Parliament should be treated.
The question before us is no longer whether there should be a treaty; it is whether Parliament will be permitted to scrutinise it properly before it takes effect. The Government have repeatedly said that they are committed to transparency and respect for Parliament. If that commitment means anything, it must surely apply to a treaty of this constitutional significance.
We are now only days away from provisional application, and fundamental questions remain unanswered. Parliament still does not know when the treaty will be signed, when it will be laid before Parliament under the Constitutional Reform and Governance Act 2010, whether elements of the agreement will begin operating before Parliament has completed its scrutiny, and what opportunities Members will have to debate it further. These are not procedural technicalities. The CRaG exists because Parliament recognised that international treaties should be subject to democratic scrutiny before they bind the UK. If substantial parts of the treaty are allowed to take effect before Parliament has had a meaningful opportunity to consider it, many will understandably question what practical value that scrutiny is intended to have.
For those reasons, I hope the Minister will answer some straightforward questions today. Will the Government commit to providing time for a full, substantive debate on the treaty in both Houses before provisional application begins? When precisely do Ministers intend to lay the treaty before Parliament under CRaG? What assessment have the Government made of the constitutional implications of allowing provisional application before Parliament has completed its scrutiny under that Act? Do Ministers genuinely believe that the standard 21-day scrutiny period is sufficient for an agreement of this constitutional, economic and strategic importance? I believe those are reasonable questions that parliamentarians should not have to drag out of the Government.
This debate is about more than process. As we have heard, companies involved in cross-border trade need certainty and clarity about customs arrangements, regulatory compliance and border procedures. Ministers have spoken about the opportunities the agreement presents, but opportunities must be matched by preparedness. Businesses cannot prepare for new arrangements if Government guidance does not arrive until implementation is already under way, and Parliament cannot properly represent those affected if Ministers do not provide the information necessary for proper scrutiny.
The Government should therefore answer some practical questions today. Can the Minister explain in clear terms whether any new checks, controls or administrative procedures will govern the movement of British troops or military equipment to and from the military base? Given Gibraltar’s strategic importance, Members will rightly wish to understand exactly what arrangements are envisaged. Will the Government set out the precise process by which British goods will enter Gibraltar under the new arrangements, whether by land, sea or air, and explain how they differ from the arrangements that businesses operate under today? What engagement have the Government had, both before and since the treaty was announced, with British businesses that export or import goods into Gibraltar? What assessment have Ministers made of the readiness of those businesses for implementation, and what support is being provided?
The Government have spoken confidently about the benefits of closer co-operation with Spain, but what contingency plans are in place should Spain seek to create difficulties or exert pressure once the frontier fence has been removed? Gibraltar’s scrutiny and prosperity should never depend on good will alone. The Minister should also explain the rationale behind the governance arrangements for Gibraltar airport in the treaty, including the proposed operating structure, and why Ministers believe those arrangements are in Gibraltar’s long-term interests. What discussions have His Majesty’s Government had with the Government of Gibraltar regarding the parliamentary lock that the Gibraltar Parliament has indicated it wishes to have over implementation of the treaty? How do Ministers intend to respect Gibraltar’s democratic institutions as the agreement process progresses?
I would like to place on the record my appreciation for a significant recent development. The Government of Gibraltar have announced that Gibraltar has been removed from Spain’s list of non-co-operative jurisdictions, bringing to an end a designation that had remained in place since 1991. That is undoubtedly welcome news, and it represents another positive step in strengthening Gibraltar’s international standing. Once again, however, many Members first learned of that through media reports rather than from the Government. Gibraltar occupies a unique constitutional position, and the UK retains responsibility for its external relations. It is therefore entirely reasonable for Parliament to expect timely information from our Government on developments of such significance.
No one in this House wishes to see unnecessary delay or to undermine the progress that has been made. However, supporting Gibraltar and scrutinising the Government are not competing objectives; they are complementary responsibilities. I hope the Minister will use this debate not simply to repeat previous statements, but to provide the timetable for scrutiny that Parliament has been seeking for many months. Please tell us, Minister, when the treaty will be signed, when it will be laid before Parliament, what opportunities Members will have to debate and vote on it and why the Government believe that Parliament should be expected to scrutinise a treaty only after key parts of it have already begun to take effect.
Again, I am grateful to my hon. Friend the Member for Brigg and Immingham for securing this important debate, which has provided an opportunity to discuss the treaty. But as I have set out, this debate should not take the place of the vital, detailed scrutiny of the treaty that this place deserves. I await the Government’s setting out the detail; now is the Minister’s opportunity to do so. If the Government are confident that the treaty commands support, they should be confident enough to subject it to full parliamentary scrutiny before its provisions take effect.
The Minister of State, Foreign, Commonwealth and Development Office (Stephen Doughty)
I am genuinely grateful to the hon. Member for Brigg and Immingham (Martin Vickers) for securing this debate. I pay tribute to his work as vice-chair of the all-party parliamentary group on Gibraltar, and to that of its chair, my hon. Friend the Member for Portsmouth North (Amanda Martin). I thank all right hon. and hon. Members for their contributions, which have been broadly in the spirit that I and the people and Government of Gibraltar would have hoped for: reasonable, fair scrutiny with broad support. It is important to emphasise that, because it sends a strong signal that complements the strong support of the democratically elected Parliament of Gibraltar for the draft UK-EU agreement.
I will respond to specific points as I go, but will start by paying a tribute to all those involved in the process over many years: His Majesty’s Government of Gibraltar—the Chief Minister, the Deputy Chief Minister, the Attorney General and all their officials and teams—and our teams in the Foreign, Commonwealth and Development Office, particularly the senior officials who did sterling work in taking us through the detailed process. The treaty is a big one, with many associated administrative and practical arrangements. I know there have at times been frustrations about the length of the process and the detail, but it was important to get it right. This is about the future of Gibraltar and our relationship with the EU, Gibraltar and Spain.
I also pay tribute to our friends in the EU and Spain for the constructive spirit they have shown throughout the discussions and negotiations. We have come to a conclusion that is beneficial for people, which is what we all sought to do. My hon. Friend the Member for Leeds South West and Morley (Mark Sewards) made a party political point but an important one: in the end, this was about people and businesses, their lives and their ability to move, to trade and to get on, without the uncertainty caused by Brexit.
Gibraltar was not included in the EU-UK trade and co-operation agreement that was negotiated by the previous Government following the UK’s departure from the EU. That meant serious uncertainty for the people and businesses of Gibraltar, which is why we have worked together to find a practical and lasting solution that protects Gibraltar’s economy and way of life for the long term, while crucially safeguarding our sovereignty.
We had previously reached the provisional and political agreements, and have been involved in the detailed process for some time. We have now achieved an agreement that ensures the free circulation of people and goods between Gibraltar and the EU by removing the physical barriers on the border between Gibraltar and Spain. I cannot overemphasise the importance of that, not least because of what the people of Gibraltar went through for so many years. That will mean jobs, investment and stability, not just for Gibraltar but—it is important to emphasise—for the whole region. That involves EU Schengen area rules relating to border checks being applied in Gibraltar and a customs union being established between the EU and Gibraltar. That will bring certainty to the territory.
Let me turn first to some of the questions about scrutiny; I will answer the questions from the shadow Minister, the right hon. Member for Aldridge-Brownhills (Wendy Morton), in detail in due course. The CRaG Act 2010 gives statutory form to long-standing constitutional conventions on the scrutiny of treaties and is the process we are legally obliged to follow to ratify treaties. Despite the very particular approach of the CRaG system, transparency has been at the heart of our approach. I gently rebuff some of shadow Minister’s comments, because we published the draft text of the agreement on 26 February, and I gave an oral statement to the House on the same day. We have had this debate today and I have appeared before Committees and answered many questions. We have attempted at all stages to be transparent and open. I have offered private briefings to shadow ministerial colleagues and the shadow Foreign Secretary, the right hon. Member for Witham (Priti Patel).
Stephen Doughty
I will come back to the timeline in due course. It is quite right that throughout the process Parliament has provided scrutiny, as it has been doing in this debate, which is very welcome.
Edward Morello
Perhaps it is useful to point out that the Foreign Affairs Committee does not, as standard, hold evidence sessions on every treaty that is laid before Parliament under the CRaG process. The Minister and the Chief Minister very kindly appeared before us to give evidence, and frankly a lot of the questions that the shadow Minister asked were probably answered in that evidence session.
Stephen Doughty
Indeed; that is a fair point, and I appreciate the hon. Gentleman making it. We did appear before the Foreign Affairs Committee, and we have endured scrutiny in the media and from businesses and others—and quite rightly so. On my visit to Gibraltar, I met with the leader of the opposition, businesses and others, who had legitimate and reasonable questions to ask. We have done our best to answer those transparently and in good faith.
What matters most at this point is providing clarity and certainty for the people and businesses of Gibraltar, which is why I am pleased to say that the UK and EU will provisionally apply the agreement from 15 July—next week. This is an important milestone for Gibraltar. The UK and the EU, along with Gibraltar and Spain, are committed to fully ratifying the treaty as soon as possible, and we are all working at pace to achieve that.
My understanding is that the process in the European Parliament will take place this autumn, up to December. We will be operating under a similar timeline, in accordance with the discussions we are having with the relevant Committees and others regarding the CRaG process. Once signed, the treaty will be provided immediately to the UK Parliament, and I will make the appropriate statements to signify that moment. We will then have the CRaG process and ratification. I hope that satisfies Members who asked about the timeline, but I will go into a little more detail later.
Much of the legislative and operational work to bring the agreement into force is being led by His Majesty’s Government of Gibraltar, and they have made very strong progress in a short space of time. They have already put in place their main primary legislation and are working tirelessly on the many practical steps needed to apply the agreement. I am pleased to say that there is very strong co-operation between the Spanish and Gibraltarian authorities across areas of shared implementation, including the physical infrastructure works required at Gibraltar’s airport. We stand ready to assist in whatever way we can, and have done so throughout the process.
It is important to emphasise, as many Members have, that negotiations on sovereignty were never on the table during the treaty negotiations, and that was not in doubt. The agreement is about technical arrangements that govern Gibraltar’s relationship with the EU. I appreciate the compliments paid by the Liberal Democrat spokesperson, the hon. Member for Surrey Heath (Dr Pinkerton), and others about article 2 of the treaty, which makes it clear that the agreement in no way affects our sovereignty position on Gibraltar and cannot be used to challenge it.
As I set out both in opposition and now in government, we remain committed to the Gibraltar double lock, which means we would never enter into arrangements under which the people of Gibraltar would pass under the sovereignty of another state against their freely and democratically expressed wishes, and we would never enter into a process of sovereignty negotiations with which Gibraltar was not content. The sovereignty of Gibraltar is protected in the treaty for the long term. If it had not been, we would not have agreed it.
Many Members raised important points about the military base. Safeguarding the operational autonomy of the UK’s military facilities has been a red line for the UK Government throughout our discussions. The agreement protects that autonomy and allows our facilities to continue their vital contribution to regional security and prosperity. The Ministry of Defence has been closely involved in the negotiations at every stage. We have the full backing of the Defence Secretary and defence teams on this agreement. I am glad that that was confirmed by colleagues’ experiences of engaging with the Commander British Forces in Gibraltar.
The agreement also removes immigration checks at Gibraltar’s land border with Spain. That is crucial for the nearly 15,000 people who cross the border every day for work, and for protecting Gibraltar’s economy. To unlock the benefits of a fluid border, travellers arriving at the airport will undergo dual immigration controls. Under this system, visitors have the benefit of crossing freely into Spain without checks. Time spent in Gibraltar will therefore count towards the EU’s 90/180 days requirement. The Government of Gibraltar have assessed that the significant impact of an open border outweighs any challenges that might result from it. Because Gibraltar automatically already applies a period for UK residents coming into Gibraltar, it has been pointed out that, practically, this means very little. It does not, of course, affect the residents of Gibraltar itself. The agreement delivers a solution that the Government of Gibraltar want, and the Chief Minister has been very clear on that.
The treaty has a series of benefits for wider relationships. The shadow Minister rightly pointed out the welcome announcement regarding non-co-operative jurisdictions from our friends in Spain. That is important to Gibraltar and is a testament to how things have moved forward. We have seen tangible and positive developments in our relationship with our friends in Spain across a whole series of issues that matter to people here in the UK, including our co-operation in business, security and trade. That is welcome. The treaty is, of course, one of the crucial aspects of the reset in our relationship with the European Union. This agreement is good for Gibraltar and for the United Kingdom, and it is good for all the people, including our people. Right hon. and hon. Members have accurately reflected the work and statecraft that has gone into it and the practical benefits it will deliver. This marks a turning point.
Before I conclude, let me respond to some of the specific points that have been made. I have answered the questions about the timing of the CRaG process, but Members will appreciate that bringing a treaty of this complexity into effect has required a set of interlocking processes. We are not the sole guardians of the process; there are processes in Gibraltar, Spain and the European Union, and the treaty can be signed only once those processes—including the EU’s translation of the text into 23 other official languages—have concluded and been aligned. Rather than delaying the publication until that point, we chose to bring forward the draft treaty so that Members could scrutinise it and see the detail.
I assure Members that the text published in February remains substantively unchanged. The intervening period has been used for legal verification, technical checks and the preparation of authentic language versions. That is one of the reasons why the final treaty will be published and signed imminently. The provisional application will take place from 15 July, and we will then make the appropriate statements in this House and start the CRaG process, in line with discussions with the secretariat of the European Affairs Committee regarding the practical arrangements.
Stephen Doughty
I am conscious that in between there will be a recess. I will ensure that that does not affect this House’s ability to have the proper period to scrutinise under the CRaG process. That may be what the shadow Minister was going to ask.
Wendy Morton
It was along those lines, but for absolute clarity, does the Minister envisage the treaty coming forward before we break for recess?
Stephen Doughty
I do envisage the treaty coming forward, but I want to ensure that we do not start the clock and then Members feel they do not have a chance to scrutinise it over the recess. The minute that the treaty is signed, it will be provided—within appropriate transmission times—to both Houses. We will ensure that we are in close contact with the Committees and that we have an agreement on the CRaG process, and we will make the appropriate statements. Sir John, you will know that the timing of statements and debates in the House is a matter for the usual channels between the Government and the Opposition, but I do not want to shy away from scrutiny, and that is why I welcome this debate. We will not try to curtail the CRaG process in any way. In practical terms, this treaty will have had far more pre-scrutiny and Committee scrutiny in this House than many other international treaties. I hope that provides some assurance to colleagues.
Members asked a number of other questions. I have covered the questions about article 2 and sovereignty. I was asked about future scenarios that might emerge with respect to the relationship between the UK and Gibraltar. It is important to emphasise that the Gibraltar Parliament unanimously passed a motion calling on the UK to ratify the treaty, subject to the existence of a concordat assuring that the UK can exercise its powers in the treaty only with the consent of His Majesty’s Government of Gibraltar, and that the people of Gibraltar have the right to determine in a referendum whether the treaty should be terminated in the future. Obviously, we hope to never get to that scenario, but it is important that we have those safeguards in place.
To answer the questions that my hon. Friend the Member for Leeds South West and Morley asked, I quote from my letter to the Chief Minister on 2 March:
“It is therefore politically inconceivable that in any normal circumstances, should a democratically elected Government in Gibraltar or indeed the Gibraltarian people determine that this agreement does not serve their interests, His Majesty’s Government would not take action.”
I hope that provides assurance, as it is certainly the tenor of my discussions with the Chief Minister and, indeed, of the discussions he has had in the Gibraltar Parliament.
I have touched on the questions about the 90-in-180-day rule, but for the record, under the agreement, non-resident British nationals can visit Gibraltar for up to 90 days, as is the case today—there is no change in that—but, as visitors will be free to enter Spain without checks, time spent in Gibraltar will count towards the 90-in-180-day requirement of the EU. Importantly, immigration into Gibraltar is and will remain the responsibility of the Government of Gibraltar. The agreement provides a unique solution, a fluid border, and puts different procedures and processes in place.
On the military base, there are lots of details, but I was asked a specific question, so I want to be clear that UK military personnel entering Gibraltar will not be subject to Schengen checks under the proposed arrangements. That will enable our facilities to continue their vital operations without interference or interruption. The posting of UK military personnel serving in Gibraltar and their families will not depend on Schengen border checks; as is the case now, the UK will decide who will serve in Gibraltar. We also have important agreements on goods entering the base. As colleagues will understand, we do not disclose sensitive operational details, but we have agreed special arrangements to ensure the functioning of the new arrangements.
Jim Shannon
I thank the Minister for his comprehensive response. I asked him about officials from Spain being at border control posts alongside officials from Gibraltar to oversee that work, and about the impact and influence that they may have. Can he confirm that that will be the case? What influence will the Spanish officials have? Will they oversee or counteract Gibraltar border control and customs officials?
Stephen Doughty
The hon. Gentleman asks a good question. The practical checks that take place at the airport are not dissimilar to the juxtaposed controls at St Pancras and elsewhere. We tried to come up with a practical solution to the new arrangement, and it is one that has the full agreement of the Government of Gibraltar. Everyone arriving at the airport will undergo Gibraltar immigration controls carried out by Gibraltar officials, followed by Schengen entry checks carried out by Spanish officials on behalf of the EU. On completion of those checks, individuals will be able to enter both Gibraltar and the Schengen area.
As I said, that set-up is similar—it is not exactly the same—to how we make the arrangements work practically at St Pancras. Of course, 18,000 people use Eurostar every day, and we have heard about the 15,000 people crossing the border in Gibraltar. The Government of Gibraltar and the different authorities are working closely on a whole series of practical and physical arrangements for how things will work—I will not go into the detail of all the different maps, plans and architect’s drawings that we scrutinised in great detail.
As was rightly pointed out by the Liberal Democrat spokesperson, another benefit of the agreement is that, subject to commercial interest, new flight routes into Gibraltar from other areas within the Schengen area could open up. Again, this will provide an economic boost and benefit. I pay particular tribute to the Deputy Chief Minister, who has taken a keen role in relation to the airport and its functioning over the years; it has been at the heart of the agreement throughout.
On customs checks and the business impacts, I recognise the points made by Members about the questions they have been asked by businesses. The UK Government and the Government of Gibraltar are confident that overall, the economic benefits of the agreement will massively outweigh any issues with changes. Obviously, there will be implementation periods for the taxation arrangements, which are for Gibraltar to decide on; for example, there will be a period coming up to the VAT rate changes.
On customs checks for businesses, to allow for free flow across the Gibraltar-Spain border, goods in Gibraltar must meet EU standards. Over half of all goods in Gibraltar arrive from the EU and already meet those standards, as do many others that arrive from outside the EU. They are going to be pre-cleared away from the land border by relevant customs officials. The Government of Gibraltar fully support that new model, which brings in the benefits of an open border and protects Gibraltar’s economy.
Points were made about security. I think there is a steadfast commitment on both sides to work together, with practical arrangements between law enforcement agencies. None of us wants anything going on in Gibraltar or indeed over the border in Spain that will put anyone at risk. We all know the types of threats, which we share. That is at the heart of the wider discussions we are having with the EU about how we better align on law enforcement and security and defence.
I want to conclude by thanking everybody for their scrutiny, which has been hugely important. I thank the all-party group for its consistent engagement over many years, and I thank friends in the Gallery for their engagement. I really do think this is a milestone moment in finalising something that was left undone by Brexit. The agreement will have practical benefits for the people of Gibraltar, for the people of the whole region, for the United Kingdom, and for the UK and the EU. There are wins across the board in the agreement. I very much hope that Members will engage with the CRaG process as it goes forward. I will keep the House fully informed, as appropriate, the minute the treaty is signed and deposited. With that, I thank Members for their contributions.
Martin Vickers
At the outset I expressed the hope that this would be an interesting and informative debate, and I think all Members would agree that that has been the case. The essence of the debate, as we have just heard from the Minister, has been about sovereignty, which was one of the most important issues that we debated on our recent visit. One thing that the Chief Minister was keen to point out at the airport was the positioning of the flags. As people progress through the various stages at the airport, flags remind people that they are on Gibraltarian/British territory, with the Union flag and the Gibraltar flag prominently displayed.
Most importantly, though, the Chief Minister said the treaty is about the people of Gibraltar and the benefits that they will accrue from it. Clearly, they want the certainty that it provides, but there are also day-to-day benefits. One that I noted when we met the Health Minister was that the treaty will allow ambulances to move more freely between Spain and the Rock. That is clearly a practical advantage to the citizens of Gibraltar, whose loyalty to the British Crown is certainly appreciated by those of us who have been to Gibraltar for national day. That is something that we want to maintain.
I thank all those who have taken part in the debate, and in particular the Minister for his comprehensive response, and I thank everyone—those on the British side, as well as the Chief Minister and his colleagues in Gibraltar—who took part in the treaty negotiations. We have had an interesting and informative debate this morning and I look forward to further discussions. As the Minister outlined, the process will continue.
Question put and agreed to.
Resolved,
That this House has considered the draft UK-EU Agreement on Gibraltar.
Defibrillators in Police Vehicles
(1 week ago)
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Steve Darling (Torbay) (LD)
I beg to move,
That this House has considered defibrillators in police vehicles.
It is a pleasure to serve under your chairmanship, Sir John. I am delighted to have secured this debate on defibrillators in the back of police vehicles. I have been pushing for this for some time, and it is helpful that the debate is taking place on International Paramedics Day, when we celebrate the work of people who intervene to save lives.
I pay tribute to Naomi Rees-Issitt, who tragically lost her son Jay on new year’s day 2022. Jay was unlucky in a number of ways. He was unlucky to have a cardiac arrest at the age of 18. He was extremely unlucky that the defibrillator that could have saved his life was only two minutes away, locked behind the gates of a school. His friends who were with him supported him with cardiopulmonary resuscitation, but he was unlucky that the ambulance was significantly delayed. Jay was unlucky that there was a stabbing incident in Coventry that evening, which meant that many ambulances had been relocated to deal with that incident. Jay was also unlucky that there was a backlog of patients being unloaded from ambulances at the nearest hospital, which, again, resulted in delays to intervention for his cardiac arrest.
The ambulance arrived 24 minutes after Jay’s collapse. Sadly, it was too late. The police vehicle turned up 14 minutes after his collapse, however. According to the coroner, it was a one-in-a-million situation: if there had been intervention with a defibrillator at that point, Jay would have recovered from his cardiac arrest. That demonstrates the need for defibrillators in the back of response vehicles. They could have a serious impact, saving hundreds of lives up and down the United Kingdom.
Adam Dance (Yeovil) (LD)
My hon. Friend is making a fantastic speech. Does he agree that as well as defibrillators, there should be bleed kits in the back of police cars? Yeovil town council has introduced bleed kits across the town, as well as defibrillators. Does he agree that we need both in police vehicles?
Steve Darling
I have raised that very issue with Devon and Cornwall constabulary. Following an awful incident, a grieving mother is trying to ensure that we have stab kits across the United Kingdom. As I am sure my hon. Friend has done, I have corresponded with Avon and Somerset police on this issue. Bleed kits can save lives. I have had conversations with the security staff who support us. It is quite shocking to learn what they have in their bags in case there is an incident at an MP’s constituency surgery or another event. Such measures should not be focused solely on people like us; we need to make sure that there are opportunities to support people out in the community.
Going back to the serious issue of cardiac arrests, the medical evidence shows that for every minute without intervention, there is a 10% reduction in survival for individuals.
Jim Shannon (Strangford) (DUP)
I commend the hon. Gentleman for securing this debate. By equipping every police vehicle with a device, such as the CU Medical iPAD SP1 or the Defibtech Lifeline AUTO, we will expand our chain of survival on the roads. Our police officers are trained in cardiopulmonary resuscitation. Does the hon. Gentleman agree that we must give them the physical tools to ensure that when a father, mother or child collapses on our streets, they have the best possible fighting chance of returning home to their loved ones—the very thing he is trying to achieve?
Steve Darling
The hon. Member makes a valuable point. Resuscitation Council UK highlights that if there is an intervention within three to five minutes, the chances of survival are between 50% and 70%. It really is all about timing and how we can significantly impact that.
A survey that the all-party parliamentary group for defibrillators undertook with all police forces across the country found that less than 10% of response vehicles have defibrillators as standard. That is really disturbing, because the police are often the first on the scene, as was the case with Jay. Naomi’s Our Jay charity has done stellar work in assisting both Bedfordshire and Warwickshire police to get defibrillators in a number of their vehicles. That had an immediate impact on saving lives. Within days of them being put in the back of vehicles, there was clear evidence of the impact they made. I hope the Minister will take that into account.
Another important element is that when mapping out where defibrillators are in communities, we often find they are in more affluent areas. The more deprived communities have fewer defibrillators, for whatever reason.
Amanda Hack (North West Leicestershire) (Lab)
The hon. Member is giving an impassioned speech. I share his sadness about the loss of Jay, whom he mentioned in his opening remarks.
In my constituency we did a defib dash, where I encouraged constituents to understand where their nearest community defibrillator was. The average return journey was 12 minutes by foot. In semi-rural constituencies like mine, adding a defib to the back of emergency vehicles would make a massive difference. Does the hon. Member agree that rural and semi-rural constituencies face an issue of access to defibs?
Steve Darling
The police are so often the first on the scene. It ends up being a postcode lottery, whether it is because of communities are rural, coastal or more deprived. I say to the Minister that by getting defibrillators in the back of police response vehicles, we will remove some of that postcode lottery from the system, because the police would be there to support people in their hour of need. They will also have the tools to support people more powerfully, rather than simply being able to undertake CPR. That will be a massive change for people.
I have talked to a local Devon charity called Jay’s Aim, which offers support across the south-west of England. It undertakes training for community groups on this issue and provides boxes in towns where people can access defibrillators. It shared with me that a number of the defibrillators boxes are, for good reason, hammered by the police. When the police go to an incident that may need a defibrillator, they quite rightly grab and use the one in a box near the police station. The charity has to replace loads of pads as a result. If that is not a canary in the coalmine, showing that there is a need for our policing service to be equipped with defibrillators in all response vehicles, I do not know what is.
In conclusion, I hope the Minister will ensure that we take the luck out of these situations and, through public policy, make real changes that impact on people’s lives. I am aware that in response to a written question on 27 April she said she was considering the pros and cons of providing defibrillators in the back of police vehicles, and would set out next steps. I hope she will use this debate to clearly set out some of those steps. I encourage her to ensure that it is not just standard but mandatory for all police response vehicles to have defibrillators.
The Minister for Policing and Crime (Sarah Jones)
It is a pleasure to serve under your chairmanship, Sir John. I congratulate the hon. Member for Torbay (Steve Darling) on securing this important debate. I am grateful to him for doing so, and to other Members for contributing. I know that if this had been a wider debate, other Members would probably have wanted to speak in it—several Members feel very strongly about this issue.
The hon. Member for Torbay talked at length about the Our Jay Foundation and about the death of Jamie Rees, or Jay, who died when he was just 18. I have had the privilege of meeting Jamie’s mum, stepdad and godmother on two occasions. I discussed what they are doing and trying to achieve, and what the Home Office can perhaps do. For someone to be able to experience the death of their child and put it to positive use, in order to try to get something positive out of their child’s death, is enormously powerful and very brave. Indeed, not many of us would be capable of doing that if we lost a child. I join the hon. Member in praising Jamie’s family for what they are doing; it is enormously powerful and enormously impactful.
As the hon. Member said, the foundation has been raising money; I think it has raised about £800,000 to fund defibrillators and it has now funded hundreds of them. It also has an evidence base, which was shared with me, showing the number of lives that have been saved as a result of those defibrillators. There is a conversation to be had here, and it is one that we are actively having.
Last year, the Home Office funded 750 defibrillators that we gave to police—that happened before I became the Minister, so I cannot claim any credit for it at all. There was no stipulation on where the defibrillators were placed. Some will be in police vehicles and some, I suspect, will be in police buildings, but we provided those 750 defibrillators. I know my predecessor as the Minister for Policing and Crime, my right hon. Friend the Member for Kingston upon Hull North and Cottingham (Dame Diana Johnson), met representatives of the Our Jay Foundation as well and was very moved by them. Providing those defibrillators was a step in the right direction.
As I understand it—I will write to the hon. Member for Torbay if my statistics are wrong—27% of police vehicles now have defibrillators. He cited a figure of 10%, so I will check that and write to him if I am wrong, but I think it a slightly higher proportion than that.
We are having a conversation with police. If there is a debate here—and I have talked to the foundation about this—it is because there is a slight nervousness from some parts of the police about the role of policing versus the role of other emergency services. There are also questions about the ability to train police in many different aspects of first aid, and where their role ends and that of the ambulance begins.
Steve Darling
I thank the Minister for allowing me to quiz her further. Can she expand on that point? Is the pushback from the National Police Chiefs’ Council, from lower levels within policing or from Government Ministers? Anyone can use a defibrillator, because it walks them through it. This is not about additional training on how to use defibrillators; it is about the availability of defibrillators where there is a crisis. Defibrillators need to be in the right place at the right time, and I cannot think of a better place than the boot of a police car.
Sarah Jones
It is not a comprehensive view across policing; there is a general concern about the role of policing versus other emergency services. We often have a wider debate within policing about the huge quantity of time that is spent responding to mental health issues, when other services should be doing that, so there is a general nervousness about that.
I am in the process of writing to police forces and having a conversation with them, so that we can answer the hon. Gentleman’s point and find out whether there is a concern when it comes to defibrillators. The Our Jay Foundation would say that, where it has engaged with police forces and given them defibrillators, that has been welcomed and it is useful. I want to find out what the concerns are, if they exist, and I am in the process of doing that.
I have said to the Our Jay Foundation—and I also say it to the hon. Member for Torbay and others here today—that of course we want every piece of first-aid equipment that could possibly save lives to be as widely available as possible. In police cars there are already first aid kits, and a lot of police officers carry tourniquets. It is not uncommon for police to conduct CPR on people relatively regularly; that has to be their job when they arrive before other emergency services.
The step to then funding defibs—since we are talking about the funding question here—and putting them into all response cars or a proportion of response cars is the next stage we will look at. There are two stages. The first is talking to police to see what they think. As we have already given the police 750 defibs, it would be interesting to understand what they have been using them for.
Moving on to the next stage, we are going through a very significant period of reform, setting up a national police service. That service will procure the kit we need for the whole of policing, so it presents a really good opportunity to consider what should be standard in all our police vehicles, response cars and uniforms, and to have a conversation with the police. We are going to have a national police service and make decisions nationally about what we need across the police service, and whether we want to use some of our funding to put defibs into all police cars.
Steve Darling
I know timescales are tricky, but can the Minister provide some rough timescales on the different steps? I understand that the new national police force and procurement are a bit more distant, but can she tell us what timescales she is working to, at least on the first steps she alluded to?
Sarah Jones
We will engage with policing over the next few months, so that will be done relatively quickly, and we will see what people come back with.
The national police service is not that far away. We will hopefully introduce legislation in September to set it up, and there are things that we will be thinking about, doing and working towards before we set up the establishment itself, to bring together aspects of the organisations that will become part of it. For example, BlueLight Commercial, which does a lot of the procurement now, will become part of the national police service. This is an opportunity for us to ask collectively what a good police car looks like and what kind of car we need, and to have a conversation about whether we put defibs into all police cars. There is obviously a cost, and if that money is spent on defibs it will not be spent on something else, so I want us to make the decision in the right way.
I suspect the hon. Gentleman will come back to me even if I do not do this, but I am happy to let him and the APPG know how our conversations go with policing and how we progress this work. I cannot promise that we will do what he and the Our Jay Foundation want, but I can promise that we are actively looking at it. We have already invested in defibs for policing. The Our Jay Foundation is building an evidence base from what it is doing with police forces, and we will take that very seriously.
Of course, we want to do everything we can to save lives. The hon. Member for Yeovil (Adam Dance) talked about bleed kits, and we are looking at those. There are campaigning organisations, also run by people who have sadly lost loved ones, putting bleed kits into police cars and many other public places, and those are also very useful when it comes to saving lives. We have decisions to make and I am actively looking at these things. I am very happy to keep talking to the hon. Member for Torbay as we progress.
Question put and agreed to.
Societal Impact of AI: Government Policy
(1 week ago)
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Esther McVey (in the Chair)
It is a rather glorious day, so if people would like to remove their jackets, they should please feel free to do so.
Neil Duncan-Jordan (Poole) (Lab)
I beg to move,
That this House has considered Government policy on AI and its impact on society.
It is a pleasure to serve with you in the Chair, Ms McVey. I think we all agree that AI is a transformational technology with the potential to bring many benefits to our society, but to fully realise them we will require the Government to look at radical changes to taxation, welfare and our industrial strategy. Everyone in the UK needs to benefit from a managed AI transition that puts workers and human dignity at its heart. It must make the world fairer, not more unequal, and it should give UK citizens a meaningful say in decisions that will affect their lives.
Evidence from the New Contract, a pro-worker AI campaign organisation, reveals that the public are deeply suspicious about AI. Around six in 10 people expect the gains to flow to wealthy investors and big corporations, while just 7% think they will be shared fairly across our society. Understandably, seven in 10 workers are worried about the impact of AI on their jobs. Even the Foreign Secretary said recently that AI poses a Hiroshima-style threat to humanity unless global rules are put in place.
In today’s digital age, a cartel of technology giants—Google, Meta, Microsoft, Amazon and Apple—wield extraordinarily influence over our lives online. These platforms have become so embedded in daily life that meaningful participation in society depends on using their services. Similarly, the digital infrastructure that facilitates our work and public services is now an essential layer of the economy, but that gives oligarchs like Elon Musk enormous power to distort public discourse. We have effectively subcontracted our right to information to a handful of big tech gatekeepers.
Iqbal Mohamed (Dewsbury and Batley) (Ind)
The hon. Gentleman is making a powerful point about big foreign tech companies. Does he believe that our dependency on six tech companies in all aspects of our lives poses a national security threat and needs to be assessed as such?
Neil Duncan-Jordan
I thank the hon. Member for his intervention; I will deal with AI sovereignty a bit later in my speech.
We should ensure that, like a socialist Government’s approach to energy or water, the public have a stake in the development of AI technology, to ensure that the value it creates is captured and shared for the good of society as a whole. Previous waves of technological change have brought with them huge economic disruptions, but the human and social costs that followed were not inevitable. They were the product of political choices, as Governments left workers and communities to absorb the shocks alone.
Lee Pitcher (Doncaster East and the Isle of Axholme) (Lab)
The last time we saw a change of such potential scale was when we moved from being a manufacturing economy to being more of a service economy. There were trade-offs at that time, and some people, cities, towns and villages were left behind—including in my constituency. Does my hon. Friend agree that on this occasion we can plan because we know it is coming? We need to be thinking about jobs, access and skills for younger people, and ensuring that the benefits are felt right the way across the country and not just clustered in one place.
Neil Duncan-Jordan
I absolutely agree with my hon. Friend’s point about no place being left behind as a result of the AI revolution. I will develop that point a later. We can already see the first signs of AI impacting on work here. We have record numbers of young people not in employment, education or training because many entry-level jobs have disappeared.
Jim Shannon (Strangford) (DUP)
I congratulate the hon. Gentleman on securing the debate. I spoke to him beforehand; he knows where I am coming from. My concern is for the young people of today looking for the jobs of tomorrow. My grandchildren will have to prepare themselves. We must try to equip young people. In the last few days the Belfast Telegraph reported that this may be the first time in a century that young people have lower scores in tests for memory, focus and reading than their parents. Is it not time for the Government to acknowledge the challenges and ensure that there are employment prospects for young people? If the hon. Gentleman’s objective is that, it is the right way to go.
Neil Duncan-Jordan
Yes, young people and their employment prospects are intrinsically linked to the debate about the future of AI. The hon. Gentleman is right that we have to get that right for those people to have a future.
We also need the Government to introduce a raft of measures to manage AI-driven changes to work. Those measures should include an employment levy on companies that replace large numbers of workers with AI, training subsidies for displaced workers, redeployment programmes to move workers into sectors with skills shortages, and a job subsidy scheme for workers and companies at the sharp end of industrial change, along with, of course, stronger social security support for those who face unemployment.
We know that if it is left to the market, firms will often reach for the crudest form of automation, stripping out roles and degrading the work that remains. The alternative is that we start to advance the case for dignified work, and recognise that that will mean having meaningful worker involvement in every step of the process. The involvement of workers in adoption is often what turns a promising tool into a productive one. That is why I agree with the TUC that the Government should strengthen the Employment Rights Act 2025 to give workers a real say in decisions. There should be a duty on employers to disclose their use of AI, and a right for the workforce to be consulted and negotiate over how AI is introduced.
One of the biggest challenges of AI is to ensure that everyone gets a fair share of the gains. The AI and big tech corporations in the US stand shortly to become some of the wealthiest and most powerful private actors in history. Their wealth has been built on public research and public investment, as well as all our shared written inheritance, which has trained the models they use.
The fact that our tax system taxes income from work far more heavily than income from capital gives firms a direct tax incentive to automate a worker out of a job rather than employing them, and could see AI facilitate a further shift of national income away from labour and towards capital, eroding the tax base that funds the public services that we all need and want.
Jim Shannon
The hon. Gentleman is focusing on employment and big tech companies; does he agree that we need to go a step back—back to school, teachers and training? Teachers need to prepare their pupils for the future with AI, and for what that means. Does the hon. Gentleman feel that that is something not for this Minister but perhaps for a Minister in another Department?
Neil Duncan-Jordan
I thank the hon. Gentleman for his second intervention—let us see whether he can make it a hat trick before I finish. The reality is that AI is here now. We have to deal with how it impacts on today’s workers and future workers as well. This is not one generation against another, and I know the hon. Gentleman understands that.
The Government could seek to equalise tax treatment, actively explore widening the digital services tax to include AI companies, which it currently excludes, and raise the level of the tax from 2% to the European average. We cannot allow the use of machines to be made artificially cheaper than employing people.
It is important to look at AI sovereignty, which the hon. Member for Dewsbury and Batley (Iqbal Mohamed) mentioned earlier. The UK is growing increasingly dependent on US tech, and owns little of the data infrastructure and AI models on which the future economy will increasingly rely. This repeats the pattern of recent decades in other sectors, whereby essential national infrastructure has passed into overseas ownership and money has flowed offshore, leaving British people with less and less control over the essentials of a good life. That dependence not only creates security risks, as has been mentioned, but prevents the UK from capturing and distributing any AI windfall.
We need to give UK companies a meaningful chance to compete. The Competition and Markets Authority could use existing powers to take on the concentration in the cloud market, which underpins the AI companies’ business models. A progressive sovereign AI programme should involve an industrial strategy that seeks to expand public investment in the sector and impose strict conditions on private access to public assets, alongside active support for models such as co-operatives, public interest companies and other democratic ownership models, so that the gains of AI can be captured and shared throughout the UK.
At the heart of this debate is the role of the public. Big decisions about AI, such as where data centres are built and how AI is deployed in public services, are being taken with little democratic input.
Chris Hinchliff (North East Hertfordshire) (Lab)
I apologise in advance, Ms McVey, that I need to go to a Select Committee so cannot attend the full debate. My hon. Friend is, as usual, right about everything. Does he agree that public resistance to the construction of data centres is due not just to concern about the impact on the environment, but to underlying public scepticism about the breathlessness with which politicians talk about economic growth driven by digital technology when we have an economy that has a completely unsustainable food system, is not delivering genuinely affordable homes, has rubbish public transport in many parts of the country, and is not delivering the basics?
Neil Duncan-Jordan
One data centre, even a modest one, uses the same amount of electricity as 100,000 homes. The bigger the data centre, the more electricity it uses. Very few of them run off renewables, so that is another issue we need to address. The communities that host the infrastructure see the costs, in water, energy and land, without getting any of the benefits that we have discussed.
These big debates are why the Government must embed ongoing public and democratic oversight of the AI transition and legislate for community benefit where infrastructure is built, including a share of the value created locally. We must ensure that the AI revolution does not lead to more power being in the hands of a few who can determine our future. Governments must build independent, publicly funded alternatives to ensure that AI is developed for the common good. Only public investment can support AI that prioritises social and environmental challenges. We need an “AI for the people” strategy—one that starts to recognise the challenges we face and has the ideas to meet those challenges head on.
Several hon. Members rose—
Esther McVey (in the Chair)
Order. I will call the Front Benchers from 3.30; I will not impose a fixed time limit, but about six or seven people want to speak.
Sir John Hayes (South Holland and The Deepings) (Con)
I rise in support of much of what the hon. Member for Poole (Neil Duncan-Jordan) has said. He has done a service to this Chamber, and Parliament more generally, by highlighting the threats that AI will bring.
Perhaps I can set the scene by reminding Members present that it took 25 years for Parliament and successive Governments to recognise that the internet must be regulated. That is extraordinary. When I was in the IT industry back in the ’80s and ’90s, I became aware of the concept of the internet—before it was widely spoken about—and even then I knew the harm it might do.
In 2000, at the beginning of the new millennium, I was privileged to be able to speak at the Spalding Gentlemen’s Society, with which I do not imagine you are familiar, Ms McVey, but suffice to say it is a learned society of the old school—it now does admit women, you will be pleased to know. It has a lecture programme on all manner of things, and I was pleased to be invited to give the first lecture of the millennium. Then, I warned of what the internet might do. Most of the audience, by the way, disbelieved what I said. It was a very civilised meeting—it was not raucous in any way—but they could not quite come to terms with what I predicted.
What I predicted then has come to pass. What has occurred is the distortion of public discourse, the enabling of widespread fraud and the provision of the means for every imaginable form of harm, from hardcore pornography being available to children, to internet gambling addiction, suicide sites and much more. Now, the prospect of AI will make all that still more chilling. As the recognition of what is real and what is invented is increasingly blurred, it will become more and more difficult for people to navigate the inevitable vicissitudes that pervade every life.
Imagine a future where the once secure certainty of what really exists is so undermined that people can no longer believe what they are told and have no place to go to establish that certainty—the basis on which we all gauge reality and are able to live reasonably productive lives. I see wellbeing being affected by that detrimentally; unless the Government take very urgent and extremely serious action, that will happen far more quickly than anyone here envisages.
Iqbal Mohamed
Does the right hon. Gentleman agree that one of the primary obligations of any Government is to keep their citizens and the people living in their country safe from all avoidable harms? AI is a major potential cause of harm, and it is avoidable. Does he agree that the Government cannot wait 25 years to catch up?
Sir John Hayes
I absolutely agree. That is why I began by describing what has occurred over the last quarter of a century and the misunderstanding—a pervasive one that affected all political parties and Governments of all kinds—that a dangerous fascination with novelty was more important than the certainty that I have just outlined.
The hon. Member for Poole is right to issue a clarion call for action. Let me go into a little more detail. He is right, for example, that we have allowed a handful of multinational corporates, which have displayed a carelessness to the effects of what they do, to wield immense power—more power than national Governments. It is increasingly difficult for Governments to pull levers that affect these people, because they exist beyond the purview of this House or of any Government Minister. They have shown by their example that carelessness, and only when they have been prevented from doing harm have they ceased to do so.
I am delighted that the Government are now taking steps to prevent children from accessing social media and mobile telephones; I would like to go much further, actually, and I hope the Government will. I called for the ban on phones in schools, along with many other Members of this House, a long time ago. But AI makes all that more serious, because the AI available through that technology, which has the ability to distort the very nature of reality, will be immensely difficult to control. And yet we must try to do so. Legislation is not always the only means of doing that but, as the hon. Gentleman set out, it certainly must play a part.
Umberto Eco described the internet as the “empire of imbeciles”. Over time, it has become impossible to distinguish experts from idiots, and every bar-room bigot now has an audience of millions. Most people had a sense of proportion; my parents were working-class people who left school at 14, but they had a very good sense of what really mattered. Now we have elevated trivia to an extraordinary degree and, as a result, that sense of proportion, which was once taken as read, can no longer be guaranteed.
Perran Moon (Camborne and Redruth) (Lab)
On the point about proportionality, a lot of concerns about AI have rightly been raised in the debate, but let me sound a more positive note about public services. In my constituency, North Kerrier integrated neighbourhood team, which covers one of the most deprived regions in the UK, is using Brave AI to identify frailer and more vulnerable patients earlier and thereby prevent avoidable hospital admissions. Given the opportunities of AI, and the risks the right hon. Gentleman is talking about in great detail, does he agree, particularly in relation to healthcare, that the right approach is proportionate regulation, so that we do not stifle innovation, but maintain public trust and safety?
Sir John Hayes
I know from my dealings with the hon. Gentleman that he is a good and effective Member of Parliament who takes a very responsible view of these things, but we must not let the virtues that he describes blind us to the vices. That is what happened with the internet. When I made that speech back in 2000, when people said, “But I can reunite with my family in Australia.” I replied, “Well, if they really wanted to unite with you, they wouldn’t have gone to Australia in the first place.” I remember Friends Reunited—as though we want to get in touch with people we were at primary school with. They look so different; that is frightening in itself. Why would we want to revisit our ancient history?
But that is all an aside. I think the hon. Gentleman is right, and of course it is true that there will be the advantages that he describes, particularly in the research field. My fear is that they will obscure, in the eyes of those who have the power to make a difference, the points that the hon. Member for Poole made. I hope that does not apply to this Minister, who I am sure is far more clear-sighted than that suggests.
Parliament and the Government need to act quickly and decisively to deal with the points that the hon. Member for Poole made and that I have attempted, imperfectly, to amplify. It is critically important to understand that although innovation may matter, ethics matter more; that science and technology are morally neutral and have no implicit ethic; and that what really counts is not what is new, but what is true.
Anneliese Dodds (Oxford East) (Lab/Co-op)
It is a real pleasure to speak in this debate. I am very grateful to my hon. Friend the Member for Poole (Neil Duncan-Jordan) for securing it, and I agree with many of his remarks and those made by other speakers. I particularly agree with his remarks about the New Contract initiative.
The UK’s AI sector has grown 23 times faster than the rest of our economy. We must ensure continued investment and the realisation of productivity gains from appropriate use, but we must also secure greater domestic control and resilience, and mitigate near and later-term risks from inappropriate use, if we are truly to become an innovation nation. I believe that we must change our approach to AI, and I want to spend the time that I have setting out the case for doing that.
Above all, we must seek sovereignty as if we actually mean it. Supporting UK niches, such as photonics and quantum, is key to sovereignty and to boosting growth from Southampton to Sheffield and from Belfast to Birmingham, but we must recognise how crucial access to frontier models is to our sovereignty. The recent debacle with Fable 5 and Mythos 5 only serves to underline that. The sovereign AI fund needs a clearer rationale. It should be developing UK companies and partnerships, and public stakes should genuinely put our people and our places first.
We must also work more concertedly with allies to develop joint sovereign capability. AI development needs to be part of an economic security reset with the EU, and we need to be able to participate in the Scaleup Europe Fund. Interestingly, Mistral AI’s chief executive recently claimed that the EU has at most two years to build its own AI or become permanently structurally dependent on the US or China. The UK must be included in that EU-level debate before it is too late.
Delivering stronger sovereign control and resilience also means the Government putting their money where their mouths are and supporting UK AI and UK partnership AI in procurement. All Departments should be assessed publicly on that, and the Competition and Markets Authority should be engaged on how to ensure more advanced market commitments to support our sovereignty. We can learn from other countries on that. Look at France, which recently dropped Palantir from its intelligence services. Of course I realise that changes cause disruption, but we cannot work purely on the basis of cost or short-term capability any more. We have to make assessments on the basis of control and resilience, given their significance for our national interest.
In public services, we must move beyond no, low and performative adoption to appropriate and transparent adoption that puts people and places first. It is critical that the UK can deploy sufficient compute to support those aspirations. I hope that the AI Energy Council can develop plans for a line delivery of renewable energy and data centre projects, as well as fixing difficult issues such as demand modulation to unblock additional capacity. There can genuinely be a win-win here, but for that and greater adoption to be achieved, I agree with what others have said: we have to face up to public concern about the risks. We need only look at what is happening in Scotland right now to see that.
First, on unemployment, half of all UK workers feel that they will lose their job to AI. From what I can see, there is very mixed evidence about that so far, beyond the field of software development. Pleased as I was to see the Early Careers Jobs Alliance and the AI adoption insights agreement from the Government, we must go further. Lessons should be learned from the consultation on the social media ban, “Growing up in the online world: a national consultation”.
I would like to see the Government launch a consultation on starting work in a world of AI, so that we can involve young people who are worried about that, gather their good ideas and show that the Government are engaging with that crucial issue. We should be doing far more in our schools and colleges to prepare our children.
Adam Dance (Yeovil) (LD)
AI is increasingly being used to make cutting-edge assistive technology for people with special educational needs and disabilities, but the industry is a bit of a wild west, and access for young people in areas such as Yeovil is uneven. Will the hon. Member join me in urging the Government to publish guidance for schools on best practices for AI assistive technology for SEND?
Anneliese Dodds
The hon. Member raises a really important point, and it is part of a broader picture. My understanding is that something like only half of all schools have an appropriate AI policy. Simply saying to students, “Don’t use AI”, having an unorganised approach to it, or just taking a company’s word for it without a broader set of guidance and frameworks for deployment is not supporting our children and young people. Saying, “Just don’t use AI”, when we know children and young people are using it, is not fair to them, and will do a disservice to our economy in the future.
Our children and young people need to understand how AI works, as well as the risks of cognitive offloading and the negative impacts on social interaction from inappropriate use. I also want to see us encouraging international discussion in the OECD and the United Nations about taxation—taxation of permanent establishment, capital gains and the cost of human labour compared with tokens. That does not need to have an immediate impact; we could set a threshold of employment impact to trigger a token tax, for example. However, we cannot run away from this debate, especially given how much services dominate our economy.
Secondly, we have to engage with concerns about the safety of frontier models. As I said many months ago alongside the Centre for Countering Digital Hate, just regulating applications after harm has been done is unacceptable. Grok should not have been able to produce 3 million non-consensual nudified images in the first place. New York, California, Illinois and the EU have moved towards approaches requiring mandatory assessment of frontier models, and we should too. We should place the AI Security Institute on a statutory footing as a first step, and we should use our presidency of the G20 next year to reinvigorate global attempts at co-ordination, which started with the Bletchley conference but have effectively stalled since. We can work with EU countries to do that as well as with nations from India to Brazil.
Thirdly, and finally, although AI can release huge productivity gains, we have to recognise that unscrupulous and inappropriate use is already imposing huge costs too.
Sir John Hayes
I am interested in the right hon. Lady’s comment on productivity, because it is one of the prevailing macroeconomic challenges facing this Government and previous Governments, as the stalling of productivity has been a problem across western economies for a while. It is true that AI might help, but it could also harm. Equipping people with skills is critical to building productivity, and dependence on AI may actually undermine people’s confidence and their skills over time.
Anneliese Dodds
I absolutely agree. That phenomenon of so-called cognitive offloading and the lack of scaffolding in skills is a genuine concern. Equally, we see how rapidly and accurately AI can assess tumour scans, for example, working with human beings to deliver the highest possible quality of healthcare. I agree with my hon. Friend the Member for Camborne and Redruth (Perran Moon) about the potential there. We need to have a sensible approach to this issue.
I also want to mention some additional harms. We are now seeing ubiquitous slop on the internet, AI-enabled fraud and cyber-attacks, and the impact of AI summaries on local media use as well, so I want to see the CMA using its powers for competition-focused action on strategic market status services. I want the Government to adopt a maximalist approach to the “Watch this Space” White Paper, and I want us to stop treating bots as separate, because AI is increasingly going to be integral to our interface with the internet, as well as to so much else, so we need to adopt a safety-by-design approach to online regulation, and that needs to recognise the increasing ubiquity of AI.
Damian Hinds (East Hampshire) (Con)
I commend the hon. Member for Poole (Neil Duncan-Jordan), as well as his two friends and allies who have just spoken, my right hon. Friend the Member for South Holland and The Deepings (Sir John Hayes) and the right hon. Member for Oxford East (Anneliese Dodds), on bringing this important subject to Westminster Hall. This is in danger of turning into one of those rare debates in Parliament where one learns something from everybody who speaks and we all come away better informed and equipped.
This subject is enormous, and it is only a 90-minute debate. It obviously will not be the last time we discuss these matters, and I freely confess to not being an expert on the subject. Like many colleagues, I am trying to educate myself more to understand better the implications, including the upside for productivity, the implications for energy and water, and the effect on all manner of things in the public and private spheres, such as healthcare, education, international relations, and foreign and security policy and so on. I am no expert, but one thing I have learned is that no one knows what the societal effect of AI is at this moment in time. A lot of people have a story to tell, but no one really knows. That is one of the reasons why we have to keep coming back to these subjects as our understanding iterates and evolves.
Iqbal Mohamed
The right hon. Gentleman says no one knows, but throughout history, when we have approached technologies or situations that we have never experienced before, we have done scenario planning and risk assessments, and we have prepared as best as possible for scenarios that may be plausible or possible. Does he agree that when it comes to AI, we have been absolutely asleep at the wheel and that planning has not happened?
Damian Hinds
I agree with large parts of what the hon. Gentleman says. The timeframes are obviously shorter this time than they were for say, the industrial revolution, the printing press or any of the other massive changes that we have seen in the past. When Gutenberg invented his printing press, I am not sure it was foreseeable to even the most far-sighted, omniscient individual what all the effects of that would be. That does not mean we do not try to scenario-plan and to think about the different possible outcomes and try to mitigate them.
Labour market effects are probably what we as politicians worry about the most, along with all the other implications, like the consequences for income distribution, intergenerational fairness and so many other aspects. People already say that AI has had a big impact on job markets, particularly on the graduate job market. I honestly do not know whether that is true or not. It strikes me that it is quite an easy thing to say: if a company is not doing that well this year and is not employing graduates to the same extent that it used to, it is a great thing to say, “Well, we’re investing in AI.” I do not see how a professional services firm, with the current technology deployment, would be able to substitute people for AI in quite that way.
In the future, it is true that there is a scenario in which there is mass unemployment. But it is also true that when there have been huge upheavals previously, labour markets have adapted, albeit over time, and sometimes it is that gap that makes the difference. Labour has found its way into different sectors—
Clive Lewis (Norwich South) (Lab)
I thank the right hon. Gentleman for his excellent speech. There are lots of things about AI and its impact that we do not know. But one of the things that history teaches us is that if vast amounts of power and wealth are handed to a handful of individuals, corporations or even the Chinese Communist party—this is not just about corporations; it can be about states as well—the outcome is usually not good for the vast majority of people. I think we can all agree on that. We do not need to know whether AI will be beneficial or hostile, or become super-AI. What we can see is that when a small group of people are allowed to define what reality and knowledge are, that in itself—well, we have all read “1984”.
Damian Hinds
I agree with the hon. Gentleman; this is, of course, not a left versus right argument. For example, the antitrust regime in the United States exists precisely to prevent the concentration of power. Indeed, all the companies in the list we heard earlier were American. We did not mention ByteDance or Huawei, which we could easily have done. As the right hon. Member for Oxford East said, sovereign capability is obviously important, too.
On labour markets, there is also a risk—actually, the hon. Member for Poole did not do this, but I thought that he was going to keep saying, “Universal basic income, universal basic income.” He did not, but a lot of people do. Universal basic income is a policy prescription that those people calling for it tended to believe in years earlier, before they had even heard of AI, and now it fits this scenario. I do not know what the outcomes and therefore the mitigations of AI will need to be, but we must keep an open mind.
Damian Hinds
I had better press on, because we have a number of colleagues to get through.
Regarding generative AI and its effect on information integrity, which my right hon. Friend the Member for South Holland and The Deepings referred to earlier, we should bear in mind that so far the massive growth in fraud, misinformation and disinformation has all been done with cheapfakes. People talk about deepfakes, but it is done with rubbish, which can still take in large numbers of people. Just imagine what happens when such fakes become convincing. For example, there is the email that says, “I am stranded in Bermuda”, or whatever it is, “and I need you to send me £100 overnight.” Imagine when that scam actually involves a video of someone’s child saying it to them.
However, we soon realise that those things seem relatively benign when people start talking about agentic AI and super-intelligence, whereby machines take control of a situation, which some people have described as being ultimately an existential threat to humanity.
I do not know what all the answers are, but I think that as politicians—as the House of Commons—we need to ensure that our organisational architecture is equipped to consider all these questions as they evolve. However, I do not think that our Select Committee structure today is equipped in that way. For example, I do not think that having a Science, Intelligence and Technology Committee, which obviously covers technology, is a suitable way to address all these matters, and I also do not think that it is appropriate to expect every other Select Committee to develop such expertise themselves. Somehow, we need to meld the two structures. We must have some form of super-Select Committee—a support team, or something like that—to work with all the other teams or Committees across the piece.
I will finish by mentioning two specific things that we can do right now, because there is a ticking bomb with AI, specifically regarding children. In education now, if someone asks the typical year 9 pupil, “How many of your friends use AI to help them do their homework?”, that child would just laugh and say, “All of them.” The idea that we have some sort of issue where we have to encourage children to use AI is just nonsense. It is also crazy to suppose that we can just say to them, “Don’t do it,” and they will comply. Every child in the country learns computing in primary school. We need to make sure that the curriculum evolves so that children get to understand how the thing works, how it generates its content, why it might hallucinate, why it tries to flatter the questioner and why we cannot fully rely on it.
There is a real danger. Cognitive offloading is a fancy term, but it basically means relying on a machine to do the work for us. One way we can mitigate that effect with schoolchildren is ensure that when they do their exams at the end of the year, they do them with a piece of paper and a pen in exam conditions. I am afraid there is a move across exam boards to make more exams digital. Of course, they will say that the computers are not attached to the internet and children cannot do this, that and the other, but pen and paper is the safest thing. Of course, there should be exceptions for children with a special educational need or disability that means they need to use a keyboard, and exceptions for computer science, but in general, children at school doing their public exams should do them on pen and paper. That will make sure it happens lower down the school as well. It will also ensure that children continue to write. This sounds like a stupid thing to say, but people already ask, “Why is my child learning to write with a pen, because by the time they grow up nobody will be doing that?”
Finally, we are about to make the same mistake with chatbots as we did with social media. I am talking about anthropomorphism, where a computer program develops a personality of its own and develops relationships with people. I welcome the development of an age-appropriate design code for chatbots, but it is not enough. The regulatory regime we have in this country, with Ofcom and the Information Commissioner’s Office, relies on there being evidence of harm. The evidence will not come before the harm. We need to change that system and adopt a precautionary principle when it comes to protecting children.
Emily Darlington (Milton Keynes Central) (Lab)
It is a pleasure to serve under your chairship, Ms McVey. I have rewritten my speech because I do not want to repeat all the things that have been said. I think we are in agreement, although we may have different perspectives.
I want to take us back to 80 years ago, to a country house a few miles from Milton Keynes in my constituency. A handful of mathematicians built a machine that cracked the enigma code, and it gave birth to modern computing. That was Bletchley Park, where Britain proved that it could outthink the world. That inheritance still runs through Milton Keynes in the data centres rising on our edge, the British Standards Institution at Knowlhill—the oldest standards institute in the world, whose kitemark has told people that a product is safe since 1903—and a plethora of AI start-ups that outnumber Oxford or Cambridge.
Britain is standing at another one of those moments, as we see with our economy and our military tech coming together and pushing forward either for the good of the nation or for its ultimate damage. The potential benefits of artificial intelligence are enormous, and not only for the private sector. AI is a tool that can pull our public services back from years of managed decline. The technology will allow us to detect diseases earlier and cut NHS waiting lists. It will free nurses and other public servants from back-office grind for work that only people can do.
However, every country can see that prize, and the question that decides whether Britain leads or merely buys in is whether we make the technology or just import it. A maker exports its products, services and ideas around the world, as we did in world war two, but the UK is at risk of becoming an AI taker and simply handing over the keys to giant US tech firms that are buying up our best young AI companies. It is still our technology; it is just being bought up, packaged and sold back to us so that we become indebted.
As we are talking about the impact on our economy and our society, I want to point to Palantir, which has the contract with the NHS. We know that UK companies could do exactly the same work, because I and many Members present have spoken to them. Even more concerning is that the Ministry of Defence now uses the company. With the activist Government in the US turning off technology and restricting its availability outside the US, that puts at risk not only our NHS but, most importantly, the defence of our realm against Russia, for which others may have more sympathy than we do.
There is also a social cost, as people look at a company such as Palantir and say that it does not reflect their values. It is used by US Immigration and Customs Enforcement and by Israel to target Gaza. That has a huge impact on public trust. It is also bad for the UK economy and innovation, because it crowds out UK firms that could have those public contracts. That is just one example of a dependency that is putting us at risk both socially and economically.
It does not have to be that way. British AI firms need three things to succeed: customers who will buy their products, the ability to increase supply to meet demand, and a USP that British AI is the most trusted. The Government can help with all three. First, we have to act as a good customer. Why should those NHS and MOD contracts not go to British AI firms? Not only would that increase trust, but those products would be developed in a way that meets our needs; we would not be buying something that had been developed elsewhere. That would also mean that we had to invest in the entire British AI stack—it must be British from start to finish.
The second issue is supply. We need to make sure that we have the compute power we need and that we are not relying on US firms again for that. We are overly reliant: despite the fact that we part-own Crown Hosting, that accounts for only 6% of public sector data; the rest is nearly all on Amazon Web Services, which is a significant risk. We need to look at how we diffuse the supply of compute power—the underused capacity—to increase that.
Finally, we need to increase AI take-up across British businesses by building trusted products. The British Standards Institution is at the heart of that. It does not always have to be about regulation; it can be about standards that lift everything up. What attracts the world to the BSI is that it is known for doing that and its standards become international, so we get first-market advantage.
This partnership model of an industrial strategy is mission-driven, creates public trust, evaluates the impact on society and creates opportunities for our ideas and innovation to flourish. That is something we did with the innovations at Bletchley Park. We need to become an innovation leader again—an AI maker, not just an AI taker, which puts us at risk.
Esther McVey (in the Chair)
As three Members wish to speak, the time limit for speeches is three to four minutes, because we are going to the Front Benchers at 3.30 pm.
Iqbal Mohamed (Dewsbury and Batley) (Ind)
Responsible AI, done right, could be the saviour of humanity. Irresponsible AI, done wrong, could lead to the destruction of humanity. There is, to my knowledge, no effective, self-regulated industry anywhere in the world that puts consumers and the planet before profit and shareholders.
I thank the hon. Member for Poole (Neil Duncan-Jordan) for securing this important debate. As he and many Members have highlighted, a handful of companies run by men answerable to no electorate and standing before no constituents are making decisions right now that will shape healthcare, education, employment, childhood and the economy more than most Acts of this Parliament ever will.
I will focus on topics that have not been covered and speak about safety and economic risks. I have spent 20-plus years in the pharmaceutical regulatory industry, and we can learn much from it. We regulate medicines before they reach a single patient. We do not wait for harm; instead, we test, we license and we monitor. That is the entire logic of the GxP framework that underpins pharmaceutical safety in this country, yet AI is being deployed in our hospitals, schools, courts and welfare system with no comparable safety regime at all, not because the risk is smaller but because the oversight is simply not there.
I put the following demands to the Government. First, where GxP protects patients from medicine, we need GAIP—good AI practice—regulation to protect patients from algorithms. Any AI system used in healthcare must meet a statutory standard before it touches a single patient record or clinical decision. The AI Security Institute already evaluates frontier models for biological, chemical and cyber risk, but only if the AI companies allow it to. That is progress, but progress in security assessments is not the same as regulating delivery in the healthcare industry.
This Government brought Palantir into the heart of our NHS; in doing so, they handed a US surveillance contractor that is complicit in genocide the keys to patient data that belongs to the British public, not to a share price on Wall Street. I ask the Minister to guarantee the British public that their NHS data will never be given to or allowed to be stolen by Palantir or any other private company.
Secondly, the Government must mandate independent statutory testing for AI before its release, and a yellow card scheme that would be a national register where safety incidents, near misses and harms caused by AI were reported, tracked and acted on exactly as we do for adverse drug reactions. It must not be the manufacturer marking its own homework and hoping that nobody checks; self-certification does not work and must end. Thirdly, every AI system developed in this country must have a kill switch that is triggered automatically the moment a system takes unauthorised action and that any human being can trigger manually at any time without obstruction or AI override.
This danger is not only about safety but about who pays the bill as AI unfolds. More than 300,000 private-hire drivers in this country face displacement by robotaxis. I ask the Minister how the Government will fund public services going forward. There are dangers, but there are opportunities from AI. We must try to access them as much as possible, but we must address the societal, economic and safety consequences that AI poses.
Anna Gelderd (South East Cornwall) (Lab)
It is a pleasure to serve under your chairship, Ms McVey. I thank my hon. Friend the Member for Poole (Neil Duncan-Jordan) for securing this crucial debate. The quality of the contributions reflects how timely this conversation is.
Artificial intelligence is no longer a distant future challenge; it is here, shaping our economy, public services and daily lives. The challenge is how we ensure that these changes work for people, strengthen our communities and deliver benefits that are shared across the country and internationally. The UK has an opportunity to lead by embracing innovation and making sure that the right safeguards are in place to protect our communities, build confidence and ensure that the benefits are shared.
It is vital that we recognise how we can share in that new economy, and that we act now to safeguard public value and wealth generation. Every day, through our public services, our NHS, our transport network and countless interactions with the British public, we generate data that has enormous value. AI is the technology that unlocks that value, but the resource it is built on is our human data, which belongs to us all.
As I outlined in a recent article, we must learn the lessons from the past on this. In the past century, Norway decided to turn the national resource of fossil fuels in the North sea—the original driver of modern industrial development—into lasting public wealth. In the UK, we did not invest the revenues from North sea oil; we spent it to cover day to day costs. We must not make that same mistake twice. Rather than allowing the value created by AI from public data to flow permanently into a few private hands, we must ensure that British public services share in the wealth generated from that value—from the national assets we have created—by creating a national data wealth fund.
The Government have already recognised the strategic importance of data through the national data library and the AI opportunities action plan. Those are welcome steps forward, but we must do more to build the institutions that capture this value before it slips through our hands. I fully agree with the comments made by my right hon. Friend the Member for Oxford East (Anneliese Dodds) about the need for real sovereign AI capabilities and urgent collaboration with our European allies.
Keeping our communities safe and defending our democracy are essential parts of the AI challenge. I recently met the Minister for AI and Online Safety to discuss the growing impact of AI on children and young people particularly. We need to ensure there are strong safeguards around AI-generated content. If we cannot trust what is shown to us online, and if we cannot distinguish between what is real and what has been artificially created, the consequences can reach far beyond individual users and can undermine trust in our democratic institutions themselves.
That brings me to accountability. Companies with influence over what millions of people see should be held accountable and made responsible. Social media is not a village noticeboard. It is driven by algorithms that control what is recommended and amplified to millions of people every day. Technology companies act as editors: they decide what people see, what spreads, what is promoted and what disappears. AI will increasingly determine the information that people consume not only through social media, but through search engines, digital assistants and the services people use every day. That is why transparency, accountability and effective regulation are crucial.
As AI use grows, so too does the demand for further infrastructure, as I have outlined before. Data centres will become increasingly important to Britain’s economy. As the Member for South East Cornwall, I know that nature is not a blocker to growth. With careful planning, meaningful engagement and strong environmental protections, we can protect the landscapes that make Cornwall special while creating skilled jobs, attracting investment and ensuring that local communities benefit from a new technology, which, concentrated in companies in London as it is, can often feel very far from South East Cornwall.
The economic revolution is happening whether we welcome it or not, but our responsibility is to ensure that we are ready to unlock the opportunities, that we protect children and vulnerable people, and that we hold the powerful platforms to account. I am ready to ensure that the remarkable technology being developed today strengthens my community and does not leave them behind.
Susan Murray (Mid Dunbartonshire) (LD)
It is a pleasure to serve under your chairship, Ms McVey. I thank the hon. Member for Poole (Neil Duncan-Jordan) for securing a debate on a question that will shape every community in this country, including mine. I will try to focus on topics that have not been covered, including infrastructure.
In my Mid Dunbartonshire constituency, AI has recently been brought to the forefront of local debate. At Westerhill, near Bishopbriggs, a developer has proposed a 300 MW AI data centre with 500 MW of battery storage—nationally significant infrastructure on our doorstep. My constituents’ response has rightly been one of caution—not hostility and not blind welcome. They have serious concerns and questions: “What jobs will this bring, and for whom? What happens to the environment, to the grid, to water and to energy bills?”
Developments on this scale must be good neighbours and deliver community benefit that people can see, as well as skills, local employment and investment in the places that host them—not just high fences and, as the hon. Member for Dewsbury and Batley (Iqbal Mohamed) said, profits that are disseminated at a distance. That is how they will be judged by the communities who host them.
This is an international issue, and it has so far been dominated by US policy. Last month, the United States showed the first sign that it may not see us as being part of its team when it comes to AI access. On 12 June, the US Government ordered one of the US’s leading AI companies to cut off access to its two most advanced models for anyone who is not a US citizen—the first time that export controls have ever been applied to AI models. Access for British businesses and researchers was switched off overnight not because of anything we did, but because Trump decided to cut us off.
That is not a partnership; a vital technology that can be withdrawn at another Government’s whim is a chain around Britain’s neck. We cannot build our public services, our security and our economy on systems that can be cut off at a whim. It is clear that the UK must build its sovereign capacity—the data centres, skills and software needed to ensure that we are not locked out of the AI race.
Communities such as mine, which are being asked to host the infrastructure of that future, should share fairly in the rewards, and we must build public trust. The Liberal Democrat approach would make that possible, based on a cross-sector, principle-based framework to give innovators certainty and the public confidence, and to give transparency wherever AI is used in the public sector, so that people can understand the impact it is having on their lives.
Victoria Collins (Harpenden and Berkhamsted) (LD)
It is a pleasure to serve under your chairmanship, Ms McVey. I wholeheartedly thank the hon. Member for Poole (Neil Duncan-Jordan) for securing the debate. Its richness shows that we need also to have it in the main Chamber, because the Government need to tackle this issue head-on. Before I dive in, I refer Members to my entry in the Register of Members’ Financial Interests.
The Government have done some work, but it still seems that AI policy is done by announcement, rather than by taking a real, strategic overview of how it will power our society, and there is still no sign of an AI Bill. As has been talked about today, AI is everywhere, and the Government must tackle it head-on. They need to see that it is a tool that can be used to benefit our society or that can lead to our society’s demise.
Helen Maguire (Epsom and Ewell) (LD)
On the demise of society, AI can fuel the threat of disinformation, which can inflame tension and distort debate. We have seen that in Epsom and Ewell. Does my hon. Friend agree that AI must be regulated and that the Government must bring forward the AI Bill?
Victoria Collins
Absolutely, and that has been at the core of a lot of our debate today.
AI can drive inequalities, break down our society, security and safety, and take away jobs, or it can be used to tackle our biggest problems, empower individuals and drive growth. AI is a bit like the electricity of today—a supercharged version of electricity—and we need to think about where we are going to direct it. At some point, we started using electricity to light our cities and to power our homes, businesses and industries; now we need to think about where we will direct AI, and how we prepare people for that future.
The hon. Member for Poole and others talked about the future of our economy, tax and wealth, and there are key examples that highlight how important that is. We have started talking about donkeycorns; Members may have heard of unicorns, but donkeycorns are billion-dollar companies with one or two people. There is a legend that OpenClaw was a one-person company that was sold for £1 billion. That is a real shift in our economy, and we need to tackle it head-on.
As Liberal Democrats, we believe in embracing that progress and change, but we also believe in empowering individuals. When it comes to AI, we thought about tackling that big picture, which is why we launched a project called “Everyday AI”. We brought together over 100 global stakeholders from industry and civil society—to look at a Liberal vision for AI and how Britain can thrive in the age of AI. We looked at backing British innovation, empowering people and building trust, and building infrastructure for success.
As the right hon. Member for East Hampshire (Damian Hinds) said, no one knows where we are going. As a Member of Parliament and a politician, I often feel it is difficult to sound neither utopian nor dystopian about this issue. However, it is crucial that we ask the right questions, and keep on asking them, to make sure we are going in the right direction.
Victoria Collins
I am going to advance, because I want to hear from the Minister.
Crucially, we need to lean into the opportunities and challenges, and I will share some of our proposals, which I would be happy to discuss with the Minister afterwards. When it comes to leaning into the opportunities, it is about helping start-ups and small and medium-sized enterprises to thrive with AI, with AI procurement guides, skills tax credits and capital expenditure reliefs for AI software and adoption.
We need to look at supporting our university spin-outs and the incredible research in this country; quintupling proof of concept funding; having a standardised national framework for negotiating IP between universities and staff; and moving towards full IP ownership by researchers and research teams. We have to help to grow these things here in the UK.
As mentioned by the right hon. Member for Oxford East (Anneliese Dodds) and the hon. Member for Milton Keynes Central (Emily Darlington), we must use Government procurement to support UK tech. It has to be a catalyst for British sovereign tech. We are calling for a trial increase to 30% for the social value in procurement contracts. That would align with our strategic goals on digital sovereignty and AI, while maintaining open borders.
When it comes to tackling the challenges head-on, we need to look seriously at the cyber-security threats that have been talked about today. The hon. Member for Poole talked about the impact of big tech companies, and Mythos was a wake-up call. We hear that China is now developing such models, but I am most worried about those we are not hearing about.
We need to prepare for the future of work and fuel our creative industries, because we are nowhere without them. When it comes to NEETs, we have to realise that we are at a squeeze point, because companies are looking at how AI is bringing down costs. However, I would gently add that this is not the time to increase the cost of employment; that will not tackle the employment question.
We need to look at establishing safety by design in AI systems and models. We must tackle harm from chatbots through a harm-based framework, but enforcement is crucial. The AI Safety Institute is now the AI Security Institute. It is such a shame that that focus has been diminished, because we should be looking at AI ethics, as well as safety and security. We have to ensure that AI systems are not used for harm.
Members talked about AI fraud, which is a massive, serious problem in the UK. Revolut told us that the UK accounts for 22% of its customer base but 68% of its fraud costs. We are not tackling that massive problem properly, and AI is supercharging it. We are therefore calling for an online crime agency and AI labelling. We are also saying that social media companies, where a lot of AI-enabled fraud starts, should be financially liable for it.
We must tackle the energy question for AI datacentres and their role in the community, which my hon. Friend the Member for Mid Dunbartonshire (Susan Murray) mentioned. We have to make sure they add value to our communities, and the AI Energy Council must tackle those issues head-on. On public services, we need to make sure a person stays in the loop.
Ultimately, we need to prepare for a future that is arriving very quickly. Underpinning that, we are calling for a national people strategy. Things are changing very quickly, so we need a single, coherent framework, from primary school to the workplace, with regional input. We must realise that the skills we need for an AI future are not just technical skills, but critical thinking and analysis.
We must also look at a digital sovereignty strategy, as many Members have said. We need to look at our tech stack to ensure that we do not have a single point of failure. A resilient tech stack would be good not just for our security and for businesses, but for our tech and our economy, so we absolutely need to look at that.
We cannot give up on frontier models; we need to start looking at them now. A point was made about proportionality in models. We do not all need massive, complex models that require massive amounts of energy to solve most of our problems. Most companies probably need simple models. They can be UK models, but if we do not start now by backing and investing in them, we will be left behind very quickly.
Finally, we need to move quicky on smart regulation. The Financial Conduct Authority has a fantastic approach to fintech that looks at output and standards. We need a flexible approach to AI, because things are moving quickly. We also need a digital Bill of rights.
We need to unlock the benefits by addressing the challenges head-on. According to the Ada Lovelace Institute, 91% of the public feel that it is important that AI systems are developed and used in ways that treat people fairly, and almost 90% are calling for an independent regulator for AI. Will the Minister listen to those concerns, take back the many great ideas that have been raised today and speak to his colleagues across Departments? AI is an extremely powerful tool, and we must embrace it. The Government must tackle this head-on. Where will they let the power be focused?
If anyone is unsure how quickly AI is going to change, I am repeatedly reminded that this year is the slowest we will ever see in AI development. If a plane going around the world is 1° off, it will be 500 miles off course. We need to decide now the direction we are going in with AI. We need to look at that holistically. We are here to support that Government work and make sure it empowers society, so that Britain can really be the leading nation on trustworthy, innovative technology.
Dr Ben Spencer (Runnymede and Weybridge) (Con)
It is a pleasure, as always, to serve under your chairmanship, Ms McVey. I thank the hon. Member for Poole (Neil Duncan-Jordan) for bringing forward this interesting debate, and all the Members on both sides of the House who have taken part. I recognise many of those who have participated in many debates such as this and who will, I am sure, participate in many more to come.
I will start by thanking my right hon. Friend the Member for South Holland and The Deepings (Sir John Hayes)—I wish I had attended his lecture in 2000, not least to have had the experience of being in a room where everyone disagreed with him, which must have been rather unique—for making an important point about how slowly Parliament regulates and responds to change.
My right hon. Friend the Member for East Hampshire (Damian Hinds) made a similar point about our responsiveness to this rapidly evolving sector. I also very much welcome his point about education and the challenges involved, particularly given his experience in the sector. However, more than anything, I welcome his point that nobody knows what the future outcomes will be—a point I shall come back to a bit later.
I want to focus the bulk of my remarks on employment. I share the desire of the hon. Member for Poole to look at how to support and enhance employment through the AI transition, and we do need to have more such discussions. However, I am saddened that one core proposal from Labour Back Benchers is a plan on who or what we should tax now. I regret that the hon. Member’s plans for an employment levy, which he is very passionate about and has written about previously, would not work to protect jobs—protectionism never does. It would simply put a brake on the ability of organisations, large and small, to adapt to AI, and leave us behind our competitors, losing jobs across all sectors.
The history of protectionism is, sadly, frequently a very tragic one. With each technological intervention and change, there are often calls for protectionist approaches, and when they come in—
Iqbal Mohamed
Will the hon. Member explain how this will work, then? Human beings at work pay national insurance, income tax and pension contributions, and then they can support their families. AI agents and AI-powered robots do not pay any of that—there are no tax receipts for the Government—so how will Government fund public services in that scenario?
Dr Spencer
I thank the hon. Member for his challenge regarding a future hypothetical that has yet to be realised. I think I will be able to address some of his points, but I think the premise he is setting is a bit beyond the scope of this discussion. However, I can give some concrete proposals for protecting human jobs. As a starter for 10, rather than inventing a new tax, we could start with some old ones, and rather than inventing new regs, we could start with some newish ones.
The Labour Government’s approach has been to make it as difficult as possible to employ human labour by increasing national insurance contributions from employers; making it more difficult for younger people to compete in the workplace by increasing the minimum wage; and increasing employment regulations, making it a greater gamble for businesses to take on new starters. To support jobs in the UK, we should, before looking at AI, look at the Labour Government’s policies, which are uniquely designed to make it more and more difficult to employ a person over a machine.
We are right to think about the workforce implications of the adoption of AI, but the future is always unclear and uncertain; that is the challenge of working in this sector, and I am very mindful of that position of humility as I move on to the following, more specific remarks.
Other technological disruptions, while displacing jobs, have ultimately led to more jobs through elasticity of demand. As costs decrease through automation, demand increases. That is the story of what happened with mass manufacturing in the automotive sector: to begin with, people were concerned that mechanised manufacturing would reduce jobs in the sector. Of course, the car sector exploded because the cost of a car went through the floor, and as a net result there were more jobs in the automotive sector. The issue was that they were different jobs; it is more of a transition than a replacement.
There are signals and concerns that the current decrease in the number of youth jobs is due to AI. However, as my right hon. Friend the Member for East Hampshire said, it is unclear whether that is due to AI replacement, the current prevailing economic circumstances, or a mixture of the two. The data remains unclear, but I appreciate that we need to be thinking now about what possible futures could unfold. Equally, our tech sector provides growth and jobs. The UK could be the world’s fastest AI adopter, but only if it is not punished with burdensome taxes and regulations. We are already seeing a hint—just a hint—of what AI can offer, especially in the research and health sectors. Our economic future needs AI, or we are going to be left behind.
Before I come to my final questions for the Minister, let me touch on AI and tech sovereignty, which is increasingly being talked about in the media and in this place as people focus on it more and more. AI and tech sovereignty, as described in this debate and in other forums, is illusory. We work and operate in global supply chains, with technology enmeshed around the world. Whether it is microchips built by TSMC in Taiwan, microchip etches created in the Netherlands, quantum tech built in the UK or frontier models, most of which are based in the States, our sectors are completely and utterly enmeshed.
Rather than talking about tech and data sovereignty, we should be talking about resilience and leverage. What are the core functions and features that we want to have on domestic soil? We can have a discussion about that. What should it be necessary to have on British soil, and what are the core technologies on which we want to be elite? We want to be world leaders, and to be indispensable to the world so that it looks to us, as opposed to the other way around. We need resilience and leverage rather than to chase the illusory rainbow of tech and data sovereignty.
Given my remarks about regulation and competitiveness, can the Minister rule out any part of the UK being brought into the EU AI Act? That would reduce our competitiveness with the EU. Will the Minister summarise the impact on the UK AI sector of Government taxation and employment policies? Have they been positive or negative? If they have been negative, to what extent? Can he confirm that there will be a decent statement before recess, as has been promised, on social media and the regulation of chatbots? Has he spoken to the virtual Prime Minister, the right hon. Member for Makerfield (Andy Burnham), about the importance of anti-protectionist policies in the UK’s AI sector?
Esther McVey (in the Chair)
I call the Minister, mindful that I would like to give some time to the hon. Member for Poole to wind up the debate.
The Parliamentary Secretary, Cabinet Office (Mr James Frith)
It is a pleasure to serve under your chairship, Ms McVey. I congratulate my hon. Friend the Member for Poole (Neil Duncan-Jordan) on securing the debate, which speaks directly to the kind of country and society that we want to create for everyone we represent, and our friends and family—the type of country and society we want to live and thrive in.
The Government recognise that AI is, as Members have said, already changing our economy, the delivery of public services, our expectations of each other and the ways in which we interact and engage in debate. For me, it is not merely the latest thing, or the something new and shiny that is so attractive to politics and politicians; in my mind, it is equivalent to a new atmosphere in which we now all expect to feature and play our part. We see the potential of AI in everything from scientific discovery to better public services and stronger economic growth.
The Government have a clear responsibility to make sure that the change at the heart of this debate reinforces rather than weakens the fabric of our society. That includes standing up to big tech firms when we deem it necessary—examples will follow—when they facilitate harm to UK citizens. As so many Members have powerfully made the argument for, it also includes developing sovereign capability—determining what comes next and honing it for best benefit. As we bring this debate to a close, it is important that we continue to consider those questions. We must collectively decide how we build a better society in an AI-enabled world. AI must serve us, and not the other way round.
The Government recognise the pressure to internationally compete on AI. That means we need to actively shape the transition towards it to secure benefits for the UK while managing risk or, as my right hon. Friend the Member for Oxford East (Anneliese Dodds) put it, exert the domestic control that we need. That is why we are working hard to ensure that the UK has the capability, access and influence it needs in the technologies that will shape our economy, public services and national security. It is why we established the sovereign AI unit with £500 million to enable the Government to back promising UK firms. The UK already attracts the third highest private investment in AI.
Luke Myer (Middlesbrough South and East Cleveland) (Lab)
The Teesside region has the potential to bring nationally significant investment in new AI data centre infrastructure. We welcome that investment and we are open for business, but will the Minister commit to meet colleagues at the Ministry of Housing, Communities and Local Government to ensure that the governance arrangements around the Teesworks site attract business, rather than deter it?
Mr Frith
If I am considered worthy to meet in a few weeks’ time, I will be very happy to do so.
This is not about self-sufficiency or about turning away from trusted international partners; it is about ensuring that where the UK has genuine strengths—in research, talent, creativity and innovation—we can translate them into long-term economic benefit. Significant private investment is now flowing into areas that would have seemed like science fiction even a decade ago, including therapies that slow or reverse biological ageing and AI-accelerated drug discovery that could compress timelines for curing major diseases. If realised, such developments would profoundly reshape expectations of health, work and the role of the state. That is why the Government have already committed to ambitious plans to transform services and digitise government, as set out in the road map for modern digital government published earlier this year.
Sir John Hayes
I hear what the Minister says, but there are no specific laws governing the standards of AI, there is no dedicated regulator to deal with AI development, and there are no sanctions on companies that knowingly use AI for malevolent purposes. Those things are all needed now.
Mr Frith
The Government’s principle is to regulate at the time of deployment or at use. I understand the right hon. Gentleman’s argument, but it is important that we strike the right balance between innovation and regulation. Of course, as I will come on to discuss in more detail, where there have been examples of harm we must call that out and call in those who caused them.
The Government have already committed to ambitious plans to transform services. For a radiologist, that means access to the best tools for detecting cancer—tools that can save lives and cut waiting lists in our NHS. The public sector is where it is perhaps most crucial that the Government ensure that we embed frameworks, standards and guidance to ensure that AI is deployed in a way that is fair, transparent and accountable. We are doing so with the data and AI ethics framework, the AI playbook, and transparency standards that ensure the public can understand how systems are used.
We are also supporting UK firms that provide third-party AI-assurance ecosystems, demonstrating that AI systems are safe and reliable as well as creating new jobs. That is critical not just for risk management but for building businesses, building confidence in those deploying AI, and building trust in the systems we use. To the points that were made about the job market, AI has the potential to enhance job roles and the performance of each of us at work, but it is necessary and reasonable, as my hon. Friend the Member for Poole pointed out, to distinguish the jobs that are most at risk—those least likely to be enhanced and most likely to be replaced. That is a very reasonable proposition. We recognise that one of the primary areas where people will interact with AI is in the labour market.
To zone in on labour markets, and the issue of young people and entry-level jobs, an estimated 12.8% of all people aged 16 to 24 in the UK are not in education, employment or training. That goes well beyond data-entry or access-level jobs, or a potential shift of culture in relation to entry-level jobs. To date, there is little conclusive evidence that AI is reducing employment. However, the International Monetary Fund estimates that around 70% of UK workers are in exposed occupations. Around half of those exposed workers are in high complementary roles, where AI will enhance rather than replace their work.
The Government are committed to supporting the worker experience through the AI transition, and have a proud record of advancing workers’ rights. To that end, earlier this year the Government established the AI and the future of work unit, bringing together expertise from across Departments and industry to monitor how AI is affecting jobs, wages and opportunity in real time. We are putting in place the institutions, data and cross-Government co-ordination needed to ensure that AI transforms the labour market, that workers are supported and that opportunities are widely shared across society.
We are also investing in people, because the opportunities of AI will be realised only if the workforce are equipped to harness them. That is why we have launched one of the most ambitious skills programmes anywhere in the world. Our AI skills boost programme is already delivering results. In an answer given to the House last week, I referred to the early careers funding and work on curriculum reforms to come, such as an AI-inclusive GCSE in computing.
This is about ensuring that workers at every stage of their career, and whether in small businesses, large firms or public services, have the tools that they need to thrive in an AI-enabled economy. AI will have—is having—seismic impacts on our working lives and productivity, and we must embrace the democracy this gives us. We must democratise access to AI to ensure that communities across the country reap the benefits. Central to that effort is ensuring that support is delivered to the graduates and young people entering the world of work for the first time. Much has been made of the rising level of NEETs. Programmes such as TechLocal are creating new jobs, traineeships and professional training, while scholarships and fellowships are supporting the next generation of researchers and innovators.
Nobody is waiting 25 years to tackle the threats, however. AI harms are very real, and we do not sit idly by when it comes to tackling them. We are not standing still. The AI Security Institute is conducting world-leading research to understand the capabilities and impacts of advanced AI. In response to the generation of vile and degrading non-consensual sexual deepfakes on Grok earlier this year, the Prime Minister himself, and the Government, stood up to Grok and X and won that fight. We have criminalised the creation of non-consensual sexual deepfakes and legislated to require platforms to remove them. Separately, we have banned nudification apps and criminalised AI tools designed to create sexual abuse material, as well as learning the importance of sovereignty when considering the recent switching off of the latest Anthropic AI tool.
I was asked a specific question about the social media ban. I was a proud early adopter of the policy and I am pleased to say that it remains the Government’s intention to update the House before recess.
The UK is proactively responding to the AI revolution—we are shaping it. AI has extraordinary potential to improve healthcare, accelerate scientific discovery, personalise education, strengthen public services and drive economic growth. We will harness the opportunities across every region and community to shape UK society for the better for all.
Neil Duncan-Jordan
I thank all Members for their contributions to an excellent debate that showed we need to have more of this discussion. I will make some very quick points. First, we need to act with speed, as I think was accepted by a number of Members. As the right hon. Member for South Holland and The Deepings (Sir John Hayes) mentioned, we cannot wait 25 years.
We also need clear democratic oversight of what is happening. We cannot allow people we do not know and do not control to make our futures for us. We have to be in control of our own destinies. That is very important and will require global regulation. We will have to work with other authorities across the globe to come to the necessary arrangements.
Finally, the protections we will need must ensure that the next industrial revolution, which is already here in effect, benefits everyone and not just a few.
Motion lapsed (Standing Order No. 10(6)).
Government Support for Bus Services: West Dorset
(1 week ago)
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Edward Morello (West Dorset) (LD)
I beg to move,
That this House has considered Government support for bus services in West Dorset constituency.
It is a pleasure, as always, to serve with you in the Chair, Ms McVey. It is my privilege to bring this debate to the House.
This issue may seem niche, but it matters a great deal to my residents. It has generated a huge number of queries, social media comments, emails and constituency casework since I became an MP, reflecting just how deeply it affects people’s daily lives. Buses determine whether my constituents can get to work, reach college, attend a hospital appointment, visit the high street or simply remain independent. When services are reduced or withdrawn, it can cause real anxiety for those who rely on them and, as I recently saw through casework, their families, too. That is especially true when it comes to reaching vital hospital appointments or when there are further cuts to essential routes, as we saw when the X53 and X51 services were significantly reduced due to last-minute increases in the subsidies demanded by the bus company, which the council could not afford to meet, when changing to a winter timetable.
In the spirit of constructive opposition, I welcome the direction that the Government have taken. I welcome the introduction of the new local authority bus grant, bringing together previous funding streams into a single multi-year settlement. I welcome the recognition of rurality in the funding model, as well as the extra funding that has been provided to local authorities. Long-term funding provides certainty. It allows authorities to plan strategically and move away from the stop-start cycle of short-term funding announcements that has characterised this area for too long.
Jim Shannon (Strangford) (DUP)
I commend the hon. Gentleman for securing this debate. As he is well aware, West Dorset is similar to my constituency, with market towns and many townlands rather than towns, and the profitability of public transport can be questionable. However, does he agree that the bottom line is not the ledger, but connectivity and the end of rural isolation in an affordable fashion? Does he agree that we are not getting the balance right for our rural constituencies, which are the backbone of the United Kingdom of Great Britain and Northern Ireland?
Edward Morello
The hon. Member rightly touches on a lot of the issues that I will come to, all of which I know are as pressing in his part of the United Kingdom as they are in mine.
I thank the Minister for the constructive meeting we had on these issues. For the first time, the funding formula explicitly recognises rurality. That is an important step forward, and one that I and many other rural Members have called for from our first days in the House. However, recognising rurality and adequately funding rurality are two different things. The scale of the challenge in rural areas is immense, requiring a sustained and significant effort to rebuild networks that have been hollowed out over many years. Rural bus services fell by 52% between 2008 and 2023.
Adam Dance (Yeovil) (LD)
My constituency neighbour will know that in Somerset and Dorset, we get older models of buses no longer used elsewhere. At the same time, rural bus depots, such as the one in Yeovil, are closing. If a bus breaks down from Ilchester on the way to Dorchester, passengers have to wait over an hour for a replacement bus. Does my hon. Friend agree that if depots for repairs are going to be closed, we need newer buses in West Dorset and Yeovil?
Edward Morello
My hon. Friend and neighbour is right to raise the pertinent issues of older buses and the closing of depots, which are directly linked. I hope that has been heard by the Minister.
Across England, there were over 1 billion fewer passenger journeys in 2023 than in 2015. Bus service frequency in West Dorset has fallen by an astonishing 62%, and 10 of Dorset’s 14 towns are already transport deserts or at serious risk of becoming one. That creates barriers to employment, healthcare and independence. Patients miss hospital appointments, which contributes to the £1.2 billion annual cost of missed appointments for NHS England. Young people miss out on opportunities, older residents become isolated, and communities slowly lose confidence that public transport will ever return.
That is why simply maintaining today’s network cannot be considered a success; the scale of decline means that we must actively rebuild what has already been lost. Between 2026 and 2030, Dorset will receive £13.8 million in Government bus funding: the lowest allocation anywhere in the south-west. That is £10.9 million less than neighbouring Somerset receives and £7.5 million less than Wiltshire. Devon and Torbay alone will receive over three and a half times Dorset’s allocation and Hampshire will receive nearly four times as much. It is therefore unsurprising that neighbouring authorities can expand services, modernise fleets and increase frequency, while Dorset is often forced simply to maintain what it has left.
The Government deserve credit for recognising rurality, but rurality now needs to be given greater weighting within the funding formula. Serving dispersed populations inevitably costs more per passenger than operating in dense urban areas. There is a significant difference between increasing the frequency of an existing service and recreating a lost route from scratch. The latter requires considerably greater investment before passenger numbers can even begin to increase.
Every summer, West Dorset’s population increases by over 42% due to seasonal visitors. Around 4 million day visitors and 2 million overnight visitors place a huge additional demand on our transport networks, which were designed to serve a much smaller permanent population. Yet that seasonal pressure is barely recognised in the national funding allocations.
The Prime Minister in waiting takes great pride in the transformation of Manchester’s bus network. However, the Bee network demonstrates the scale of the investment required. Greater Manchester receives about £41.42 per resident, compared with approximately £4.84 per resident in Dorset—over eight times as much in funding per head.
Transport for Greater Manchester manages a budget exceeding £480 million and subsidises almost a quarter of the network. That level of investment has transformed services, and I want Dorset to have the same level of ambition. However, rebuilding transport across hundreds of square miles of villages, market towns and dispersed communities is significantly harder than doing so in a major urban area. If the Government truly wish to level up rural transport, the funding formula must recognise that restoring services in rural Britain costs more, not less, than maintaining them in our cities.
The consequences of poor bus services are perhaps felt most keenly by young people. The recent Milburn review identified transport as one of the main drivers of young people becoming detached from education, employment and training. The review found that in rural, deprived and coastal communities, transport itself had become a major barrier to opportunity for those without access to a car. The proportion of 17 to 20-year-olds holding a full driving licence has fallen to 29%, while for many families the cost of owning and insuring a car has simply become unaffordable.
At the same time, bus services have become less frequent and more expensive. Bus fares increased by 59% between 2015 and 2023. On average, young people are now 15% less likely to travel than they were just 15 years ago, which should concern every Member of this House. When the last bus leaves before a hospitality evening shift finishes, a young person cannot access that hospitality job; they have been presented with a challenge that they cannot overcome. That is why I was pleased to table amendments to the Bus Services Bill during its passage to improve connectivity for young people by providing free bus travel for 16 to 18-year-olds, to encourage better co-ordination between buses and trains, and to ensure that funding reflects the realities that rural communities face. Those amendments were not adopted, but I hope the Government will start to move in the positive direction that they indicated.
West Dorset has an ageing population, and many people rely on buses to reach GP surgeries, hospitals, pharmacies and shops. When the bus services disappear, independence disappears with them. Poor transport also increases pressure on the NHS, on social care and on local authorities—all these things are connected. That is why I believe we should return to a sort of “total place” thinking, which was first developed over a decade ago: looking across departmental boundaries, instead of operating within them. The Dorset total transport pilot brought together school transport, adult social care transport, public bus services and community transport.
With just £180,000 of funding, the pilot improved services in some areas while identifying longer-term efficiencies and introducing more flexible, demand-responsive transport. It also explored digital technology to better match transport supply with demand. Rather than allowing buses to sit empty after a school run or to return to depots, we should ask how those vehicles could transport patients home from hospitals, connect isolated villages or just provide additional journeys during the day.
We also need a more joined-up approach between different modes of transport. People should not wait 40 minutes for a bus because the train was three minutes late. We need a properly integrated local transport network with more regulated and co-ordinated bus services. In many rural communities, community transport is often the only reason people remain connected at all.
Lee Pitcher (Doncaster East and the Isle of Axholme) (Lab)
Interconnectivity goes across not just buses but other modes of transport such as trains. There is a petition in one of my rural areas where, pre-covid, trains ran every 30 minutes; that is now every two hours, and there is a big gap in the middle of the day. Does the hon. Member agree that we need strategic planning in the mayoralties across all modes of transport?
Edward Morello
I agree 100%—talk to anyone who has got off the last train from Crewkerne when the last bus stopped two hours beforehand. We are depriving our communities of the ability to get around, and of course there is an economic impact to that.
The CB3 community bus in Beaminster demonstrates exactly what local communities can achieve when volunteers, councils and residents work together. Similarly, the new LB1 evening service between Lyme Regis and Bridport has quickly proved a success, despite disruption caused by necessary works on the A35. I am also encouraged by proposals for further community transport in places such as Sherborne, which have my support, but parish councils and volunteers cannot continue to carry the burden alone.
The Department for Transport currently makes up to £3.8 million available annually for eligible community transport operators, but that is across the whole country. Given the scale needed, that is simply not enough. Instead, there should be dedicated, ringfenced grant funding specifically to help communities establish new community transport services where commercial routes have disappeared. A hub-and-spoke model supported by smaller community buses and demand-responsive transport could reconnect villages at a fraction of the cost of restoring traditional commercial routes immediately.
Importantly, that funding should recognise that the greatest cost comes at the beginning. Communities need capital investment to purchase vehicles, recruit drivers, establish a booking system and build passenger confidence. Once services become established and passenger numbers increase, public subsidies can reduce over time. Demand-responsive transport has already shown real promise in Wiltshire, where passengers can book flexible journeys through an app and AI software identifies the most efficient routes. Data suggests that these services have been particularly successful among younger users travelling between villages and market towns before they learn to drive. West Dorset would be an ideal place to pilot a similar, larger-scale approach.
For rural communities such as West Dorset, buses are fundamental to tackling social isolation, supporting economic growth and giving young people genuine opportunities. I hope that the Minister will listen to the appeals of my residents and ensure that rural Britain is no longer left waiting at the bus stop while the rest of the country moves ahead.
The Parliamentary Under-Secretary of State for Transport (Simon Lightwood)
It is a pleasure to serve with you in the Chair, Ms McVey. I congratulate the hon. Member for West Dorset (Edward Morello) on securing this important debate. He has been a committed champion of bus services and transport needs in his constituency, and I thank him for the constructive tone with which he has approached these subjects.
Buses are at the heart of our vision for better and more integrated, reliable, affordable and accessible public transport. The Government have set out an ambitious plan to deliver better bus services, grow passenger numbers and ensure that communities that have too often been underserved can benefit from reliable public transport. Of course, there is no one-size-fits-all approach to local bus services. That is particularly the case in rural areas such as West Dorset, where there can be additional challenges to running a good local bus service.
The Bus Services Act 2025 puts decision making into the hands of local leaders across England, including in rural areas, so that they can determine how best to design their services for their communities and have greater control over routes and timetables. As the hon. Gentleman knows, since he was on the relevant Bill Committee, it expands the options available to local authorities, allowing each area to pursue the model of bus service delivery that best suits their needs while safeguarding the needs of passengers. The Act also tightens a requirement around the cancellation of vital bus routes, particularly those relied on by vulnerable and disadvantaged passengers. The Government are committed to monitoring the effectiveness of those measures, including the impact on rural services, with a review five years after their introduction.
We will provide meaningful financial support to improve bus networks totalling more than £3 billion over the next three years. That includes nearly £700 million per year for local transport authorities through the local authority bus grant. That funding can be used to support the introduction of new routes; for more frequent services; for safer, better, more accessible bus stops; for new electric buses; and for improved real-time information so that passengers can travel with greater confidence. It could also be used to increase the provision of community transport, for instance.
At the end of last year, we published individual multi-year settlements for local authorities under the local authority bus grant for the next three years. As the hon. Gentleman said, those allocations were determined by a new, revised formula. Gone are the days when it was a competitive funding bid—each local transport authority now receives funding. For the first time, the formula considered rurality to ensure that rural areas are not disadvantaged. Other parts of that formula include population size, levels of deprivation and the extent of current bus services.
I hear what the hon. Gentleman was saying about not just protecting what is there, but going further and building back. He has my assurance that we will continue to look at that funding formula to make sure that it is the fairest possible way to distribute funding across the country. We have already allocated multi-year settlements for the next three years, so it would be after that period. I am pleased to confirm that Dorset council will receive slightly over £12 million through the local authority bus grant for the next three years. That is nearly £200,000 more per year than the allocation in 2025-26, or roughly a 5% increase. Under the local authority bus grant, local leaders will be able to invest in transport priorities that are right for their area, such as enhancing bus services in rural communities.
Alongside the multi-year funding, this Government’s bus reforms are fundamentally about giving local leaders more powers and more choice over how to deliver services. That includes unlocking franchising as an option for all areas. There is no one-size-fits-all approach. Different areas face different challenges because of their geography, population density and demographics. That is why work is under way to provide active support to local transport authorities that wish to explore franchising, particularly in rural areas.
The work includes our bus reform and franchising pilot programme, which supports authorities with feasibility assessments for bus franchising. The programme is designed to test different types of franchising model to understand how they could be best implemented to deliver improved bus services for passengers in rural locations. Case studies, guidance and templates from the programme will be shared with other local transport authorities, ensuring that learning is captured and can support other areas considering franchising. These products could be particularly important for small towns and rural communities, including in West Dorset, where members of the community may rely on buses as their only realistic public transport option.
We also know that in some areas, traditional stopping bus services may not be viable. We want to encourage local leaders to consider a range of options to deliver better services for passengers. That includes incorporating demand-responsive transport and community transport services into the local transport network. DRT has the potential to improve local transport in areas where demand is more dispersed over longer distances, which makes it harder to provide conventional fixed-route services that meet residents’ needs.
Our franchising guidance outlines key considerations for LTAs exploring franchising regarding DRT, including how local bus services integrate with alternative models such as DRT. We have recently published guidance on best practice for local authorities to set up and deploy demand-responsive schemes, from planning and procurement through to launching and sustaining those services.
Making bus fares more affordable is one of the Government’s transport priorities because that really matters to passengers. The Government continue to cap single bus fares at £3 on thousands of routes in England, outside London, until March 2027, helping millions of people access affordable travel and better opportunities. That cap can be particularly beneficial for rural passengers, helping to limit the cost of journeys where single fares can otherwise be significantly higher.
The Chancellor went further in May, announcing more than £100 million additional funding for the bus sector, to help children travel free this summer, and to continue supporting services. Under the offer, children aged five to 15 will be able to travel free on participating local buses in England throughout August, helping families to get out and about for less, at a time of increased cost of living. Further details will be announced shortly.
To pick up on the point about better integration, I draw Members’ attention to a fantastic read—“Better Connected”, the Government’s integrated national transport strategy. That looks at how to dovetail buses with trams, trains, micromobility and active travel. I highly encourage Members to take a look at that, because we recognise the challenges they have mentioned today.
Adam Dance
My biggest concern is that we have no electric buses in Yeovil. There is nowhere to charge them because other depots have been shut down. How will we cope with an electric future if First Bus is closing depots?
Simon Lightwood
That will be a commercial decision for First Bus about whether to invest in those services. The option remains for local leaders to consider whether they want to pursue franchising and take greater control over that issue. They could also lift the ban on establishing new municipal bus companies. There are options there. I will continue to work across Government to ensure we get grid connections for future deployment of electric buses. Funding from local authority bus grants and other sources can be used to purchase electric buses.
In closing, I reiterate my thanks to the hon. Member for West Dorset for securing this debate, and to the other hon. Members for their interventions. Improving bus services, importantly in rural areas, is central to the Government’s mission to drive growth and opportunity across the country. We know there is more to do, but we are taking meaningful steps to ensure that wherever people live—in a city, rural area or small town—they have access to the reliable, accessible and affordable transport that they deserve.
Question put and agreed to.
National Youth Strategy
(1 week ago)
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Harpreet Uppal (Huddersfield) (Lab)
I beg to move,
That this House has considered the National Youth Strategy and youth enrichment.
It is a pleasure to serve under your chairship, Ms McVey. I am grateful for the opportunity to highlight the importance of the national youth strategy and youth enrichment. I know that many colleagues share my commitment to ensuring that every young person is offered the support and opportunities they need to thrive.
Youth services are not a luxury, but an essential part of our communities. I commend the Minister and her team for the Government’s national youth strategy and its £500 million commitment to rebuild the places, relationships and power structures that young people need to thrive. It aims to right the wrongs of previous Administrations and confront the challenges faced by more than 10 million young people.
We must be honest about the challenges. Having been born and raised in Huddersfield, I have seen at first hand the impact of austerity on young people. Too many have had their futures torn away from them. Youth services have lost around £1.2 billion in local authority funding since 2010, with more than half of council-run youth centres closing in that time. Kirklees council, which covers my Huddersfield constituency, saw a 70% decrease in funding from 2011 to 2025. That leaves just over £47 per young person being spent on youth services in our community.
David Williams (Stoke-on-Trent North) (Lab)
We know all about funding cuts in Stoke-on-Trent and Staffordshire—they were more than 90% in our local area—so I welcome this investment. However, does my hon. Friend agree that we must ensure we get the revenue funding as well as capital funding? That is what makes activity work on the ground.
Harpreet Uppal
My hon. Friend is quite right, and I will come to that point later.
Young people who have lost access to youth clubs have been shown to be 14% more likely to engage in criminal activity in the six years following closures. A recent project in Ashbrow in my constituency saw antisocial behaviour fall by an incredible 63%. Alongside policing operations, partnerships were developed with community organisations to support children and young people, alongside regular intervention programmes designed to support those most at risk. The evidence is clear: when youth services are cut, our young people and communities suffer; when they are funded, young people and entire communities thrive.
The youth strategy sets out a 10-year vision, but current funding commitments cover only the first few years, so will the Minister outline how the Government will ensure long-term investment so that organisations have the certainty they need? Will she also confirm how her Department will work alongside other Departments to ensure greater alignment between all Government reforms focused on young people?
Since being elected, I have had the privilege of visiting many of the youth work organisations in my constituency and have witnessed at first hand the life-changing work they deliver. They include Central Stars youth club, Yorkshire Community Development, Empower, Positive Stepz, Team KickStart, Conscious Youth, Boxpower and Temple Well-Being, as well as the foundations of Huddersfield Town football club and Huddersfield Giants. I will also mention organisations working at the national level, such as the Duke of Edinburgh’s award team, some of whom are here today—thank you for joining us [Hon. Members: “Hear, Hear!”]—the National Youth Agency and all members of UK Youth. All those organisations and many others deliver outstanding community-led services and policy work, often in difficult financial circumstances.
Crucially, many of the organisations also offer opportunities to access sustained enrichment programmes, such as volunteering, physical activity and skills development, which can help to close opportunity gaps, particularly for young people who face disadvantage. Enrichment should not be seen as a “nice to have”; activities outside the classroom also give young people direct exposure to environments that many have never previously accessed.
Gordon McKee (Glasgow South) (Lab)
My hon. Friend is generous in giving way, and she is making an important speech. The crisis of young people not in education, employment or training is one of the biggest problems we have in this country. Does she agree that youth clubs and the Duke of Edinburgh’s award scheme are part of how young people get the skills that will help them to get into the world of work?
Harpreet Uppal
My hon. Friend is quite right. That is why it is so important that we fund and support these organisations sustainably.
As I was saying, enrichment activities help to raise confidence, skills and aspirations, while making future opportunities feel achievable. Last week, when I visited a school in my constituency, pupils asked me what services and activities will be available in their local area once the under-16s social media ban is in place. Importantly, access to opportunities should not depend on family income. Every £1 of public money invested in the youth sector generates between £3.20 and £6.40 in benefits for the taxpayer, while for every £1 saved from youth service closures, nearly £3 is lost in educational outcomes and increased crime costs.
The Duke of Edinburgh’s award is a proven national enrichment programme that helps young people to develop skills and gain experiences that can have a lasting impact on their lives. Last year alone, more than 350 students from a range of backgrounds in Huddersfield took part in it. I was pleased to see the launch last month of the “Every Child Can” programme to fund enrichment activities, and the national youth strategy’s commitment to halving the participation gap in enrichment activities between disadvantaged young people and their peers. Youth workers see enrichment as one of the most important commitments in the strategy, so can the Minister confirm how the Government plan to deliver on that pledge, and whether she has considered an enrichment premium or targeted funding to help to do so?
Alongside enrichment, many who work in the industry believe that the most significant policy change the Government could make would be to strengthen the statutory duty on local authorities to provide a sufficient local youth offer. I understand that the national youth strategy commits to “explore reviewing” that, but the youth sector is clear that it needs to be urgently prioritised. I ask the Minister: will the Government commit urgently to reviewing and strengthening the statutory duty on local authorities to provide a local offer, and will it be backed by dedicated funding and clear national benchmarks to define what sufficient youth provision means?
Tom Hayes (Bournemouth East) (Lab)
I make a habit of agreeing with my hon. Friend, and I particularly agree with her on that point. When I speak with youth workers, they are clear that they do not want to reinvent the wheel. Youth work works; we just need more of it to be ringfenced and have dedicated funding. We are about to have a youth hub opened in my area as part of the youth guarantee, which is fantastic news. Will my hon. Friend join me in paying tribute to MBN Arts and Mike Ness? Last Thursday, they put on a summer exhibition for younger neurodivergent, to help them with their educational and creative pathways and into a brighter future.
Harpreet Uppal
That sounds like an excellent programme and I absolutely commend it.
Youth workers are central to delivering the national youth strategy, but the workforce are under acute pressure: more than 4,500 qualified youth workers have left the profession in the last decade, around 60% of the workforce has no recognised youth work qualification and only six undergraduate youth and community work programmes remain, down from 37 in 2013. The strategy provides a £15 million commitment for youth workers, including new qualifications and educational pathways, which is excellent, but can the Minister confirm how that will align with the Government’s wider skills reforms to rebuild workforce capacity at scale and improve job prospects in the industry?
I also want to highlight the importance of Young Futures hubs, which reflect a growing understanding of the importance of youth services and provide accessible pathways into education, employment, volunteering and community participation. However, to be a success, the hubs must effectively support young people to re-engage with education and training, and create collaborative working partnerships. Can the Minister outline the steps the Government will take to deliver that long-term approach to youth engagement? I reiterate my previous requests for Huddersfield to be included in future phases of the programme; the Minister may need to pass those on to someone else, but that would be amazing.
Many young people and youth support workers have persistently been excluded from having a voice or influence in the national and local decisions that directly affect them. The national youth strategy will help to change that; it includes a commitment to placing young people’s voices at its heart, and explicitly identifies youth workers as the people holding a fragmented system together. Those are major shifts, and a recognition that the sector has fought hard for. To deliver that ambition, youth participation must be built into implementation, not treated as a one-off consultation. Young people should have meaningful opportunities to shape and monitor delivery of the strategy at national and local level. That should include long-term, properly resourced mechanisms for youth voices and democratic engagement, particularly for those least likely to be heard.
I will take this opportunity to give a shout-out to my annual summer school for young people from Huddersfield; it was great to welcome them to Parliament this week. One of the main issues they raised in our sessions was the importance of their voices being central to the decisions that affect them. I heard that message loud and clear. Can the Minister confirm what long-term arrangements will be established to ensure that young people are meaningfully involved in developing and implementing the delivery of the strategy at all levels?
I thank the Minister for being here, and you, Ms McVey, for chairing the debate. I look forward to hearing contributions from other Members.
Esther McVey (in the Chair)
I remind Members that they should bob if they wish to be called. I will call the Front-Bench spokespeople at 5.10 pm. This debate is popular, so I set a time limit of three minutes and remind Members to keep interventions short.
Robbie Moore (Keighley and Ilkley) (Con)
It is a pleasure to serve under your chairmanship, Ms McVey. I thank the hon. Member for Huddersfield (Harpreet Uppal) for securing this important debate. I am sure that all Members of this House will advocate for ensuring that the next generation has every opportunity to thrive, and to develop confidence and resilience. Youth enrichment is fundamental to building stronger communities, improving wellbeing, fostering social mobility and developing skills that needed by employers, communities and, of course, the country.
My first point follows a conversation that I had with GoWild Outdoors, which is a business that operates outdoor education activities for children and young people across my constituency and beyond. That business is extremely worried about the Government’s decision to end the physical education and sport premium for primary schools, which gives primary schools direct control over funding, after the 2025-26 academic year and to replace it with the PE and school sport partnerships network. GoWild Outdoors told me that the change would mean not only a potential reduction in schools’ autonomy over how PE and sport provision is developed, but a 22% drop in annual funding.
As a result, schools are already starting to cancel sessions from third-party providers, because there is a lack of clarity from the Government on how the new PE and school sport partnerships network will work and will impact funding. That lack of clarity is not just harming local businesses and third-party providers in my constituency, such as GoWild Outdoors; it is having a hugely negative impact on the children whose learning and wellbeing benefit from additional non-classroom provision. GoWild Outdoors asked me to ask the Minister for reassurance that the new scheme will not negatively impact the ability of third-party providers to deliver for children and young people who rely so desperately on the programmes that they provide, because the uncertainty is having a direct impact, right now.
My second point is about the Government giving mayoralties the ability to roll out a tourism tax and apply it to accommodation for youth organisations, such as the Girl Guides and Scouts. I seek reassurance from the Government that the tax will not apply to organisations that provide youth enrichment through accommodation that is generally provided through charitable means. Doing so will have a direct impact on the youth enrichment programmes run by the many great volunteer organisations that I am sure many Members of Parliament interact with across our constituencies. I would greatly appreciate the Minister responding to those implications of the tourism tax.
Natasha Irons (Croydon East) (Lab)
I thank my hon. Friend the Member for Huddersfield (Harpreet Uppal) for securing this important debate. As the chair of the all-party parliamentary group on youth affairs, I know the importance of services for young people, and I welcome the Government’s leadership on this issue.
When I meet young people in my constituency or through my work on the APPG, I am struck by how tough it is to be a young person in Britain today. Whether through the 73% cut in youth services over the last decade, a housing crisis that prevents some young people from moving on to the next stage of their lives and means that others grow up in temporary accommodation, or youth unemployment, our young people are growing up in a world that is economically challenging, internationally volatile and often hostile to them. Our young people are just as ambitious, just as determined and just as willing to work for their future as anyone who has gone before them, and in that context of hope, opportunity and ambition for our young people, the national youth strategy is so important.
Around £1 billion has been taken out of the sector since 2010, more than half of council-run youth centres have closed, and the statutory framework is often too weak. We have been left with a postcode lottery for youth provision, where spending on youth services can range from as little as £1 per young person in one area to £137 in another. Co-created with young people, and backed by £500 million of Government investment, the national youth strategy is a 10-year plan to provide young people with somewhere to go, something meaningful to do and someone who cares.
Although I wholeheartedly welcome this landmark strategy, for it to have a truly meaningful impact it must be backed by statutory protections for the services that our young people rely on. That is why I introduced the Youth Services Bill last year, which aims to strengthen the statutory duty on local authorities by introducing clear, measurable benchmarks for what sufficient youth provision looks like. It includes expectations around qualified staff and accessibility, and it embeds the conditions needed for long-term improvement through joined-up safeguarding, quality standards and meaningful youth voice in the design and delivery of services.
I have seen at first hand the impact of a lack of statutory protections for youth services. In Croydon, London’s youngest borough, the council shut down the youth engagement team, a group of wonderful youth workers who were a critical link between the voluntary sector and the council. The lack of statutory protections meant that it could be closed down without real consultation with young people, the NHS or the police.
Protecting our youth provision is not about placing unrealistic burdens on local authorities; it is about making a practical investment in our young people’s future and financial savings for our communities. As has been outlined, for every £1 we save on youth services, we save up to £6.40 in social value. Although I wholeheartedly recognise and welcome this strategy, I urge the Minister and the Government to think again about how we can provide statutory protections for our youth services.
Jim Shannon (Strangford) (DUP)
It is a real pleasure to serve under your chairship for the third time today, Ms McVey; I think we are getting to know each other quite well. I thank you for your courtesy and guidance. I also congratulate the hon. Member for Huddersfield (Harpreet Uppal) on securing this debate. I spoke to her beforehand. When I saw the title of the debate, I said, “I’m definitely going to Westminster Hall.” People will say, “You’ll be in Westminster Hall anyway.” But I came racing down for this debate—I love this debate—and I am going to explain why.
It is nice to see the Minister in her place again. She gets all the good debates, and today she has a really super one. I look forward to her contribution. This year is the 70th anniversary of the Duke of Edinburgh’s award, and a new national youth strategy will be in place. This is an opportunity to reshape what will be offered to the next generation to ensure that every child, regardless of their background, postcode or circumstances, is given the tools to become world-ready.
I wanted to come and speak in this debate because my three boys, Jamie, Ian and Luke, got the Duke of Edinburgh’s award. When they were young men, Jamie got the gold and the other two boys got the bronze. I watched them march off with their impossibly heavy rucksacks into the damp, unpredictable weather, maps in hand, full of nervous energy. I watched them return tired, covered in mud, but standing just a little bit taller. I believe it taught them resilience—the hon. Member for Huddersfield outlined that incredibly well in her contribution—and it taught them how to look at a challenge, look at their peers and say, “This is something that we have to do together.” It is not just about a single person; it is about doing it together. That is what the Duke of Edinburgh’s award instils. As a father, I owe a great debt of gratitude to the legacy of the late Prince Philip, and to the ongoing devotion of the current Duke of Edinburgh, Prince Edward. Through the Duke of Edinburgh’s award, my boys made friends for life.
Every year, Northern Ireland produces some of the highest completion rates anywhere in the United Kingdom for gold, silver and bronze. Our schools, our uniformed organisations, such as the Boys’ Brigade and the Girl Guides, local youth clubs and even farmers clubs have been the engines driving this success. The charity’s 70th anniversary goal is to reach 2 million more young people over the next five years—what a goal that is, and it is achievable.
In Northern Ireland, young people are unfortunately dealing with a mental health crisis. It is deeply concerning. We are dealing with pockets of severe deprivation where a child might never otherwise, without the award, get the chance to see the beauty of the Mourne mountains, let alone hike across them. The Duke of Edinburgh’s award is the framework that catches young people when formal education is not enough, building their focus, memory and social awareness. It does all those things, and brings them together for us, ensuring that no child is left behind in my constituency of Strangford and across Northern Ireland, including in the inner-city estates of Belfast and the border regions.
Let us use this 70th anniversary not just to celebrate the past, but to build a robust, unbreakable foundation for the future of our youth. My three boys did the Duke of Edinburgh’s award; they did well, and the award did that for them.
Josh Dean (Hertford and Stortford) (Lab)
It is a pleasure to serve with you in the Chair this afternoon, Ms McVey. I congratulate my hon. Friend the Member for Huddersfield (Harpreet Uppal) on securing this debate.
I welcome this Labour Government’s national youth strategy, and how it recognises the importance of achieving good work and the emphasis that it places on trusted adults. Too often, those relationships have been seen as a soft offer—a nice to have—when in fact they are a key strategic asset in tackling youth unemployment. That is because today we risk having a lost generation. There are a million young people neither earning nor learning, with hundreds of thousands of them disconnected from traditional employment support and hidden from the system entirely.
A growing evidence base suggests that trusted adult relationships, whether with youth workers, coaches, mentors or others can act as the connective tissue to the wider support that will help to address the barriers locking young people out of education, employment and training. They can transform a young person’s journey to employment through the continuity, advocacy and encouragement that many need to navigate a system that is often confusing and isolating. That consistent, person-centred support can be vital in identifying those hidden NEETs too.
On Monday, to mark Youth Employment Week, I hosted a roundtable with the Youth Futures Foundation where we heard the powerful testimony of its youth ambassadors: Aarya, Elaina, Grace, Niamh, Serena, Sharna and Yusra. They talked about the impact that the presence, or absence, of a trusted adult had had on them. I am living proof that trusted adults can succeed where traditional provision falls short. When I dropped out of school feeling like the world had ended, it was a local youth worker called Russell who helped to rebuild my confidence and set me on a positive journey. I would not be here representing the home that I love without the support that he gave me.
In a fragmented and often confusing landscape, trusted adults can act as a golden thread, bridging young people into the right support at the right time. They can also help to draw this Labour Government’s offers together, aligning work across employment, education, skills, health and youth policy, delivering the system change required to tackle the NEET challenge.
Young Futures hubs can act as centres of excellence for relational practice, offering open access and co-ordinated support for young people across employment, mental health and crime prevention in every community. I would be grateful if the Minister could set out in her response how she is working across Government to deliver this manifesto commitment, and how she thinks we can strengthen and support the role of youth workers like Russell, and trusted adults more generally, across this important policy area.
Chris Vince (Harlow) (Lab/Co-op)
It is a pleasure to serve under your chairmanship, Ms McVey. I thank my hon. Friend the Member for Huddersfield (Harpreet Uppal) for securing this really important debate. I also thank my two work experience students, Nicoleta and Lyra. They are both from Harlow and are in the Public Gallery today. They have prepared me a very thorough and informative briefing ahead of this debate, so my contribution might be slightly more informed than usual.
When I met with Nicoleta and Lyra before this debate, they spoke about their experiences of taking part in the Duke of Edinburgh’s scheme, which obviously celebrates its 70th anniversary this year. I want to read out some of their thoughts on the scheme and the difference that it made to them and their friends and peers. Nicoleta completed the Duke of Edinburgh’s bronze award while she was studying at Burnt Mill academy. She said:
“I would describe it as very insightful and gave me an opportunity to give back to community by mentoring primary school children as part of the volunteering section.”
Lyra completed the Duke of Edinburgh’s bronze award while she was at Stewards academy, which is also in Harlow. She said that
“taking part in a local theatre production as part of the skills section, was very insightful and ignited a new passion. As part of the volunteering being able to volunteer at Harlow Youth Council improved political interest and involvement with the town.”
I think we can all agree that that is admirable and fantastic.
I have a few points with regard to the national youth strategy. I welcome the publication of the first long-term youth strategy that we have had in over two decades. Following a lot of lobbying from me and others, I am really pleased that young carers were included in that strategy, because it is hugely important that groups like that are listened to and their voices are heard.
I emphasise to the Minister the huge importance of prevention rather than intervention, and of ensuring that every young person, regardless of their postcode, has the opportunity to be involved in the schemes that have been mentioned. We can all appreciate, as Members across the Chamber have commented, the huge difference that taking part in schemes like the Duke of Edinburgh’s scheme can make to young people’s confidence and their ability to be part of the community.
Finally—I know I am running out of time—I am really delighted that Harlow will be the home of a Young Futures hub funded by this Labour Government. I am also delighted that this Labour Government have an ambition to halve the enrichment participation gap between disadvantaged young people and their peers.
Rachael Maskell (York Central) (Lab/Co-op)
It is always a pleasure to see you in the Chair, Ms McVey. If we are going to make interventions that will have a real impact on lives and change opportunities and trajectories, we have to look at where we place those priorities. Of course, these transition points in life are those opportunities: the 1,001 critical days, the start of school and the transition between primary and secondary.
Then there are youth services, and I believe we are at a juncture where we need to bring our services together around our young people. We are doing incredible work on people not in education, employment or training and in the criminal justice space; we have the national youth strategy; and we are looking at young people’s wellbeing and mental health. We need to bring those into one space, because ultimately they are about the relationships that young people build with trusted adults. They do not compartmentalise themselves, and these different areas are completely interwoven, so I urge more joining up of the different strategies as we move forward.
As part of that, statutory youth services should be returned and local authorities should have the obligation but also the necessary funding. Often, we are talking about the same children who need that security as they go through their teenage years. I am bringing the organisations together in York. We have so many brilliant organisations, such as the Scouts, Guides, churches, Door 84 and the Island—I could spend a few minutes just talking about them—but, ultimately, they are working in siloes because we do not have that integration. I have the jobcentre, the local authority and the police coming, and we want to ensure that we are able to lead on having one integrated service for youth in our city.
I look to the Minister at this point in the debate, recognising the way that these services were ripped of their funding in 2011 and lost so many youth workers across the board. We lost 60% of our workforce; we can rebuild that under her leadership, but we need to ensure that services are built and co-produced by the young people so that they can take a lead in determining their future and the outcomes they want to see.
As we enter this conversation as a city—I will also be bringing it to the Minister’s door—I want to ensure that young people transition well from those years of exploration as teenagers into adulthood, with the securities that they need around them in every part of the system. That will take funding. I note the incredible £500 million, which will be transformative, but we must ensure that it is sufficient for the services that we need. Young people need opportunities and confidence as they grow into adults, and I want to ensure that our Government deliver that for them.
Sureena Brackenridge (Wolverhampton North East) (Lab)
It is always a pleasure to see you in the Chair, Ms McVey. I thank my hon. Friend the Member for Huddersfield (Harpreet Uppal) for introducing this really important debate on national youth strategy and youth enrichment. I truly welcome it because, as a former teacher and deputy headteacher, I saw the transformative impact that youth work, enrichment activities, sport, volunteering, the arts and outdoor education can have on a young person’s confidence, aspirations and life chances, but I also saw the consequences when those opportunities were decimated. We have a growing number of young people who feel safe only in their bedrooms on digital devices. That has to change.
For too long, young people have paid the price for over a decade of austerity. Local authority spending on youth services in England and Wales has fallen by 74% in real terms since 2010, while the number of local authority-run youth centres has fallen from 931 to 379. Investing in young people is smart economic policy, too. I know that education never stops at the school gates. Young people learn resilience through volunteering, teamwork through sport and confidence through challenge. That is why I welcome the Labour Government’s commitment through the national youth strategy to ensure that every young person has somewhere to go. Backed by more than £500 million, it includes investment in youth spaces, a new enrichment entitlement and an ambition to halve the enrichment gap by 2035.
I particularly welcome the Government’s recognition of opportunities that should not be based on family income, geography or background. I grew up in an area called Ashmore Park, and we had a youth club on my doorstep. I spent many an evening there—I will stop the conversation there. It was one of 30 local youth centres that were lost over 15 years, and we felt that hole in the community. But recently and despite those challenges, there are organisations in Wolverhampton and Willenhall that are delivering the vision that we set out in the strategy.
I must mention the Wolves Foundation in conjunction with Wolverhampton city council. A couple of weeks ago I went to one of their community space sport activities, had a go at basketball, shot a few hoops—I do not know whether that is the right phrase—and had a brilliant time. More importantly, so did the 50 other young people with the free activities in Heath Town. We are opening up the same in Tennyson Road, in Low Hill and the Scotlands as well. I must mention the Loft youth club at the Hive in New Invention. Across Wolverhampton, the Way Youth Zone has become a shining example of what investment in young people can really achieve.
I will finish by thanking the Duke of Edinburgh’s award and all the staff and volunteers that take part to give young people a brilliant opportunity to really find themselves, and I thank my hon. Friend the Member for Huddersfield for securing this important debate.
Jim Dickson (Dartford) (Lab)
It is a pleasure to serve under your chairship, Ms McVey. I congratulate my hon. Friend the Member for Huddersfield (Harpreet Uppal) on securing this important debate.
In Dartford and our towns and villages we have an increasingly youthful population, with a quarter of households in the constituency comprising a family with children. Our young people do our community proud, from our brilliant Kent youth county councillors, including Madalena, Amelia, Sam, Stephan and Flourish; our Dartford youth councillors; Heritage, who got to the final of Monday’s Poetry by Heart national competition; and so many others who star in our cultural and sporting life. And let us not forget eight-year-old Ruth, who wrote a brilliant and persuasive handwritten letter to me last week about YouTube.
Ahead of the Government’s very welcome national youth strategy last year, it was a pleasure for me to work with the YMCA to host an event to discuss with our Dartford young people what they wanted to see in the strategy. The concerns they shared at the event were many and varied. They worry about their futures: how they will find affordable housing, cope with the cost of living and deal with growing challenges to their mental health and to their sense of community in a digital age. There was a strong feeling in the room that their generation needed better public transport, access to more varied job opportunities locally, and more places for them and other young people to come together.
Last year’s national youth strategy was a wonderful document. It rightly promised a place-based approach to rebuilding a local offer for young people, and I hope that for Dartford it will mean more sports facilities such as a rebuilt Swanscombe Pavilion and more youth provision in the town centre. I hugely welcome the youth guarantee. The challenges faced by young people getting into the early stages of a career come through in the people I meet and the stories I hear across Dartford. It is welcome that Dartford will host one of the Government’s new youth hubs, providing access to expanded employment and wraparound support services. But we need to go further, as others have said, to rebuild the youth services lost over the past decade and a half, and to give young people a chance to meet, create, play sport and learn.
One of the great underacknowledged dimensions to young people’s excessive use of social media and its effect on their mental health is the loss of such opportunities. We owe it to young people in Dartford and across the country to give young people back the chance to grow, to take risks and to unlock their talent.
Dr Lauren Sullivan (Gravesham) (Lab)
It is a pleasure to serve under your chairmanship, Ms McVey. I congratulate my hon. Friend the Member for Huddersfield (Harpreet Uppal) on securing this really cool debate, and I refer Members to my entry in the Register of Members’ Financial Interests.
In Gravesham, we have a good track record of listening to and working with our young people. Gravesham Youth Council is about to celebrate its 26th anniversary. The current chair of the council is work shadowing with me this week, and I am married to the first chair of the council, who was activated to enter politics because his youth club was closed by the then Conservative-run Kent county council. How things have changed—or not changed.
Under the last Conservative Government, that trend continued. Kent County Council used to have 36 youth centres; the number went down to 12, and now the youth centres are family hubs. There is limited open-access provision, as family hubs are not available exclusively to young people. Indeed, a young person needs a referral or targeted youth support to gain access to those services, rather than there being predominantly open-access youth services.
The national youth strategy aims to reverse that decline and to enhance youth services, which I really welcome. Last week, I attended an event hosted by Gifted Young Gravesham and organised by the charity The Grand, and there were representatives from nearly every local secondary school on the day, which was a very hot one. When I spoke to school councillors during a consultation on growing up in the online world, I heard many of the same themes: social media disrupts sleep patterns, but also young people are struggling inside and need somebody to talk to. They want somewhere to go, but where can they go?
That is the digital isolation paradox, which is evident across the UK. One young person at that event said:
“Social media is so extremely flawed - but it’s all we have. If we had more places to go outside of social media, we’d be happy. But adults build these toxic platforms, and then got angry when they hurt us. They destroyed the places where we would connect and got angry when we stayed home.”
That is the paradox, and that is where the national youth strategy is coming with more youth centres.
We are grateful to have been able to receive a youth hub, working with the Department for Work and Pensions in Gravesham and with the Gravesham Youth Council. I am fulfilling a promise by directly reporting back to the Minister, the Members and all the decision makers who are here today, to show that we are listening to and hearing young people.
I have to agree with my hon. Friend the Member for Croydon East (Natasha Irons) about how we can help to structure young people’s voices. Young people’s voices need support around them, and we have heard some really amazing testimony today from my hon. Friend the Member for Hertford and Stortford (Josh Dean) about the impact of youth work. Youth workers are professionals who need to be protected by statutory requirements for local authorities to fund this quality and professional service. That can be done. Indeed, it has been done in Scotland with the Community Learning and Development Standards Council, and I urge the Minister to look into that.
I will end with a quote: “Young people are not a problem to be solved. They are potential to be unlocked.”
Munira Wilson (Twickenham) (LD)
It is a pleasure to serve under your chairmanship today, Ms McVey.
I pay tribute to the hon. Member for Huddersfield (Harpreet Uppal) for securing this important debate and I also pay tribute to all the other Members who have spoken in it for making really excellent speeches. Some very compelling points were made about the value and importance of youth services and youth enrichment.
I have no doubt that many in this Chamber share my core belief that every child and young person has some innate and special talent and ability in them, and that it is our job as families and as a wider society, through both the formal and informal support that we put in place, to draw out that talent and ensure that every young person grows up to thrive and contribute to our society and our economy. Youth services and youth enrichment are a key part of that, including, of course, the Duke of Edinburgh’s award, which celebrates its 70th anniversary this year. It has helped so many young people to improve their skills and has equipped them to make valuable contributions to their communities and societies.
I congratulate all the young people across the country, and especially in my constituency of Twickenham, who have completed their bronze, silver or gold awards. I also offer huge thanks to all those people who give up their time to make the awards happen. I know some very hard-working teachers who give up their weekends to go camping and do all sorts of crazy things in all weathers. I am awestruck by them. I certainly would never do that, but I am not a camper. I thank all of them.
These experiences not only change individual lives, but strengthen our communities. Through volunteering in the community and completing expeditions, young people are countering the rising tide of isolation. Last year alone, young people participating in the Duke of Edinburgh’s award contributed to an impressive 6 million hours of volunteering, with an estimated value of £45.4 million.
A number of Members have mentioned Alan Milburn’s recent report on young people not in employment, education or training, and the scale of the challenge that we face. It is important that we challenge the narrative we hear all too often that young people are disengaged, lazy or selfish. Actually, they are anything but. This generation is growing up in an online world shaped by economic uncertainty, mental health challenges, rapid technological change and concerns about the future of our planet but, time and again, young people show us their determination, creativity and drive, especially when they are given the space and support to thrive.
The Liberal Democrats have long campaigned for a fair and long-term funding settlement to support youth work, resources and infrastructure. We very much welcome the Government’s national youth strategy, particularly their promise to introduce multi-year funding settlements and halve the participation gap in enrichment activities between disadvantaged young people and their peers by 2035.
I note, however, the recent YMCA report, which found that spending on youth services by local authorities in England and Wales fell by 10% in a single year, in the largest annual reduction since 2016-17. At the same time, we know that children from lower income backgrounds have less access to enrichment activities outside school, and that schools are facing tighter budgets than ever. The Joseph Rowntree Foundation reported that almost one in five schools has cut back and stopped enrichment activities and clubs in order to provide support for pupils experiencing hardship.
I also draw the Minister’s attention to a briefing from the Duke of Edinburgh’s award, which notes the vital role that education providers play in successfully implementing enrichment targets, especially in the light of some of the cuts we have seen in youth services. With both schools and youth providers stretched to the limit, the Government’s ambitions will be challenged. Achieving them will depend on practical support, sustainable funding and capacity.
We have already seen concerns emerging in West Sussex, where the county council has decided to stop centrally commissioning the award, leaving many schools unable to meet the administrative costs themselves. I would be grateful if the Minister could share whether she is aware of similar situations arising elsewhere in the country. I am keen to understand what discussions she has had with the Secretary of State for Education on the ask from the Duke of Edinburgh’s award for 80 hours of enrichment per year for every young person.
As we have heard, the evidence for investment is compelling. We know that enrichment activities can help to improve school attendance, and we have heard about the return on investment from youth services, reducing pressure on other public services. Without funding certainty beyond the three years currently promised, we know that youth organisations will struggle to run consistent programmes. [Interruption.] I am being asked to wind up, so I will just reiterate that the consequences of under-investment are clear and youth services are not an optional extra. The Liberal Democrats stand ready to collaborate with the Government to ensure that the right investment goes in for our young people and their future.
Mr Louie French (Old Bexley and Sidcup) (Con)
As always, it is a pleasure to serve under your chairmanship, Ms McVey. I congratulate the hon. Member for Huddersfield (Harpreet Uppal) on securing this important debate.
We all recognise that this issue is increasingly important to our constituents across the country. I spend a lot of time discussing it as both the local MP in Old Bexley and Sidcup and a shadow Minister. I have had the pleasure of having young people on work experience with me this week to keep me on my toes. It has been a busy week.
In 2022, the previous Government allocated £560 million over three years to fund the national youth guarantee, ensuring that young people aged between 11 and 18 in England had access to regular clubs and activities, something to do after school, experiences away from home and opportunities to volunteer. As part of that, we allocated £300 million to youth facilities, improving and developing 300 of them. We established the National Citizen Service; this Government cancelled it, but more than 750,000 young people participated in it and it had a 93% satisfaction rate—something this Government could only dream of.
As the Government well know, youth charities, like all employers, are subject to national insurance contributions, and the increase in contributions requires them to find additional funds. According to the National Council for Voluntary Organisations, these changes could cost the charity sector an additional £1.4 billion a year. For smaller charities with limited reserves and core funding, that will seem like an insurmountable challenge. As has been mentioned, this has led to a reduction in provision.
Youth work has huge economic benefits. Research has shown that every £1 of Government investment in youth work has a social return on investment of between £3.20 and £6.40. Moreover, it saves around £500 million annually by preventing antisocial behaviour, knife crime and associated criminal justice costs. As a Government, we established the youth investment fund, which delivered £300 million over approximately three years. This Government scrapped it, and announced a new national youth strategy, which analysis shows cuts the funding by around £50 million each year over the life of the strategy.
Yesterday, my hon. Friend the Member for Meriden and Solihull East (Saqib Bhatti) and I hosted a roundtable with those from the enrichment sector—it is great to see some of them in the audience today. The renewed national focus on enrichment is welcome and timely, but access to enrichment remains uneven, and Government funding cuts will only make that worse. We agree with those we heard from yesterday that the challenge is how we ensure that fantastic youth enrichment provision is accessible for as many young people as possible across the country.
As others have said, enrichment is not an optional extra; it is a vital way in which young people learn fundamental life skills that often cannot be taught in traditional learning environments. I have seen some of the Duke of Edinburgh work in one of my local schools, with pupils putting up tents and camping. The Duke of Edinburgh’s award celebrates a milestone next week—70 years—and I am sure that many Members will be there to support that tradition.
Jim Shannon
Those opportunities allow many young people to enjoy camping—unlike the hon. Member for Twickenham (Munira Wilson), who is not really a camper. Those who get the thrill of camping for the first time will always want to do it. My oldest boy did it, and now he goes camping every summer with his wife and the children. That is just an example of people acquiring something that lasts.
Mr French
I thank the hon. Gentleman for one of his famous interventions. I am pleased that his son enjoys camping; I am not sure I am as sold on a camping holiday in this weather. He is right that it teaches young people key life skills that they can take forward for the rest of their lives.
We all know the crisis we have, with more than 1 million young people not in education, employment or training. A good enrichment offer is a key way of reversing the alarming increase we have seen in recent years. The Government’s national youth strategy has some noble aims, including halving the participation gap in enrichment activities between disadvantaged young people and their peers, and giving half a million more young people access to a trusted adult outside of the home by 2035—I believe passionately in the power of role models, and I would love to go on about it longer, but I am looking at the time, so I will not.
The warm words in the strategy are all well and good, but the funding must match them. Governments of all colours make big announcements, but the funding does not always match them. That is my concern: that the money being put forward is not enough to deliver the objectives.
Government can often be siloed, so I hope that the Minister will also commit to making a concerted effort to ensure that policies and programmes across Government are put into practice in a more holistic and strategic way in this area. There ought to be an understanding of the need for funding pots and programmes for enrichment to complement one another, to work in tandem, and not to duplicate efforts or to compete with other Departments’ aims. Will the Minister therefore urge colleagues in the Department for Education to reverse the 22% cut to school PE funding and reverse the cut to the opening schools facilities fund, which would help many youth clubs to have somewhere to provide their services?
Esther McVey (in the Chair)
I call the Minister, hopeful that Harpreet Uppal will have a couple of minutes at the end to wind up.
The Parliamentary Under-Secretary of State for Culture, Media and Sport (Stephanie Peacock)
Of course. It is a pleasure to serve under your chairship, Ms McVey.
I congratulate my hon. Friend the Member for Huddersfield (Harpreet Uppal) on securing this important debate, and I am grateful to all those who contributed to what is an important conversation. We heard some brilliant contributions that highlighted just how important it is to support young people across the country. This generation is the most connected but most isolated one, and our national youth strategy aims to tackle that and the challenges associated with it. Members made a number of points on spaces, places and funding, which I will address throughout my contribution.
A specific point put to me was around the importance of providing streamlined funding, particularly access to both revenue and capital funding. The Government have merged some funding regimes, and I am happy to write to Members with more details. The shadow Minister and my hon. Friend the Member for Harlow (Chris Vince) not only made important points but paid tribute to their work experience students. I add my thanks to those students for their contributions.
The hon. Member for Keighley and Ilkley (Robbie Moore) put two specific points to me, including one about GoWild Outdoors in his constituency and the changes to school sport. I understand the concerns about the decision to replace the existing PE and sport premium for primary schools; however, despite sustained investment through that premium for more than a decade, fewer than half of children get the 60 active minutes a day recommended by the chief medical officer, and persistent inequalities remain for girls and people from disadvantaged communities. That is simply not good enough.
The Government are determined to close those gaps in participation, which is why we have committed more than £1 billion in funding for PE and school sport over the next three years. That includes £580 million for a new PE and school sport partnerships network to replace the PE and sport premium, alongside investment in improvements to school sport facilities and transitional support for primaries. That change includes secondary and primary, and capital and revenue funding. I am happy to meet the hon. Gentleman to discuss that further, if it would be helpful. He also asked about the overnight levy. That policy is led by the Ministry of Housing, Communities and Local Government, but of course, the Department for Culture, Media and Sport and the Treasury have significant interest in it, and I work closely with my ministerial colleagues. The consultation on that is yet to be published, but I will happily write to him on that point in due course.
I will now take the opportunity to celebrate the 70th anniversary of the Duke of Edinburgh’s award. Over the last seven decades, the award has changed the lives of countless young people; I saw that in action and at first hand when I visited Barnsley academy in Kendray in my constituency. We know the transformative power the award can have on young people: learning new skills, developing confidence and making friends are just a few of the benefits of completing the DofE award.
I am delighted to be attending the parliamentary reception for the 70th anniversary next week; it is great to see that some representatives join us today. I thank the teachers, volunteers and all those who have worked hard to achieve the award across the country. Just a few months ago, I visited Centrepoint just outside of the centre of Barnsley, which is working with homeless young people on their Duke of Edinburgh’s awards. As the hon. Member for Twickenham (Munira Wilson) referenced, more than six million hours of volunteering is phenomenal, and just one of the contributions made by the Duke of Edinburgh’s award.
As the Minister with responsibility for youth, I am proud of the conversations that the Government have had and continue to have with young people. Last month, I signed the power of youth charter to demonstrate our commitment to youth empowerment. That sends the clear message that we are listening and will act, and illustrates the importance that we place on youth voice, which was raised by a number of Members. We always said that our youth strategy would be not about young people, but made with and by young people. We wanted to know what mattered, and we listened. The voices of young people are right at the heart of the decisions that we made.
The Government’s landmark national youth strategy is ambitious, long term and cross cutting. “Youth Matters” radically transforms how we work, to give every young person somewhere to go, someone who cares and a community that they feel part of. We have been clear about what that means: by 2035, we want to halve the participation gap in enriching activities between disadvantaged young people and their peers, and for half a million people to have access to a trusted adult outside their home. We have the ambition to halve the participation gap because we do not believe that a young person’s background should determine the opportunities that they get. We are fiercely committed to breaking down barriers, and are working across Government and with partners to make that a reality.
David Williams
On closing that gap, research shows that for every £1 a year spent on a young person in a place such as Stoke-on-Trent or Kidsgrove, £10 a year is spent on a young person in inner London. I welcome all the investment via the national youth strategy, but how can we use the strategy to close the gap, to make sure that we lift young people from Stoke and Staffordshire up to those levels?
Stephanie Peacock
I totally appreciate my hon. Friend’s point. Under the previous Government, my area of Barnsley saw some of the worst cuts in the country, but despite that, the then Labour council invested in the youth zone and free transport for under-18s. I know that the challenges in Stoke will be similar to those in Barnsley, and of course there will be pockets of deprivation in London and other areas. We want to ensure that every young person, whatever their postcode, gets the support they need. Obviously, this is in the context of 73% cuts in England over the last so many years. That will not be reversed overnight, but we have an ambition to work towards reversing it.
The strategy is backed by £500 million of DCMS funding. That will include funding for new builds, refurbishments and capital equipment, so that organisations can improve or expand their services. I have seen the impact of schemes like that, from the reopening of the Double Six Youth Club in Sheffield, to Eloquent Dance in Birmingham.
The second ambition is increasing access to trusted adults—my hon. Friend the Member for Hertford and Stortford (Josh Dean) spoke about this—because we know how important it is for young people to have someone in their corner. As the Minister responsible for youth but also civil society and sport, I often hear about the fantastic work of youth workers, volunteers, sports coaches and many others. I have also seen that at first hand in places such as East Bierley Community Sports Association in Kirklees, which I visited a few weeks ago and which is just down the road from the constituency of my hon. Friend the Member for Huddersfield. In the interest of time, I will not mention any more, but I have seen so many.
However, as many as one in five young people still does not have a trusted adult outside the home to talk to. We want to change that. Our recent joint investment with the King’s Trust of £10 million will expand young people’s access to a trusted adult. That money will be matched with corporate and philanthropic investment, bringing the total to £20 million to build young people’s skills and tackle youth unemployment. We will follow that with £15 million, over the next three years, for youth workers, volunteers and others who work closely with young people. An additional £5 million will help organisations to spread good practice, improve data and build strong local partnerships.
Expanding enrichment is a key aim of our strategy. Young people have told us that they want more in-person opportunities, whether that be through arts and culture, sports, volunteering, or being outdoors in nature. We know that those experiences are invaluable for wellbeing, belonging, school attendance and future employment opportunities. That is especially true for disadvantaged young people. Those who attend after-school clubs achieve, on average, a two-points-higher total score in their key stage 2 assessments in English, maths and science at the end of primary school. That is the value of enriching activities, and that is why the Government recently published the enrichment framework to give every school and college the tools to offer high-quality enrichment. That framework is for all pupils, to ensure that access is not limited because of who someone is or where they are from.
Building on the enrichment framework, my Department will invest £22.5 million to support up to 400 schools to meet the benchmarks. That will help them to listen to the pupils in their school about what they really want, and to act on it. We will work with schools in some of the most deprived areas of England to ensure that where young people live is not a barrier anymore. We have also announced Every Child Can—an investment of £132.5 million of dormant assets funding to fund opportunities across the five key categories of enrichment. That includes ensuring that every school has access to a library.
When talking about enrichment, I think of organisations in my own area, such as the Barnsley Youth Choir, which is giving hundreds of young people amazing experiences, opportunities and skills, Beat the Street, whereby primary schools get together and get kids more active, or our brilliant new Base71 Youth Zone.
A number of Members, including my hon. Friend the Member for York Central (Rachael Maskell), spoke about cross-Government work. We have a Young Futures ministerial group. Delivering for young people is a shared responsibility; we are not doing that alone. Across Government, we are working with incredible partners that are delivering on the ground and galvanising action—uniformed youth organisations, the Duke of Edinburgh’s award of course, and many others. We are working closely with local authorities and developing a network of up to 50 youth hubs. We have already opened eight pilot hubs, and the learnings will inform the remainder of the programme. That includes how we align with other Government initiatives such as the Young Futures panels and the Department for Work and Pensions youth hubs.
My hon. Friend the Member for Huddersfield, my hon. Friend the Member for Croydon East (Natasha Irons), who of course is the chair of the all-party group, and my hon. Friend the Member for Gravesham (Dr Sullivan), as well as others, spoke about strengthening the statutory duty on local authorities to provide a sufficient youth offer. We are already taking steps to address that. Our local outcomes framework outlines key priorities and accountability for local government. We will explore reviewing the statutory duty, but we must ensure that any change is properly funded in order to empower, not burden, local authorities.
Every time a young person discovers their passions and pushes themselves outside their comfort zone, that has an impact far beyond the youth club or sports pitch. It is a step towards them becoming a more resilient, positive and connected adult, and it is a powerful reminder of our nation’s story—one that has produced world-famous musicians, actors, athletes, inventors and entrepreneurs. They all started as a young person who was told that they could reach their potential. This Government are ensuring that young people hear that same message again.
I thank my hon. Friend the Member for Huddersfield and all other Members who contributed to the debate.
Harpreet Uppal
I thank everyone who took part in the debate—I also join the hon. Member for Twickenham (Munira Wilson) in saying that I am not a camper either. I thank the Minister and her team for everything that they do, and all youth workers as well.
Question put and agreed to.
Resolved,
That this House has considered the National Youth Strategy and youth enrichment.
Written Correction
Ministerial Corrections
Science, Innovation and Technology
(1 week ago)
Written CorrectionsRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Kanishka Narayan
… Let me state in more detail the reasons for objecting on the mechanism. First, the provisions for information sharing are deeply discretionary for UK regulators. Secondly, the subjects in which they can pursue that information sharing are restricted to significant matters of national security and domestic crime prevention in the UK.
[Official Report, 16 June 2026; Vol. 787, c. 781.]
Written correction submitted by the Under-Secretary of State for Science, Innovation and Technology, the hon. Member for Vale of Glamorgan (Kanishka Narayan):
Kanishka Narayan
… Let me state in more detail the reasons for objecting on the mechanism. First, the provisions for information sharing are deeply discretionary for UK regulators. Secondly, the subjects in which they can pursue that information sharing are restricted to set purposes, including matters of national security and domestic crime prevention in the UK.
Written Statements
British Industrial Competitiveness Scheme
(1 week ago)
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The Parliamentary Under-Secretary of State for Business and Trade (Chris McDonald)
The Government are continuing to make progress on delivering their industrial strategy through publication of the response to a consultation on regulatory changes and scheme delivery for the British industrial competitiveness scheme.
BICS is the flagship policy of the industrial strategy that will address Britain’s longstanding competitiveness challenge in manufacturing. The policy will support heavy industry, advanced manufacturing and manufacturing supply chains.
Following the recent consultation, the Government confirm that they will proceed with planned changes to the renewables obligation, capacity market and feed-in tariffs to implement BICS.
The consultation response also confirms key aspects of scheme delivery, including certificate length, application windows, further eligibility requirements and an update on the delivery of the additional payment announced in April. These measures will help ensure that BICS delivers the greatest possible impact for businesses in Great Britain.
The Government will shortly be announcing the launch of an online eligibility checker tool. This simple, free-to-use tool will allow businesses to input basic information and receive an indication of their likely eligibility for BICS. It will be accompanied by comprehensive business guidance.
To support the timely introduction of BICS, legislation will be laid before Parliament in the autumn. Applications will open on 1 October and close on 30 November for year one of the scheme. Eligible businesses will receive support from April 2027, subject to applying within this window.
I encourage hon. Members to engage stakeholders in their constituencies to raise awareness of the British industrial competitiveness scheme and to invite businesses to use the eligibility checker in the coming weeks to assess their likely eligibility and then apply when applications open in October.
[HCWS200]
Modern Industrial Strategy: One Year On
(1 week ago)
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The Parliamentary Under-Secretary of State for Business and Trade (Blair McDougall)
One year ago, this Government published the modern industrial strategy, a 10-year plan to increase business investment, drive economic growth and support high-quality jobs across the United Kingdom. The strategy backs the industries that will define the 21st-century economy and tackles the barriers that have too often held back investment, innovation and growth.
Businesses, trade bodies and investors told us that what they needed most was a long-term plan that provided certainty. They also told us that one of the greatest barriers to growth was not ambition, but friction. In response, we have taken action across planning, infrastructure, energy, skills, access to finance, and regulation to make the UK a better place to start, grow and scale a business.
Today, we are publishing a one-year update on delivery of the industrial strategy, setting out how we have taken co-ordinated action to start addressing these barriers to growth. This includes introducing major planning reforms to accelerate infrastructure delivery, reducing energy costs for thousands of firms, improving access to finance for growing businesses, investing in the skills needed by key industries, and strengthening the support available to companies seeking to start, scale and stay in the United Kingdom. Twelve months on, businesses are beginning to see the benefits of a more joined-up approach to Government, with over £380 billion of private investment commitments secured, more than 155,000 jobs supported, and reforms under way to remove barriers to growth across the economy.
The Industrial Strategy Advisory Council continues to play an important role in advising on delivery of the strategy and maintaining a long-term focus on implementation. In January we announced the appointment of Amelia Gould, Keith Anderson and Dana Strong to the council, and in April confirmed that Clare Barclay would continue to serve as chair. We are now confirming that Aislinn Rice, Dame Diane Coyle, the right hon. Greg Clark, Greg Jackson, Henrik L. Pedersen, Henry G. Overman, Kate Bell, Roy Rickhuss, Tunde Olanrewaju and Dame Nancy Rothwell (deputy chair) will continue to serve as members of the council. Chris Grigg, chair of the National Wealth Fund, and Phil Smith, chair of Skills England, will also continue as ex-officio members.
Supporting growth also means ensuring that regulation works for businesses and investors. Alongside the industrial strategy update, we are reporting on progress under the regulation action plan and introducing a new regulator sponsorship charter and growth goals for regulators, marking a shift from ambition to delivery. Our approach is clear: we are regulating for jobs, growth and investment, ensuring the UK’s regulatory system actively supports economic expansion, innovation and competitiveness.
We committed to reduce the annual administrative burden of regulation by 25% by the end of this Parliament, equivalent to £5.6 billion in savings. We have already identified £2 billion in net annual savings, with £1.5 billion delivered and a further £0.6 billion in progress—we are now over a third of the way to our target.
Alongside reducing burdens, we are enabling innovation. Later this year, we will introduce legislation to create regulatory sandboxes, allowing businesses to test new products and services safely in controlled environments and providing clear pathways to market.
Sandboxes are being developed across key sectors, including AI, life sciences, maritime autonomy and last-mile delivery, helping ensure that the UK s areas of greatest opportunity are also its fastest-moving.
The regulator sponsorship charter and growth goals for regulators will further embed a pro-growth mindset across the regulatory system. This will ensure that regulators actively support innovation, investment and economic expansion alongside their core duties.
This marks a shift towards a more flexible, responsive way of regulating that keeps pace with innovation, rather than relying on fixed rules that can quickly become outdated. It means moving from barriers to pathways, from risk aversion to managed experimentation so that innovation can be tested, refined and scaled in the UK.
One year on, the industrial strategy is beginning to give businesses the certainty and confidence to invest, grow and create jobs. By working in partnership with industry, we are backing the sectors, technologies and places that will drive future prosperity, while building a more resilient economy in an increasingly uncertain world. Regulatory reform supports that wider mission, helping ensure that businesses can bring new ideas to market more quickly and seize the opportunities of the industries of the future. As we enter year two, we will continue to strengthen the conditions for investment and growth across the United Kingdom through the industrial strategy.
[HCWS199]
Enhanced Free Trade Agreement: Turkey
(1 week ago)
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The Minister for Trade (Chris Bryant)
The fifth round of negotiations on an enhanced free trade agreement with Turkey took place in Ankara between 15 and 23 June 2026.
Economic growth is our first mission in Government, and free trade agreements have an important role to play in achieving it. A stronger trade relationship with Turkey can support jobs and prosperity in the UK, with trade between the two totalling £28.4 billion in the four quarters to the end of Q4 2025—an increase of 4.3% from the previous year.
To support this round of negotiations, I travelled to Turkey to meet with the Minister of Trade, Professor Dr Ömer Bolat, and Deputy Minister of Trade, Mustafa Tuzcu.
Negotiations were constructive, with positive progress being made in a number of areas.
Trade in services
Productive discussions were held across a range of technical areas, including digital trade, domestic regulation and telecommunications. The investment session saw valuable exchanges, reflecting the shared ambition and good will between both sides. Particularly strong progress was made in legal services, among other areas. Across sessions, negotiators engaged in detailed text-based discussions, testing areas of alignment, exploring respective levels of ambition, and identifying outstanding issues. Both sides continued to engage productively, building on progress made in previous rounds.
Trade in goods
Negotiations covered a range of market access and regulatory issues, including goods market access and sanitary and phytosanitary measures, along with others. Discussions focused on reviewing respective proposals, testing areas of alignment, and identifying remaining gaps, while maintaining and upholding the UK’s high standards. Both sides reached agreement on modalities for market access offers. These sessions were positive and productive with both sides seeking a high ambition outcome to support businesses and drive progress forward.
Additional areas
Wider cross-cutting discussions covered intellectual property, Government procurement, trade remedies, environment, state-owned enterprises, among others, with intellectual property discussions in particular picking up pace—signalling a growing shared focus on this area. Key themes included strengthening protection and enforcement of intellectual property, as well as environmental co-operation and sustainability.
Concluded chapters
After five rounds of negotiations negotiating, teams have closed 11 chapters, along with agreement on multiple annexes and associated issues. They have made substantial progress towards an agreement that will strengthen bilateral trade and create the enabling environment that can increase UK exports to Turkey, supporting jobs across UK nations and regions.
The UK will only ever sign a trade agreement that aligns with the UK’s national interests, upholding our high standards across a range of sectors.
The sixth round of negotiations is expected to take place in the autumn. Ministers will update Parliament on the progress of discussions with Turkey as negotiations continue.
[HCWS198]
Health and Social Care 10-year Capital Plan
(1 week ago)
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The Minister for Secondary Care (Karin Smyth)
Today the Government are publishing the 10-year capital plan for health and social care. Long-term capital under-investment has left the healthcare system starved of resources to function at its fullest, with large parts of the NHS and wider healthcare estate operating in outdated, inefficient and occasionally unsafe infrastructure. This was made clear in Lord Darzi’s report, which estimated a £37 billion shortfall of investment since 2010 compared with international peers.
The 10-year health plan set out the long-term vision for healthcare provision with the three shifts of hospital to community, analogue to digital and sickness to prevention as the core components of a new care model based on the NHS’s founding principles. This capital plan will bring together our commitments into a single coherent framework that is aligned with the 10-year health plan, and ensure infrastructure is the enabler for transforming the NHS over the decade ahead.
The Government are fully embracing this challenge and have already taken steps to address the root causes affecting healthcare delivery. At spending review 2025, the Chancellor provided the largest ever health capital budget, as well as multi-year allocations to 2030 for capital funding streams overall and extended certainty on NHS maintenance budgets to 2035. The priority is now to get on and deliver our priorities within this—making the most of both the budget and the certainty that enables the most strategic investment choices.
We will enable the first shift from hospital to community by reconfiguring the estate so that patients see the appropriate staff in the right place, and we have already invested £102 million in the primary care utilisation and modernisation fund, with a further £200 million over four years to 2030. In addition, we will support the development of neighbourhood health centres, as well as ensuring the secondary care estate can deliver the highest-quality healthcare for the most complex and specialist cases. Maintenance of the estate will extend beyond the current spending review via an investment of £6.75 billion over nine years to target the most critical building repairs through the estates safety fund.
The second shift from analogue to digital will be enabled through over £4.4 billion of capital investment over this spending review period, alongside over £6 billion of revenue funding into technological and digital programmes. This will enable seamless navigation between primary and secondary care such as through the NHS app and single patient record as part of an ambition to make the most digitally accessible healthcare system in the world.
The third shift from sickness to prevention will be achieved through continued investment into research and development as part of DHSC’s non-NHS capital allocation over the course of spending review 2025. This will enable earlier identification of illnesses, allowing for earlier intervention and strengthening system resilience to future threats. This is backed by notable investments including a new state-of-the-art health security campus in Harlow, Essex, that will create 1,600 extra jobs, and up to £1 billion for pandemic preparedness to replenish and expand stockpiles, in line with lessons learned from covid-19. We are also continuing our investment into genomics, pledging more than £650 million over the next five years.
This plan also supports the Government’s wider missions set out in the plan for change of driving economic growth and productivity, supporting the housing agenda, creating new healthy spaces to live and progressing towards net zero and clean energy. We will continue to commit to the NHS’s existing net zero targets and increase its climate resilience through continued setting of standards, showing climate leadership, and working across the system to break down barriers to financing and delivering net zero investments.
The increases in funding will be supported by our capital reforms, to reduce the layers of approval and reduce the time from initial proposal to get spades in the ground. We have already set the additional freedoms and flexibilities through devolving more control over capital budgets to the NHS frontline. Through this plan, we are also placing much greater focus on the outcomes of spend, and on taking steps to continually strengthen our approach to evidence, evaluation and benefits realisation.
The 10-year capital plan provides the clarity needed to do things differently and allow capital to become a true enabler of healthcare reform.
[HCWS202]
New Hospital Programme Annual Report
(1 week ago)
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The Minister for Secondary Care (Karin Smyth)
Today the Department has published the first “New Hospital Programme annual report”, covering the 2025 to 2026 financial year.
This report marks the first full year of delivery following the programme reset and the publication of a costed, phased delivery plan through the NHP plan for implementation in January 2025. It represents an important transition from recovery and stabilisation to sustained delivery under a clearer and more realistic framework.
The report sets out the progress made by the NHP during the last financial year, at both programmatic and scheme level. Over the reporting period, the programme has strengthened its governance and assurance in response to scrutiny from the National Audit Office and Parliament.
It has made progress across hospital schemes in multiple waves, and new delivery approaches have been implemented such as the Hospital 2.0 standardised design model and the Hospital 2.0 Alliance commercial framework, aimed at improving efficiency, increasing market capacity, and enabling faster delivery at scale.
Each scheme within the NHP presents its own complex challenges. Market capacity at all tiers continues to pose potential delivery constraints. The launch of the Hospital 2.0 Alliance is an important step in creating a commercial environment that protects the supply chain and enables concurrent delivery of several large hospital schemes.
Looking ahead to the 2026-27 financial year, the NHP will continue to progress schemes in line with the plan for implementation. For wave 1 schemes, focus will remain on business case development and preparing sites for main construction. The seven RAAC replacement schemes, while having been deemed safe to remain open beyond 2030 with appropriate mitigations in place, remain a priority and will continue to be a key focus for the programme in the financial year 2026-27.
Wave 2 schemes will focus on early works to support scheme readiness and de-risk future delivery, and for schemes in wave 3 there is focus on early pre-construction work to de-risk the delivery of schemes where it is necessary to do so at this stage.
A copy of the report has been placed in the House of Commons Library and is available on www.gov.uk.
[HCWS201]
Grand Committee
Arrangement of Business
The Deputy Chairman of Committees (Lord Duncan of Springbank) (Con)
My Lords, shall we make a start? The Committee will be aware of what might take place in the Chamber; if it does, a Division Bell will ring and we will all scamper off, do our voting and come back. Before we begin debate on the Bill, I understand that the Whip would like to make a few remarks.
Lord in Waiting/Government Whip (Lord Wilson of Sedgefield) (Lab)
As usual, I want to make a couple of remarks, as I have done over the last five sessions. I remind noble Lords that they should declare any relevant financial interest the first time they speak at each stage of the Bill. This means that, in Committee, relevant financial interests should be declared during the first group in which a noble Lord contributes. The declaration does not need to be repeated in debate on later groups at this stage, and it should be specific and brief. Members should briefly indicate the nature of their financial interest, not simply refer to their entry in the Register of Lords’ Interests.
I also remind the Committee again of guidance in the Companion at paragraph 8.82 that, when withdrawing amendments, noble Lords should
“be brief and need not respond to all the points made during the debate, nor revisit points made when moving the amendment”.
This applies to all Members of the House, including the Front Benches. A number of contributions last week were lengthy and I encourage all participants to keep their remarks shorter, in the spirit of the guidance.
Financial Services and Markets Bill [HL]
Wednesday 8th July 2026
(1 week ago)
Grand CommitteeRead Full debate Financial Services and Markets Bill [HL] 2026-27 View all Financial Services and Markets Bill [HL] 2026-27 Debates Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: HL Bill 5-VI Sixth marshalled list for Grand Committee - (7 Jul 2026)
Baroness Neville-Rolfe (Con)
My Lords, our amendments in this group concern the future of the bank ring-fencing regime. I will start by setting out clearly the position that we have reached as the Official Opposition. Through our diagnostic work, we have found a consensus that the bank ring-fencing regime is no longer fit for purpose. It adds costs to banks and their customers and it has been superseded by other rules since its introduction. A regulatory regime should not be preserved simply because it exists. It must continue to justify itself against present-day risks, tools and costs. In our view, the ring-fencing regime no longer does so. The next Conservative Government would repeal the post-global financial crisis ring-fencing regime, bringing the United Kingdom more closely into line with other international jurisdictions. Amendment 160A reflects that policy.
It is worth reminding ourselves what ring-fencing is. The regime was created through the Financial Services (Banking Reform) Act 2013, which amended FSMA 2000. The implementing regulations and orders came into effect in 2019, more than 10 years after the onset of the global financial crisis. At its core, ring-fencing is the structural separation of certain retail banking activities from activities normally conducted by international wholesale investment banks. In practice, that means a separate legal entity, with restrictions on what it can do and how it can interact with the rest of the banking group. Retail and small business deposit-taking is placed inside the ring-fence, while certain other activities must be conducted outside it.
The regime was introduced for serious reasons. The Parliamentary Commission on Banking Standards, convened after the financial crisis, identified three broad objectives: to make it easier to deal with failing banks without taxpayer-funded solvency support; to insulate vital banking services used by households and SMEs from problems elsewhere in the financial system; and to curtail implicit government guarantees, thereby reducing risks to public finances and incentives for excessive risk-taking.
Since ring-fencing was designed, the wider regulatory landscape has changed profoundly. We now have a much more developed resolution regime. We have recovery and resolution planning. We have operational continuity arrangements in resolution. We have stronger capital and liquidity requirements. We have the leverage ratio, the liquidity coverage ratio and the net stable funding ratio. The Bank of England, the PRA and the FPC have a broad toolkit for reducing the risk of bank failure and dealing with failure if it occurs. Moreover, we have sounder management of banks as a result of the senior management regime.
That is precisely the point that we wish to highlight in our amendment. The risks that ring-fencing was designed to address are now addressed through other more modern, more targeted and more internationally coherent tools. The 2022 Independent Panel on Ring-fencing and Proprietary Trading, chaired by Sir Keith Skeoch, reported that the regime has an annual cost to the UK banking sector of around £1.5 billion, which comes from running multiple separate legal entities, duplicating governance systems and raising the cost of capital and lending conducted by non-ring-fenced bodies. This is because large retail deposits inside the ring-fence cannot be used as sources of finance elsewhere in a group to support lending and investment. That review also found that the reduction in the implicit government guarantee and progress in ending “too big to fail” were not attributable to ring-fencing but instead to the development of the UK resolution regime. Ring-fencing is therefore a good example of a broader problem in financial services regulation: rules that are introduced in response to a crisis which then remain in place long after the conditions that justified the change.
We are now left with two regimes that are not aligned in the way that they aim to address “too big to fail”. That adds complexity, cost and burden. It also risks making the United Kingdom less competitive than jurisdictions that rely on resolution, prudential supervision and capital frameworks, rather than structural separation of this kind. Clauses 39 and 40 show that the Government recognise that there is a problem. They seek to make changes to the ring-fencing regime and give the PRA more flexibility over ring-fencing arrangements, but in our view these reforms do not go far enough.
Amendment 160A would repeal Part 9B of FSMA and the core statutory ring-fencing provisions introduced after the financial crisis. It would require the Treasury, the PRA, the FCA and the Bank of England to take the necessary steps to unwind the related rules and guidance. It would require an orderly transition, with attention paid to financial stability, continuity of core banking services and the competitiveness of the United Kingdom. Consumer savings would continue to be protected. Banks would continue to be subject to prudential supervision. Resolution planning would remain in place.
This reform matters for competitiveness. Other major financial centres do not operate a UK-style ring-fencing regime. If UK banks are required to carry costs and structural constraints that their international competitors do not face, that affects the cost and availability of finance. It affects the ability of banks to deploy capital efficiently and it affects the attractiveness of the UK as a place to operate and invest in. It also matters for customers. Regulations that increase costs without delivering commensurate benefit feed through into pricing, service innovation and lending capacity.
If the Government believe that ring-fencing remains necessary, will the Minister explain precisely what financial stability objective it now achieves that is not already achieved through the resolution regime and other prudential rules? Ring-fencing was created in response to a particular crisis at a particular moment for reasons that were understandable at the time. But regulation must evolve. It must be reviewed against current conditions. It must be removed when it no longer serves its intended purpose.
Finally, I would add that whatever changes are made, it is right to have a proper process of consultation with business and stakeholders and a follow-up report to Parliament. That is the purpose of my Amendments 159 and 174.
Lord Pitt-Watson (Lab)
My Lords, if I may respond to that, I had thought until recently that what we were debating was a response to the Skeoch commission established by the last Government, but we have new amendments now, it seems—Amendment 160A and the abandonment of clauses—that are really throwing ring-fencing out. I guess that they are tabled in response to a speech by the leader of the Conservative Party, Kemi Badenoch—a speech underpinned by a policy document from her party. That speech, the policy document and this amendment are not asking to think things through further from the Skeoch report: they have made their minds up. Kemi Badenoch announced that a future Conservative Government will end ring-fencing—definitive end of discussion. That, I believe, would be a bad idea. So did the review by Keith Skeoch, who was commissioned by the Conservative Government to opine on this and whose recommendations we are now trying to take forward.
Worse still, the evidence for Mrs Badenoch’s statement is based on really questionable claims, numbers and Mickey Mouse logic. For example, the claim was that the Skeoch report reckoned that the cost of ring-fencing was £1.5 billion. In fact, the report notes that that figure was presented to the review and that
“it has not been possible to draw a strong conclusion based on aggregating these costs”.
The report recognises that there are some costs to ring-fencing, but notes that that was expected and acknowledged by the Independent Commission on Banking, which said that that would not be a cost to the economy, but rather
“a consequence of returning risk to where it should be—with bank investors, not taxpayers—and so would reflect the aim of removing government support and risk to public finances”.
The policy paper has a Mickey Mouse logic that costs should be placed on the taxpayer, when they should be paid by the banks and the investors in the banks.
We should of course be in favour of reviewing the ring-fencing regime to be sure that it is properly doing its job. This is what Skeoch did and, now, if this Bill follows that report, I ask the Minister to ensure that we are careful with definitions in the implementation. For example, we should ensure that, within the growth allowance, the definitions are very carefully drawn up. We do not in future want the taxpayer subsidising proprietary trading—what many refer to as “casino capitalism”.
Badenoch suggests that her reforms would release £450 billion in capital—another number from nowhere. I know that the noble Baroness, Lady Neville-Rolfe, will not have a lot of time to sum up, but I would be grateful if she might write afterwards on how these numbers have been derived and what reduction in bank equity capital they assume. If these numbers do not stack up, that pulls the rug from under the policy document and the speech that was made by the leader of the Conservative Party.
The policy paper suggests that we should abandon the Financial Ombudsman Service. In this industry, which represents 8% of GDP but attracts 42% of corporate fines, Mrs Badenoch has decided that the front-line institution that protects consumers should be abolished. We could say that this does not matter and that Kemi Badenoch is unlikely any time soon to be Prime Minister, but it should matter to us. As the noble Baroness, Lady Noakes, has pointed out, there is considerable expertise in financial services across all parties in the House. Although we have differences, we are united, I hope, in trying to set a framework for the industry that allows it better to serve its purpose: to serve the outside world; to help get money from point A, where it is, to point B, where it is needed; to keep our money safe; to help us transact; and to help us share risk.
If the Opposition Benches feel mandated to follow the policy documented last month, we have a problem. I could not find a single reference in that document to any input from any consumer group anywhere. It felt like a lobbyist document from the City, but I have talked to at least one lobbyist who said “No, it goes way further than we would ever suggest”.
Baroness Noakes (Con)
In Committee, it is normal to address the amendments and not opposition parties’ policy documents.
Lord Pitt-Watson (Lab)
The amendment has been put to us at the last minute. The points that it relates to have been there for weeks, indeed months, but I would argue that what has triggered the amendment is the speech by the leader of the Conservative Party and the policy document that underpins it. If the noble Baroness thinks, like me, that the policy document is lacking, I would be pleased to hear it because, as she knows, it would abolish the FOS and seek to mandate regulatory changes that come close to invading the independence of the regulator.
Lord Tunnicliffe (Lab)
I rise to speak to the Motion that Clause 40 does not stand part. As I explained at Second Reading, I have no professional knowledge of the banking industry but, because of circumstances, for more than 14 years I have been in this Room talking about the finance industry and doing my best to pretend to understand at least bits of it.
The one thing that I think I bring to this Bill is my long experience of concern about problems of little likelihood, even small likelihood, but with catastrophic results if the risks mature. It is on that theme that I am concerned that we are creating risks. In 2008 we had the crisis. It is now 18 years ago, just long enough for most people to have forgotten it. We had the Vickers review, which we all felt was pretty good, and after that came ring-fencing, and we convinced ourselves that this would solve most of the problems. There were some other things as well. There was the splendid clause that vested criminal responsibility on the boss of a subordinate who committed some criminal offence. Clearly this was too uncomfortable for the City, so it was changed. I led the opposition to the change and failed with a 200-vote tie. Because we were the Opposition not the Government, we failed.
The preparation for my consideration of this ring-fencing issue caused me to read through a lot of stuff. I came to the conclusion that the ring-fencing was not nearly as effective as we had felt it would be at the time, but, in a sense, I was reluctant to be overly concerned about it because I felt that the resolution regime developed by the Bank of England, in which I had personally taken a great interest, would be good enough to pick up the holes in the Bill.
I was comfortable in this position—almost willing to ignore it—until, at Second Reading, the noble Baroness, Lady Kramer, for whom I have immense regard, rather woke me up. I quote her speech:
“Picking up on the point made by the noble Lord, Lord Tunnicliffe—I disagree with him completely—that in the case of resolution, we do not need ring-fencing because we have a resolution regime in place or we can weaken the one because the other exists. Will the Minister be able to look me in the eye and say that he would activate a bail-in bond scheme if a big bank failed? The consequence would be huge financial instability among those who held those bail-in bonds—I am talking about the insurance companies and pension funds. Many would be on the verge of collapse if we ever exercised bailing in those bonds. That is one of the reasons why, in the financial crises that have happened, no Government have ever taken that step”.—[Official Report, 8/6/26; col. 1206.]
I do not have the weight of knowledge to be able to disregard such a statement.
The Minister was kind enough to facilitate a visit to the Treasury and the Bank of England to take me through the bail-in regime. It took four people from the Treasury and four from the Bank of England to try to persuade me that it was in good hands. I came out of that uncomfortable. If one is uncomfortable about a potential catastrophe, one feels that one has to pursue it, I am afraid.
Then one comes up against the mechanisms of legislation; here, I have to give notice of my concerns. If we are going to remove or take away activity from the ring-fencing solution and replace it with the resolution regime, it is important that that is tested much more intrusively than is proposed. I hope to persuade the Minister that, between now and Report, some mechanisms that are convincing to like-minded, fair-minded people have to be put together so that that balance will be achieved.
I was responsible for all sorts of safety, but particularly in the railway industry. You would not be able to do this in the railway industry. If you make a change that is of critical importance, there is a set procedure that must be gone through, and it must be signed off at the highest level. We should recognise that Clause 40 is of that magnitude. It just so happens that, in yesterday’s Times, there was an article that said:
“The Bank of England is planning to loosen rules it brought in to make the financial system safer after the 2008 crisis despite worries about the proposed changes voiced by some of its own officials … The central bank’s financial policy committee announced on Tuesday that it intended to revamp some regulations on the loss-absorbing capital that lenders must hold because it wanted to tackle the ‘unintended consequences’ of its rules and make it easier for banks to lend to households and businesses … Andrew Bailey, the Bank’s governor, insisted the overhaul would ‘make our capital regime more effective, proportionate and better calibrated to the risks in today’s financial system without unduly compromising the safety and soundness of firms’”.
“Without unduly compromising” is not nearly a powerful enough test. The limited test is that the risk should be lowered—as low as reasonably practicable.
We have all sorts of problems in this world, and all sorts of unprecedented things are happening. We have cryptocurrency. Now, I do not understand cryptocurrency; it seems a series of charades to me, but I suppose the purist would also point out that the dollar is a series of charades, because that is the essence of paper money. Nevertheless, things that can go and down up like that are fundamentally dangerous, given how large they are becoming in the banking world.
We also have the unregulated banking area. Without knowing the detail, but from listening to people who know about it talk about it, that seems to be an increasing threat. We also have wars all over the place. If we are moving to a regime where we give up ring-fencing, depending on resolution, we will need to subject it to a stronger set of tests through the processes of this legislation.
Lord Massey of Hampstead (Con)
I support Amendment 160A. I want to start by briefly addressing a couple of issues raised by the noble Lord, Lord Pitt-Watson. Most importantly, I want briefly to quote the conclusions of the Skeoch report. The panel judges that the ring-fence
“is worth retaining at present”
but adds a number of considerations:
“The Panel recognises that the regime’s benefit will likely diminish with time, especially as the resolution regime—designed to ensure the continuation of all critical functions … —is embedded. This is because … UK authorities become comfortable with the viability of the large banking groups’ restructuring capabilities”.
I mention this only because the impression was given—
Lord Pitt-Watson (Lab)
I did indeed talk to senior members of the Skeoch commission before writing my speech, and what I said is completely consistent with the conclusions of the Skeoch commission, which was set up by the previous Conservative Government, as I said.
Lord Massey of Hampstead (Con)
I am just reading the conclusions from the report, my Lords. They make it very clear that the continuation of ring-fencing made sense at the time the report was written, but the commission clearly envisaged that it might not be needed over the passage of time. I also remind noble Lords that Glass-Steagall was abolished some 25 years ago with no detriment to the American banking system. I say this just to make the point that it is not so obvious.
Lord Pitt-Watson (Lab)
I find it difficult to believe that someone has told me that the withdrawal of Glass-Steagall, which took place 13 years before the global financial crisis, had no detriment to the American banking system. As I say, I have read the Skeoch report and discussed it with senior members of Skeoch, and I believe that what I said is entirely consistent with the recommendations that they made to the Government and this House, which is recognised in the Bill.
Lord Massey of Hampstead (Con)
I also draw attention to the abolition of FOS, which the noble Lord mentioned. I draw the Committee’s attention to Amendment 172A, which discusses the changes proposed to FOS. It is to be abolished and replaced with something called the financial adjudication service, which is a broadly similar methodology to give redress to consumers and private clients, in the event of problems with the firms that serve them. While it is a change, it is a reform to FOS with an organisation with a different name, but it is not a straightforward abolition of that very important process. This will be dealt with in that later amendment—not in my name, I might add.
Governments, like some businesses, are very good at locking the stable door after the horse has bolted. Our reaction to 2008 was an example of just that. But we are now 18 years on and the banking sector has been solid during that time. However, as we know, growth has flatlined, despite many years of ultra-low interest rates. I am not suggesting that we are an exception here; there has been a similar experience across most of Europe. But we now have a substantial cost of capital for business to bear, with interest rates stuck at 3.75% and sadly not much prospect of a reduction in the near term.
Baroness Noakes (Con)
My Lords, I have some experience of ring-fencing as, in my capacity as the chairman of the risk committee of a major bank, I oversaw the implementation of ring-fencing. At that time, it was a significant risk to the bank that we would not be in compliance with the ring-fencing legislation and therefore this required considerable oversight.
I am clear that ring-fencing has been a very expensive element of the post-financial crisis reforms. The Skeoch report, which has been referred to, put the upfront cost at £2.9 billion and the ongoing cost at £1.5 billion, which amounts to about £14 billion to date. The noble Lord, Lord Pitt-Watson, tried to undermine those numbers, but, from my experience, I do not doubt that order of magnitude. More importantly, the implementation, and, to a lesser extent, the ongoing element—
Lord Pitt-Watson (Lab)
There were two points, one of which is that the Skeoch report says that the numbers given are not its numbers. The report is clear that whatever the cost of ring-fencing, it is not a cost to the economy—this is what the Vickers report said earlier —and that, by removing ring-fencing, it suddenly becomes a cost to the taxpayer rather than to the bank’s investor. That is the key point that Skeoch is bringing to our attention.
Baroness Noakes (Con)
My Lords, I understand the point that the noble Lord is trying to make, but I argue that the risk of the taxpayer picking up the tab is now considerably lower, which means that it is reasonable to re-examine whether ring-fencing should be an ongoing part of the regime.
I was about to say that, in addition to the cash costs, there was during the implementation, and to some extent on an ongoing basis, considerable diversion of scarce management resource, which will have damaged the banks in a number of ways. My noble friend Lady Neville-Rolfe has registered her opposition to Clauses 39 and 40 standing part of the Bill. I support Clauses 39 and 40 on the grounds that any improvement in the ring-fencing regime is better than none. The flexibility that will come with letting the PRA handle some of the changes via rules is a constructive solution. The PRA is, however, heavily invested in ring-fencing and no one should be under any illusion that the power will be used by the PRA to make significant changes to the regime. That is why I believe that we need to make provision to go further and I support the other amendments in this group.
As we have heard, since the implementation of ring-fencing, the parallel and very expensive requirement to maintain and develop resolution plans has been implemented, and the Bank of England has confirmed that the major banks are resolvable. In addition, bank capital levels are significantly above the levels that they were immediately after the financial crisis and well above regulatory minima. Regulatory capital is expensive and can restrict the ability of banks to lend to support the economy. I am always extremely sceptical about claims that reducing capital requirements on banks will immediately lead to masses of extra lending by the banks—there is some element of truth in it, but the effect is not as great as might be claimed.
We are hugely proud of the robustness of our financial regulation and what we do in the UK is often copied abroad. No one anywhere else in the world has ever copied ring-fencing and that is for a very good reason: it is a very expensive solution to a problem that can be and has been addressed in other ways. That is why I support the amendments from my noble friend, which pave the way for eliminating ring-fencing. It cannot be done away with overnight, so I support the measured approach taken in my noble friend’s Amendment 160A.
Lord Vaux of Harrowden (CB)
My Lords, it has been an unusual experience to have had a debate with two sides to it on the Bill; the Minister must be pleased about that. I am afraid that I sit firmly on the fence—indeed, on the ring-fence. I am in two minds on this issue. Ring-fencing requirements were put in place after the financial crisis for very good reasons. You can argue that they went too far and that, to some extent, they have been overtaken by other regulations and that they perhaps overburden and create some restrictions on the banks. But, in the Bill, the Government recognise that.
On the other side of the equation, the economy and the banking system are currently facing a whole range of threats, which are arguably greater than have been faced at any time since the financial crisis in 2008. We have the private credit situation and the impacts of AI, to name just a few. Is it really the right time to remove ring-fencing entirely?
I am also not entirely convinced by the argument that removing ring-fencing would have that much impact on domestic lending. Domestic lending is inside the ring-fence. In fact, you could argue that it would have the opposite effect, as banks could then use deposits for more risky non-lending activities. Therefore, I confess that I find that argument unconvincing.
I am open-minded, but I am more minded to support the government proposals to loosen the ring-fencing rules and introduce some flexibility to them. I do not think I am ready to support complete removal at this stage. However, I am drawn to Amendment 159, which requires a consultation and assessment to take place before the proposed changes can be made.
Baroness Lawlor (Con)
My Lords, I am delighted to have the debate, and I am very grateful to the noble Lord, Lord Pitt-Watson, for raising questions which have encouraged debate, but I support my noble friend Lady Neville-Rolfe’s opposition to Clause 39 standing part of the Bill. I also support her Amendment 160A about ring-fencing.
Clause 39 gives the Treasury powers to loosen the ring-fencing scheme. It has been anticipated, as others have said in this debate, by a number of announcements and reports, not least the Skeoch report—I hope I have pronounced it rightly, in the Celtic way—and the announcements this year by the Treasury itself. All of these point to and address a real problem. The question before us today is whether the Government’s solution in their Clauses 39 and 40 is sufficient to deal with the problems raised by reviews and announcements going back to the 1 March 2022 independent review of the working of the scheme.
I have a concern. The clause may seem to be the answer to some of the serious questions raised in that review and other concerns, and allow for the mitigation of problems arising from the ring-fencing regime—to allow for “proportionate” changes, to use a word which continues to recur throughout the assessments of how the scheme is working. However, in essence, it protracts the dominance of the regime and the regulators in what should be business decisions under good law, which is the spirit of the common law. It is a law which is permissive of risk-taking rather than prohibitive of the spirit of enterprise, or looking over the shoulder to the precautionary principle.
Officials and regulators can be very intelligent, competent and talented people, but it is not part of their skill set to drive through an entrepreneurial idea from the drawing board to production, sale, expanding their markets, developing a business, taking risk, and hiring and training people—which is an additional cost—while all the time keeping on top of the services sector, one of the fastest growing sectors in the UK and a jewel in the crown. Enabling officials to decide which activities should or should not be prohibited, and under which circumstances, does not tackle the fundamental problem to which the ring-fenced regime has given rise: the artificial and contrived structure. We are dealing with a structural problem—an artificially separated structure.
This structure inhibits the financial services sector from functioning in the best possible way, as an enabling hub for the whole UK economy, to allow small businesses, in particular, to grow and credit to flow. It is unlikely to remedy what we are dealing with, the fundamental problem of risk aversion imposed by ring-fencing law on businesses and the endemic risk aversion in the operation of the law.
Lord Pitt-Watson (Lab)
I wonder whether there might be some confusion here. The thing about the ring-fence is that there are activities within it that the Government are promising to bail out. Those things are being insured. By the way, the move in the ring-fence proposed by the Government will extend these a little, but they include lending to the small businesses that the noble Baroness has talked about. The question is: are we going to be rid of that? Is it the case that the implicit guarantee that the Government are giving can go to any other activity that the bank decides that it wants to undertake? That could include, although Skeoch would say it is not a problem right now, the sort of proprietary trading that brought the American banks down in 2008—of course, they had been allowed to do that because Glass-Steagall had been removed 10 years earlier. What we are talking about here is: how much of bank activity will the Government stand behind? As Mervyn King said, we must make sure that it is just the very most important things.
Baroness Lawlor (Con)
I thank the noble Lord, but it is about where the line is drawn in law, so that businesses can be certain and have predictability, because activities change day by day.
Lord Pitt-Watson (Lab)
With respect, that is what Skeoch is recommending and what is being allowed in what we are being asked to accept here—there is an extension of the ring-fence. He is saying, “Look, there are other important activities that go beyond the ring-fence that are administratively complicated for the banks. Please can you move this? Also, can you move this in a way so that it doesn’t need to go to primary legislation any time it needs to change, because all these things are moving?” What we are trying to do here is recognise that the independent commission is run by a senior financial businessperson—he used to run Standard Life—whom we are going to back. He indeed said that, in the long term, you may want to think about how ring-fencing goes together with the resolution regime, but that is not for now. He certainly did not say that we should abandon it.
Baroness Lawlor (Con)
I thank the noble Lord, but he was speaking about 2022, which was light years away for the financial sector. Things have moved on and have changed. We have different regimes in place now. As my noble friend Lady Noakes has explained, the banks are now resolvable. There are other schemes that will avoid the problems for the taxpayer. That should be borne in mind.
I had better finish quickly. That is my objection. It is about who decides for businesses. If you have a ring-fence, ultimately, no matter how much you relax it, the Government are never going to have the knowledge of the sector, and the detailed tactical and strategic ability, to be ahead of the game and make businesses grow. They will always play slightly safe, but maybe they are over-safe.
I will finish on why we need to repeal the ring-fence, not just why Clause 39 is not good enough. In a sense, we are seeing the inhibition of risk-taking and a structure that inhibits it. As other noble Lords have pointed out, we do not have parallels in other economies. I know that there is the Volcker rule in the US, but Switzerland has solved its “too big to fail” problem without a ring-fence and it has a very instructive banking sector. France and Germany have it individually but not the EU, which rejected it. Australia reviewed it again in 2019 and rejected it on the grounds that noble Lords have mentioned. It is well worth going back to the famous Skeoch review, which contends that, in the longer term, we will not need the ring-fence and we will have resolution schemes in place. For those reasons, I support my noble friend’s opposition to the clause standing part of the Bill and her Amendment 160A.
Baroness Altmann (Non-Afl)
My Lords, I support Amendments 159 and 174 in the names of the noble Baroness, Lady Neville-Rolfe, and the noble Lord, Lord Altrincham. I would be concerned about abolishing the ring-fence for similar reasons and concerns as those expressed by the noble Lord, Lord Vaux. However, I believe that a review of the workings of the alternative protections, such as the higher capital cushions and the bail-in regimes, would be appropriate. I also think that consultation would be advisable rather than simply removing these clauses. We are talking about taxpayer risk; that is basically what the ring-fencing is designed to mitigate. When it comes to consumer deposits, we have done an awful lot for retail savings to make sure that there is protection.
I apologise that I have been unable to participate fully in Committee, but I would like to put on record that there is another risk to the taxpayer in the form of retail pensions. In particular, I have concerns about the lack of any underpinning for the Financial Services Compensation Scheme around annuities, which are assumed to be 100% protected. There is a risk to the taxpayer, which I hope the Minister may consider or take back to the department to ensure that some of those issues are addressed through this Bill. Currently the implicit 100% guarantee can be met only by the taxpayer, and offshore operators of bulk annuities pose a serious risk to the retail pension sector.
Baroness Kramer (LD)
My Lords, I thought the Committee might like to be reminded why such a radical step as ring-fencing was taken after the 2008 financial crisis. It was in part because, in a universal bank encompassing both retail and wholesale banking, failure in the investment bank could and did destroy the viability of the retail bank. It was also in part because, as the noble Lords, Lord Tunnicliffe and Lord Pitt-Watson, said, the investment bank, able to access retail deposits at zero interest and protected by deposit interest, could now take risks that it never would have been able to take if it had had to raise that funding in the financial markets. That was a major factor behind the extraordinary and careless risk-taking that led us into the 2008 crash.
There was also a further reason: cultural contamination that led to irresponsible lending and funding in the retail banks and the abuse of customers as, under pressure from directors, they sought to catch up with the performance of their investment bank equivalents. We all, as a community, paid a very high price for that. Even at the time when the ring-fence was introduced and the Parliamentary Commission on Banking Standards recommended it as the best way to provide protection for the future, all of us knew that there would at some time in the future be a dangerous complacency. I quote from evidence to the PCBS:
“The classic problem for human institutions and for the design of our regulatory structures and our policy is how do we design against [delusion] in 25 years’ time, when … we have another: ‘This time it’s different. This time we’re cleverer than the previous generation.’”
Another quote is that
“financial crises don’t often happen immediately one after another; there tends to be a lag while those people who learnt lessons move out of the industry”.
In opting for ring-fencing, the PCBS warned of future pressures to weaken the separation:
“Those pressures will include the siren voices of those who contend that structural separation as implemented represents a barrier to financial innovation and growth”.
That was prescient indeed.
The noble Baroness, Lady Neville-Rolfe, said in a previous day of Committee that I look too much to the past. I accept that memory is inconvenient, but the amendments today from her and her colleagues come from a party that, perhaps with the exception of Nigel Lawson, never accepted its responsibility for light-touch regulation, the culture of hubris and the casino mentality that was quite heralded and led to the crisis in 2008. I still hear little sympathy, frankly, from those Benches for the ordinary people who bore the consequences. I do not want to denigrate the banking community—there are many good people in it—but most of them walked away largely untouched and with the personal rewards for the activities that led to the crisis still in their pockets. Respecting the positives of the financial sector always has to sit with a recognition that so much money can be made from a bending or an adjustment of the rules that guardrails are a necessity.
As I listened to the proposals in this group, I realised that growth has become an excuse and resolution has become a cover for eliminating the ring-fence and, essentially, the precautionary principle. Resolution for systemic banks is not just untested but—I was thankful to the noble Lord, Lord Tunnicliffe, for quoting my Second Reading speech—it has a poisonous side-effect for others in the financial sector, notably the insurance and pension funds that in this case hold most of the bail-in bonds through MREL, and for their customers.
In 2023, the Swiss financial regulator FINMA—I was reminded of this when the noble Baroness, Lady Lawlor, talked about the Swiss being so secure—saved the equity holders of Credit Suisse, a collapsing bank, in order to rescue it, but wiped out the bondholders, an issue that is still in litigation and has cost the Swiss very dearly in their bond issuances. FINMA took its decision on the grounds that any other action would have undermined financial stability, it was so conscious of the contagion that comes when you activate a resolution procedure. While the Bank of England has said it would not hesitate to activate resolution procedures and wipe out both equity and bondholders, I find very few people in the industry who actually believe it on those kinds of statements. No one should look with equanimity at the idea that we allow a bank to fail and be rescued only through the extreme activities of resolution, rather than looking at the precautionary principle.
Yesterday, the ground shifted even more. The noble Lord, Lord Tunnicliffe, referred to the financial stability report of July 2026 from the Bank of England. I have not had time to read it thoroughly. I have done only a first read but, frankly, it is schizophrenic. The first half of the report, as others have raised, is chilling in its assessment of the increased risk—the noble Lord, Lord Vaux, raised some of these questions—of private credit, the Iran war and AI, and especially of these crises crystallising at the same time. But the second half of the report explains policy decisions to weaken the regulatory capital buffers for banks—the regulatory system that several people have spoken about here as the reason why it is possible to remove the ring-fence. That was weakened in yesterday’s publication. The reasoning appears to be that regulators overseas are weakening their buffers and, for international competitiveness reasons, we should too.
Last Sunday, the Sunday Times ran a piece in anticipation of this change, saying that the Bank is set to relax capital rules for lenders again. My reaction to the report is mirrored by the quote from Sir John Vickers in that article, in which he cautions against reducing capital requirements:
“At a time when risk has plainly gone up, it would not make sense to dial down insurance”.
The Bank, I suspect encouraged by the Treasury, is weakening the resolution system. The noble Baroness, Lady Neville-Rolfe, and her party propose in addition to remove the precautionary protection of ring-fencing. All this is at a time of increased risk to financial stability. I came away from going through these amendments, frankly, in a mood of despair. We have to start once again to recognise the reality of risk.
The Minister of State, Department for Business and Trade and HM Treasury (Lord Stockwood) (Lab)
My Lords, I have enjoyed this exchange of views today. As the noble Lord, Lord Vaux, pointed out, it is refreshing and a little unsettling to find myself in the middle ground in a debate.
Before I turn to the specific amendments and stand part notices, it may be helpful if I briefly set out the Government’s approach to ring-fencing. The Government remain committed to retaining the ring-fencing regime as an important safeguard for financial stability and depositor protection. As the Chancellor set out in her 2025 Mansion House speech, the Government will uphold the regime while delivering meaningful reforms that support growth. Following a review undertaken by the Bank of England, and consistent with the conclusions of the independent Skeoch review, we concluded that aspects of the framework have become unnecessarily rigid and duplicative over time. The measures in the Bill address those issues by making the regime more flexible and proportionate while preserving its core protections.
I turn first to the question of whether Clause 39 should stand part of the Bill. Clause 39 addresses a key conclusion of both the Government’s review of ring-fencing and the Skeoch review: too much operational detail is fixed in legislation, meaning that even relatively minor and technical updates can require legislative amendment. Clause 39 therefore allows HMT, by order, to provide for certain detailed aspects of the excluded activities and prohibitions framework to be specified in the PRA rules, rather than in legislation. This will make the framework more flexible and responsive as market practice, prudential standards and firms’ business models evolve.
Importantly, the clause does not remove parliamentary oversight. Any future delegation would require secondary legislation and be subject to parliamentary scrutiny and approval. This allows the regime to evolve alongside market developments while ensuring that Parliament retains control of the overall framework. Where functions are delegated, the PRA will be subject to the same statutory tests and considerations as currently apply to the Treasury. The clause therefore preserves the existing safeguards while allowing detailed provisions to be updated more efficiently over time.
I now turn to the Clause 40 stand part notice, which was tabled by the noble Baroness, Lady Neville-Rolfe, and the noble Lords, Lord Altrincham and Lord Tunnicliffe. Clause 40 makes the ring-fencing regime more flexible and better aligned with the wider prudential and resolution framework. Since ring-fencing was introduced, those frameworks have evolved significantly and, in some areas, they now provide protections that overlap with ring-fencing rules. The clause reduces unnecessary duplication and helps the regime operate more coherently alongside the wider framework.
Some noble Lords have suggested that developments in resolution remove the need for wider ring-fencing altogether. I am afraid that I cannot agree. Ring-fencing and resolution perform different but complementary functions. Ring-fencing seeks to reduce risks and improve resilience before a firm gets into difficulty, while resolution provides the tools to manage failure if it occurs. Ring-fencing also complements resolution by creating simpler and more self-contained banking structures, which can support resolvability and make an orderly resolution easier to execute if a firm fails.
These resolution powers have been tested in practice, demonstrating that the framework can be used effectively. For example, the Bank of England used its resolution powers in relation to Silicon Valley Bank UK in 2023, facilitating its sale to HSBC without disruption to customers or the use of public funds. The independent review led by Sir Keith Skeoch concluded that ring-fencing has contributed towards the resilience of retail banks, while recommending reforms to improve its flexibility and align it more closely with the wider prudential and resolution framework. Clause 40 gives effect to that approach.
I turn to Amendments 159 and 174, which would require a further consultation and assessment before Clauses 39 and 40 could be commenced. I agree that it is important that proper procedures are followed. When exercising the powers in Clause 39, HMT will follow the better regulation guidance on consultation, and further legislation will be subject to parliamentary debate. The PRA is required by FSMA to consult and conduct cost-benefit analysis on most rule changes. So, in my view, the best point for detailed consultation and impact assessment is when specific changes are proposed.
Amendment 160A, tabled by the noble Baroness, Lady Neville-Rolfe, and the noble Lords, Lord Altrincham and Lord Howard of Rising, would repeal the ring-fencing regime in its entirety and require the Government and regulators to make arrangements for an orderly transition to a non-ring-fenced banking system. I am afraid I cannot agree with this. The ring-fencing regime was introduced following the global financial crisis in response to the recommendations of the Independent Commission on Banking. The commission concluded that separating core retail banking services from riskier activities would help protect the continuity of essential banking services and reduce the risk that taxpayers would be exposed to the costs of a bank failure. The Government’s view is that those objectives remain as relevant today as they were after the financial crisis. Ring-fencing continues to play an important role in supporting financial stability and protecting depositors by helping ensure that essential banking services remain resilient in times of stress. The Skeoch review recommended retaining the regime for now but reforming the regime, just as we are doing.
Several noble Lords highlighted the cost of ring-fencing. It is true that the regime results in costs, but those costs must be weighed against the benefits of a safer banking system, stronger deposit protection and a reduced risk for taxpayers. As I set out when speaking to Clause 40, the Government do not accept that developments in the resolution framework remove the need for ring-fencing. Ring-fencing and resolution perform different but complementary functions, and the Government remain of the view that both continue to play an important role in supporting financial stability. Our objective is therefore reform, not abolition, retaining ring-fencing’s core protections while ensuring that the regime remains effective, proportionate and, importantly, fit for the future.
Alongside the changes in the Bill, the Government are taking forward further reforms intended to support lending, investment and growth while maintaining financial stability. This includes a new growth allowance that will unlock significant additional financing for UK businesses and infrastructure. I assure my noble friend Lord Pitt-Watson that this will be subject to careful consultation.
This has been a genuinely fascinating debate. There has been a range of views, and I hope the Committee will agree that the Bill strikes the right balance between these different positions. For those reasons, I ask that Clauses 39 and 40 stand part of the Bill and respectfully ask the noble Baroness to withdraw her opposition to Clause 39.
Baroness Neville-Rolfe (Con)
I am grateful to noble Lords who have contributed to this lively debate, and to the Minister for his response. I am grateful for the support I have received, particularly for my Amendments 159 and 174 and, from some of my noble friends, for Amendments 160A. While I agree with the noble Lord, Lord Pitt-Watson, that this House is admirably expert, he tried to politicise the discussion in a way that I regret. I set out clearly why I think that ring-fencing should go. I want to be absolutely clear that our amendment is not about weakening financial stability or compromising the safety of firms. It is about looking forward, not backwards, as the noble Baroness, Lady Kramer, has done, and recognising that the financial stability framework has changed significantly since ring-fencing was first proposed and introduced. As my noble friend Lord Massey of Hampstead argued, we now have a much more developed resolution regime, stronger prudential supervision, capital and liquidity requirements, recovery and resolution planning, and operational continuity rules. They support financial services and consumers right across the country, as the noble Lord, Lord Pitt-Watson, rightly pointed out.
I am also going to quote from the Skeoch review, as I am winding:
“It was acknowledged at the outset that the regime would impose direct costs on the banks in setting up new structures and operating within the regime. Based on banks’ submissions, implementing the ring-fencing regime had a one-off cost for the industry of c. £2.9 billion, which has already been incurred, and has an annual aggregate ongoing cost of £1.5 billion”.
My noble friend Lady Noakes said that she thought that was a reasonable figure, and I think that is not something we are disagreeing on, which is good. She also said that the risk to the taxpayer is now much lower. The £450 billion figure came from UK Finance in its response to the FPC and the PRA’s capital assessment in April this year. That figure relates to the changes in capital requirements reform, which we have already debated.
I am very grateful to the Minister for his comments, including his reference to this new growth feature, which I will have a look at. But I remain concerned that the Government’s approach, while moving in the right direction, is too limited. Clauses 39 and 40 suggest that the Government accept that there is a problem with the current regime, but their answer is to adjust it rather than to ask the more fundamental question of whether it is still needed, following international practice, which has been quoted. In our view, ring-fencing has been superseded. It imposes real costs on banks, customers and the wider economy; it affects competitiveness, capital efficiency and lending; and it places the UK at a disadvantage compared with other international jurisdictions.
My noble friend Lord Massey of Hampstead rightly said that we will discuss the FOS on a later amendment, and he rightly referred to the risk-aversion problem in the sector, which I recall was a theme of the excellent report by our committee, now chaired by my noble friend Lady Noakes.
We will reflect carefully on what the Minister said, but my approach is a measured one, putting any unwinding in the hands of the Treasury and other stakeholders. But the central problem remains: if we are serious about growth, competitiveness and reducing unnecessary regulatory burden, ring-fencing cannot be exempt from scrutiny. Of course we must learn from the past and look after the consumers, but their savings would continue to be protected, and resolution and prudential supervision have changed our financial services framework since the financial crisis. For now, we have had a good debate, and I beg leave to withdraw my opposition to Clause 39 standing part.
Baroness Kramer
“(1) The appropriate regulator shall consider whether there is sufficient provision to ensure the effective provision to a ring-fenced body of services and facilities that it requires in relation to the carrying on of a core activity.(1A) Subject to subsection (1B), when considering whether there is sufficient provision for the purposes of subsection (1) concerning services and facilities that are provided to a ring-fenced body by another member of its group, the appropriate regulator shall take account of all relevant circumstances, including—(a) the appropriate regulator’s ability to assess and influence the terms on which such services and facilities are made available to a ring-fenced body,(b) the availability, continuity and sufficiency of such services and facilities, including in circumstances where the Bank of England would be entitled to exercise any of the stabilisation powers under the Banking Act 2009, and(c) any assessment that the Bank of England has made of a group of which the ring-fenced body is or proposes to become a member under a statement of policy that the Bank of England has issued pursuant to section 3B (safeguards relating to directions under section 3A) subsection (9) of the Banking Act 2009 and, where applicable, the absence of any such assessment.(1B) The appropriate regulator shall not consider that there is sufficient provision for the purposes of subsection (1) where a ring-fenced body is, or proposes to become, a member of a group for all or part of which the appropriate regulator is not responsible for consolidated supervision, and such services and facilities are provided to the ring-fenced body from outside the United Kingdom by a member of the group that is not in a part of the group that is subject to consolidated supervision by the appropriate regulator, unless the appropriate regulator has made rules to ensure that—(a) there is no less uncertainty concerning the availability, continuity and sufficiency of such services and facilities than there would be where they are provided to a ring-fenced body within a group that is subject as a whole to the consolidated supervision of the appropriate regulator, and (b) the ring-fenced body is not permitted to receive such services and facilities unless the provider of those services and facilities is adequately resourced and the arrangements under which those services and facilities are provided would facilitate the orderly exercise by the Bank of England of its stabilisation powers under the Banking Act 2009 in circumstances where the Bank of England would be entitled to exercise those powers.(1C) If, having regard to all the circumstances, including the matters referred to in subsection (1A), the appropriate regulator does not consider that there is sufficient provision for the purposes of subsection (1) or may not do so under subsection (1B), the appropriate regulator must exercise its power to make rules requiring a ring-fenced body to make arrangements to ensure the effective provision referred to in subsection (1).(1D) The appropriate regulator shall consider whether there is sufficient provision to achieve the group ring-fencing purposes.(1E) The appropriate regulator shall not consider that there is sufficient provision for the purposes of subsection (1D) where a ring-fenced body is or proposes to become a member of a group for all or part of which the appropriate regulator is not responsible for consolidated supervision, unless the appropriate regulator has made rules to ensure that there is no less uncertainty concerning the achievement of the group ring-fencing purposes in those circumstances than would be the case where the ring-fenced body is a member of a group that is subject as a whole to the consolidated supervision of the appropriate regulator.(1F) If the appropriate regulator does not consider that there is sufficient provision to achieve the group ring-fencing purposes, or may not do so under subsection (1E), the regulator must exercise its power to make rules for the group ring-fencing purposes that apply—(a) to ring-fenced bodies, or(b) to authorised persons who are members of a ring-fenced body’s group.”Member’s explanatory statement
This amendment, and others in the name of Baroness Kramer, seek to require the PRA to assess whether existing law and regulation makes sufficient provision in the case of regulated companies based outside the United Kingdom.
Baroness Kramer (LD)
My Lords, this group originally preceded the one we just debated. I noticed the change this morning. My points in this group on ring-fencing are quite narrow. I am not particularly happy about the changes in Clauses 39 and 40, but I do not feel strongly enough that we need to change the relevant clauses wholesale.
But I have a problem with a narrow area that feels to me like a Trojan horse. In easing ring-fencing in this Bill through giving the regulator greater flexibility to adjust the ring-fence, the Government are still taking greater risk. I find it frustrating that people who remove a protection then say that there is no additional risk. Let us be honest: there is greater risk. I am cautiously relieved that ring-fencing has not been holed below the waterline by the Government. But, in Amendments 155 to 158 and 160, I am trying to address a breach that has been identified in the ring-fence and that potentially has serious unintended consequences.
In the Financial Services (Banking Reform) Act 2013 and the SIs under FSMA, which implemented much of it, the structural separation between retail and wholesale banks within the same overarching bank group left few shared operational services. The ring-fencing rules prohibited receiving services or facilities that are regularly required from any entity or company within the group that is not a permitted supplier, so that, in case of failure—for example, the failure of the wholesale bank—the retail bank could continue unaffected. This Bill relaxes the rules on intragroup services, and it argues in the Explanatory Notes that the current situation causes duplication and overlap.
As far as I can understand, the Government think that there is no risk to changing the rules because the bank resolution process now includes the operational continuity in resolution regulation, OCIR, which ensures that critical banking services are provided to customers should a bank have failed and be in resolution. There are some problems because the ring-fencing rules and the OCIR rules do not fully match, and what happens to non-critical shared services is not clear. At the very least, we need to know the intention around that.
Much more seriously, if a banking group is not headquartered in the UK, so that the PRA is not the group supervisor and the Bank of England is not the group resolution authority, how can shared services to customers be assured in a crisis? It depends completely on the voluntary support of an overseas regulator. Given the fragmentation in international co-operation that we see today, that becomes a serious potential risk.
Lord Altrincham (Con)
My Lords, I speak briefly to Amendments 155 to 158 and 160 in the name of the noble Baroness, Lady Kramer, and hope that she will forgive me as a former banker with cultural contamination, perhaps. I notice a lot of quite warm language about banking in this debate, with references to the casino and the rest of it.
The concern behind these amendments is that a ring-fenced bank may depend on services, systems or facilities provided by other entities within its wider group. Those entities may be based outside the United Kingdom or supervised primarily by an overseas regulator. I very much hear what the noble Baroness says, but the PRA does look at intragroup services in protecting UK domestic businesses.
We of course have our own amendments on ring-fencing, which we have just discussed. However, as we have said before, our approach to this Bill is that it will regulate in the immediate term and, therefore, our wider policy ambitions can sit alongside proper scrutiny of the provisions before us. Even where we take a different long-term view of the future of ring-fencing, it is still right to test whether the regime, while it remains in place, operates properly and consistently. That said, I have some concerns about the effect of these amendments, even if they were to impose additional safeguards or burdens specifically on foreign-owned banks, as they could place those banks at a competitive disadvantage. That matters because foreign-owned banks contribute to competition in the UK market. If additional requirements make it harder or less attractive for them to operate here, the results could be less competition for deposits here and, ultimately, worse outcomes for consumers.
International supervisory co-operation has also been significantly strengthened since the financial crisis. Crisis management groups, co-operation agreements and regulator-to-regulator engagement are now central parts of the framework. Recent experience has shown that this co-operation can work in practice, including during the failures of Silicon Valley Bank, as referenced by the Minister, and perhaps also in the case of Credit Suisse, where co-ordination between overseas regulators and UK authorities helped to maintain continuity and manage risk. I just note that Credit Suisse was the fifth-largest bank by balance sheet in the UK at the time. I would therefore be grateful if the Minister could explain how the PRA currently assesses overseas group structures and whether he believes that any gap exists in its present powers. In particular, does the PRA already satisfy itself that critical services provided from outside the United Kingdom will remain available in stress or resolution?
We may differ from the noble Baroness on the broader future of ring-fencing, but the questions that she raises are important. My concern is that the proposed solution may be unnecessary and may risk reducing competition by placing foreign-owned banks at a disadvantage. I look forward to the Minister’s response.
Lord Stockwood (Lab)
My Lords, Amendments 155 to 158 and 160 all relate to Clause 40. As I set out in the previous debate, Clause 40 makes the ring-fencing regime more flexible and proportionate by allowing the PRA to take account of protections already delivered elsewhere in the prudential and resolution framework, when considering whether ring-fencing rules are required. The clause is intended to reduce unnecessary duplication, while maintaining the core protections and purposes of the ring-fencing regime. We have already debated this, and it was clear that there were a wide range of views.
The noble Baroness’s amendments focus principally on shared services arrangements, operational continuity and cross-border group structures. The Government recognise the importance of these issues and we have spoken to a couple of outside parties on this topic. Ensuring the continuity of critical services and managing operational dependencies are important objectives of the ring-fencing regime.
However, I am not persuaded that these amendments are the right route forward. They would introduce detailed statutory tests governing when the PRA may rely on protections delivered elsewhere in the prudential and resolution framework, particularly for shared services arrangements involving cross-border or non-consolidated groups. Their practical effect would be to make it harder for the PRA to rely on equivalent protections elsewhere in the framework, increasing the likelihood of additional ring-fencing rules, greater complexity and additional compliance burdens, even where the PRA considered that the relevant outcomes were already being achieved.
In contrast, Clause 40 is intended to make the regime more flexible, streamlined and proportionate by reducing unnecessary duplication while maintaining core protections. It does not allow the PRA simply to assume that protections provided elsewhere in the framework are sufficient. The PRA may rely on those protections only where it considers that there is sufficient provision to achieve the relevant ring-fencing purposes and ensure the effective provision of services and facilities to ring-fenced banks.
For example, the noble Baroness, Lady Kramer, asked whether the OCIR framework can be replaced by the PRA’s rule 9.1. This is a matter for the PRA, but it has indicated that it intends to consider these issues through consultation. Where the PRA does not consider that sufficient provision exists, including in relation to shared services arrangements or cross-border groups, it must act, including through making ring-fencing rules where necessary. The clause therefore preserves key protections.
If further details are required, I am more than happy to follow up before Report, but, for those reasons, I ask the noble Baroness to withdraw her amendment.
“(5) After section 284A insert—“284AA Tax treatment of risk transformation arrangements(1) The Treasury must, after consultation with the Commissioners for His Majesty’s Revenue and Customs, publish guidance concerning the tax treatment of investments issued in connection with risk transformation arrangements within the meaning of section 284A.(2) Guidance under this section must include the circumstances in which a risk transformation arrangement is to be regarded as having been entered into for genuine insurance risk-transfer and capital markets purposes. (3) In exercising functions relating to the assessment, collection and management of taxes, the Commissioners for His Majesty’s Revenue and Customs must ensure that arrangements falling within a description specified by guidance under subsection (2) are treated in a consistent and certain manner.(4) Where—(a) a risk transformation arrangement falls within a description specified in guidance under subsection (2), and(b) the arrangement complies with applicable requirements relating to authorisation and supervision,the arrangement is to be treated for all tax purposes as a commercial arrangement entered into for bona fide insurance risk-transfer and capital markets purposes, and not as having as its main purpose, or one of its main purposes, the obtaining of a tax advantage.(5) The treatment in subsection (4) applies without any requirement to consider the purpose of the arrangement other than by reference to the conditions in that subsection.(6) Subsection (4) does not apply only where the Commissioners can demonstrate that—(a) one or more of the conditions in subsection (4) is not met, or(b) there has been fraud, deliberate misrepresentation, or material non-disclosure of relevant facts.(7) The Treasury must review guidance published under this section at intervals not exceeding three years.””Member’s explanatory statement
The amendment requires HM Treasury to produce guidance in consultation with HMRC to confirm the tax status of Insurance-Linked Securities vehicles.
Baroness Bowles of Berkhamsted (LD)
My Lords, this amendment is about insurance-linked securities—ILS—which are the UK’s version of fully funded risk transfer vehicles, which were legislated for in 2017. They include catastrophe bonds, collateralised reinsurance, sidecars and other fully funded mechanisms used by insurers to transfer peak and speciality risks to the capital markets. Catastrophe bonds are the most visible part of the market, but they represent only a portion of a global ILS market now estimated at over $136 billion. The catastrophe bond market alone is estimated at somewhere between $35 billion and $65 billion.
When the regime was introduced, the hope was that London, as the world’s leading commercial reinsurance marketplace, would become a major provider but, almost immediately, Singapore copied the PRA’s work and moved faster. I recall hearing evidence about this when I was on the Industry and Regulators Committee before the formation of the Financial Services Regulation Committee. At that time, the PRA was being blamed for sluggishness. However, it is not the problem now. Since then, London has not built a substantial market, and we now have only 2% of the global market that we should have led.
Clause 44 on transformer vehicles is part of the reforms to which the Government have committed under the Leeds reform package. Those reforms are welcome. They will improve flexibility and the ease of delivering transactions, including allowing the PRA to widen the scope of permissions. But even with Clause 44, one major block remains: tax uncertainty. HMRC continues to rely on a main-purpose anti-avoidance test that is inherently subjective. Investors and sponsors are forced into a costly, months-long clearance process with the Treasury for every single transaction. This destroys the speed to market that is required for catastrophe bonds, so they are out of the game. There is no hope of competing with jurisdictions that do not impose this hurdle, which rightly puts more trust in these fully funded, transparent risk transfer mechanisms. They are not tax-driven structures, yet they must prove that fact afresh every single time for every single contract.
A competitive ILS market cannot grow while this situation prevails. The window of opportunity closes before HMRC’s clearance process reaches a conclusion. When Parliament created the ILS regime in 2017, it included a deliberately broad anti-avoidance clause because the market was new. Ten years on, HMRC should be comfortable that these are not avoidance vehicles. There are no cases of mass tax avoidance via these vehicles. They are, by definition, highly regulated and fully funded, yet HMRC appears unwilling to update its existing guidance. Some recent case law on avoidance purposes has only increased uncertainty. The existing guidance is non-binding and investors cannot rely on it. Amendment 162 would require the Treasury to publish clear guidance that provides a presumption of commercial purpose for vehicles that meet all regulatory and authorisation requirements. It would shift the burden of proof away from the investor and provide the certainty that our major competitors already offer as a matter of course.
This is not the only area where the clearance culture is acting as a drag on growth and competitiveness. It also affects infrastructure investment, and it casts a long shadow over the Mansion House Accord. How can we expect a trustee to back a vital infrastructure project if they fear that the tax status of the vehicle will be held hostage by a subjective, years-long tax process? The Government have recognised the need for certainty by launching the Advanced Tax Certainty Service this July, but that service is restricted to multi-billion-pound megaprojects; they are looking after their own. This might work for the largest infrastructure schemes, but what of the hundreds of medium-sized and local infrastructure projects and the ILS transactions that form the backbone of our growth agenda?
I recognise that tax avoidance is a sensitive subject, and that none of us wants a return to the abuses of the past, but there is a world of difference between a structure designed to extract value from a company—that is cheating—and a structure designed to ring-fence risk for a power plant or a catastrophe bond. One is misuse of corporate law and the other is a structural necessity of it. HMRC’s current main-purpose test fails to distinguish between the two and treats structural necessity as a potential abuse.
Lord Ashcombe (Con)
My Lords, I remind the House of my interest as an employee of Marsh, an FCA-regulated firm. I wish to speak in support of this amendment in the name of the noble Baroness, Lady Bowles, but before doing so, I would like to pick up briefly on something I said earlier this week about regulatory clarity. I talked about how firms need clear definitions so that they can plan investment with confidence. That principle matters across the Bill, for not just client definitions, but for how we approach emerging markets and new structures.
Amendment 162 is a good example of that. The amendment addresses tax clarity on insurance-linked securities. These are important instruments. They attract capital into insurance, help firms manage catastrophic risk and have become a serious part of global risk management practice. Since being created in the 1990s, the global market has grown to about £136 billion, making up close to 20% of the insurance/reinsurance industry. According to Swiss Re, one of the world’s leading providers of reinsurance, insurance and other forms of insurance-based risk transfer, 2025 was the busiest year in its history of this market.
The London insurance market is phenomenally well placed to lead here. We are larger than our five closest competitors combined. However, we need to be honest: our ILS regime has been somewhat underwhelming at best. That is not because we lack expertise or capital—we do not—but because the regulatory approach has been disproportionate and the legislation inflexible. Firms simply cannot transact deals here as efficiently as they can in Bermuda or other jurisdictions.
To the Government and the PRA’s credit, they have listened. This Bill moves us in the right direction: it gives the PRA flexibility on fully funded definitions, allows multiple contracts in protected cell companies and there is a consultation pipeline on further simplification. That is good. However, there is one thing that the Bill has not addressed, and, as mentioned by the noble Baroness, Lady Bowles, that is tax clarity. When the ILS regime was created in 2017, there was a broad anti-avoidance clause. That is fair enough, but a decade on, I think that HMRC and the Treasury should be comfortable that these are not tax avoidance structures, but are risk transfer vehicles.
Right now, firms have guidance from HMRC, but it is not legally binding. Therefore, every transaction requires a tax lawyer’s opinion every single time, as the noble Baroness mentioned. That cost, that time, that friction is the difference between doing a deal and doing it somewhere else. This amendment asks for something straightforward: a clear and legally underpinned directive that HMRC will presume that ILS vehicles are not being used to secure a tax advantage. That is not asking for exemption from anti-avoidance rules; it is asking for clarity so that legitimate risk transfer does not get caught up in unnecessary caution. That clarity matters because it removes the last barrier to this market. We have the regulation sorted and we have the expertise; what we really need is tax certainty.
This is about positioning London correctly in a competitive global market. It is about letting the PRA’s sensible reforms work, and it is about giving firms the clarity they need to invest with confidence in the United Kingdom.
Lord Altrincham (Con)
My Lords, I will speak to Amendment 162 in the name of the noble Baroness, Lady Bowles—perhaps from the Liberal Democrat risk-transfer derivative desk. This amendment raises what seems to be a sensible and practical point about certainty in the treatment of insurance-linked securities and related risk-transformation arrangements. Insurance-linked securities can play an important role in allowing insurance risk to be transferred into capital markets. Catastrophe bonds and similar structures can help insurers and reinsurers manage exposure to major risks, including natural catastrophes, while providing investors with a different form of capital markets instrument.
The United Kingdom has quite rightly sought to develop itself as a competitive centre for these structures, but for that to happen, firms and investors need clarity, as my noble friend just explained. As I understand it, the amendment would require the Treasury, after consulting HMRC, to publish guidance clarifying the tax treatment of these arrangements. It would also provide that where an arrangement falls within that guidance and complies with the relevant regulatory authorisation and supervision requirements, it should be treated as a bona fide commercial insurance and capital markets transaction, rather than as one entered into for tax avoidance purposes. It does not appear to be an attempt to protect fraud, misrepresentation or non-disclosure. HMRC would still be able to challenge arrangements where the conditions are not met or where there has been improper conduct, but it would give legitimate market participants greater certainty where they are using properly regulated structures for genuine commercial purposes. That certainty matters: if the UK wants to attract insurance-linked securities business, investors and firms need to understand the tax position in advance. Uncertainty can deter activity, reduce confidence and make other jurisdictions more attractive.
I would therefore welcome clarity from the Minister on this point. Do the Government accept that greater tax certainty would help to support the development of the UK insurance-linked securities market? Are they aware of the concerns that uncertainty about HMRC treatment may be limiting the attractiveness of the UK regime? Will they consider whether further Treasury or HMRC guidance is needed to ensure that properly regulated ILS vehicles are treated consistently as genuine commercial arrangements. This seems to me to be a practical amendment aimed at supporting competitiveness and certainty in a specialist but important part of the financial services market. I look forward to the Minister’s response.
Lord Stockwood (Lab)
My Lords, risk transformation is a key element of the UK’s insurance market, and the growth of this market is critical to the Government’s objective of making the UK the location of choice for specialist and complex insurance. The Government’s reforms in Clause 44 aim to support this market by increasing the attractiveness of the UK for establishing the legal vehicles used to undertake risk transformation. I am glad to hear the noble Baroness, Lady Bowles, and the noble Lord, Lord Ashcombe, broadly welcome these reforms.
The Government recognise the role that the bespoke tax regime for transformer vehicles plays in ensuring that the UK is competitive in this area. We also recognise, as does this amendment, the role that robust anti-avoidance measures and clear guidance have in ensuring a well-functioning regime for transformer vehicles. These anti-avoidance requirements are set out in the bespoke tax regulations for transformer vehicles, the Risk Transformation (Tax) Regulations 2017. HMRC has worked extensively with industry to produce guidance on how anti-avoidance measures apply to transformer vehicles.
I appreciate that some people consider that this guidance could be clearer, but it is important that any guidance does not constrain the Government’s ability to apply anti-avoidance rules. It must be aligned with the broader approach taken by HMRC to anti-avoidance. The current guidance allows HMRC the flexibility effectively to pursue instances where vehicles are established for the purposes of avoiding tax. It is important that we preserve that ability. I therefore ask the noble Baroness to withdraw her amendment.
Baroness Bowles of Berkhamsted (LD)
My Lords, I thank all those who have spoken in the debate. I must say that I find the Minister’s response rather disappointing. He is saying that the status quo is all right, but the status quo is not all right, so we will not have the business. I think that is all there is to it. Surely, there must be a way in which you can have something that moves faster when you have to negotiate things faster: otherwise, the door is shut on these transactions. So I ask the Minister to engage with the industry on this and find out more detail, because it is being treated as if it is something dodgy. How will an investor invest in something that has a ticket on it saying, “Careful, I might be slightly dodgy”? That is in effect what is happening. How will we get these things into pension funds if the trustees are thinking, “Whoa, something might happen way down the track”?
These are very serious questions. I realise that it is very specialist, but we need to take action: otherwise, we are closing the door on opportunities for good investment and opportunities for pension funds. The fact that the ATCS solves the problem for really big infrastructure shows that the Government know what they are about when they are in the business of having to negotiate contracts, but the smaller people are being left out. That is just not the right way to proceed. So I hope that the Minister will report back to the Treasury and reread my speech and that of the noble Lord and come to a better conclusion. For now, I beg leave to withdraw my amendment, although I think that this is so important that I may wish to return to it on Report.
Baroness Neville-Rolfe
“Review of tokenisation in UK wholesale financial markets(1) Within 12 months of the day on which this Act is passed, the Treasury must lay before Parliament a report on the development of tokenisation in UK wholesale financial markets.(2) A report under subsection (1) must consider, in particular—(a) the extent to which the existing legal and regulatory framework supports the safe adoption of tokenisation in UK wholesale financial markets;(b) the extent to which current arrangements provide sufficient legal certainty in relation to the issuance, holding, transfer and settlement of tokenised financial assets;(c) the prudential treatment of tokenised assets and the extent to which such treatment is consistent with equivalent non-tokenised assets, where the underlying risks are equivalent;(d) the availability and suitability of settlement arrangements for tokenised financial market transactions;(e) the progress of the Digital Securities Sandbox and the extent to which it is expected to support the development of any permanent regulatory framework;(f) barriers to interoperability between tokenised and non-tokenised market infrastructure, and between different tokenised market infrastructure arrangements;(g) the effect of the current framework on innovation, investment and the international competitiveness of UK financial markets;(h) any further legislative or regulatory changes which the Treasury considers may be required.(3) In preparing a report under subsection (1), the Treasury must consult—(a) the Bank of England;(b) the Prudential Regulation Authority;(c) the Financial Conduct Authority;(d) such other persons as the Treasury considers appropriate.(4) The Treasury must publish the report.”Member’s explanatory statement
This probing amendment would require the Treasury to review the framework for tokenisation in UK wholesale financial markets, including legal certainty, prudential treatment, settlement arrangements and barriers to innovation and competitiveness.
Baroness Neville-Rolfe (Con)
My Lords, I will speak also to Amendment 164 and thank my noble friend Lord Ranger of Northwood for his very interesting amendments. This is a really important group. It is clear that digital assets are becoming an accelerating part of our financial and economic landscape, yet the Government, for all their warm words and the work done by the FCA, still lack a clear digital asset strategy. More than one in 10 UK adults now owns a digital asset. Sovereign bonds issued on blockchains, digital settlement systems and collateral, tokenised assets and new payment technologies are all developing fast. They are part of the future of financial services. With financial services changing at extraordinary speed, we have to ask ourselves whether the regulatory framework being created is fit for the future.
We raised this point at Second Reading and we return to it today. This is an area where we see a real risk of regulatory grey zones. Firms are innovating, consumers are participating, institutions are exploring tokenisation and market infrastructure providers are looking at distributed ledger technology. Yet, too often, the answer from the UK regulatory system is uncertain, fragmented or slow. Major banks, asset managers and market infrastructure providers are now exploring tokenised bonds, tokenised funds, digital collateral, digital repo markets and blockchain-based settlement systems. These products are increasingly part of the future of wholesale finance.
Lord Ranger of Northwood (Con)
My Lords, I support my noble friend’s Amendment 164 and will speak to Amendments 164A, 164B and 164C in my name. I declare my interest as a non-executive director of Ecila.Group—an R&D-focused firm in digital assets and payments infrastructure. I am also a member of the UKUS Crypto Alliance and, for completion, the co-chair of the Digital Markets and Digital Money APPG.
The amendments in my name go some way towards the underlying point, which is that, if the United Kingdom wants to be a serious global centre for digital assets, tokenisation and digital financial markets, we need a regulatory framework and, as my noble friend Lady Neville-Rolfe mentioned, a strategy that is clear, coherent, proportionate and capable of supporting innovation. We do not have that at the moment. We have a lack of clear regulatory direction, too many overlapping areas of responsibility, regulators with differing priorities and, in some cases, different and changing levels of appetite towards digital assets. We also have firms that are trying to understand whether the UK is genuinely open for innovation or whether it will remain a jurisdiction where uncertainty and delay make it harder to invest, scale and launch new products.
I say this because I have heard it directly from industry, particularly over the last 18 months. During that period, I have engaged extensively with businesses in the digital asset arena. I have also travelled to other jurisdictions such as the US—I have been to Washington four times in that period—and the UAE. I have spoken to the US SEC chair, Paul Atkins, I have met with Commissioner Hester Peirce several times and I have spoken to policymakers in these jurisdictions to understand their approach, as well as what they think we should be considering.
These are issues, as my noble friend Lady Neville-Rolfe said, because we are looking for growth. Firms are developing products, consumers are engaging with digital assets, and institutions are looking at tokenisation, digital collateral, new settlement systems and digital market infrastructure. The world is changing; it is already happening. Other jurisdictions are therefore moving fast. If we do not provide clarity, firms and—as has been said—jobs, growth and investment will move and move fast. This is very much a global market change.
The problem is not simply too little regulation. In some respects, a deeper problem is that the regulatory landscape is not yet properly constituted to support the market. If we simply layer new regulation on top of old regulation, without first clarifying who is responsible, what the objectives are, what the vision is and how the different regimes fit together, we risk creating an even more complex framework, with more duplication and confusion, than the one we have already.
That is why Amendment 164A is important. It would require the FCA and the PRA to establish and maintain a defined and representative digital assets industry forum. The forum would be co-chaired by senior regulatory representatives and a senior industry figure, and would bring together regulators, digital asset firms, tokenised businesses, banks, payment firms, market infrastructure providers and relevant trade bodies. The point is simple: the Government and regulators need a proper, structured mechanism for engagement with the industry if we are to take sensible steps in this area.
This is a fast-moving and highly technical area. Regulation cannot be developed in silos by separate regulators. Regulators need to understand how these products work, where the risks are, where innovation is taking place and where proposed rules may have unintended consequences. Industry needs to understand what regulators expect and where the UK intends to go, if not lead. At the moment, that dialogue is not sufficiently structured and there is not the sort of ongoing forum that a market of this complexity requires. Without that, we risk regulating by assumption, rather than by evidence, and we risk fragmentation.
My Amendment 164B addresses a related issue: access to banking, payment and settlement services for digital asset firms. This is a very real concern. A digital asset firm may be regulated or registered—it may have compliance systems, governance and legitimate commercial activity—but still struggle to obtain the basic banking and payment services that it needs to operate. This is a serious barrier to growth and market entry, which again I have heard many times from businesses in the sector.
There is also a debanking point here. If the regulatory environment is unclear, banks and payment providers may respond by taking the most conservative approach possible. They may decide that it is simply easier not to serve digital asset firms at all, rather than navigate regulatory uncertainty. Financial crime risk, supervisory expectations and reputational concerns all build a very strong defensive risk posture. That does not support innovation. It does not support competition. It entrenches incumbents, disadvantages new entrants and pushes activities to other jurisdictions. This is a consequence of the regulatory environment that we have right now. Yes, we must balance the risks that are out there, but we must also seek to encourage innovation and the market.
My amendment would require the Treasury to review how access to banking, payment and settlement services affects competition, innovation and market entry into the sector. It would also require consideration of whether the current and proposed framework risks conferring an advantage on incumbent firms over new entrants and firms developing new products. That is an important question. If the UK says it wants a thriving digital asset sector but firms cannot get bank accounts, access payments infrastructure or access settlement services, policy ambition will not be delivered in practice.
Amendment 164C concerns consumer redress. This is another area in which clarity is required. Digital assets do not always fit neatly into existing financial services redress frameworks. Consumers need to know what protections they have, where complaints should go, what remedies may be available and how responsibility is allocated when something goes wrong. Firms also need to know what standards apply to them and the liabilities they face. The amendment would require the Treasury to review whether the existing consumer redress framework can provide a clear, coherent, proportionate and internationally competitive basis for regulated digital asset markets. The key word is “proportionate”. We need consumer protection, but we must not create a redress environment that is so uncertain or open-ended that firms decide that the UK is not a viable place to operate. Equally, we must not leave consumers in a position where they do not understand their rights or where harmful conduct falls between regimes.
The wider concern behind all three amendments is that the UK risks falling behind because of a lack of clarity. Industry is not asking for no regulation; it is asking for clear, proportionate regulation that reflects the pace of technological change and the markets that are beginning to exist. My fear is that if we carry on regulating digital assets in a piecemeal way, we will end up with a regime that is consistently playing catch-up or that delivers unintended consequences. It will be unpredictable, overly burdensome and difficult for firms to navigate—even more so than it is already. That would be a bad outcome for innovation, for consumers and for the competitiveness of the United Kingdom.
I will therefore be listening carefully to the Minister’s response to my noble friend’s amendment that calls for a digital assets strategy, to which I have added my name. We should be trying to streamline, simplify and clarify the regime, not add more layers of uncertainty. I would be grateful if the Minister could also address the following three points. First, will the Government commit to establishing a proper representative industry forum for digital assets so that regulators and market participants can engage continuously and constructively? Secondly, what assessments have the Government made of the difficulties digital asset firms face in obtaining banking, payment and settlement services, and the effect this has on competition and market entry? Thirdly, how will the Government ensure that the consumer redress framework for digital assets is clear, coherent and proportionate without making the UK an unattractive place for responsible firms to operate?
As has been said, the UK has a real opportunity in digital assets and tokenised finance. The opportunity will not be realised unless firms know where they stand, so we need clarity, co-ordination and confidence. These amendments are designed to help the Government to provide that.
Lord Holmes of Richmond (Con)
My Lords, it is a pleasure to follow my noble friend Lord Ranger of Northwood. I agree with all the amendments that he has eloquently described. I support my noble friend Lady Neville-Rolfe, and particularly her Amendment 163, to which I have added my name. The Government rightly talk about growth. The reality is that digital assets, tokenisation and market dematerialisation are sources of growth in potentially a shorter time than some other sectors that have had greater focus.
Baroness Kramer (LD)
My Lords, we on these Benches in large part support the amendments in this group, with a few caveats. It is important to emphasise the frustration that we do not have today, and do not seem to see in the near future, that comprehensive regulatory framework that will draw together the UK approach to all these assets. It is a disservice to Parliament, because it makes it hard for us to investigate as we attempt to pull together a report from one committee or one regulator and try to mesh it with something that has come from another. The experience of even trying to do that demonstrates a lot of the fragmentation. Many of us thought that the Bill would be one of the mechanisms to create that framework, but it is not here. I very much support the amendments that begin to address that issue.
My caveats may seem minor but reflect some fundamental frustrations. For example, subsection (2)(g) proposed by Amendment 164, which is to “have regard” to various factors, puts financial stability and international competitiveness on exactly the same standing. That is an ongoing frustration that I have had through much of the Bill. We have to understand the primacy of financial stability. It is one thing to have a secondary objective but, in general conversation, and over and over again in amendments, we see the two merged as being essentially on a par. That is highly questionable.
We have a history of variations on the digital industry forum. In the early days of fintech, it was the industry that really pulled itself together into a representative body and then the Government indicated their willingness to negotiate with that body. Out of that came a coherent set of appropriate regulations, which met the needs of both sides and were developed by engagement with both sides. I would like to see that industry begin to pull itself together. I am always suspicious when Governments set up forums, because then they pick and choose who sits on them and who the voices are. When industry does it, it tends to be a far more inclusive and more effective group, but the Government need to indicate that they would wish to have such a body and to engage with it. That would move us very much forward.
The issue of interoperability is absolutely key, but I take it further: it also needs to be looked at from a consumer perspective. If you get your salary in sterling stablecoin going into your virtual wallet but then you, as an individual, want to be able to go and get pounds, how on earth can you do that at a current ATM? That is simply impossible, so interoperability in all kinds of ways is fundamental to developing the whole new digital direction. However, costs are always involved when you look at interoperability. I would like the Government—or the regulators, if they are the appropriate bodies—to establish a principle that those who use the payment system and are part of it all carry a part of the burden, rather than simply falling back on the traditional banks to carry the costs. That would get us a whole lot further and make the banking community far more willing to be engaged in this process.
I hope that the Government will take these amendments seriously. They seem to move us very much in the right direction. As I say, my caveats are fairly small and I will be looking forward to the Minister’s response. I thank the noble Lord, Lord Ranger, for engaging with the industry to be able to bring forward amendments that take us in this direction.
Lord Stockwood (Lab)
My Lords, I thank the noble Baroness, Lady Neville-Rolfe, and the noble Lords, Lord Altrincham, Lord Ranger of Northwood and Lord Holmes of Richmond, for these amendments and their contributions to this debate. It is an important discussion of how technology and finance will play an increasingly important role in global markets. I declare that I have been personally trading cryptocurrency since 2017; none of the gains have gone towards political donations—I think it is worth mentioning that at the moment.
Taken together, these amendments seek to support the UK’s focus on innovation, competitiveness and consumer protection in digital asset markets. The Government strongly support the digitisation of financial markets and share many of the objectives that noble Lords have set out today. However, before we turn to the detail of the amendments, it is important to recognise that the UK already has a comprehensive programme of work in train to support the development of digital assets and a tokenised market.
First, on the registry framework for crypto assets, the Government have legislated to establish a framework coming into force on 25 October 2027. This will bring a wide range of crypto asset activities within the registry perimeter, providing the legal certainty and consumer protections that noble Lords rightly identify as essential.
Secondly, I can assure noble Lords that we have a strategy on wholesale market digitisation and tokenisation and an expert to drive it forward within the sector. The Government published the Wholesale Financial Markets Digital Strategy last year, setting out an ambitious plan for government, regulators and the industry to support digitisation of the UK wholesale financial markets. As part of this work, the Government have appointed Chris Woolard CBE as the Wholesale Digital Markets Champion to provide market leadership and co-ordinate industry efforts on tokenisation. The champion has already established a cross-sectoral task force and will report to the Chancellor this year and next on progress on how the UK can further advance the adoption of distributed ledger technology in wholesale markets.
Thirdly, on payments, the National Payments Vision sets out our ambition for a world-leading payments ecosystem delivered on next-generation technology. The Government are working with regulators and industry to renew retail payments infrastructure and ensure that the regulatory framework keeps pace with innovation in digital settlement assets. There is clearly more to do in a fast-moving environment, but the Government see the opportunity and are moving to take advantage of it.
Turning specifically to Amendments 163 to 164A, these relate to the Government’s overall strategy for digital assets and engagement with industry. I agree that, as I said, the underlying objective has already been taken forward through the wholesale financial digital market strategy and the work of the Wholesale Digital Markets Champion. There are also a number of existing mechanisms via which the regulators engage with industry on the subject of digital assets and the wider strategy—whether that be joint Bank of England and FCA engagement with firms experimenting with new technologies in the digital security sandbox, or the recent Bank of England and FCA call for input on tokenisation, which is seeking views on opportunities and risks associated with the wider use of tokenisation in financial markets. I do not think that we need to push such engagement with industry on a statutory footing when it is something that regulators are already prioritising.
Amendments 164B and 164C seek reviews of banking access and consumer redress for digital asset firms. On banking access, the Government recognise the difficulties that some firms have encountered and we are engaged with the sector on those matters. While such decisions are commercial in nature, we also expect businesses to be treated fairly. Under the crypto asset regulatory regime, firms will need to be licensed by the FCA to provide relevant crypto asset services. We would not expect such licensed firms to be subject to the restrictions by banking service providers simply because of the sectors they belong to.
On consumer redress, the Government agree that consumers should have clarity about the protections available to them. However, the existing FSMA framework and the regulated activities orders are deliberately flexible. When new activities are brought within regulation, the relevant regulatory protections, including complaints handling and access to the Financial Ombudsman Service, can be considered as part of the process.
I therefore agree with the underlying objectives of these amendments but I think that the existing strategy and ongoing work provide the most effective route forward. I am a strong believer in the need to digitise financial markets, and I am confident in the actions that the Government are taking with this agenda, which is a key strategic priority for the UK. If I have missed any questions in my response, I will be happy to follow up and write. I therefore ask the noble Baroness to withdraw her amendment.
Baroness Neville-Rolfe (Con)
My Lords, I am very grateful to my noble friends Lord Ranger of Northwood and Lord Holmes of Richmond for their support and the amendments that they have tabled on this important topic of digital assets.
I am very glad to hear of the Woolard review of tokenisation and the progress on crypto assets. I hope that the Minister is right about that solving the debanking issue—we will see. However, I am slightly disappointed in his response, because I know that he comes from a sector where digital progress has underlined success. I think that the industry lacks the clarity it needs. That is what it has been telling us. Firms need to know what the Government’s overall strategy is and how the different regulators will work together—I am sure there are some good examples. There is also the question of what definitions will apply to digital assets, along with how the UK intends to remain competitive internationally. There has been a lot of progress around the world.
Therefore, the points that we have raised and those put forward by my noble friend Lord Ranger need to be addressed. I was very struck by the way that he has travelled the world in his international search for success and growth in digital assets. Listening to him, I believe that we can learn from what both Rishi Sunak and the current Government have done together to get behind AI. I also agree with the noble Baroness, Lady Kramer, that we can learn from the successes on fintech—which I remember being involved with probably nearly a decade ago.
If the UK wants to be a leader on tokenisation and digital assets, we need a clear strategy. We need a joined-up and proportionate regulatory approach and a framework that supports innovation, while—most important of all—protecting consumers. I think that we will want to return to this issue on Report. Progress is being made, but we would like to see a little more ambition. However, for now, I beg leave to withdraw my amendment.
Lord Holmes of Richmond
“Shared digital identity and compliance utilities(1) The Secretary of State must, within 18 months of the day on which this Act is passed, publish a specification for—(a) a shared digital identity utility (“the identity utility”), providing API-based identity verification services accessible to authorised persons and regulated institutions operating in both legacy and digital markets;(b) a shared anti-money laundering and know your customer compliance utility (“the compliance utility”), providing API-based access to customer due diligence data and screening services.(2) The specification must address— (a) governance arrangements, including whether the utilities are to be publicly owned, privately owned under public specification, or operated as industry utilities;(b) data standards and interoperability requirements;(c) access arrangements for legacy and digital ledger technology-based market participants;(d) privacy and data protection safeguards, including compliance with the UK GDPR;(e) the transition period during which legacy and digital know your customer processes will operate in parallel.(3) The FCA may make rules—(a) requiring regulated institutions to register with and use the identity utility or compliance utility once operational;(b) providing that compliance with compliance utility standards satisfies the customer due diligence requirements of the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017.(4) Use of the identity utility or compliance utility by a regulated institution does not, of itself, discharge that institution’s obligations under the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 or under the FCA's financial crime rules.”Member’s explanatory statement
This amendment is modelled on Singapore’s MyInfo and the EU's European Digital Identity Wallet framework.
Lord Holmes of Richmond (Con)
My Lords, it is a pleasure to open this group of amendments in my name. I can only apologise to the Committee that I did not manage to get through the full alphabet and require Roman numerals to be used after some of the amendments —perhaps when we come to Report. I will take Amendment 164E first before moving to the substantive group, which all speak to tokenisation and market demat.
Amendment 164E goes to the digital opportunity that we have when it comes to many issues, not least what passes for KYC and AML. In many ways, KYC has failed to deliver for more than quite a long time in the UK. Indeed, as a jurisdiction, we are not alone in that fact. It would be a joke if it was not true that you can avail yourself of financial services and other products by demonstrating what a capital, stand-up character you are because you produce a paper gas bill. We can do better, and we need to do better not only in terms of KYC and AML, but in terms of being able to realise all the opportunities from digital assets, tokenisation and market demat. We need an effective system of digital ID, and that is what Amendment 164E is all about. It is uncontroversial and draws on systems already in place, such as the MyInfo system in Singapore and the EU digital ID wallet framework. I will be interested in the Minister’s response on Amendment 164E and, if he is not in favour of it, his thoughts on the current situation and how it is working in terms of the digital ID framework in the EU and, indeed, the MyInfo system in Singapore.
The remainder of the amendments in this group continue the discussions that we had on the previous group. My noble friend Lady Neville-Rolfe, in her Amendment 163, displayed brevity in what I have taken an entire group of amendments to do. I have sought to open up the detail: the critical factors and principles we need to consider and put into the Bill to enable tokenisation and market demat, to have the right frameworks in place, and to send the right signals across the UK and around the world that we, the UK, not only understand what is required but want to be market leaders, market shapers and market makers in this space.
Many colleagues joined me in this Room in 2021 for the Financial Services Bill, in 2023 for the Financial Services and Markets Bill and through these past six days on this latest Financial Services and Markets Bill. Is the conclusion we draw from that that we are having too many financial services Bills or do we see that given there has been a three-year gap since the last one they are becoming fewer and farther between? Whatever the right conclusion, if we have a sizeable Financial Services and Markets Bill in front of us now, why would we not take the opportunity to put in at least a clear framework for what is required: tokenisation, market demat and all the potential opportunities of digital assets for the United Kingdom? I will not try the patience of the Committee by running through every amendment in detail, so long as I can be assured that the Minister will address every amendment when he comes to respond. I definitely saw a nod from him.
However, the issues that I set out, and the underlying principles, are clear. We have to move to tokenisation. There will clearly be a period in which we have tokenised and traditional assets coexisting. They need to be able to interoperate; there need to be bridges between them, and from one to the other. They need to be clearly understood and set out. When many argue that we cannot legislate in time, I merely offer the Electronic Trade Documents Act and the Property (Digital Assets etc) Act. Both are very precise, clear and blessedly very short statutes that enabled clear opportunities in the similar area of what these emerging technologies can deliver.
Lord Ranger of Northwood (Con)
My Lords, I support my noble friend Lord Holmes’s amendments across the alphabet, particularly because he is right about the detail and the need for us to look at the ambition and see whether we are really targeting changes that will help us fulfil the ambition. When it comes to the point about regulation and whether or not it has worked, in terms of KYC, AML and even PEP, we know that these fundamental versions of regulatory burdens do not succeed. We hear constantly of their failings, so how are we going to adopt and adapt as we move into the digital assets universe, as I have been calling it, rather than naming each different type?
Fundamentally, one of the elements here is the use cases. These amendments speak to specific points and changes that could be brought through, but we must look at the use cases in which these will apply. We talk about tokenisation or how stablecoins will be used. We must talk about how property and assets might be traded differently. We must look at how services will be adapted and the wholesale settlement that international markets are looking at. We must talk about and consider the use cases around retail e-commerce. With that, I support my noble friend’s amendments.
Baroness Kramer (LD)
My Lords, I am going to be brief again: these are very interesting amendments. The breadth of the amendments put before us by the noble Lord, Lord Holmes, gives us a sense of the extensive work that must be done, right across the plumbing of the entire financial services sector, to move and take advantage of the opportunities of the digital world. There is no discussion here of some of the risks, namely about the levers of power shifting to different hands and whether we should be concerned about that or whether there are monetary sovereignty issues. Those are crucial issues, and we cannot walk away from them. Plumbing seems boring, but it is crucial. It seems that every aspect of that plumbing has been raised here, something that I hoped we might hear about in greater detail from the Government. I am particularly focused on the first of the amendments tabled by the noble Lord, Lord Holmes, which is Amendment 164C. I apologise, I have the wrong one.
Baroness Kramer (LD)
That was very good too. I meant Amendment 164E, which is headed,
“Shared digital identity and compliance utilities”.
I come from a party that is always very concerned about identity cards, whether they are digital or traditional, old-fashioned cards, and what they do to privacy and independence, so I have those caveats constantly in the back of my mind. It seems to me, however, that a series of fundamental questions are raised by the noble Lord, Lord Holmes, in subsection (2), where he talks about the various specifications, the governance arrangements, the very straightforward things such as whether utilities are to be publicly or privately owned, under public specifications or operated as industry utilities. There are issues of data, access to digital ledgers, privacy, data protection and how to cope with the transition period, which will be very complex and very different for different individuals. Some people will transition completely almost in the blink of an eye, and others will be very late adopters. That creates a whole set of issues around financial inclusion and exclusion. I hope very much that we will get the discussion that we need, particularly around subsection (2), which then sits as a foundation to all the other issues that are raised. These are issues that engage the regulator, of course, but many of them are above the regulatory pay grade, and we need to be engaged on those issues here in this Committee.
Lord Altrincham (Con)
My Lords, this group is a snapshot, in a sense, of where we are now in digital regulation for financial services in the UK, as discussed by my noble friend Lord Holmes. This group somewhat dovetails with the amendments that we discussed in the previous group, which sought to probe the Government’s strategy for digital assets, tokenisation, access to banking and payment services and consumer redress. However, I am concerned that this package rather jumps the gun. The issue is more profound than the absence of individual regulatory provisions.
As my noble friends Lady Neville-Rolfe and Lord Ranger of Northwood, and the noble Baroness, Lady Kramer, said, we do not yet have the basic architecture in place, and we do not yet have a clear digital assets strategy. We do not yet have a settled framework of engagement with the industry, and we do not have a proper industry forum through which the Government, regulators and market participants can work through these questions in a structured way. That matters because this is a fast-moving area: if we legislate too quickly, or in too much detail, without proper consultation and industry engagement, we risk creating a framework that is either obsolete before it is implemented, or misaligned with how the market is actually developing.
The point that we have been making throughout these debates is that the Government need to move from ambition, the Digital Markets Taskforce and their initiatives to strategy. It is not enough to say that the UK should be a global centre for digital assets or tokenisation: we need to know what that means in practice, who is responsible for delivering it, how the regulators are working together, what definitions will be used, and what sort of regime firms can expect. At present, the problem is not only a lack of regulation: in some respects, the problem is the way the regulatory system is operating, those overlaps between the Treasury, the FCA, the PRA, the Bank of England and other bodies. There are sometimes different emphases, different attitudes and different levels of appetite toward digital assets and tokenised finance. That creates uncertainty for firms.
Industry does not need more rules; it needs clarity, a coherent regulatory perimeter, regulators that are aligned with one another and confidence that the UK is developing a framework that supports responsible innovation, rather than simply adding new layers of process and permission. This is why we need to be careful before layering further statutory requirements on top of a system which has not yet been properly clarified. That said, the principle raised by my noble friend about looking to world leaders for inspiration is a good one. This is something we should be paying attention to if we wish to remain internationally competitive.
In addition, the principle for higher regulatory neutrality between traditional and tokenised assets is a sensible one. If two instruments have the same economic substance and risk profile, there is a strong case for treating them consistently. But before that principle can operate effectively, the Government and the regulators need to define clearly what counts as an additional asset—a tokenised security, a crypto asset, a stablecoin or a form of digital market infrastructure. That is why the industry forum proposed in the previous group seems so important. We need a better mechanism for engagement before we decide the detailed architecture, and we need to hear from banks, payment firms, digital asset businesses, market infrastructure providers, asset managers, lawyers, technologists and consumer representatives. Without that, we risk legislating for a market as we imagine it, rather than for a market as it is developing.
In summary, my noble friend Lord Holmes raises important issues and many of the ideas in this group may well form part of the future architecture for digital finance. The first task is to sort out the foundations. We need strategy, clarity, co-ordination and proper industry engagement before we start building further layers of regulations. For those reasons, I welcome the debate and the questions raised by these amendments. The Government must first address the more fundamental uncertainty at the heart of the UK’s approach to digital assets and tokenised finance.
Lord Stockwood (Lab)
My Lords, I am grateful to the noble Lord, Lord Holmes of Richmond, for tabling these amendments and for his contributions to this and the previous debate. I will not rehash the arguments I made previously. We believe that we have a strategy, and we believe that that has been executed. These amendments cover a wide range of issues. The noble Lord asked me to respond to all of them; I will try to do so but, if I miss any, we can follow up afterwards.
The amendments include proposals on shared digital identity, AML utilities, prudential treatment for tokenised assets, an additional digital financial markets sandbox, education and use-case libraries, issuer governance, common token and data standards, model contractual clauses, custody and bridge infrastructure, issuer pathways and payment rail neutrality. The Government agree that the development of tokenised markets depends on proportionate regulation, legal certainty and effective payment and settlement infrastructure. These are all important issues, and the Government are already taking extensive action to drive forward this agenda, which I set out in the last debate.
On Amendments 164E to 164H, the Government recognise the importance of trusted digital identity, effective AML processes, proportionate prudential treatment, testing environments and education. I am happy to assure noble Lords that these matters are already being progressed through existing frameworks, including the UK digital identity and attributes trust framework, guidance on the use of digital verification services under the money laundering regulations, the digital securities sandbox and wider government and regulator work on tokenisation and market digitalisation.
The Government also recognise the importance of market understanding. However, I have concerns about requiring in legislation for the FCA to maintain a detailed use-case library or to prescribe particular commercial models for the development of digital financial markets. The role of the Government and the regulators is to establish clear and proportionate frameworks that support innovation while protecting consumers, market integrity and financial stability. The development of specific use cases and business models is a matter for industry, operating within those frameworks. The wholesale digital markets champion, whom I mentioned previously, can look at these issues if this is raised with him.
Across all these areas, the Government’s approach has been to support innovation through enabling frameworks rather than prescribing particular models in legislation. The Government believe that it is preferable to continue building on these flexible frameworks rather than putting in place detailed statutory requirements.
Amendments 164J, 164K, 164L, 164N and 164P focus on the infrastructure needed to support tokenised markets. The Government recognise the importance of legal certainty, interoperability, custody arrangements and clear issuer pathways for tokenised financial instruments. These are precisely the issues currently being considered by the Government and regulators, including through a joint call for input published by the FCA and the Bank of England earlier this year on the future of tokenisation in UK wholesale financial markets. The regulators have made clear that this work will inform a joint road map of reforms developed in partnership with industry.
The digital securities sandbox was also specifically designed to provide that flexibility, allowing government, regulators and industry to test how legislative and regulatory frameworks may need to evolve before making more permanent changes.
Lord Holmes of Richmond (Con)
My Lords, I thank all noble Lords who have taken part in this debate. It certainly seems that I am getting more from the Liberal Democrat Front Bench than my own Front Bench at the moment—strange times, but there we are. For the time being, I beg leave to withdraw the amendment.
The Deputy Chairman of Committees (Lord Young of Cookham) (Con)
As Amendment 165 has not been moved, I cannot call Amendment 165A for reasons of pre-emption.
Baroness Neville-Rolfe
“Duty to promote public understanding of financial services and financial capabilityThe FCA must take such steps as it considers appropriate to promote public understanding of—(a) financial services and markets,(b) personal financial management,(c) saving, borrowing and long-term financial resilience,(d) financial decision-making and financial risk, and(e) pensions.”Member’s explanatory statement
This amendment would give the FCA a statutory duty to promote public understanding of financial services and financial capability, and to report annually on the steps it has taken, the groups most at risk of poor financial literacy or exclusion, and the contribution of improved financial capability to consumer resilience, competition and economic growth.
Baroness Neville-Rolfe (Con)
My Lords, in moving Amendment 167, I am grateful for the support of my noble friend Lord Altrincham and the noble Baroness, Lady Altmann.
Financial education is incredibly important, but it is unusually weak in the UK compared to, for example, Finland, the Netherlands, Singapore and Australia. The Times rightly has a campaign to improve it. Rishi Sunak has spent time and effort since leaving office trying to do so, citing how much better people do in life if they understand inflation, the magic of compound interest and the importance of diversifying risk. Financial education is an issue on which I have campaigned for a very long time, notably in my 2022 review of the state pension age. I believe it is central to how people live their lives, make decisions, protect themselves and participate responsibly in the economy. It helps them to make sensible decisions about borrowing, mortgages, insurance and pensions, to avoid scams and financial harm, and to understand basic financial and economic statistics. This is a mission that I hope noble Lords of all political perspectives can support.
Amendment 167 would give the FCA a new statutory duty to promote public understanding of financial services and financial capability. For example, it could produce succinct basic explanatory material on concepts such as compound interest, basic banking, and portfolio and asset diversification. The amendment would require the FCA to report annually on the actions it has taken to improve financial capability, the groups most at risk of poor financial literacy, the groups most vulnerable to financial exclusion, and how improved financial capability contributes to consumer resilience, competition and economic growth.
The reason this matters is that the FCA’s current objectives focus on consumer protection, market integrity, competition, and growth and competitiveness. There is not currently a primary statutory duty on the FCA to improve financial capability across society. Better-informed consumers are less vulnerable to fraud and more likely to save, plan for retirement, compare products, switch providers and exercise choice. That supports not only individual resilience but competition and growth. Poor financial literacy often falls hardest on those who are already vulnerable or excluded. If people do not understand the financial system then they are less able to access it, less able to challenge poor treatment, less able to avoid expensive mistakes and less able to make decisions which improve their long-term security.
One problem is that financial education provision is scattered and variable in quality. There are many good initiatives, some even by the private sector, as I remember from the work done by Tesco Bank in Scotland, but they are not joined up. The curriculum has been improved slightly, although mainly through citizenship and maths, with some schools doing very good work but others being less effective. As recent debates on student loans have shown, this is something that we really need to grasp. We ask 17 and 18 year-olds to make significant financial decisions with long-term consequences, yet we do not ensure that they are equipped with the skills and knowledge needed to make the decisions well.
Many teachers find financial education difficult, and, like people from all walks of life, they are not aware enough of it in their own lives, let alone skilled enough to teach the basics well. They need support, resources and confidence. Financial education needs to be included in teacher training and linked to university teaching. I echo the difficulties of the noble Lord, Lord Carlile, with the scope of the Bill, since an amendment I tabled on the subject was rejected.
The truth is we need a step change at every level. My amendment does not ask the FCA to replace schools, teachers, parents, charities, or the Money and Pensions Service—although that service is too divorced from most financial transactions to do a good job. Our amendment would impose a duty on the FCA to recognise that improving financial capability should be part of its mission, and would require it to report properly each year on what it is doing. That could have a catalytic effect.
I welcome Amendment 170, in the name of my noble friend Lord Holmes of Richmond, which would require the FCA to work with the Money and Pensions Service to produce a national financial education strategy. That is complementary to my amendment.
There is a strong case for a more joined-up national approach. Financial education should not be a patchwork of disconnected initiatives. We need a coherent strategy, covering budgeting, saving, investment literacy, pensions, debt, fraud prevention, digital finance and support for vulnerable groups. I was glad to have a positive response on this issue from the noble Lord, Lord Livermore, to a recent Question, and would be very grateful if the Minister could respond to our pleas. Better financial education could be a key pillar of consumer protection. This is an area where a legacy is waiting to be created. I beg to move.
Lord Holmes of Richmond (Con)
My Lords, it is an absolute pleasure to follow my noble friend Lady Neville-Rolfe. I support her Amendment 167, which, as she rightly identifies, has many common themes with my Amendment 170.
I have been working on financial education and financial capability for a long time. As my noble friend rightly identifies, and as we have mentioned in other groups, the need for a coherent cross-society, cross-economy financial education and financial capability strategy, covering every stage of life, could barely be more needed than it is today.
There are two pernicious forces striding our streets, walking hand in hand: financial exclusion and digital exclusion, one often causing and compounding the other. Becky Francis’s review found that it was absolutely key to have financial education and capability within the curriculum, but it is about how that naturally touches on digital capability, media literacy and capability, and AI literacy and capability. These threads all come together, and can do so a positive, additive fashion if they are seen as positive, and are personalised and focused on the individual at every stage of her or his life, to enable all of us to make choices and to be included. With so much in society going digital—to be fair, not much in the Bill is going digital, but that is perhaps an outlier—financial exclusion for want of financial education and capability could dramatically increase and exacerbate the exclusion already felt by those at the most extreme end of our society.
Education is not just about what happens with the curriculum; it is a matter for our regulator. Through that, when it is a primary concern for the regulator, it gives it a sharpness of focus, putting it right at the centre for the regulator responsible for our financial services. It works with the Government’s stated aims in other areas. If the Government constantly state that they want to take a domain-specific approach, a financial education and capability, together with a domain-specific approach, will mean that the FCA will bring in money advice and a pension service alongside that.
I add to this to ensure that financial education and capability go beyond traditional products. When one considers how many young people are engaging with and investing in—in some senses, I put quotes around “investing in”—crypto, it is clear that the financial education and capability need to cover all the financial products, instruments and assets that are currently out there and being used and traded, not least by young people, who need to be enabled, empowered and given the capability and capacity to choose which products they want to engage with in a meaningful and capable fashion.
Amendment 171 is a different matter. It is a very specific amendment on SME right of action with the FCA—a right of action that is currently not available to SMEs. One can see at first blush why this is the case, because there is a clear distinction between a private person and an SME. The difficulty is, as currently set out in Section 138D of FSMA on the definition of a private person, that a private person and an SME are, in reality, characters that represent a principle and policy that sit underneath them. That is what the amendment is all about. The principle being set out is the assumption that a private person is always in need of a right of action because of their circumstances, which an SME is not.
This is beguilingly appealing at first blush, but entirely wrong in being a coherent strategy that includes everyone. The reason is that it inevitably tends to the mean: the average private person on the famous omnibus or the average SME with levels of understanding, support and financial wherewithal. But that does not cut it. That should never have cut it, and it does not cut it for current situations, because, on the one hand, it is clearly entirely possible and a reality that thousands of small and micro entities out there do not have these assumed resources, capabilities and capacities. On the other hand, there are millions of private persons who are far more capable and economically sophisticated than these small and micro entities.
This amendment is specific, clear and coherent: it is to extend that right of action to small and micro entities. I am not suggesting that the drafting is perfect; there may need to be de minimis levels put in, or a clearer definition of what small and micro entities are. But again, if the Government want growth and to back our businesses, not least our small and micro businesses, it is a question of coherence, clarity and fairness. SMEs should have a right of action when it comes to the FCA. This should not be limited just to private persons, as currently set out. I look forward to the Minister’s response and I beg to move.
Lord Davies of Brixton (Lab)
I cannot but support the desire for greater public understanding of financial matters. The noble Baroness, Lady Neville-Rolfe, and the noble Lord, Lord Holmes of Richmond, have made a powerful case for better understanding, but I am not convinced that they have made the case for it to be focused in the way that they have set out in their amendments, so I look forward to the response from my noble friend the Minister. I want to make two points about these amendments.
The first is that better understanding is not a magic trick. We can be in favour of it but we must never overstate what it can achieve. It certainly does not weaken the case for effective regulation or remove the need for it at all. We need to be clear about that because, sometimes, when the issue is discussed there is a slight—or sometimes more than a slight, perhaps an overt—suggestion that that is what it would achieve.
It is worth my quoting a bit from the interim report from the Second Pensions Commission, which is obviously about pensions but gets to the heart of the matter. It says in its report:
“As with the principles underlying automatic enrolment, the pensions system needs to work in the interests of savers as they enter retirement and protect those who do not, or cannot, engage”.
That is the bottom line: whether people choose to take education or are capable of taking it, they are still entitled to first-class financial services. I am sure everyone here would agree with that, but sometimes it is not front and centre to the way that people think about it.
Lord Holmes of Richmond (Con)
Just to be clear, is the noble Lord suggesting that in anything that I have set out—I will not speak for my colleagues—financial education and financial capability would then be used to weaken and have lesser regulation? I do not believe that that is what I said.
Lord Davies of Brixton (Lab)
No, I am not for one moment suggesting that. I am saying that, in other discussions, I have heard it said explicitly or by implication. It is a danger and, given what we are trying to achieve, it is one that we should recognise and take account of.
My second point is that both amendments refer to the FCA. The first amendment, from the noble Baroness, Lady Neville-Rolfe, specifically refers to pensions. Let us be clear: the FCA knows little or nothing about pensions. It is the wrong body to undertake any form of public information about pensions. I have heard the discussion on the regulation of pensions and people asking, “Why do we have two regulators?” Well, we do have two: one is the Pensions Regulator and the other is the FCA, but the FCA’s involvement is narrow and we should understand that it is dying. It is going because personal pensions are dead, and the FCA will have little or nothing to do with pensions in the future. The life companies have not quite realised this yet—they are fighting against it—but history will remove them from this market.
Clearly, pensions do not fall within the ambit of the FCA for these purposes. It can provide information about life insurance products and annuities, but those are not pensions. The word “pensions” is wrong in Amendment 167.
Baroness Kramer (LD)
My Lords, I suspect that nobody in this Room would not speak out very strongly in favour of financial education and that, in this House, we would be really grateful if there were some capacity for it, particularly in the ever-changing world that we are dealing with today, with all its complexity. I sign up totally to that underlying concept, although I think that the noble Lord, Lord Davies, alighted on an important point. I know that my noble friend Lady Tyler speaks a lot on financial inclusion and always talks about financial education as part of that, but she becomes extremely frustrated when people seem to think that, somehow, financial education is a substitute for the other actions that are needed, such as access to cash or to personal services. The noble Lord is completely right that we want financial education, and it is brilliant if we have good financial education, but that does not take away from the need to make sure that our financial services sector delivers proper, safe, first-class services, appropriately regulated.
Of all the bodies to choose to provide financial education, the FCA would be right at the bottom of my list. This is a body that has so many responsibilities already, and to take on another absolutely massive task—communicating with the ordinary person on the street, among other things—would be way beyond its capacity. It has plenty to do without this. Also, has anybody read letters from the FCA? It does not write human in its general communication. I think this is probably a government responsibility, and to me it makes a whole lot more sense to fund someone—I am picking this out of the blue—such as Citizens Advice, with people who speak with normal people and understand the issues they face and how they face them, if we are going to look for a financial education champion. I am sure people will come up with others.
I want to address Amendment 171 in the name of the noble Lord, Lord Holmes, because it is very important. It would provide a right of action to SMEs for breaches of the FCA handbook. I have from time to time, in this House and even in this series of debates, expressed my very deep frustration with the regulatory perimeter: the consumer protections that the FCA provides are limited to individuals—consumers. It now includes very small micro-businesses, but it does not include small businesses. Bad actors in the industry completely exploit that. We have seen that in example after example of mis-selling, whether back in the days of asset stripping or the mis-selling of derivatives or a play with mini-bonds. That perimeter has been used as a mechanism, because, on the far side of the perimeter, from the FCA perspective, there is not protection: it is entirely caveat emptor. In the complex world of today, where small businesses have to deal with so much and compete on a scale that they never had to if you go back a generation or so, I think it is wrong not to recognise that they will not have the capacity to be able to deal with some of that financial complexity.
I have always been keen on a right of private action; it is a very old and core tradition in British common law. One of my frustrations with the FCA has been that, in a sense, it went down the path of adopting the consumer duty to avoid doing what this House had intended it to do: look for a duty of care—because embedded in a duty of care is a right of private action. The FCA opted for a tick-box approach, rather than the principled approach that lies with a duty of care and the right of an individual citizen to get redress through the court system if they feel they have been damaged. For small businesses to now have a right of private action when they deal with the regulator seems to be an important step forward and a recognition of the reality of the challenges that small businesses face today.
Lord Stockwood (Lab)
My Lords, I am grateful to noble Peers for raising the important issues of financial education and the right of action for SMEs. On financial education, Amendment 167 would place a statutory duty on the FCA to promote financial capability, and Amendment 170 would require the FCA to publish a national financial education strategy. I am clearly supportive of the motivation, but I do not believe that new statutory duties on the FCA are the right way to achieve it.
The noble Baroness has already mentioned some of the good work that is being done by the Government on financial capability as part of their financial inclusion strategy, such as the work the Department for Education is doing in schools. The Government are also taking steps to improve financial education for adults. For example, we have announced the expansion of the Money Guiders programme, which is run by the Money and Pensions Service. This helps front-line workers, such as nurses and social workers, to have conversations about money with those they support. Fair4All Finance is also deploying £50 million funded by dormant assets in England to support financial capability initiatives. I assure the noble Baroness that the Money and Pensions Service already has a statutory function to develop and co-ordinate a national strategy to improve financial capability and education, as set out in the Financial Guidance and Claims Act 2018, and the FCA also carries out substantial work in this space. Helping consumers navigate their financial lives is already one of the FCA’s four priorities for 2025 to 2030.
Amendment 171 relates to SMEs and would significantly extend private rights of action. The Financial Services and Markets Act 2000 already draws a clear and deliberate distinction between general private law claims available to all parties, including SMEs, and the specific statutory right of action under Section 138D, which is limited to “private persons”—generally individuals and persons not acting in the course of a business. That reflects Parliament’s long-standing judgment that FCA rules are primarily regulatory and supervisory standards, rather than offering a comprehensive basis for civil liability for all market participants. SMEs can and do bring claims under contract, misrepresentation, negligence and other established causes of action.
I understand why the noble Lord is motivated to extend the right of action to SMEs for regulatory breaches. Historically, SMEs were often left with little option outside litigation, and I agree that those firms have fewer resources to seek redress. This was deliberately addressed in 2019 with the significant expansion of the Financial Ombudsman, which is now accessible to 99% of the UK’s small businesses.
I hope I have gone some way to reassuring noble Lords on the action the Government are taking on these important issues, and I therefore ask the noble Baroness to withdraw her amendment.
Baroness Neville-Rolfe (Con)
My Lords, I am grateful to all noble Lords who have contributed to this important debate, and to the Minister for his response. I commend the remarks of my noble friend Lord Holmes of Richmond and the work that he has done on financial education, and I support his complementary amendment on that subject. This has been a useful discussion, because it is an area that deserves a great deal of attention. There is clearly broad agreement that financial education is too important to be left to a patchwork of uneven provision.
The Minister cited the Money and Pensions Service, which I think is based in the DWP. To date, I have not been terribly impressed by the speed or breadth of the education that it provides. It is not only individual groups that I am worried about. We could get an enormous improvement in growth and performance if financial education were spread much more widely, but I should be happy, if it could be arranged, to talk to the service to understand what it is doing before we get to Report. It may be that some of the plans it has are dealing with this wider problem.
Baroness Neville-Rolfe
“Reform of financial services dispute resolution(1) The Treasury must, within the period of 12 months beginning with the day on which this Act is passed, publish draft legislation containing provision—(a) replacing the ombudsman scheme established under Part XVI of the Financial Services and Markets Act 2000 with a scheme to be known as the Financial Adjudication Service;(b) removing the requirement in section 228(2) of that Act that complaints be determined by reference to what is fair and reasonable in all the circumstances of the case; (c) requiring complaints within the compulsory jurisdiction of the Financial Adjudication Service to be determined by reference to such statutory requirements as may be specified.(d) providing free access to the Financial Adjudication Service for complainants;(e) providing that the expenses of the Financial Adjudication Service are met by levies or fees imposed on regulated persons;(f) providing that determinations of the Financial Adjudication Service are binding on both parties unless appealed as described in subsection (2);(g) making such amendments to Part XVI and Schedule 17 of the Financial Services and Markets Act 2000, and any other enactment, as the Treasury considers necessary for the purposes of that provision.(2) Draft legislation published under subsection (1) must propose the establishment of a chamber of the First-tier Tribunal to be known as the Financial Services Chamber to hear appeals against determinations by the Financial Adjudication Service and make decisions which are binding on the Financial Adjudication Service unless and until overturned on appeal.”Member's explanatory statement
This amendment would require the Treasury to publish draft legislation to replace the Financial Ombudsman Service with a Financial Adjudication Service and to establish a Financial Services Chamber of the First-tier Tribunal to determine appeals according to law, to provide speed, expertise and high settlement rates.
Baroness Neville-Rolfe (Con)
My Lords, Amendment 172A is in my name and that of my noble friend Lord Altrincham. It would require the Treasury to publish draft legislation to replace the Financial Ombudsman Service with a new financial adjudication service, and to create a dedicated financial services chamber within the First-tier Tribunal. This is a significant amendment but also a serious and necessary one. As noted earlier, it follows the policy announcement made by the leader of my party, Kemi Badenoch, at TheCityUK’s conference last month.
The amendment reflects a wider concern about the way in which the Financial Ombudsman has evolved, and about the need for a consumer redress system that is fast, expert, accessible and legally certain. A little bit of history: the Financial Ombudsman Service was created to provide a low-cost and informal alternative to the courts. That purpose remains important. Consumers and SMEs need an effective way of resolving disputes with financial firms. Going directly to court can be expensive, intimidating and slow. There must, of course, be a route to redress that is accessible and free to use.
However, the FOS has moved far beyond a simple dispute-resolution function. It now operates in many respects as a quasi-regulator. Its decisions can set expectations for firms, shape market behaviour and influence the way in which FCA rules are understood. Yet it does not receive the same scrutiny as regulators such as the FCA, nor does it produce binding legal precedent in the way that a court or tribunal would. That creates a serious problem of legal uncertainty.
At the heart of this issue is the “fair and reasonable” test. The ombudsman is required to decide complaints, not simply according to law, but according to what it considers fair and reasonable in all the circumstances. That gives the FOS a broad discretion. It means that firms can comply with the law, the FCA rulebook and their contractual obligations but still be found against on the basis that the ombudsman takes a different view of what is fair and reasonable. That is not a stable foundation for a predictable regulatory system and that has been recognised, I am glad to say, by the Government but they are not going far enough.
Courts have confirmed that the FOS must take account of the relevant law but is free to depart from it. Firms do not know whether compliance with the FCA’s rules will be enough. They do not know whether the FOS will go further than those rules or whether an individual determination will be treated as an indication of wider expectations. That uncertainly drives gold-plating and overcompliance.
One example that has been raised with us concerns packaged bank accounts and the consumer duty. The concern is that the FOS may take the view that providers should look at whether a customer has used any of the benefits of a packaged bank account in the previous year and, if not, prompt them that this might not be the right account for them. That goes far beyond current FCA guidance.
The wider point is that if the FCA believes that its rules need to change, it should amend them prospectively. If Parliament believes that the statutory framework needs to change, it should legislate. We should not have a system in which major changes in practical standards emerge through a redress body applying a broad fairness jurisdiction.
There is also a serious performance issue, which we have touched on before. The FOS is under significant strain. The backlog has become very large and timeliness targets have been missed. The FOS is now being used as an instrument of mass redress when it was not designed to operate as a quasi-court, a quasi-regulator and a quasi-mass claims mechanism.
Our proposal is to reform the architecture. The financial adjudication service would retain the benefits of a specialist and accessible adjudication system. It would be designed to provide speed, expertise and high settlement rates. Consumers and SMEs would continue to have a route to redress without the cost and complexity of ordinary litigation. The key difference is that decisions would be made according to law. The “fair and reasonable” test would be removed. The new service would apply statute, FCA rules, contractual obligations and legal principles. Where the law is unclear, that uncertainty should be resolved through proper legal determination, not discretionary case-by-case judgment.
Where a dispute required appeal or authoritative determination, it would go to a dedicated financial services chamber of the First-tier Tribunal. That would create binding precedent. It would fill the gap that currently exists between the FOS and the courts, where the only meaningful challenge to an FOS decision is judicial review. Judicial review is not a proper merits appeal. It requires firms to show that the decision was not merely wrong but unlawful or irrational. In practice, this means that FOS decisions are rarely challenged.
A tribunal system would be different. It would allow principles to be determined clearly, openly and according to law. Over time, that would create a body of precedent that would help firms, consumers, advisers and regulators to understand what the rules mean in practice.
That is the point of our amendment. It is not about removing redress but about making redress clearer, faster, more expert and more legally certain. Nor is it about weakening consumer protection. Consumers benefit from certainty too. They benefit when firms understand their obligations, when decisions are consistent, when disputes are resolved quickly and when similar cases are treated in similar ways. This amendment therefore asks the Government to publish draft legislation for a new model. It would not require every operational detail to be settled in the Bill today. It asks the Treasury to come forward with the legislative architecture needed to move from an ombudsman model based on broad discretion to an adjudication and tribunal model based on law.
The purpose of the amendment is to begin a serious conversation about the future architecture of financial redress. We need a system that is accessible for consumers, fair to SMEs, predictable for firms and capable of generating clarity over time. The current model sadly no longer does that. It is too uncertain and discretionary. A financial adjudication service, backed by a dedicated financial services chamber of the First-tier Tribunal, would preserve access to redress while restoring legal certainty. That is the balance that we should seek to strike. I beg to move.
Baroness Kramer (LD)
I have one question for the noble Baroness, as my noble friend Lord Sharkey will speak for us on this. What will the cost be to the individual of going to the tribunal system? I am conscious that an individual needs to raise between £40,000 and £50,000 to get to preliminary hearing at the employment tribunal. Is that the kind of number that she has in mind?
Lord Massey of Hampstead (Con)
I support this amendment and just raise the point of the First-tier Tribunal. I have experience of dealing with the FOS as a firm. At the moment, if you want to appeal the decision of the FOS, you have to go to judicial review. Therefore, whatever the cost of this First-tier Tribunal, it would be very substantially less than going through a process of judicial review, which firms are reluctant to go through, as noble Lords can imagine, because of its cumbersome nature.
Baroness Lawlor (Con)
Can I ask the noble Lord to clarify? Judicial review can determine a matter only if there is a matter of law involved, not a matter of adjudication; is that right?
Lord Sharkey (LD)
My Lords, as the noble Baroness, Lady Neville-Rolfe, remarked earlier in our Committee discussions, we often agree about things, but not, I am afraid, about this amendment. There are three reasons for that: first, the amendment is not necessary; secondly, it probably would not work, although its lack of any real detail makes it quite hard to tell; and, thirdly, it would significantly bypass parliamentary scrutiny mechanisms. For example, proposed new subsection (1)(c) says that the determination of complaints will
“be determined by reference to such statutory requirements as may be specified”,
without actually specifying them. This does not make for proper scrutiny.
How complaints are determined is absolutely critical in how redress is obtained. The amendment tells us nothing about how that would be done, or on what criteria judgments would be made. Proposed new subsection (1)(g) contains what looks suspiciously like a Henry VIII power. None of these provisions is really necessary, and nor is the amendment as a whole. That is because there does not appear to be a convincing evidence base for the radical root-and-branch reform that abolishing the FOS would bring about. The nearest we have to evidence is in the assertion by the Minister that:
“The Government’s review found that, in a small but significant minority of cases, the FOS has acted as a quasi-regulator”.—[Official Report, 22/6/26; col. GC 260.]
That is all the government explanation there is for the proposed radical reform and, by extension, for the amendment before us.
I have repeatedly asked the Minister for more detail; I asked at Second Reading, and I asked again on the first day in Committee. I have had no response to what are essentially simple questions. How many cases are small? How was their significance assessed? How is the FOS, in this small number of cases, acting as a quasi-regulator? What we have currently is an assertion, but it certainly is not evidence. When he speaks, can the Minister tell the Committee what “small” means in this context? How many and what kind of cases were involved and how did they come to be characterised as significant? As for HMT’s rather bland consultation report, the frequent use of the phrase “broadly speaking” does not inspire a lot of confidence about the strength of its case.
The amendment before us is essentially skeletal and removes the complaints procedure to a wholly different legal arena. Given the grossly overstressed nature of our justice system, it is very hard to see any improvements being located there. The FOS is meant to be, and is, a quick, simple alternative to costly court processes for consumers. There is no hard evidence to support the proposals made in this amendment and, indeed, no clear sense of what kind of redress system and what criteria for determination are envisaged.
Last July, the FCA and the FOS signed a memorandum of understanding. Article 21(b) of the memorandum says that the two parties will
“seek to achieve a complementary and consistent approach, so far as that is consistent with their independent roles by consulting each other at an early stage (including on the interpretation of regulatory requirements where they are relevant to the resolution of disputes)”.
Article 24(c) says:
“For the Financial Ombudsman Service: seek a view from the FCA on the interpretation of its rules and how redress could potentially be assessed, as early as possible in advance of issuing a final determination, and provide the FCA with any relevant information and draft determinations it can share, to assist the FCA in formulating a view.”
The following article says that the FCA should try to respond to the FOS’ submission within 30 days.
Lord Stockwood (Lab)
My Lords, I am grateful to the noble Baroness for tabling this amendment and giving the Committee a further opportunity to discuss the FOS.
An effective ombudsman service ensures that consumers have quick and easy redress when things go wrong, improving customer confidence in, and engagement with, our financial services system. The FOS largely fulfils that vital role, and the reforms in the Bill will improve that further, ensuring that it provides a quick and informal route for resolving disputes in financial services.
The amendment would undermine this vital role entirely. We believe that replacing the FOS with a financial adjudication service alongside the new tribunal appeal structure would create a more formal, legalistic and adversarial system. That approach would move away from Parliament’s intention of providing consumers and firms with an accessible alternative to resolving disputes through the tribunal and courts system. The Government’s view is that this would not be the right outcome for consumers and firms. The Government’s reforms have been developed in response to issues identified through the review and consultation last year to stop the FOS acting like a quasi-regulator, to stop it taking the lead on mass redress events and to deliver a clearer, more consistent and predictable framework.
I thank the noble Lord for raising that issue and I apologise for not writing in answer to his question. I promise that I will get back to him as soon as we have that information to hand again.
Lord Stockwood
I do not have it to hand. My apologies, I will bring it to the noble Lord. We are confident that the changes will improve trust and confidence that the FOS acts fairly and impartially, while ensuring that decisions are closely aligned with the high standards of conduct and consumer protection set by the FCA where relevant.
The right approach is this careful, targeted reform that preserves the core strengths and benefits of the FOS model—quick, informal and accessible dispute resolution—while delivering the necessary changes to improve the overall operation of the framework. I therefore ask the noble Baroness to withdraw her amendment.
Baroness Neville-Rolfe (Con)
My Lords, I thank all noble Lords who have contributed to this debate. I also thank the Minister for his response.
I recognise the concern that replacing the Financial Ombudsman Service with a financial adjudication service could make redress more formal, more logistic or less accessible. I understand that concern, but it is not the intention of our amendment. I say this also in response to the noble Baroness, Lady Kramer. The purpose of our amendment is to retain a specialist, accessible and free-to-use route for consumers and SMEs while ensuring that decisions are made clearly, consistently and according to the law.
Clearly there will be set-up costs. However, the Treasury could advise on that because part of our proposal is to require the Treasury to look at the issue and publish draft legislation for a new model. I agree with the noble Lord, Lord Sharkey, that parliamentary scrutiny would be important. There are also other questions that he addressed that the Treasury could answer. Indeed, some of the points that he made also apply to the proposal from the Government for the FOS. Like the noble Lord, Lord Sharkey, I would very much appreciate replies on those points before we get to Report, so that we can make sure that we understand what the Government are proposing properly.
I remain concerned that the Government’s approach does not go far enough. Recalibrating the existing model may improve some aspects of the system but it does not solve the fundamental problem, as I tried to explain at length. Firms and consumers still lack a body of binding precedent that explains what the rules mean and how they will be applied. Consumers would gain from extra certainty. They benefit when firms know what is required of them, when similar cases are treated consistently, and, above all, when disputes are resolved promptly and predictably; I know that from other parts of the consumer market. A system that is unclear and overstretched does not serve consumers well.
We will consider carefully what the Minister has said and look at any follow-up material but, for now, I beg leave to withdraw my amendment.
“Review of the City of London Corporation(1) The Secretary of State must, within 12 months of the day on which this Act is passed, appoint an independent person or panel to undertake a review of the functions of the City of London Corporation in relation to regulation of financial services and markets.(2) The review must consider—(a) the arrangements relating to engagement between the City of London Corporation and the FCA and PRA, and(b) the extent to which the City of London Corporation contributes to the regulation of financial services and markets.(3) The reviewer must publish a report setting out their findings and recommendations no later than 18 months after appointment.(4) The Secretary of State must lay the report before Parliament and, within six months of receiving it, publish a response setting out what steps the Government intends to take in response to the recommendations.”
Baroness Bennett of Manor Castle (GP)
My Lords, this amendment would provide for a review of the City of London Corporation with regard to the regulation of financial services and markets. At Second Reading, I referenced my intention to address this issue—here it is.
In the interests of transparency, I note that my interest in the City of London Corporation extends beyond that. Noble Lords who read the Politico email newsletter may have noted that it has reported that I am working with the All-Party Parliamentary Group on Investment Fraud and Fairer Financial Services on a survey of people’s views of the City of London Corporation, including whether it should be retained as it is, reformed or abolished. That extends beyond the regulation of financial services and markets as covered by the Bill.
I also note that the survey’s existence has led to me being contacted by a significant number of both city residents who are unhappy with the way in which the corporation fulfils its local government-type functions and organisations that receive funding from it and are concerned about the way in which things are done. Those organisations are most keen that what I say does not identify them in any way, for fear of reprisals—I suggest that that is disturbing and telling in itself—but significant elements of the corporation’s operation not being covered by the freedom of information legislation makes it difficult to uncover exactly what is going on.
The survey and my expression of my personal views on the subject have sometimes been confused, as in a letter sent on 1 July by the corporation’s policy chairman, town clerk and chief executive to members of the APPG, including me. The letter seemed to be unable to distinguish between the questions in the survey and comments that I have personally made about the corporation. As the letter from the corporation notes, my views on its existence are well known. Indeed, when I was elected as leader of the Green Party of England and Wales in 2012, the city diary in the Evening Standard noted my calls for its abolition; that was the only record of the election result in that newspaper.
However, the letter of 1 July from the corporation contains powerful arguments for my amendment, which calls for an independent person or panel to be appointed by the Secretary of State to undertake a review of the functions of the City of London Corporation in relation to regulation of financial services and markets. The letter refers to the corporation’s place
“in the delivery of strategic, financial and professional services initiatives”.
It says:
“Mayors have helped to catalyse major initiatives such as the Mansion House Compact and Accord”.
As one industry commentator has noted, in seeking to channel pension fund capital into growth assets,
“private equity, infrastructure, private credit and venture capital are now firmly on the radar”
of pension funds. These are all sectors where we know that benefits are more likely to flow into the financial sector than to investors.
The corporation’s letter also points to its role in the Office for Investment: Financial Services, which describes itself on its website as providing
“international fintech firms with a single front door for regulatory assistance and wider business support”.
I direct noble Lords who want to explore the issues around this so-called foreign direct investment further to an excellent book by Angus Hanton, Vassal State: How America Runs Britain. It quotes a late Member of your Lordships’ House, Lord Myners, who said in 2021:
“Britain is open for business in the same way that a car boot sale is open for business”.
It is now even more open for business, with the Financial Times recently reporting that the value of acquisition by foreign buyers is now up to £128 billion this year—more than triple the level in the same period in 2025, and that was before the apparently pending sale of easyJet to yet another US private equity firm. That the last rotten borough in the country—finally otherwise removed by the Reform Act 1867, with non-residential votes removed from other council areas in 1969—operating under rules that would be unacceptable anywhere else in public life and that shield it from scrutiny, skewing democratic representation in favour of business, overwhelmingly financial businesses, can exercise privileged influence over our laws and their administration over regulation is surely something that should be examined, particularly over financial laws that, as we discovered in 2007-08, are so essential to our security.
That is all that this amendment asks for: to conduct an independent review of the corporation’s impact on financial regulations and markets. Surely, if the corporation is so confident about the claimed positive impacts that it likes to trumpet, it and the Government could have no objection to a review. Given the problem we have with trust in our politics and financial system, more transparency and consideration would surely be a good thing. I note a recent Public First survey that found that 40% of people think that financial markets have too much influence over decisions made by elected Governments. I also note—the Minister might like to consider this—that the same survey found that 52% agreed that the UK should prioritise financial stability and consumer protections, even if this limits investment and economic growth. When asked about the potential changes to the UK’s post-2008 bank ring-fencing regime, 64% agreed that financial stability should be the priority.
Questioning the City’s place is not, after all, new. The Royal Commission on the Amalgamation of the City and County of London recommended its abolition in 1894. It was Labour Party policy to abolish today’s City of London Corporation until Tony Blair took over the party, and he instead chose to give even greater weighting to the business votes against those of residents.
Defenders of the City of London Corporation tend to reach for the language of heritage, as does the letter of 1 July: the corporation is ancient. It is part of the fabric of London’s history. Reform would be complicated. These are not effective arguments against examination. Age alone does not confer legitimacy—just look at the UK constitution. The corporation’s structures were not designed for a modern democracy. They pre-date it and have been carefully preserved by those who benefit from them.
The corporation is not the financial sector, but it is its lobbyist, its defender and a power base enjoyed by no other part of our society. Its existence cannot be separated from the fact that the financial industry is in a privileged position in our society. Giant financial corporations do not need any further boost to their power; they have more than enough already. No other major financial centre has anything resembling the City of London Corporation—not New York, Tokyo, Frankfurt or Singapore. Surely we should be examining the impact of this singular entity on the state of the UK. I beg to move.
Baroness Bi (Lab)
My Lords, I remind the Committee of my interest as the chair of Norton Rose Fulbright. Although my firm was located in the City of London for more than 200 years, from its founding in 1794, we are no longer within the jurisdiction of the corporation, having ventured south of the river a few years ago. My current office at More London gives me what is probably the best view of the Tower of London, which, notwithstanding the imminent arrival of the Bayeux tapestry, has been a daily reminder that not even the conqueror had the poor sense to interfere with the freedoms of the City, which worked extremely well, and we should be careful before we consider doing so. I oppose this amendment, which contemplates a two and a half year process after Royal Assent, with the attendant costs and distraction for the Treasury that such a review would entail. We should therefore ask what the review is actually meant to uncover.
Lord Pitt-Watson (Lab)
My Lords, the noble Baroness, Lady Bennett, has suggested that we inquire into the City of London’s role with the regulators and regulation. My noble friend Lady Bi summed it up well: there is no direct role there. But I wonder whether we could send a message to the City of London, perhaps a little more collegiate and, as a result, more effective. We all recognise that the role and constitution of the City corporation is quite difficult to defend from 21st-century principles. Why does one square mile of the country have these unique privileges? It has billions of pounds worth of property and investment, and the Lord Mayor of London has the status of a Cabinet Minister, apparently, when he or she goes on trips abroad. Why is it charged with the powers of a local authority but also with promoting Britain’s financial services industry? I point out that your Lordships’ House bears witness to the fact that historic institutions can—and often do—do good and important work. I wonder whether, harking back to the traditions of the City of London, there is one that we could help revive, in the spirit of what the noble Baroness, Lady Bennett, may want to happen.
Historically, the City of London was responsible for the good conduct of the trades in the city, ensuring that the goods produced could be trusted to be of high quality. Indeed, I believe that Elizabeth I even had the goldsmiths of London check that the coinage that the Mint was producing was of a high enough standard, because the goldsmiths were more professional than the people at the Royal Mint.
Over time, that role of policing good conduct has passed to professional bodies and then to regulators, but we often forget that it is the professionalism that we need. Regulators cannot replace professionalism, for which so many people from Britain and around the world come to use Britain’s financial services industry. Professionals, whether individuals or institutions, are a disciplined group possessing special knowledge and skills in a widely recognised body of learning. They are prepared to apply this knowledge and exercise these skills in the interests of others. That professionalism, both for individuals and for institutions, harks back to that old role of the City of London: not regulation but professionalism. It is and should be the core and unique selling point of the UK financial services industry. I sense that that is what we in this Room would like to achieve.
The City of London promotes financial services, but surely, if it does that, it must be sure that the services it promotes—maybe not every financial service—serve a purpose in the world. There is still enormous room for the City to identify and help to encourage good practice, not just to promote financial services generally but to ensure that all the services it promotes deliver benefit to the customer and the world. That may, from time to time, involve talking to a regulator—I do not see that as a problem—but it should seek much more to ensure that professional good practice becomes a norm. The City already does some of this, but it could be so much clearer about its focus and role. There would be no better way to promote the success of financial services in Britain.
I have one last coda on this and a more immediate thought. Spokespeople from the City of London Corporation like to explain—correctly—that they represent the whole financial services industry of Britain, two-thirds of which works outside London. But those who work to promote the industry are exclusively employed in the square mile, and it is difficult to express the level of frustration that I have felt among some that the City talks the talk about employment around the country but maybe needs to walk the walk in its own practices on where people are employed. I hope that might be a constructive suggestion about how this venerable institution might serve its country better.
Baroness Dacres of Lewisham (Lab)
My Lords, I fear that Amendment 172C strays beyond the purpose of the Bill, which is concerned with improving the regulation of financial services and markets. It is not, in my view, the appropriate vehicle for reopening broader questions about the role and governance of the City of London Corporation. This amendment takes us into a rather different debate—it asks us to examine the role and function of the City of London Corporation—whereas the purpose of the Bill is to strengthen the UK’s financial regulatory framework, ensuring that it is effective, proportionate and capable of supporting growth, investment and innovation, while maintaining high standards. Our focus should remain on achieving those objectives.
It is important to be clear about the respective roles of the organisations involved. The City of London Corporation is not a financial regulator. It does not authorise firms, supervise markets or enforce regulatory rules. Those responsibilities rest with the Financial Conduct Authority, the Prudential Regulation Authority and the Bank of England, all of which are independently accountable to Parliament.
The City corporation performs a different, but none the less valuable, function. It acts as a convenor of expertise, an advocate for one of the United Kingdom’s most important industries and a champion of the UK as a global financial centre. Through its international engagement, it promotes inward investment, supports exports of financial and professional services, and works with industry to help maintain the UK’s reputation for high standards and innovation.
I question whether the amendment has demonstrated that there is a genuine accountability gap requiring statutory review. Before Parliament creates a new review mechanism, we should be satisfied that there is evidence of a problem that the existing arrangements have failed to address. I have not yet heard that case made. The City corporation is already subject to established governance and oversight arrangements, while the regulators are independently accountable to Parliament.
At a time when the Government are rightly seeking to promote economic growth and strengthen the United Kingdom’s competitiveness as a leading international financial centre, I am concerned that this amendment risks creating uncertainty without identifying a clear public benefit. Our efforts should be directed towards ensuring that regulators can carry out their duties effectively, while organisations such as the City of London Corporation continue to play their distinct role in supporting the wider success of the UK’s financial and professional services. For those reasons, I believe our attention should remain firmly on the purpose of the Bill: strengthening the United Kingdom’s financial regulatory framework. I cannot support Amendment 172C.
Lord Altrincham (Con)
My Lords, I shall speak briefly to Amendment 172C in the name of the noble Baroness, Lady Bennett of Manor Castle, on the promotional role of the corporation and the survey views of local residents. Let me also say how interesting the speeches of the noble Baronesses, Lady Bi and Lady Dacres of Lewisham, and the noble Lord, Lord Pitt-Watson, were on this.
I have some concerns about whether this amendment is necessary, proportionate or properly directed at the issues before us in this Bill. If the concern is about the regulation of financial services and markets, Parliament should scrutinise the regulators and the Government. Indeed, much of our debate on this Bill has been precisely about that: how we ensure that the regulators are accountable, transparent, proportionate and properly focused on growth and competitiveness.
The City of London Corporation, however, is not a financial services regulator and does not set prudential rules. I am therefore not persuaded that a statutory review of the City of London Corporation’s role is the right mechanism in this Bill. At a time when we are trying to strengthen the competitiveness of the United Kingdom, attract global capital, support innovation and ensure that financial services remain one of our national strengths, we should be cautious before creating unnecessary uncertainty around one of the institutions that help to promote that sector internationally. I think the noble Baroness would recognise that as one of its roles.
There is also a question of evidence. Has there been a regulatory failure caused by the City corporation? Has there been a financial stability concern arising from its role? Has there been evidence that its activities have distorted the regulatory process in a way that existing scrutiny mechanisms cannot address? Without that evidence, I am cautious about launching a statutory review through the Bill.
Nor do I think that the Bill is the right vehicle for a wider constitutional debate about the governance of the City of London Corporation. This Bill is about financial services regulation, market infrastructure, consumer protection, competitiveness and the regulatory framework. The governance of the corporation is a broader issue, and one that would need to be considered separately if Parliament wished to do so. That is not to say that scrutiny is unimportant, but we should focus scrutiny where regulatory power actually sits. In this Bill, that means the FCA, the PRA, the Bank of England and the Treasury. Those are the bodies whose powers are being expanded or adjusted, and those are the bodies that Parliament should be most concerned to hold to account. For those reasons, I do not support this amendment.
Lord Stockwood (Lab)
My Lords, I thank the noble Baroness, Lady Bennett of Manor Castle, for her amendment. I have listened carefully to the arguments presented both in support and in opposition. I want to put on record my respect for the expertise of the City of London Corporation. I have worked positively with the corporation over the last year while I have been in office. It is an institution that represents the interests of the financial and professional services sector and, in that role, it contributes hugely to our mission of strengthening our financial services sector and ensuring that it delivers for people across the country.
It participates in initiatives designed to promote the UK as a place to do business and attract vital investment into the UK that will provide good jobs and pay for vital public services. I am aware that the noble Baroness is keen to revisit the structure of the corporation. However, I can assure her that, as my noble friends Lady Bi and Lady Dacres have said, the corporation has no unique role or special access in designing or influencing the development of financial regulation. The Government engage with a wide range of interested stakeholders in the development of financial services legislation. This includes the regulators, firms, trade associations and consumer groups. The City of London Corporation can and does participate in that engagement on the same basis as other interested parties.
Baroness Bennett of Manor Castle (GP)
My Lords, I thank the Minister for his response and everyone who has taken part in this interesting and informative debate. We have engaged with some interesting and broad issues. I particularly commend the noble Lord, Lord Pitt-Watson, who gave us some interesting suggestions and proposals that I am certainly going to go away and think about. I do not think that continuing with the history is necessarily the right thing to do, but that does not mean we cannot learn from history. The idea of the City of London having responsibility for its tradespeople has an interesting comparison, which makes me wonder: had we held the City responsible for the financial crash of 2007-08, and if the City had paid some of the large expenses that were instead, by austerity, put on the shoulders of the poor, the disabled and the young around the country, how different things might have been.
I note that the noble Lord also said that the City should be responsible for seeing that these services should deliver benefit to the world. That is an interesting proposal that I will take away. In responding to what the Minister and the noble Baroness, Lady Dacres, said, questioning what influence the City has over the FCA and the PRA, I will refer to the contribution from the noble Baroness, Lady Bi—
Lord in Waiting/Government Whip (Lord Wilson of Sedgefield) (Lab)
The noble Baroness was not here at the start of this sitting, which started earlier this afternoon, almost five hours ago. I point out that, as far as the Companion is concerned, when noble Lords are withdrawing amendments, they must be short and not rehash the whole argument or make responses to all the points made during the debate. If the noble Baroness would move towards withdrawing the amendment, that would be good.
Baroness Bennett of Manor Castle (GP)
I thank the noble Lord, the Whip. I am not rehashing; I am engaging with the contributions.
Lord Wilson of Sedgefield (Lab)
No. Paragraph 8.82 of the Companion says that when withdrawing amendments, noble Lords should be short in doing so and should not engage, because they will have done that during the debate.
Baroness Bennett of Manor Castle (GP)
I was speaking for about a minute and a half before the noble Lord interrupted me. I think three minutes might count as short, and I have two short points to make. The first, as I was saying before I was interrupted, is that the noble Baroness, Lady Bi, said that the City—
Lord True (Con)
My Lords, I apologise to the noble Baroness, but I support what was said from the Government Front Bench. This matter was discussed again in our Procedure Committee this morning: arguments that have been put are understood by a committee or by the House, and there is often merit in moving on relatively quickly, so, from the Opposition Front Bench, I support what was said.
Baroness Bennett of Manor Castle (GP)
I note the noble Lord’s contribution. As I said, I would have finished by now had I not been interrupted multiple times. The simple point I want to make is that the noble Baroness, Lady Bi, said that the City engages constructively with regulators. She also said that it uses its convening power to promote the sector. I would argue that, put together, those two things make the case for this amendment.
However, I was going to be brief; I would otherwise have finished a minute ago. We have had an interesting discussion. I will think about where this might go on Report but, in the meantime, I beg leave to withdraw the amendment.
Baroness Neville-Rolfe
“Review of regulatory causes of debanking(1) Within 12 months of the day on which this Act is passed, the Treasury must lay before Parliament a report reviewing the extent to which individuals, businesses, charities and other organisations have been refused access to banking services, had banking services terminated, or had the use of banking services materially restricted as a result of regulatory requirements, regulatory uncertainty or risk aversion arising from the operation of the regulatory framework.(2) A report under subsection (1) must consider, in particular—(a) the scale and nature of debanking in the United Kingdom;(b) the categories of individuals, businesses, charities and other organisations most affected by debanking;(c) the sectors, industries or lawful activities most affected by debanking;(d) the extent to which debanking decisions are attributable, wholly or partly, to—(i) anti-money laundering requirements,(ii) counter-terrorist financing requirements,(iii) sanctions compliance,(iv) financial crime prevention requirements,(v) regulatory reporting, monitoring or due diligence obligations,(vi) regulatory guidance or supervisory expectations,(vii) fear of regulatory enforcement or supervisory criticism,(viii) uncertainty or confusion as to the proper interpretation of regulatory requirements, or(ix) the cumulative cost or burden of regulatory compliance.(3) In preparing the report under subsection (1), the Treasury must seek evidence from, and consult—(a) the Financial Conduct Authority;(b) the Prudential Regulation Authority;(c) the Financial Ombudsman;(d) relevant financial institutions;(e) persons who have been refused banking services, had banking services terminated, or had such services materially restricted;(f) politically exposed persons, their family members and known close associates;(g) persons appearing to the Treasury to represent the interests of politically exposed persons, their family members and known close associates;(h) persons representing firms operating in the defence sector or sectors connected with national security;(i) persons representing charities, voluntary organisations and civil society organisations;(j) persons representing small and medium-sized enterprises, start-ups and new market entrants;(k) persons with expertise in anti-money laundering, counter-terrorist financing, sanctions compliance and financial crime regulation;(l) such other persons as the Treasury considers appropriate.(4) The Treasury must publish the report.”Member’s explanatory statement
This new clause would require the Treasury to review whether debanking has occurred as a result of excessive regulation, regulatory uncertainty, confusion, supervisory expectations, enforcement risk or risk aversion arising from the operation of the regulatory framework. The review would identify the sectors and customer groups most affected, including politically exposed persons and their families, defence firms, charities, SMEs and other affected persons.
Baroness Neville-Rolfe (Con)
My Lords, in moving this amendment in my name and that of my noble friend Lord Altrincham, I shall speak also to Amendments 172E and 172F.
Amendment 172D probes on debanking. It would require the Treasury to carry out a review into whether individuals, businesses and organisations are being denied, having restricted access or losing access to banking services as a result of the way in which the UK’s financial regulatory framework operates. The core issue is this: the regulatory environment we have at the moment, and the way in which it is constituted, can mean that people, firms and organisations are denied access to banking services. Without access to a bank account, payment services or basic financial infrastructure, people and businesses are severely constrained in their ability to trade, to invest, to employ, to grow and to participate fully in the economy. The amendment asks the Treasury to examine whether debanking is taking place because of excessive regulation, uncertainty, regulatory confusion, supervisory expectations, enforcement risk or general risk aversion.
We have heard concerns from a number of sectors that they are, in effect, playing it safe. They are not necessarily closing accounts because there is a clear requirement to do so; they are doing so because the regulatory environment has become so complex and uncertain that the safest option is to avoid certain customers and sectors altogether. This matters for SMEs. A small business that cannot obtain or retain banking services may be unable to trade properly, receive payments, manage cash flow or invest. It matters for charities, particularly those operating internationally or in complex environments. It matters for defence firms, which may face additional scrutiny because of export controls, sanction concerns or reputational sensitivity, even where their activities are lawful and important to national security. It matters for politically exposed persons and their families; I am sure that many noble Lords will have experienced this. As we have discussed in relation to digital assets, it also matters for innovative firms that are trying to build new products and services but cannot access the banking or payment infrastructure they need.
My amendment therefore underpins our broader calls throughout the Bill for simplification, streamlining and clarity. I appreciate that the regulators have done some work on this, such as a new requirement to provide notice before closing an account and the recent FCA reviews of account closures. The amendment therefore asks the Government to look at how the regulatory landscape interacts with this work, as well as what other steps can be taken to address this problem more effectively.
I turn to Amendments 172E and 172F, which are probing amendments on the protection of sensitive commercial information and the ending of the compensation cap for senior managers under the Employment Rights Act. They were born of a conversation with my noble friend Lord Howard of Rising; I thank him for his insight. The financial services sector depends heavily on confidential and proprietary information. Firms hold business plans, client data, pricing information, trading strategies, algorithms, models, methodologies, internal systems and processes. Such information, as I know well from my business career, represents a major part of a firm’s competitive advantage. These amendments are designed to probe the Government’s position on the protection of that information, including the continued ability of employers in the financial services sector to use non-compete clauses, which can be an important mechanism for protecting commercially sensitive information.
I know that the Government have issued a working paper on options for the reform of these clauses in employment contracts. However, I want today to explain that their use in financial institutions and firms is crucial. I would welcome clarification from the Minister that no provision in the Employment Rights Act will prevent employers in the financial services sector using appropriate and proportionate non-compete clauses. It is important not only for individual firms but for the integrity and competitiveness of the UK financial services market. We have heard that the change could lead some firms to close up in London.
Finally, I turn to Amendment 172F, which is designed to probe the Government on the impact of changes to the rules for senior managers and, in particular, the wider implications of the removal of the compensation cap. The Bill reforms the statutory regime governing the recruitment, approval, mobility and accountability of people working at authorised firms. The Government have, in their Explanatory Notes, identified slow senior hiring and internal mobility as barriers to operational agility.
In the Government’s own analysis of the Employment Rights Act, they accept that high-paying sectors may be affected by the removal of the compensation cap. However, some in the financial services sector have told us that the removal could affect decisions on the future of UK operations because of the risk of enormous million-pound or million-dollar payouts to those who have highly paid roles. Indeed, an article in the Financial Times last month reported that firms were seeking urgent legal advice on how to prepare for the changes. This amendment therefore raises a financial services competitiveness and regulatory agility issue that is properly connected to the Bill; we believe that it is vital that the Government consider this issue as a part of financial services policy.
I would be grateful if the Minister could address three points. First, what assessment have the Government made of the sectors and groups most affected by the loss of access to banking services? Would a review not be useful? This amendment looks backwards. Secondly, can the Minister clarify the Government’s position on the continued use of proportionate non-compete clauses in financial services, where they are necessary to protect commercially sensitive information? Thirdly, will the Government assess the effect of changes to the rules on the employment of highly paid senior managers, and consider changing the rules in the interests of growth and competitiveness? Those are the rules that relate to compensation. Both amendments look forward, and the Minister should be concerned. I beg to move.
Lord Howard of Rising (Con)
My Lords, I support Amendment 172E in the name of my noble friend Lady Neville-Rolfe. She expressed her support for it far more ably than I ever could, but I want to say that it would be unrealistic to think that sophisticated financial businesses with complex computer systems and programmes can continue to operate in this country if they cannot protect the secrecy of systems oh whose development they may have spent millions of pounds or dollars.
Whether this is carried out by non-compete clauses, which I imagine will be the easiest way to do it, or some other method, what must be achieved is the ability of financial companies to preserve the security of their systems—that is, if we wish these businesses to remain in this country and not go somewhere else where they will get security for what, as I say, may have cost them many millions to develop. In that context, they just do things that we do not know about. For example, the method of communication in the United States now is to bounce radio waves off the ionosphere. They do not want to come here and show everybody how to do it. So I urge the Minister to pay good attention to what my noble friend has said.
Baroness Lawlor (Con)
My Lords, I support my noble friend Lady Neville-Rolfe’s Amendment 172D. The problem of debanking has reached a serious level in the UK, with roughly half a million people reported to be affected last year alone. I welcome and recognise that the Government have moved on this and that the new rules require banks to give 90 days’ notice and provide a clear explanation. I also welcome the fact that there is a right to challenge unresolved disputes via the ombudsman.
Lord Stockwood (Lab)
My Lords, this is the final group before Committee stage is completed. I am grateful for the discussions so far, not just on this group of amendments but on each of the more than 220 amendments we have discussed over the past three weeks. I appreciate the insights and wisdom shared by everyone in the six sessions. As someone relatively new to the House, I come away from this stage of the Bill’s journey with renewed faith and belief in the importance of scrutiny in the House of Lords. I thank noble Lords.
These amendments propose that the Treasury conducts reviews into a range of important issues in financial services. I will first speak to Amendment 172D, which would require HM Treasury to undertake a review into the scale and nature of debanking in the UK. The Government recognise the serious impact the loss of access to those services can have, but there is already a significant amount of work under way. Parliament has legislated to ensure that domestic politically exposed persons and their family members and close associates are treated in a more proportionate manner under the anti-money laundering framework. The FCA has also undertaken significant work on account access, account closures and debanking as required by Parliament. The FCA has collected evidence to understand where account closures and refusals are occurring and why, and has undertaken further work better to understand the reasons behind account closures and refusals.
I am not sure that regulation is a principal driver of debanking. Decisions to refuse, restrict or terminate banking services may arise for a range of reasons, including commercial decisions, firms’ assessments of risk, legal obligations and financial crime concerns. The FCA has emphasised that when accounts are closed or denied, providers must adhere to their consumer duty obligations. They include ensuring that all communication with customers is clear and easy to understand. The Government have also legislated to address concerns around account closures. This includes ensuring that providers give customers at least 90 days’ instead of two months’ notice before terminating payment services and provide a sufficiently detailed explanation of their decision and signpost appropriate complaints routes.
The Government have also taken steps to reduce the impact of anti-money laundering rules on legitimate customers through recent changes to the money laundering regulations. This included measures to make customer due diligence requirements more proportionate and effective while maintaining robust protections against economic crime.
Amendment 172E would require the Treasury to conduct a review into whether financial services firms have adequate means to protect commercially sensitive information. Confidentiality and the protection of commercially sensitive information is vital to the strength of the UK’s financial sector, and the Government take the importance of this matter very seriously. Without robust protection of commercially sensitive information, investors lose confidence, consumers are at risk and the reputation of the sector is degraded.
The FCA and the PRA have rules and expectations that address the protection of commercially sensitive information by firms. However, I am afraid that I am not an expert in the Employment Rights Act and the contracts that were mentioned are not within the scope of the Bill. While I am aware that I am giving Charles Dickens a run for his money in the number of letters I have suggested I will write, I will write to the noble Baroness on the Government’s position on this as well.
Amendment 172F concerns the effectiveness and operation of the senior managers regime. The Bill already introduces reforms intended to make the regime operate more proportionately, while preserving the accountability standards which are central to it. As I mentioned on Monday, the changes will help deliver the ambition of the Government and the regulators to reduce burdens from this regime by 50%; the reforms to this regime alone are expected to reduce administrative burdens on the sector by almost £600 million over the next 10 years. The detailed operation of the reformed framework will be taken forward by the regulators through their rules, subject to their statutory consultation requirements.
In those circumstances, the Government’s view is that the right course is to allow those reforms to be developed, implemented and monitored through the existing framework. The Government will also continue to engage closely with the regulators as they implement these changes, to ensure that the regime is more proportionate in its approach.
I will write on the compensation cap for senior managers, which the noble Baroness also mentioned, as this is a matter of employment law. I thank her for raising that issue. For those reasons, I ask the noble Baroness to withdraw her amendment.
Baroness Neville-Rolfe (Con)
My Lords, I thank my noble friends Lord Howard of Rising and Lady Lawlor for their support, and the Minister for his response. These amendments have raised three distinct but connected issues: problems with access to banking services, protection of commercially sensitive information, and the ability of financial services firms to recruit, retain and deploy talent in the UK under the new Employment Rights Act. I hope the Government will reflect further on these issues before Report and provide more concrete evidence on what has been happening on debanking to those who have been involved in Committee. The Minister made some encouraging remarks, but some data would be useful. I very much look forward to his letter on the points that I have raised about the impact of the Employment Rights Act.
As the last speaker, I also thank all those who have been involved in the Committee. We have completed it on time and with great good humour, in general. I look forward to Report and, for now, beg leave to withdraw my amendment.
Royal Assent
Wednesday 8th July 2026
(1 week ago)
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Unpaid Carers
(1 week ago)
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Baroness Pitkeathley
To ask His Majesty’s Government what assessment they have made of the finding in the Carers UK report The ‘tipping point’: when unpaid carers can no longer combine caring with paid employment, published on 12 May, that 47% of carers are considering reducing their working hours or leaving paid employment because of the pressures they face; and what steps they intend to take as a result.
Baroness Pitkeathley (Lab)
My Lords, I beg leave to ask the Question standing in my name on the Order Paper, and I declare an interest as vice-president of Carers UK.
The Parliamentary Under-Secretary of State, Department for Business and Trade (Lord Leong) (Lab)
My Lords, I pay tribute to the millions of unpaid carers across the UK whose compassion, sacrifice and dedication support loved ones every day and make an immeasurable contribution to our society and economy. The Government recognise the immense contribution made by unpaid carers and the pressures highlighted in the Carers UK report. We take its findings seriously. Supporting carers to remain in work is good for individuals, employers and the wider economy. That is why we have launched a public consultation reviewing employment rights for unpaid carers, including where further workplace support is needed, while ensuring that any future changes remain fair, proportionate and workable for employers.
Baroness Pitkeathley (Lab)
My Lords, I thank my noble friend for that reply. The public consultation that has been launched is very welcome. As my noble friend knows, carers want to combine paid work with caring if they can because it provides income, independence and social interaction. There is never a problem making the moral case for carers—everyone knows they are unsung heroes and heroines—but does my noble friend agree that there is a strong economic case, too? The DWP estimates that carers leaving work results in about £37 billion a year in lost productivity and increased welfare expenditure, so there are economic benefits to supporting them in any way possible, such as paid carer’s leave—as I have said, the consultation is most welcome—access to reliable social care and better support from both employers and healthcare services.
Lord Leong (Lab)
My Lords, I totally agree with my noble friend that supporting unpaid carers is both a moral and economic imperative. When experienced people are forced to leave work, we lose their skills, productivity and contribution to our economy. That is why we are reviewing employment rights for unpaid carers, including paid leave and wider workplace support. But this goes beyond employment rights. We must also consider how healthcare, social care and employers can better support carers to remain in work.
Lord Sharpe of Epsom (Con)
My Lords, the Minister is quite right that this goes beyond employment rights. The chief executive of Care England, Professor Martin Green, warned that the Government’s changes to employer national insurance contributions would leave many care organisations
“on the brink of bankruptcy”.
During the passage of the national insurance contributions Bill, His Majesty’s Official Opposition pressed the Government to exempt adult social care from these damaging provisions, but the Government rejected that exemption for no good reason. Will they now think again and exempt adult social care providers from these employer national insurance changes before more essential care provision—provision on which so many vulnerable people so desperately depend—is lost?
Lord Leong (Lab)
I hear what the noble Lord says about national insurance, but let me say this. There is a moral imperative on employers to play their part in supporting unpaid carers. There are fantastic employers up and down this country that are doing fantastic things to support carers. I shall give an example: Centrica estimates savings of £1.5 million last year in reduced absence costs alone, achieved through support measures for unpaid carers, with further savings on retention. So these measures result in improved retention, better productivity and reduced absence from work.
Lord Fox (LD)
My Lords, when I was piloting the Carer’s Leave Bill 2023 through your Lordships’ House, Centrica was one of the companies I spoke to. Centrica and other companies were already doing phenomenal work, but we all agreed that the Bill was the first step for unpaid carers. The Act has now been in force for just over two years, and data on take-up is sketchy. At best, the Minister’s department puts take-up at 29% of those eligible, but other data says just 10%. We do not have to wait for a consultation. The barriers have been researched by the Minister’s department. The first barrier is that it is unpaid by nature: that is what we hope to change. But the second is awareness, or lack of awareness, by people who might benefit. The third barrier is fear from employers. Can the Minister tell your Lordships’ House what the Government are doing in order to take away those two important barriers—for people getting what little benefit they have already—before his consultation finishes its work?
Lord Leong (Lab)
My Lords, let me be absolutely clear. There is active cross-governmental engagement on how we better support unpaid carers, because we recognise that employment cannot be considered in isolation from health and social care. My department is working with colleagues across government, including the DWP and the Department of Health and Social Care, as we consider the evidence and responses to our current consultation. We must take our time to ensure that we get this right. Our shared objective must be to help those carers who want to work to remain in employment, while ensuring that they can access the wider support that they and those they care for need.
Baroness Finlay of Llandaff (CB)
My Lords, some employers are now adhering to the principles of Hugh’s law when there is a seriously or critically ill child and those unpaid carers are particularly severely affected. Will the consultation cover the issue of children who are very seriously ill? Will the Government also consider —and I declare my interest in Cardiff University—monitoring the family-reported outcome measures of different interventions? These are put in place to support families where there are unpaid carers, and would enable us to get a better idea of what is effective and what is less so.
Lord Leong (Lab)
As the noble Baroness has said, the Casey commission is considering the long-term future of adult social care. We must let the review take its course. Alongside that, we are already reviewing employment rights for unpaid carers through a separate consultation. We are not waiting to gather any evidence, but we will consider carefully what more can be done to help carers remain in employment.
Lord Dubs (Lab)
My Lords, does my noble friend agree that there is a particular difficulty for those who have given up full-time work—indeed given up work altogether—in order to be full-time carers? They are then left in a position where they have virtually no pension and no security. When their loved one dies, they are left entirely on their own without much support.
Lord Leong (Lab)
I totally agree with my noble friend. That is why we are conducting a review and various consultations to ensure that we better support our carers up and down the country to have unpaid leave as is necessary, and also to get the care that they need to support their loved ones.
Baroness Dacres of Lewisham (Lab)
My Lords, my noble friend will know that many young carers take on significant caring responsibilities at an early age. What further action are the Government taking to identify and support young carers, so that their caring responsibilities do not limit their ability to reach their full potential in education, well-being and future opportunities?
Lord Leong (Lab)
My Lords, my noble friend is absolutely right: young carers often face unique challenges in balancing education, work and caring responsibilities. Although the consultation before us focuses principally on employment rights for unpaid carers, we recognise the importance of ensuring that younger carers receive appropriate support and opportunities to fulfil their potential.
Baroness Monckton of Dallington Forest (Con)
My Lords, does the Minister agree that parents who look after children with 24-hour needs, and who cannot get to work, need as much support as everyone else?
Lord Leong (Lab)
Absolutely. We recognise that carer’s allowance has not kept pace with the way that many carers now combine work and caring. The current earnings cliff edge can create uncertainty and unfair outcomes. That is why the Government have launched a call for evidence to modernise the benefit, including on whether payments should gradually taper as earnings rise. We have also increased the weekly earnings limit to £204. We want a system that supports carers to work, rather than one that penalises them for doing so.
Lord Mohammed of Tinsley (LD)
My Lords, given that the issue of NEETs has been looked at by His Majesty’s Government, and that they will report back on Milburn’s recommendations, will the Government please look at the possibility of providing a free bus pass for young carers, particularly given that they have sometimes had to sacrifice their education to look after their loved ones? This support from the Government might be a step up for them in seeking work, training or education.
Lord Leong (Lab)
The noble Lord makes a very interesting suggestion. I will take it back to the officials in my department and other departments too.
Safe Refugee Routes for Students
(1 week ago)
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Baroness Royall of Blaisdon
To ask His Majesty’s Government what recent progress they have made towards developing safe refugee routes for students from Afghanistan, Cameroon, Myanmar and Sudan.
The Minister of State, Home Office (Lord Hanson of Flint) (Lab)
My Lords, the Government committed to three new safe and legal routes in the Restoring Order and Control Statement. The Home Secretary announced that the refugee study route will be open this autumn, with arrivals in autumn 2027. Officials are working closely with stakeholders to design the new routes to ensure that they are both safe and controlled, and further information will be set out in due course.
Baroness Royall of Blaisdon (Lab)
My Lords, I am delighted to hear that there is progress and that the Government are determined that the scheme should be in operation by the next academic year. However, I ask my noble friend for his assurance that those students who might be able to take up the offer being provided by the Government, and who meet the criteria and have scholarships, will know that they will be able to take up the places by 2027. Further, is the Home Office consulting with UUK to ensure that universities are not overburdened by whatever scheme is put in place?
Lord Hanson of Flint (Lab)
We intend to set out details of the scheme very shortly, which will, hopefully, provide clarity on what the Government are intending to do with the safe and legal routes. As my noble friend said, it is also important that the universities themselves are involved in, and at least have some discussion with the Government on, the implementation and design of the scheme. I will feed that back to colleagues who are dealing with this directly.
Lord German (LD)
My Lords, I declare an interest that I am supported by RAMP. What advice would the Minister give to Afra Elmahdi, a cancer specialist from war-torn Sudan who has secured a master’s place to do cancer science research at Oxford University? That post, that job, that relationship, has ended. What message would the Minister send to her? She seeks to be able to diagnose cancer more swiftly in a country that is torn apart by civil war.
Lord Hanson of Flint (Lab)
As I as have said, the Government are examining safe and legal routes. However, at the moment, we have temporarily suspended the issuing of visas to those from Afghanistan, Cameroon, Myanmar and Sudan. We have done that because there has been an increase of over 470% from 2021 levels, and over a third of asylum seekers have previously entered the UK on a visa. We are trying to put safe and legal routes in place. We will look at that scheme, and the noble Lord and others will be able to facilitate that scheme, with effect from autumn next year.
Lord Davies of Gower (Con)
My Lords, the Government have recently announced that they will allow communities to sponsor refugees on new asylum routes. Given that we had 93,525 people claiming asylum in the United Kingdom in the year ending March 2026, can the Minister tell the House how the Government can be contemplating increasing this number even further?
Lord Hanson of Flint (Lab)
If the noble Lord does not want the Government to meet their obligations on asylum, he should say so. The Government are about trying to meet our international obligations, which we are trying to ensure that we do through this scheme, as the Home Secretary announced in a press conference on 26 June, by giving refugees study and named sponsorship routes, which will be open to applications from lead sponsors in the autumn. That will put real guidelines around asylum applications. It is important that people have sponsorship and places to go, including at university, but it is also important that we meet our international obligations and do not have the abuse of the system that, sadly—dare I say it?—occurred under the Government opposite.
Baroness Gohir (CB)
My Lords, first the Taliban prevented Afghan females studying and now the Home Office are preventing them studying. Why have the Government not given them an exemption, given that Afghan female students make up a tiny proportion of all international students, to allow them to study in this country?
Lord Hanson of Flint (Lab)
As I have said, the Government have decided to put a brake on all applications from nationals of Afghanistan, Cameroon, Myanmar and Sudan. The brake is not intended to be permanent; it will be lifted when the Government consider it appropriate to do so. In the meantime, we are trying to put in place proper safe and legal routes for individuals such as those mentioned by the noble Baroness to be able to come to the United Kingdom with sponsorship in a proper and effective way. That brake is temporary, but it has been put in place for an important reason that I have to report to the House today.
Lord Isaac (Lab)
My Lords, I reinforce the point about the devastating impact on refugee students of the introduction of the visa brake. I am really pleased to hear the assurances from my noble friend the Minister that the brake is only temporary and that there will now be an opportunity for sponsorship from universities. I declare an interest as provost of Worcester College, Oxford. Can my noble friend give an assurance that clever refugee students from Afghanistan, Myanmar, Sudan and Cameroon will be able to come to the UK, study and return to their countries as future leaders?
Lord Hanson of Flint (Lab)
That is really important. My noble friend will know that one of the great things the UK has is soft power through the university sector. People will go back to their countries from United Kingdom universities to be business and political leaders. The brake is in place now, but we are looking at how we design the scheme to ensure that we have safe and legal routes from next year for the type of sponsorship that my noble friend mentions. Further discussion will be undertaken by the Home Secretary very shortly, and I would welcome any contribution he wants to make to that.
Lord Clarke of Nottingham (Con)
My Lords, given the interpretation that British courts and tribunals have put on the UN and European conventions in recent years, I assume that the entire population of places such as Sudan and Somalia would qualify for asylum and be granted it if they could get their feet on to British soil. Would the Government not prefer to tackle this legal problem, get our asylum rules back to common sense and consider putting a cap on the total numbers that our public services and society can absorb before opening up more safe and legal routes for people to come from these and other countries?
Lord Hanson of Flint (Lab)
The noble Lord makes an important point. He will know that I repeated a Statement from the Home Secretary last November on controlling the very issues he mentions. As announced in the King’s gracious Speech earlier this year, there will be an immigration Bill to put into effect some of the issues covered in that Statement on asylum. I suggest that the noble Lord will have a great contribution to make in ensuring that that Bill leaves both Houses of Parliament in a form that meets the objectives he has set out and the Government’s objectives to have safe and legal routes at the same time as putting some control into the system in an effective way. We are cognisant of European human rights issues and are reflecting on them as part of the legislative programme.
The Lord Bishop of Winchester
My Lords, if I may broaden the scope of the Question, given that the recent conflict has not led to any evident improvement in the situation facing ordinary Iranians, what assessment have His Majesty’s Government made of the availability of safe and legal routes for Iranian nationals? I am thinking in particular of members of Iran’s persecuted and vulnerable religious minorities, including Christian converts, Bahá’ís, Sunni and Sufi Muslims.
Lord Hanson of Flint (Lab)
The right reverend Prelate puts his finger on an important point. The scheme that I have outlined to the House is one that the Government are currently developing. We intend to announce further details of the scheme, and we have given a date for when it will be operational. I am happy to receive representations from the right reverend Prelate and his colleagues on how we implement that scheme for countries outside the four that are in the original Question from my noble friend.
Lord Hussain (LD)
My Lords, I hear what the Minister said about setting temporary bars for students from certain countries. However, in relation to the students who belong to the families of Afghan interpreters who are stranded in Pakistan, is there a special provision for the children of the interpreters who worked with our forces in very difficult circumstances?
Lord Hanson of Flint (Lab)
Again, the Government will look at all cases on an individual basis. I am aware of the issue, but I am not aware in relation to where the Government currently examine that aspect of policy. If the noble Lord will allow me, I will write to him on the specific issue of interpreters in Pakistan. Where there are legitimate claims for asylum, they will be considered under existing policies and, with the changes we are proposing, under future policy as well.
Lord Bellingham (Con)
I strongly support what the Government are trying to do here. The Minister will be aware of my long-standing interest in Sudan, and I agree with what he said. There are many Sudanese students who have contributed a great deal to our society and, every time I go to Sudan, I meet many people who have been to our universities and are now in positions of considerable authority in Sudan. If students come here on the safe refugee route, the key point is that they should be returned to their home country if that country then enters a period of stability at the end of their course.
Lord Hanson of Flint (Lab)
On all those aspects, the intention is to allow individuals to benefit from the safe and legal route that gives them the opportunity to study, work or bring a required skill to the United Kingdom. However, it is also important that we do not have a brain drain, or individuals leaving but not returning to their countries when possible. The noble Lords’ points are extremely important. In the scheme we are designing, we are trying to ensure that there are sponsors who have responsibility for the individuals who come to this country and that, ultimately, they return to their home countries to use the benefits they have learned in the United Kingdom to improve their home countries.
Lord Advocate
Lord Cameron of Lochiel
To ask His Majesty’s Government what assessment they have made of the appropriateness of the role of the Lord Advocate as a Scottish Law Officer and head of the system of criminal prosecutions in Scotland as delineated in the Scotland Act 1998.
Baroness in Waiting/Government Whip (Baroness Curran) (Lab)
My Lords, this Government acknowledge there is a live debate about the dual role of the Lord Advocate in Scotland. The Scottish Labour manifesto in 2024 committed to splitting the role of legal adviser to the Scottish Government and head of the system of criminal prosecutions in Scotland, and that remains our position. The UK Government would of course consider any proposal brought forward by the Scottish Parliament.
Lord Cameron of Lochiel (Con)
My Lords, I warmly welcome the Minister to her post on the Front Bench. The dual role of Lord Advocate as both the chief legal adviser to the Scottish Government and the head of the prosecution system in Scotland has become increasingly difficult to justify, not least in light of recent events and the potential for conflicts of interest. The current Prime Minister has acknowledged this as a problem. However, any changes to the status quo of course require UK Government legislation. Given that the Labour Party has long supported separating the Lord Advocate’s roles, will the Minister now commit to bringing forward legislation to do just that?
Baroness Curran (Lab)
I thank the noble Lord and recognise his position as a former Scotland Office Minister and his knowledge and experience on this matter. He is of course right to emphasise that this has become a very significant issue of public debate in Scotland at the moment, given very high-profile criminal cases. It is a matter that demands attention. The UK Government of course have a significant interest in this, and the Prime Minister has acknowledged that this is a serious issue.
The noble Lord will know that the Law Society of Scotland has recently suggested that there should be widespread consultation on this matter and has acknowledged that this is a complex matter. We recognise that the Scottish Government also have a strong interest in this and would welcome co-operation between the UK Government and the Scottish Government to pursue this matter.
Lord Foulkes of Cumnock (Lab Co-op)
My Lords, I too congratulate my noble friend on her well-deserved appointment to the Front Bench. On this occasion, however, I agree—for once—with the Opposition spokesperson.
Lord Foulkes of Cumnock (Lab Co-op)
It had to happen some time. We should not wait for the Scottish Government to ask for the legislation to be changed. This is a responsibility of the UK Government and the UK Parliament. There are other areas, such as the Murrell controversy—that embezzlement. Now, there is £1.2 million of Yes Scotland money that has gone missing, and two legal actions against the Scottish Government—and they have had many in the past. We have a responsibility for ensuring good governance in every part of the United Kingdom, including in devolved Governments, and I hope that my noble friend will persuade the Secretary of State for Scotland to take some action on this.
Baroness Curran (Lab)
I thank my noble friend for that question—I think. Of course, he is right on so many things, and I will listen very closely to what he has to say. He makes reference to the Peter Murrell case. Here, I must emphasise to noble Lords that this is a matter of great scandal in Scotland, and there are very serious concerns about what this has meant for Scottish politics and governance. So, I take very seriously these points and recognise what has been said. I commit to having that discussion with the Scottish Secretary and will of course communicate his views, and those of the Opposition, as forcefully as he has put them.
Lord Marks of Henley-on-Thames (LD)
My Lords, we welcome the outline position taken by the Minister. But formally, and uniquely in the United Kingdom, the Lord Advocate is both head of the Prosecution Service in Scotland and a Government Minister who attends Cabinet. This duality, as has been said by everyone, has long been criticised. It has caused considerable public unease, particularly in relation to the Peter Murrell case. So, when will the Government separate and clarify the two roles, probably with the Solicitor-General responsible for prosecutions and the Lord Advocate for advising the Scottish Government on the law? That is the position in Wales with the Counsel General, and I suggest it represents a sensible position that everyone can support.
Baroness Curran (Lab)
I recognise the depth of the argument that the noble Lord has put forward and understand the issues at stake, which are live in Scotland. We also have to acknowledge that this has implications for the Scottish Government, because they are responsible for the justice system and for prosecutions in Scotland. I am sorry to repeat the point, but the best way forward, I believe, is for joint co-operation between the UK Government and the Scottish Government. But, believe me, this is a live issue for the UK Government; it is one that is on our agenda and which we will pay attention to.
The Earl of Kinnoull (CB)
I also welcome the Minister to her seat. The conflicts that have been described are particularly bad for political party and election law. The Political Parties, Elections and Referendums Act 2000, which applies to the whole of the United Kingdom, has an enormous raft of criminal offences. If you look down that list of criminal offences and compare them with the facts in the Murrell mess, you will see that there are quite a lot of things that may well come up and would present a terrible conflict straight away to the Lord Advocate. Given that the political party concerned there is one that operates nationally and is represented in our Houses, it is a UK Government thing and therefore I very much support what the noble Lord, Lord Foulkes, has just said. One way to do something about it now would be to say that at the next interministerial group this will be the number1 item on the agenda and the group will not move on to the second item on the agenda until there is a satisfactory conclusion to something which is potentially so damaging to our democracy.
Baroness Curran (Lab)
What an interesting suggestion. I thank the noble Earl for putting that forward. I will take that back to the department. I draw his attention to the Scottish Government-commissioned McMillan report which looked into these roles. It was a very limited report and was not required to make any recommendations, but even so it highlighted some of the conflicts of the job and some of the political tensions that are there. So I can commit to making sure that I have that discussion with the Secretary of State.
Baroness Goldie (Con)
My Lords, recent events engulfing the SNP with the Murrell conviction crystallise the conflict of interest. The Lord Advocate, Scotland’s independent chief prosecutor, felt able to share information only with her client, the Scottish Government. A chief prosecutor either shares information with everyone or shares it with no one. I am comforted by the response from the Minister, to whom I also extend a welcome to her place. I think she is picking up from this House that there is an overwhelming unease that the duality of this role has run its day and change has to be made.
Baroness Curran (Lab)
I pay tribute to the noble Baroness as well, who commands great respect in Scotland across the political divide. Her comments therefore are of great significance. I repeat that I will take that back, because if someone of her standing is making that point, I regard that as significant.
Lord Jack of Courance (Con)
In the spirit of good will, I start by agreeing with the noble Lord, Lord Foulkes. If we are to look again at this Scotland Act, that requires primary legislation, and if we are going to have primary legislation opening up the Scotland Act again, which I think we should, can we further look at Schedule 5? Schedule 5 to the Scotland Act is everything that was a reserved matter, and anything that was not on Schedule 5 back in 1998 was not a reserved matter. Since then, many things have come to pass: AI, hydrogen gas and other things. I would be happy to give the Minister a list. I think it is important we look again at Schedule 5 and review all the things that should be reserved to this Parliament.
Baroness Curran (Lab)
Again, as a former Secretary of State for Scotland, I pay tribute to the work of the noble Lord and recognise his status within these discussions. I would not want to be in a position where I contradict many of the things that I have recently said about Scottish politics, and I do not dismiss or undermine any of the points that have previously been made. But in Scotland there is a real appetite to talk less about the constitution and more about the interests of ordinary Scots, the standards of public services and some of the failures of the SNP Government. I will be honest with the noble Lord and say that that is my priority going forward.
Maritime and Coastguard Agency
(1 week ago)
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Lord Hendy
To ask His Majesty’s Government what assessment they have made of the effect on recruitment and retention of Coastguard Rescue Officers of the decision of the Maritime and Coastguard Agency to cease on-call payments.
The Minister of State, Department for Transport (Lord Hendy of Richmond Hill) (Lab)
My Lords, in the light of a Westminster Hall debate last week, representations from coastguard rescue officers and unions, and other information, the Maritime Minister in the other place has been clear on the need to listen and to reflect on the way forward, which he is doing. That is why further scheduled engagement by the Maritime and Coastguard Agency this week has been paused.
Lord Hendy (Lab)
My Lords, I am grateful to my noble kinsman for that Answer.
Lord Hendy (Lab)
I have waited a long time to use that expression, and it is a pleasure to do so. The judgment of the Court of Appeal on 14 January was entirely predictable: that coastguards are what lawyers call limb (b) workers. However, the decision of the Maritime and Coastguard Agency, in response to that, was not predictable. It has degraded that status to nothing at all and removed the protections that Parliament bestowed on limb (b) workers for our heroic coastguards. Those coastguards are no longer entitled to the national minimum wage for the hours they work—indeed, to any payment at all. They are not entitled to paid holiday, to apply for protection from unlawful deductions from wages, to the protection of whistleblowing or to seek recognition for collective bargaining. Following the Court of Appeal case, which turned on this issue, they are not entitled to a trade union representative in a disciplinary hearing. Can my noble kinsman say whether he will use all the weight he can bring to bear to lean on the Maritime and Coastguard Agency to get it to reverse this awful decision?
Lord Hendy of Richmond Hill (Lab)
I am not sure that I am as grateful to my noble kinsman as he is to me—but, as usual, I will answer his questions. This change has not taken place yet; it is due to take place in September. There is time for my colleague, the Maritime Minister in the other place, to listen and reflect. I have talked to him three times today and I will talk to him again after this Question. He will reflect deeply on what he has heard and what needs to be done.
Lord Moylan (Con)
My Lords, the staff survey on which the Maritime and Coastguard Agency has relied in making its case has been reported in the press as having been misrepresented by the agency to Ministers and, consequently, by Ministers to Parliament. In that light, do the Government still have confidence in the chief executive of the Maritime and Coastguard Agency? Do they continue to rely on that staff survey?
Lord Hendy of Richmond Hill (Lab)
I have two things to say. First, in the course of the Maritime Minister reflecting on what he has heard, he will reflect on the accuracy and veracity of the information he has been given. Therefore, it is far too early to say what the consequence of that might be. Secondly, he has asked his officials to tell him the data that can be legitimately released so that Members of Parliament in the other place and Peers in this Chamber can hold the Government to account.
Baroness Grender (LD)
My Lords, does the Minister agree that making it so much harder for working people on low incomes to serve as coastguard rescue officers may jeopardise this life-saving service? Therefore, in this period of reflection that he has described, will he ensure that assessment is made of the impact on the diversity of workforce in this context?
Lord Hendy of Richmond Hill (Lab)
I will say two things. First, the Government recognise and are fully grateful for the extraordinary service of brave and selfless volunteer coastguards. Secondly, the noble Baroness is absolutely right that, in the course of this contemplation, we need to reflect on the diversity of those volunteers. Decisions should not be made that adversely affect that.
Baroness Bull (CB)
Can the Minister say what discussions might have taken place with other government departments to compare the approach that could be taken to the coastguard with the retained firefighter model? There is a risk that, from September, both will provide on-call emergency services, often at great personal risk, but one will be recognised as a worker and remunerated while the other will not be.
Lord Hendy of Richmond Hill (Lab)
I am grateful for that question. I am not currently aware of those discussions, but clearly there are similarities between some of the things that we ask selfless people in our society to do. I am sure that the Maritime Minister and the department will reflect on that with other appropriate government departments.
Lord McNicol of West Kilbride (Lab)
My Lords, the cuts proposed by the MCA have been resisted by the GMB union, as well as by coastguard rescue officers themselves. Is the Minister certain, at a time when we see more people around the coast of Britain using the sea for leisure, that the potential reduction in staff that could come from this will not put people at risk?
Lord Hendy of Richmond Hill (Lab)
The course of action that needs to be taken needs to recognise that the volunteer coastguards have attended over 14,000 incidents each year for the past three years and rescued over 4,000 people annually. The Government have no intention of putting any of those people in danger. That is why my colleague in the other place is thinking so carefully about what to do next.
Baroness Shephard of Northwold (Con)
My Lords, it was a delightful surprise to find that there are two Lords Hendy in this House. Who knew? We are very familiar with the Minister’s skills. He will be aware that more than half of our coastguard rescue officers will leave this vital service if the Government continue on their present course. The Minister mentioned the magic word “September”. I ask him to reconsider that. We are now entering the peak risk period on our coasts, when our coastal waters are full of swimmers and sailors, and when the work of the coastguard rescue service is in peak demand. Do the Government plan to overturn the court decision on which all this stands? Given the risk, how soon should they do so? September is too late. The risk is now.
Lord Hendy of Richmond Hill (Lab)
There are at least two of us in here who knew that there were two Hendys in the House. Maybe that is common knowledge now.
The noble Baroness is right: September is not far away. I put in the present tense the fact that the Maritime Minister is considering this because it needs to be considered right now and for the reasons that the noble Baroness said. Whatever course of action he decides to take needs to be taken very quickly to avoid the service being in anyway affected and to ensure the safety of people on the coast and in the sea.
Lord Hain (Lab)
My Lords, does my noble friend the Minister agree that the Maritime and Coastguard Agency’s total budget last year was £450 million, of which coastguard volunteer allowances cost under £6 million—around 1%—for which we, as a public, get a 24/7, 365-day emergency response network covering 11,000 miles of our coastline by 3,500 volunteers, who get a call-out allowance of £11 an hour, which is a tiny fraction of the 1,200 paid staff in the agency? This is a petty, punitive and pernicious cut, which I urge Ministers to reverse.
Lord Hendy of Richmond Hill (Lab)
My noble friend is entirely right about all the statistics he quoted. That is why I said that the Maritime Minister is currently considering what needs to be done as a result of what he has heard, what I have heard in this House this afternoon and the other information available in order to make the right judgment about how to proceed.
Lord Harper (Con)
My Lords, I am grateful for the Minister’s opening Answer, when he noted that the Maritime Minister was reflecting. This sounds like a case where it would be better to embrace the court decision, recognise the worker status and take the steps necessary to properly reward people who do incredibly valuable work. As the noble Lord, Lord Hain, said, it is very good value for the taxpayer. The MCA is an executive agency of the department; the Minister should take the right decision and direct the agency to carry out its instructions. That is what we expect Ministers to do, and I am sure that the Minister will impress that course upon his Commons colleague.
Lord Hendy of Richmond Hill (Lab)
I do not need to do that, because the course of action that he will take, after having listened and reflected, may well be the course of action that the noble Lord suggested.
Business of the House
(1 week ago)
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Baroness Smith of Basildon
That Standing Order 44 (No two stages of a Bill to be taken on one day) be dispensed with on Tuesday 14 July to allow the Supply and Appropriation (Main Estimates) Bill to be taken through its remaining stages that day.
Business of the House
(1 week ago)
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Baroness Smith of Basildon
That Standing Order 44 (No two stages of a Bill to be taken on one day) be dispensed with on Tuesday 14 July to allow the Taxation (Energy and Vehicles) Bill to be taken through its remaining stages that day.
Commercial Payments Bill [HL]
(1 week ago)
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Lord Leong
That the order of commitment of 9 June be discharged and the Bill be committed to a Committee of the Whole House; and that the instruction to the Grand Committee of 9 June shall also be an instruction to the Committee of the Whole House.
Rochdale Grooming Gang: Offender Deportation
(1 week ago)
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Lord Cameron of Lochiel (Con)
My Lords, when this Urgent Question was asked by my honourable friend Katie Lam in the other place on Monday, the Minister responding, Alex Norris, said:
“I could not be clearer that all options are on the table at this stage”.—[Official Report, Commons, 6/7/26; col. 28.]
With respect, the only option that should be on the table is the deportation of Shabir Ahmed. There is no justification whatever for him to remain in the country after the despicable crimes he has committed. If the Government say that they cannot deport him because of the law then they must change the law. The Opposition have said we will support that change, so why will the Government not commit to bringing forward the necessary amendment to the Immigration Act 1971 as a matter of urgency?
The Minister of State, Home Office (Lord Hanson of Flint) (Lab)
The crimes which led to the imprisonment of the individual concerned were despicable and horrendous. I say again to the noble Lord that we are urgently looking at these matters and will bring potential urgent action on them. We are examining this in detail and nothing is ruled out at all. I will keep the noble Lord updated on this matter. It is not acceptable that this individual is protected. For information, in the last 12 months we have deported 187 foreign national offenders for rape offences and 392 foreign national offenders for sexual offences. However, as the noble Lord mentioned, the 1971 Act places a restriction on this individual, and we are urgently examining that issue.
Baroness Doocey (LD)
My Lords, this case arises from one of the most despicable and notorious failures of local agencies to protect local vulnerable girls. Can the Minister tell the House what specific lessons have been learned from the original Rochdale investigation? How have those lessons now been built into national policing guidance on grooming gangs? How will the Minister ensure that the guidance on grooming gangs now with police will be applied consistently across the UK?
Lord Hanson of Flint (Lab)
I am grateful to the noble Baroness. Self-evidently, there are a number of lessons to be learned. That is why we have established the grooming gangs inquiry, currently operating under the auspices of the noble Baroness, Lady Longfield. There are a number of lessons to be learned on this matter. We want to ensure that we take action to give guidance to the police and help prevent future victims. In this case, it should be remembered that of the individuals who were participating in this grooming gang, Mr Ahmed was deprived of his citizenship in 2016, and of the eight gang members in total one was deported to Afghanistan and one was deported to Pakistan, two are British and therefore exempt from deportation but have faced the penalty of prison, one left the UK last year clandestinely, and the final three have been deprived of their British citizenship and have deportation orders in place. We are working speedily to make sure that those individuals face further justice.
Baroness Foster of Oxton (Con)
My Lords, I wholly agree with the point that has been raised around this case. It truly is a despicable case. Yesterday in the Chamber, I raised comments regarding the Government’s position on early release. This is not in isolation. Thousands of victims—women and young girls—are now left in the most awful situation due to the proposals of this Government on early release. Can the Minister tell us, yes or no, whether rapists will be part of the early release scheme that the Government are about to bring in?
Lord Hanson of Flint (Lab)
I told the noble Baroness yesterday, but will repeat it today, that those who are convicted of serious offences will not be considered under the early release scheme. I could not have been clearer yesterday and cannot be clearer today. The early release scheme details will be brought forward in due course. It is the intention of the Government to protect the public while dealing with a prisoner backlog in prisons, which, with due respect to the noble Baroness, lies at the door of the previous Conservative Government.
Lord Harris of Haringey (Lab)
My Lords, the noble Baroness, Lady Doocey, talked about lessons learned from the original case, but are there lessons to be learned about the release process and the way in which this individual’s immigration status was flagged up to the authorities at an early stage? I have the impression that the Government were slightly blindsided by this case. Frankly, that should not have been the case. It should have been clear earlier on from the file which no doubt follows the individual around the prison system.
Lord Hanson of Flint (Lab)
My noble friend asks me about the individual’s management within the prison system, which is a Ministry of Justice responsibility. The individual is on the sex offenders register for life, has been ordered to stay away from victims, is banned from contact with any child or young person, faces strict curfews and restriction zones, and is required to wear an electronic tag. Should he breach his conditions, he will be immediately returned to prison. As I have said in response to other questions, we are urgently examining all options. Nothing is ruled out in the response regarding the deportation. Sadly, the deportation issue relates to the 1971 Act, which was a long time ago, under the Government of Ted Heath. There are Members in this House—I am looking at one now—who were Members of Parliament at that time. It is a long time ago, but we need to examine how we ensure that individuals who have been convicted and face deportation do face the consequences of their actions.
Lord Jackson of Peterborough (Con)
My Lords, the Minister has been commendably robust and consistent on this. There are reports in the media today that the Home Secretary, Shabana Mahmood, is bringing forward legislation. Can he be more precise on the expected timescale to expedite that legislation? Is his department having discussions with the Government of Pakistan on the issuance of visas? The Pakistani Government have issued a number of, frankly, unnecessarily intemperate comments about colonialism over what is essentially one of their own citizens.
Lord Hanson of Flint (Lab)
We are in discussion with the Pakistan Government at all times. I hope that the noble Lord and the House understand that we keep all options under review and will take whatever action is required to ensure that we deal with this issue. I am not in a position today to answer the points that he has mentioned, but can reaffirm that we keep all options under review.
Baroness McIntosh of Pickering (Con)
My Lords, it appears that the said gentleman, Shabir Ahmed, has ripped up his Pakistan passport and claims to be without a state at the moment. That is an issue that has not yet been addressed. The issue of the law, the Immigration Act 1971, could simply be addressed in the Government’s legislation before both Houses. Is that not an option?
Lord Hanson of Flint (Lab)
I am going to sound like a broken record: we keep all options under review. If the noble Baroness will listen to what I have said, we keep all options under review and will take whatever action is required. I cannot further update the House at this moment, except to say that point.
Lord Mohammed of Tinsley (LD)
My Lords, at lot of the attention at the moment is rightly on Shabir Ahmed, but there are two other individuals who are facing deportation. Is the Minister able to update the House on whether there are any obstacles to their deportation from this country? Are they in a similar situation to Shabir Ahmed or is it more straightforward?
Lord Hanson of Flint (Lab)
If it were straightforward, we would have, as the noble Lord will know, dealt with the matter in a way that met the objectives that the House is pressing me to meet. There are three British citizens who have had their citizenship deprived. They have deportations in place and we are in discussions with the authorities in Pakistan to make sure that they can be deported. We will keep all options under review, to make sure that we achieve that objective. If the House will bear with me, that is as far as I can go today, but I hope the House has heard the meaning behind the words that I am saying.
Lord Sentamu (CB)
My Lords, does the Minister agree that a country that prides itself on keeping the rule of law and on the fact that nobody is above the law cannot hastily amend legislation which goes back to 1971? Such a country has to look at all the processes. Does he agree that it is time that he and the Attorney-General appoint somebody to go through all old legislation where we find ourselves caught up because it is the law?
Lord Hanson of Flint (Lab)
I am grateful for the noble and right reverend Lord’s comments. The legislation in 1971 was put in place for a proper purpose, and that was to secure the rights of Commonwealth citizens to remain in the United Kingdom. That is a positive purpose. Part of the challenge for the Windrush generation has been a consequence of the avoidance of dealing with that in a proper way. That does not mean to say that, ultimately, the Government cannot then examine legislation when serious offences have occurred, such as those for which Mr Ahmed has been imprisoned. If that legislation is causing challenges in how we can deal with that individual, we need to examine those issues. As I have said to the noble Lords opposite, we are keeping all those matters under review. I will report back to the House as soon as possible on any outcome of that review.
Police Leadership Commission Report
(1 week ago)
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Lord Davies of Gower (Con)
My Lords, I thank the Minister for bringing this Statement to the House today, and I am grateful for the opportunity to ask questions on it. Failures of police leadership are all too evident. Police leadership failed when forces overlooked, ignored and actively downplayed the scale of the grooming gangs. Police officers and police leaders were too afraid of being called out for being racist, and, as such, they left vulnerable young girls to suffer while the perpetrators got away scot free. Police leadership failed when officers manipulated evidence to ban Maccabi Tel Aviv fans from the football match in Birmingham over fears of “inflaming community tensions”. Police leadership is failing when we have officers spending more time trawling through social media posts than investigating and stopping burglary and shoplifting. When the policing of tweets and so-called diversity, equality and inclusion take precedence over the prevention and investigation of crime, we know we have a serious problem.
In 1829, Sir Richard Mayne, the first commissioner of the Metropolitan Police, wrote:
“The primary object of an efficient police is the prevention of crime: the next that of detection and punishment of offenders if crime is committed. To these ends all the efforts by police must be directed. The protection of life and property, the preservation of public tranquillity, and the absence of crime will alone prove whether those efforts have been successful and whether the objects for which the police were appointed have been attained”.
Like all officers who joined Hendon Police College, I had to learn those words by memory, and they are just as relevant today as they were in 1829, so I welcome the statement in the report that:
“Police leaders should be resolute in refusing to take sides, or to be diverted from the course of focusing entirely on the prevention, detection and prosecution of crime”.
I agree wholeheartedly. Unfortunately, that is not what is happening.
We might ask how we got here. Noble Lords might have different answers, but, for me, it is in large part because we took our eye off the ball. We allowed policing to focus, particularly after 2020, more on representation and identity politics than on promoting the best and most qualified people for the job. The report also acknowledges that nepotism has impacted progression at senior ranks, again challenging the notion that promotion should be based on merit alone. I must press the Minister to think seriously about these points. If the Government want to improve public trust in the police and restore robust but fair policing, we cannot have reforms that place greater emphasis on the identity of senior officers than on their experience and leadership qualities.
Fundamentally, good police leadership is not hard. It is about cutting crime and having your officers’ backs. Those on the ground need to know that they can take action they deem necessary and will not be hung out to dry by senior leadership when they do so. Officers need to be able to exercise their professional judgment and common sense, and not be second-guessed by endless policies and guidance. Police leaders must stop prioritising public perceptions over robust policing.
This all requires a significant cultural shift within police leadership. But to engineer that, we need to improve not just the quality but the amount of leadership training. The report highlights the striking disparity between military leadership training and the police equivalent. It points out that:
“15 years after leaving Sandhurst, a colonel in charge of 1,500 people will have undertaken 72 weeks of leadership development. By comparison, chief superintendents in the MPS”—
the Metropolitan Police Service—
“who have had comparable progression are likely to have had two or three weeks”.
The comparison with the military is particularly apt here, because British military leadership training is widely regarded as some of the best in the world—there is a reason why military officers from around the world flock to Sandhurst. I urge the Minister, when considering the work of this commission, to feed in best practice from our military academies into future police leadership training.
I also ask the Minister to think carefully about introducing new direct entry schemes. I can say from my own experience that I do not think they had a positive effect on senior leadership. The report acknowledges that the total cost of the previous direct entry superintendent programme, which ran from 2015 to 2021, was almost £10 million. Only 33 people graduated from that scheme, putting the cost per graduate at around £342,000. I do not think that can quite be considered a success. Bizarrely, though, after pointing out the cost and low numbers passing through the previous direct entry route, the report goes on to recommend the creation of new direct entry routes. This is a somewhat bizarre situation.
I wish to end with some simple questions to the Minister. The Government have this report, it is obvious to us all what is going wrong with police leadership, and it is not too difficult to figure out what needs to change, so how are the Government going to take forward these recommendations? What work is going on within the Home Office, right now, to implement leadership reforms, and when will be able to see the outcomes of the Government’s work?
If the Government are serious about restoring trust in policing and fulfilling the aims of the commission, they must take swift action to overhaul police leadership training. I look forward to the Minister’s response.
Baroness Doocey (LD)
My Lords, I welcome the report from the noble Lords, Lord Blunkett and Lord Herbert, which rightly starts with an uncomfortable truth: leadership across policing is too inconsistent and, for decades, we have failed to invest in developing leaders for the world they now face.
We support clearer standards, stronger developments of all ranks, and more transparent senior appointments, but consistency must not become Whitehall control. Before creating a national police service and a national academy, the Government must explain how police chiefs will be protected from politicisation. A central appointments panel may help, but only if it insulates chief constables’ appointments from political influence and ensures a diverse candidate pool, including those with neighbourhood and safeguarding experience.
We urgently need clarity about what we expect policing to deliver in the 2030s. Too often the police are left to pick up responsibilities that properly belong to other agencies, because those agencies are underfunded and lack the capacity to respond. But the police cannot walk away; they have a duty to the public, even when the work falls outside their remit. This results in police being increasingly drawn into non-crime work, spending hours in hospitals awaiting mental health assessments or caring for vulnerable children, leaving forces overstretched and officers shuttled from one crisis to another.
Ethical leadership cannot be a values programme instead of the hard work that inquiries have already recommended. Delivering ethics requires legally enforceable vetting and misconduct standards across forces, a complete overhaul of the complaints investigations so that they do not drift for years, and transparent monitoring of disproportionality in discipline, including for BAME officers. The public will not judge us by how many workshops we run but by whether the Angiolini, Jay and inspectorate recommendations are finally implemented in full.
Around 80% of crime now has a digital element, yet policing is still largely analogue, with 43 forces running separate IT systems and an obsolete police national computer. Outdated, poorly connected systems with multiple entry points heighten cyber security risks, given the high value of police data on the dark web. A lack of national co-ordination and the scrapping of ring-fenced capital funding means that most technology spending is now used just to maintain existing outdated systems. What is needed is a unified cloud-based technology platform and common procurement to enable seamless information sharing and good practice across forces. This will require very significant investments in IT and AI but offers the prospect of rapid returns in improved outcomes and would finally allow policing to exploit the wealth of operational data already at its fingertips.
We need national training frameworks that prioritise digital investigation skills for every officer and proper professional pathways for cyber, data, digital and forensic specialists. But highly trained specialists are locked into the same nationally set pay scales as everyone else, and chiefs have virtually no flexibility to pay them more than an entry-level constable. That is almost unbelievable. Is it therefore surprising that these specialists are routinely poached by the private sector, after they have been trained by the police for many years, on salaries that are several multiples of their police pay? If we are serious about tackling AI-enabled fraud, deepfake child abuse imagery and complex online exploitation, we must introduce genuine pay flexibilities for shortage specialties and parity of esteem for police staff.
I am deeply concerned that we are proposing a national academy and a licence to practise when there has been no independent national audit of police training since 2012. Officers need high-quality, regular, properly accredited refresher training to keep themselves and the public safe. If the College of Policing is absorbed into a new police service, we must avoid the police marking their own homework by ensuring that appropriate standards are set and independently audited.
This report gives us an opportunity to transform how we choose and develop leaders. But those leaders will succeed only if we define the mission clearly, fix the broken funding and training systems, and give policing the technological tools and special staff it needs. I very much hope the Government are prepared to meet those challenges.
The Minister of State, Home Office (Lord Hanson of Flint) (Lab)
I place on record my thanks to my noble friend Lord Blunkett and the noble Lord, Lord Herbert of South Downs, for their work on this important report commissioned by the Home Office to look at the important issues of policing. My noble friend Lord Blunkett is a former Home Secretary and the noble Lord, Lord Herbert, is a former Policing Minister; indeed, I shadowed him for a while in a previous life. They both bring extremely important experience to bear and on a cross-party basis they have examined the future training needs of the police service.
My noble friend and the noble Lord have made 27 recommendations and, in answer to the points raised by the noble Lord, Lord Davies of Gower, we are going to consider those recommendations. We are going to examine them in detail. We want to give them a fair wind. We will report back in the autumn with our response to those recommendations. I will be able to provide further clarity and discussion at that time on the Government’s approach to the points that have been made.
I begin in, I hope, a constructive way but also in a way of challenge to say that I do not accept the characterisation of the police to date by the noble Lord, Lord Davies. The police are doing a very good job in dangerous circumstances. Police officers at every level, from chief constables to ordinary police officers on the beat to police community support officers, do a very strong job. Our duty is to ensure that the recommendations that have been made by my noble friend Lord Blunkett and the noble Lord, Lord Herbert, help support those police officers to do a better job in the future.
Crime is down: theft offences by 11%; vehicle-related crime by 14%; domestic burglary by 22%; shoplifting by 1%; personal robbery by 12%; knife-enabled offences by 10%; knife-enabled homicides by 21%; and knife-enabled robberies by 15%. Those are just some examples from the past 18 months of statistics of how the police are helping to tackle those issues. But that does not mean that there is not room for improvement.
The noble Baroness, Lady Doocey, has pressed me many times to examine the issue of training; she is absolutely right to do so, and these recommendations form the basis of us examining how we can take those issues forward. I do not accept that we should not put diversity at the heart of our police service. I want to see diverse police officers representing their communities and representing the communities they police. But it is important that we secure training and support for all those officers, whatever their ethnic background.
There is a need for reform. The noble Baroness, Lady Doocey, is absolutely right that we need to examine what policing is for and how to ensure that we have the back-room support for front-line police officers. She and the noble Lord, Lord Davies of Gower, will know that we are in the middle of a radical programme of police reform. We are abolishing police and crime commissioners. We are waiting for a report from the noble Lord, Lord Hogan-Howe, on police force areas. We are establishing a national police service, which will encompass the very issues currently considered by the noble Lord, Lord Herbert of South Downs, as chair of the College of Policing, with national procurement and a focus on what national policing should do, which is, from the National Crime Agency’s perspective, serious organised crime, counterterrorism policing and other important issues such as economic crime.
This reform programme is ongoing, but self-evidently —and this is where I agree with the noble Lord, Lord Davies, and the noble Baroness, Lady Doocey—we need to put in place support and training to ensure that police officers both meet the needs of the 21st century and have the support to do their job in an effective way. In their report, my noble friend Lord Blunkett and the noble Lord, Lord Herbert, have put great care and skill into the recommendations. I also thank the other members of the commission who took part.
There is a particular emphasis on giving voice to those on the front line. It is right to say, as the report itself says, that
“the policing profession has not consistently had the excellent leadership it needs”.
The commission has highlighted the critical importance of leadership and we all know that. It will also ensure, I hope, that we maintain that principle of policing by consent.
It is right that we take time to consider the recommendations in full. We welcome the commission’s proposals and the intent behind them. We are actively looking at the recommendation to create a formal senior constable rank and how that can be done. The commission also recommends a new professional digital passport for policing, along with other measures to put in place stronger supporting structures around professional development. The review’s recommendations on a fast stream for policing, on a targeted direct entry scheme and on the role of the forthcoming national police service in promoting ethical policing are all issues that we want to look at and respond to. We will do so in due course.
The points made by the noble Baroness, Lady Doocey, about police conduct and ethical standards of policing are extremely important. She will know from when we passed the Crime and Policing Act recently, because we spent a gazillion hours dealing with it in this House of Parliament, that there is a strong emphasis in it on improving the performance of the ethical standards and on the ability to remove police officers who are not performing well. Again, that goes to the heart of the recommendations before us.
In summary, the noble Lords, Lord Blunkett and Lord Herbert, will both know that I cannot respond today to the 27 recommendations, but I welcome them. They give us a strong foundation to examine how we can improve police leadership, police performance and skill levels to face the 21st century. It is a valuable piece of work. I commit to the House, on the point made by the noble Lord, Lord Davies of Gower, that we will report back in the autumn on the recommendations and what we intend to do about delivering them.
In the meantime, there are police officers and leaders out on the streets now, and they are doing a dangerous job on behalf of us all. They should have our admiration but they should also have our support in improving their performance, and that is what the recommendations are aimed at doing.
Lord Mackenzie of Framwellgate (Non-Afl)
My Lords, I declare my interest as a former president of the Police Superintendents’ Association of England and Wales and as someone who submitted evidence to the police leadership commission chaired by the noble Lords, Lord Blunkett and Lord Herbert, who I see are in their places.
Having served for 35 years in both uniform and the CID, I want to say that the report is a major piece of work on the leadership of the police in England and Wales, and I congratulate both noble Lords on its content and its clarity. It recommends major changes throughout the service and builds on the proposed creation of a national police service, the NPS, which should take a lead role in promoting ethical and inclusive policing and be responsible for building a community of good practice across the country.
I have served under both excellent leadership and bad. The report tackles the problems, which are identified as poor training and supervision, a lack of resources and the culture of leadership across the service. The surprise is that the police service continues to deliver—remarkably, every day—to protect the public 24/7. You have only to witness the annual police bravery awards to witness this all the time.
Like the armed services, the police are legally prevented from taking strike action, which was last witnessed in England in 1919. We have witnessed major problems in recruitment and vetting following the slashing of 3,000 officers a few years ago. That was followed by the murder of Sarah Everard by PC Wayne Couzens and the conviction of serial rapist David Carrick, both in the Metropolitan Police. As a result, the commission’s report recommends a root and branch modernisation of police recruitment and training, development, promotion, monitoring and appraisal. Scotland Yard is known throughout the world—
Lord in Waiting/Government Whip (Lord Katz) (Lab)
My Lords, I ask my noble friend if he could bring his comments, interesting though they are, to a conclusion with a question.
Lord Mackenzie of Framwellgate (Non-Afl)
I support the provision dealing with senior constables, and I wish the implementation of the commission’s report every success.
Lord Hanson of Flint (Lab)
I am grateful to my noble friend for bringing his experience of policing at a leadership level to the debate and this discussion. He will know that leadership is critical in delivering high performance and for the public. The recommendations intend to help generate that discussion and to focus on how we improve leadership. Last year, for example, we had significant levels of vacancy for chief constable positions and a relatively small pool, sometimes internal, of people applying for them. We need to encourage better use of senior leadership.
I was a Member of Parliament for 28 years and my local police force probably had around 30 police superintendents during that time. That is not sustainable for continuity and performance. We have very strong leadership at the top of the triangle but a large pool of officers at the bottom end who need to be recognised for the work they do, and encouraged to have training and to have ambition to go through the system in a positive way. We will look at the recommendations and I give my noble friend the assurance that we will report back when we have had a chance to consider them in detail.
Baroness Stuart of Edgbaston (CB)
My Lords, I am grateful for the report and I see that the recommendations include the creation of a national academy of police leadership. I declare my interest, as the First Civil Service Commissioner, as a regulator for entry into the senior Civil Service. I argue that, at that level of leadership, the different professions—whether it be the Armed Forces, the police or the most senior civil servants—have a lot to learn from each other and would benefit from each other’s experiences. As the Government respond to that, I urge the Minister to look at other professions and top-level leadership so that they can learn from each other and exchange their experiences.
Lord Hanson of Flint (Lab)
My noble friend brings great experience from her role in the Civil Service Commission to the matter of recruiting individuals at a senior level. It is quite clear—the report makes this point very strongly—that police officers at all levels must be able to develop skills earlier in their career to enable them to develop and progress. The commission’s report highlights the fact that policing needs a clearer and more coherent system that supports professional development at all ranks. As the noble Lord, Lord Davies of Gower, mentioned, there are undoubtedly lessons and models that can be looked at in other aspects of society that will help support the development process.
Lord Young of Acton (Con)
My Lords, I declare my interest as the director of the Free Speech Union. I welcome this report, which contains many sensible suggestions.
Gavin Stephens, the chairman of the National Police Chiefs’ Council, announced a review last month of guidance contained in the NPCC and College of Policing’s race action plan and its anti-racism commitment. That guidance suggested that officers should treat ethnic minorities differently in order to ensure what it described as equality of outcomes, defined as equalising arrest and charging rates between different groups. Given that some ethnic groups are more likely to commit crimes than others, that inevitably means treating some groups more leniently than others—aka, two-tier policing. Will the Minister give the House a progress report on Gavin Stephens’s review of this guidance? Can he also tell us when the independent review into hate crime and public order legislation by the noble Lord, Lord Macdonald of River Glaven, will be published? A couple of weeks ago the Minister said that it would be published before the Summer Recess.
Lord Hanson of Flint (Lab)
On the latter point, we are hoping to publish the review as soon as possible. As the noble Lord will recognise, there are some things that the Government wish to announce but which they are not able to due to the upcoming change of Prime Minister. However, I intend to publish the document as soon as is practicable and will ensure that a report is made to the House in due course.
With due respect, I do not accept the noble Lord’s contention that there is two-tier policing. The document to which he refers is designed to give guidance to officers to understand the various pressures and some of the diversity issues that exist. Ultimately, officers deal with crime, no matter who commits it or where it is committed. They need to bring people to justice and make arrests accordingly. I will reflect on what he said and will discuss the matter, via our offices in the Home Office, with Gavin Stephens of the National Police Chiefs’ Council but, from my perspective, the general contention is that crime is crime, the police are there to deal with it, and we must have an understanding of the diversity issues in order to have the confidence of the whole community when dealing with those issues.
Lord Grocott (Lab)
My Lords, I thank my noble friend for making this Statement. As he is in his place, I must also mention my noble friend Lord Blunkett, who brings experience and common sense to pretty much everything he does. There is a “but” coming, and it is this: I get slightly worried when I see phrases in a Statement such as
“a new police leadership fast stream”,
and
“a focus on leaders from professions with transferable skills”.
The first thing leaders need for leadership is respect from the people they are trying to lead. They will not get the same proportion of respect unless the police constables, in whatever force in the country, know that the leaders have been through the same traumas, challenges and anxieties that a normal policeman finds in his normal work, such as when he has to break up a fight in a city centre. I am not sure a degree helps a great deal with dealing with issues like that. I would therefore like my noble friend to assure me that police recruitment does not just need to be diverse, although it is important to represent the community; it also needs to be diverse in people’s professional and other backgrounds, just as much as it does in academic qualification.
Lord Hanson of Flint (Lab)
I am grateful to my noble friend; it is good to see him in his place. The recommendations are looking at how we can significantly improve senior leadership. Some of the recommendations may mean that we need to look at how we fast-track individuals to leadership and, in doing so, how we give them effective training and support to understand the issues that they face. Ultimately, the core element of policing is the officer on the beat, male or female, who deals with the fight on a Saturday night, who deals with the shoplifter, who deals with anti-social behaviour, and who deals with all the issues that police officers deal with on a regular basis—including, as the noble Baroness, Lady Doocey, said, issues that are not directly their responsibility but which they have to deal with, because they are the last, and first, port of call in many cases.
With this whole package, we are trying to look at how we improve skill levels across the board, and that might well include looking at how we give greater skills, support and training to the front-line police officer. However, a clear issue has been identified: the failure of effective management at a senior level in some areas. It is equally important that that is addressed, and that is what we intend to do when we have a chance to reflect on the recommendations.
Baroness Wheatcroft (CB)
My Lords, I welcome the report and the sensible recommendations in it. It highlights the current importance of cliques and networks in promotions in the police. There are comments such as:
“If you don’t have a network, you’re not going to get a promotion.”
The Met has decided that membership of organisations such as the Freemasons has to be declared, and many hundreds have declared their membership, but has that made any difference, and do other forces go far enough? Does the Minister think that more needs to be done to rule out the sort of nepotism and networks that have meant that, in the end, the pool of talent is much reduced?
Lord Hanson of Flint (Lab)
The noble Baroness makes a very interesting point on the discussions. I believe that promotions should be made on merit. They should be made on the skills and adaptations of individual officers to do the next job that they face—or, for an ordinary police constable, on the different types of skills that might be required, such as those that do not necessarily involve being on the beat. That should be done on merit. Going back to the recommendations that have been made, the commission’s report highlights that policing needs a clearer and more coherent system that supports professional development and, by that very mechanism, supports people being promoted on merit. When we have a chance to reflect on those recommendations, I hope that will be at the heart of what we do.
Lord Paddick (Non-Afl)
My Lords, I declare my interest as a non-executive director of the Metropolitan Police. I welcome this report, but a lot of it appears to be reinventing wheels that came off policing many years ago. For example, we had a physical, centrally located police staff college—a centre of excellence—as this report recommends, and by the time I reached chief superintendent I had had 18 months of full-time police leadership training, the same as an equivalent Army officer, on an accelerated promotion scheme as a non-graduate. Most of this was lost because of cuts to national police training budgets. Because of my declared interests, I am not allowed to ask for more money for policing, so I will put it like this: what will the Government do to make these recommendations a reality?
Lord Hanson of Flint (Lab)
Maybe I should also have declared an interest, because I have a very close relative—a daughter—who works as a serving police officer. The key thing is that, while 27 recommendations have been given to the Government and we have to look at and assess them, we accept the general tenor of what the noble Lords, Lord Blunkett and Lord Herbert, have said. We need to improve the basic level of training, look at the skills needed for the 21st century, improve senior leadership and the training for it, and make sure that we have a wider pool for people to reach the senior chief constable positions. There is a very limited pool for chief constables at the moment and, very often, internal candidates have been inoculated through the police forces they have worked in, generally without any examination.
As part of wider reforms, as the noble Lord will know, we are looking at improving the College of Policing’s work by merging with it a senior level of activity. We are looking to shrink the number of police forces to give more effective local control and change the management structures from police and crime commissioners to mayors and other authorities, as part of a wider programme that the recommendations from the noble Lords, Lord Blunkett and Lord Herbert, fit into. I cannot give definitive answers now but, as I have said, we will report back on the recommendations and our responses as soon as practicable.
Lord Sahota (Lab)
My Lords, I read this report from cover to cover. It acknowledges that ethnic-minority officers have a poorer retention rate and slower progression because they continue to face discrimination within their organisation. Some 20 years ago, when I was on the West Mercia Police Authority as a councillor, I raised this issue constantly, yet here we are and ethnic-minority officers are still leaving at a far higher rate than white officers. This report acknowledges this issue, yet it offers no tangible or practical solution to this problem. Does my noble friend agree?
Lord Hanson of Flint (Lab)
I am grateful to my noble friend. It is important that the police reflect the communities they serve. Many parts of this United Kingdom have populations with a level of ethnic-minority British citizens who will want to see people who look like them in the police service. The point he makes is extremely important. Once we have recruited individuals, we need to value them, retain them and train them for the future, not lose that skill to outside businesses or because they are facing discrimination inside the force. The recommendations highlight the problem; we need to examine how we improve that. I want the police service to reflect the community it serves.
Lord Thomas of Cwmgiedd (CB)
My Lords, the Minister has explained over and over again the number of changes that are occurring. I welcome them all, just as I welcome the noble Lords’ report. However, there are various ways in which these changes can be implemented. Can we have in the autumn a broad strategic overview, pulling together leadership, governance and the changing of the police forces? All of these interlock, so it would be of immense assistance to this House if someone could be asked to produce an overall strategic document, dealing also with the very real issues of technology.
Lord Hanson of Flint (Lab)
I am grateful to the noble and learned Lord. I will take that suggestion away and discuss with my right honourable friend the Home Secretary how and whether we can do that. We had a police White Paper which has led to the changes that will see legislative approval, as announced in the King’s Speech this May. He makes a valid point. At some point we will have to pull these strands together. I can commit only that changes to senior levels of activity at a national level and to local policing will be put into the potential police Bill announced in the King’s Speech. I will respond to these suggestions in due course. There are a range of issues that we are continually dealing with, so I will take his suggestion away.
Lord Blunkett (Lab)
My Lords, I thank my noble friend for his generous response. With the House’s indulgence, I want to say what a great pleasure it has been, and how much I appreciate the tremendous collaboration with the noble Lord, Lord Herbert of South Downs, the 10 other commissioners who generously gave their time, the secretariat from the college and my own employee, Joanna Firth. On the response in the autumn, if anything is going to happen quickly, it will be fundamental that recommendation 27 to set up an implementation group be put front and centre, because without immediate steps to bring these recommendations to fruition, they will languish on a shelf until another report some years hence will come back with the same recommendations we are making today.
Lord Hanson of Flint (Lab)
I assure my noble friend that when we have agreed the recommendations, we will make sure that we include the very point he mentioned. If I sit down now, it gives one other Member a chance to ask a question.
Lord Barber of Chittlehampton (Lab)
My Lords, it is an honour to follow my noble friend Lord Blunkett. I congratulate the noble Lords, Lord Blunkett and Lord Herbert, on an outstanding report. Does the Minister agree that police leadership is at its best when police leaders feel they can confidently take on crime, and have the skills they need, the backing they deserve from Government and the active support of the other public services involved in tackling crime in our country?
Lord Hanson of Flint (Lab)
Absolutely—that is central to what the Government seek to achieve. I again pay tribute to both noble Lords, their staff, the commission members and the voluntary staff who supported them. They have tried to identify the challenges in leadership, and that the policing landscape and crime are changing—some 45% of crime is online fraud. The police will face a range of new challenges, and we need effective, strong leaders who reflect their communities, understand the levels of crime and have the strategic skills to tackle them. At the same time, we are still going to rely on the support of the everyday police officer working on the street. We need to recognise those who have given long service and the skills they need.
In closing, the noble Lords’ recommendations are valuable and welcome, and I thank them for their assistance. I assure the House that we will reflect on the recommendations and bring back a coherent plan of action.
Steel Industry (Nationalisation) Bill
Wednesday 8th July 2026
(1 week ago)
Lords ChamberRead Full debate Steel Industry (Nationalisation) Bill 2026-27 View all Steel Industry (Nationalisation) Bill 2026-27 Debates Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: HL Bill 22–R–I(a) Amendment for Report (Supplementary to the Marshalled List) - (7 Jul 2026)
18:22 - Division on Amendment 31 - Ayes: 95 / Noes: 202 - Amendment 31 disagreed.
Lord Fox
(b) has had regard to the impact of exercising that power on the public finances.”Member’s explanatory statement
This amendment would add a new condition that the Secretary of State must consider before exercising principal transfer powers.
Lord Fox (LD)
My Lords, in moving Amendment 1, I will speak to Amendments 7, 9 and 24 in my name.
In Committee, I noted the difficulty of phasing the exercise of the principal transfer powers and the need for scrutiny by Parliament—there is a dichotomy. At the heart of my concerns then was that Parliament would potentially be signing a blank cheque. On the other side, there may very well be a need to move swiftly in the event that a decision is made to nationalise a steel asset.
The first three amendments in my name in this group go some way to brokering this compromise. They offer two different routes of addressing the issue of the Secretary of State’s obligations regarding the financial cost of any intervention. Amendment 1 directs this attention to Clause 2 and inserts an obligation on the Secretary of State to take into account the impact on public finances before exercising the principal transfer. However, during Committee and subsequent discussions with the Minister, it became clear that the Government feel they have some legal reservations about any modification of Clause 2. Therefore, Amendments 7 and 9 seek a similar action but focus on Clauses 4 and 15 respectively instead.
Overall, of course, government decision-making relies on tests that must be conducted by accounting officers. I expect the Secretary of State would have the impact on public finances in his or her mind at all times, and I am sure there would be some Treasury Ministers leaning over that particular Secretary of State in the event that any decisions were made. However, by putting this responsibility in the Bill, it will be easier to hold the Secretary of State and the Government at the time to account on the value for money of any issue. In the event that the Minister feels constrained in accepting Amendment 1, I hope he will accept Amendments 7 and 9.
Amendment 24 addresses a different issue and returns to pension liabilities, which we debated in Committee. It is clear that, in the event the Government exercise the principal transfer power enabled by the Bill, the pensions of all ex and current workers of that asset become an important responsibility. This amendment is clear in its assertion that Parliament needs a view on these liabilities. If the Minister is unable to accept this amendment, I hope he will take the opportunity to clarify the Government’s approach to pensions from the Dispatch Box. I beg to move.
Lord Redwood (Con)
My Lords, I am grateful to the noble Lord, Lord Fox, for reminding us of the importance of contingent liabilities and the need for the Government to complete due diligence before any acquisition. He rightly says that in a hypothetical case—not British Steel Scunthorpe—it might be necessary to move quickly, and then there will have to be some trade-offs. But if we are talking about British Steel Scunthorpe, there is obviously no need to move quickly. The Government moved very quickly many months ago, and there can still be proper analysis. I would hope, indeed, that as Ministers and their chosen executives are now responsible for British Steel, while they do not own the assets, they would have done a lot of this very important preparatory work on discovering the contingent liabilities.
Where in Amendment 11, the contingent liabilities are mentioned by category, there is an omission which could be extremely important: liabilities to employees for past problems with safety and health, and—God forbid that this does not happen—for any liabilities that might follow now that the business is under the operation or control of Ministers and their chosen executives, if some safety or other health problem arose. Where people are running these very large, industrial businesses, with the obvious threats of a very powerful fire in the furnace and the dangers of extremely hot liquid steel being moved around, it is crucial that Ministers and their chosen executives have taken all the right decisions on making sure people have the right protective clothing, there are the right protocols, and there is an absolute segregation for the employees from the risks. There also needs to be an understanding of whether there have been any longer-term health risks from the atmosphere around the blast furnace or the intense heat of some working conditions.
If Ministers have not already done so, they need to take this very seriously. Whenever I was responsible for a big plant, my main nightmare was that something would go wrong on safety, and that would be unforgivable. I am not expecting the Government to give ground on these amendments, but it would reassure the House and the wider public if the Minister could tell us more about where they have got to, at least in general terms, with exposing the contingent liabilities on pensions, safety and employee health, as well as with the other financial matters mentioned clearly in these amendments.
Lord Wigley (PC)
My Lords, I am delighted to support the amendment put forward by the noble Lord, Lord Fox, and I agree with his earlier analysis. As it happens, I agree with a lot of what the noble Lord, Lord Redwood, said on this as well. Whereas there may be certain safeguards in Scunthorpe, there is considerable worry in somewhere like Port Talbot arising from some of the experiences we have had, which I referred to in Committee. I hope the Minister will be able to give some assurances on this.
Lord Sharpe of Epsom (Con)
I rise to speak to Amendment 11 in my name and that of my noble friend Lord Hunt of Wirral. It is vital, as we have said throughout our consideration of this Bill, that there is clarity about the liabilities which may be acquired when the Government exercise a principal transfer power. That is particularly important in relation to environmental liabilities. Steelworks are substantial and long-standing industrial sites and any environmental liabilities associated with the transfer could represent a significant future cost to the taxpayer.
I am very grateful to the noble Lord, Lord Fox, for his amendments in this group, which rightly focus on the need to consider the public finances. We have consistently raised the issue of the costs associated with share and property transfers and pension liabilities when compensation is assessed. I thank the Minister and the Government for their engagement on these amendments, and I look forward to hearing what the Minister has to say and hope that at least some of these amendments will be accepted.
The Parliamentary Under-Secretary of State, Department for Business and Trade (Lord Leong) (Lab)
My Lords, before turning to the amendments before us, I begin by placing on record my sincere thanks to the noble Lords, Lord Sharpe, Lord Hunt and Lord Fox, for the constructive and collegiate way in which they have engaged throughout the passage of this Bill. We have not agreed on every point, but their contributions have been thoughtful, serious and rooted in a shared recognition of the importance of the UK steel industry. I am grateful for the time they have taken to meet with me to test the Government’s position and, for raising their concerns in such a fair and friendly spirit.
Responding to the points raised in this group, I will speak first to Amendments 7 and 9 in the name of the noble Lord, Lord Fox. Over the course of this Bill’s passage, I have had ongoing and constructive conversations with the noble Lords, Lord Fox, Lord Sharpe and Lord Hunt, about the cost of nationalisation and the importance of parliamentary scrutiny. The noble Lords and I agreed that the Government must consider the costs of any nationalisation before exercising the powers. As I have stated to this House previously, existing public spending governance controls provide for this, with cost and value-for-money considerations embedded in the Managing Public Money principles and the well-established process of accounting officer tests.
However, the noble Lords have sought a statutory requirement on the face of this Bill. Through our conversations, I have been persuaded by their arguments, and I am pleased to say that the Government will support the amendment of the noble Lord, Lord Fox, which requires the Secretary of State to consider costs before exercising the share or property transfer powers in Clauses 4 and 15. We hope the House will agree. Our agreement on this issue reflects the commitment of noble Lords to ensure that this Bill is as comprehensive and effective as possible. It is an excellent representation of this House’s ability to work collaboratively, and I thank the noble Lords, Lord Fox, Lord Sharpe and Lord Hunt, for their engagement on this issue.
The noble Lord, Lord Fox, has also put forward Amendment 1, which would require the Secretary of State to have regard to the public finances when considering exercising the principal transfer powers. Given that the purpose of this amendment is achieved through Amendments 7 and 9, I do not think this is necessary in addition.
The noble Lords, Lord Sharpe of Epsom and Lord Hunt of Wirral, have tabled Amendment 11, which would require the Government to provide a statement to Parliament outlining the value of contingent liabilities associated with a steel undertaking, and the steps taken to minimise taxpayer exposure to them, prior to an intervention. As I have set out previously, I have concerns about creating additional hurdles that must be cleared prior to the exercise of the transfer powers, given the likely need to act at pace. There is also a practical difficulty in publishing the details of a private company’s financial information prior to a nationalisation. None the less, the Government share the desire of the noble Lords to minimise the taxpayer’s exposure to liabilities as far as possible, and that will inform our decision-making. If a steel undertaking is nationalised, we would expect its annual report to include details of its liabilities, where relevant. We will discuss liabilities again in later groups today, and I look forward to that discussion. I hope that that helps to clarify the matter and provides the noble Lords and the rest of your Lordships’ House with sufficient reassurance.
Amendment 24, tabled by the noble Lord, Lord Fox, requires that where the Government have exercised the transfer powers, the independent valuer must prepare a written estimate of a steel undertaking’s pension liabilities and provide that to the Secretary of State, who should then publish the estimate before Parliament. Pension liabilities will of course differ for different companies. If the Government were to decide that it was in the public interest to nationalise British Steel, I reassure noble Lords that our understanding is that there would not be significant pension liabilities, as the company has a defined contribution scheme and so pensions would be funded from an existing pot. In cases where pension liabilities are relevant to the value of a steel undertaking that is subject to the powers under the Bill, the independent valuer should consider that as part of their assessment. None the less, publishing this in isolation would be unhelpful without the full context. The Government have already committed to publishing the outcome of any compensation scheme. Therefore, I do not consider this amendment necessary.
I hope I have been able to reassure noble Lords, even though there are amendments in this group that I do not support.
Lord Fox (LD)
My Lords, I thank noble Lords for their contributions to this debate. Before coming to the Minister’s words, I will pick up on the point made by the noble Lord, Lord Redwood, on health and safety. I turn his attention to Amendment 21, which returns to the issues of health and safety and environmental liabilities. Although his point does not need to be made again, the debate on that amendment is when the Minister can respond to it.
I thank the Minister for his response to Amendments 7 and 9; I believe that they will take scrutiny a step forward. His approach to accepting them is very heartening. It is therefore clear that, if we accept Amendments 7 and 9, we do not need Amendment 1.
On Amendment 24, I am reassured by the Minister’s comments on one particular steel asset. Although we do not expect it, in the event that the future Act is used for other assets, pensions may become an issue. Picking up on the point made by the noble Lord, Lord Wigley, particularly in Committee, there have been some missteps around employee pensions. It is very important that, whoever the Government of the day are, they do not make those missteps again and create the situation we have seen and on which the noble Lord commented.
On that basis, and in thanking the Minister for his acceptance of Amendments 7 and 9, I beg leave to withdraw Amendment 1.
Lord Hunt of Wirral
Member’s explanatory statement
This amendment would limit the public interest test to the areas set out in paragraphs (a) to (c).
Lord Hunt of Wirral (Con)
My Lords, I will speak to Amendments 2, 3, 4 and 5 standing in my name and that of my noble friend Lord Sharpe of Epsom. I have no wish to repeat at length the arguments made in Committee, but I feel that the Government should be clearer about the public interest test that lies at the heart of these powers.
Lord Redwood (Con)
My Lords, there will be an issue with the public interest case, if and when we get to the full nationalisation of British Steel at Scunthorpe. Many of us are unclear as to whether the Government’s aim is to find a medium-term or longer-term solution to the problem of how to keep the two existing blast furnaces running and keep a basic steel-making capability in the United Kingdom, or whether their policy aim is still—as with the previous Government and as is the case in south Wales—to move to closing the blast furnace and opening an electric arc furnace in a new plant, which may be on that land or somewhere else.
If it is the latter, it will be much more difficult to establish the public interest case for the complete nationalisation and transfer of the blast furnaces, because that will end in tragedy for the people working there, so it will no longer be the case that the main purpose is to keep the jobs. It will not resolve the issue of the electric arc furnace, because that will need separate grant aid and might even be better on a different site. We need to know more about the phasing. In the case of south Wales, the blast furnaces were closed before the electric arc furnace was available. If they did the same again at Scunthorpe, there could even be a period when the United Kingdom will not be making any steel at all on those two works, given the transition plan.
It would be very helpful if the Minister, who will have to take this policy on, gave us a little more on the Government’s thinking about the duration of the investment in the blast furnaces, and whatever information he has about the state of those plants and the ability to maintain continuous production there, and on the Government’s intention in their net-zero strategy, which implies that steel would have to be made in a different way.
Lord Fox (LD)
My Lords, because this is Report, I will not repeat my Committee speech. Briefly, Clause 2 is unchanged and Clauses 4 and 15 have been amended along the lines that the previous groups suggested and begin to bring the rigour at the start of this process. The request made by the noble Lord, Lord Hunt, for information after the fact, if it has to be brought forward, seems reasonable, but on that basis I do not support the amendments as they stand.
Lord Leong (Lab)
My Lords, I am grateful for the contributions to this debate. Noble Lords have highlighted that the public interest test in Clause 2 is a vital part of the Bill and I very much agree. It is important that we get it right. Noble Lords have tabled several amendments to this clause and we have had fruitful discussions on them at previous stages, but I am happy to return to them.
Amendment 2, in the names of the noble Lords, Lord Sharpe and Lord Hunt, would limit the public interest factors that could be considered by the Secretary of State to those explicitly set out in statute in Clause 2. As I have set out previously, the Government agree that these are likely to be the most pertinent issues in relation to an intervention in the steel sector. We have sought to strike a balance in the Bill between minimising the scope as far as possible and ensuring that we can adapt to evolving circumstances. That is why we think it is necessary to retain some flexibility to consider other factors that may be relevant to a particular case, which may be difficult to anticipate.
Let me be clear that the legal test in this clause places particular emphasis on the factors that are explicitly set out. Where the Government seek to rely on other factors, they will need to be satisfied that those factors mean that an exercise of the powers is necessary in the public interest. I therefore do not consider the amendment necessary and respectfully ask that it be withdrawn.
Amendments 3 and 5, tabled by the noble Lords, Lord Sharpe and Lord Hunt, would create procedural steps that would need to be fulfilled before the transfer powers are exercised. Amendment 3 would require the Secretary of State to commission an independent assessment of whether the public interest test has been met and for that assessment to be met prior to using the powers. Amendment 5 would require the Secretary of State to provide details of the criteria used to demonstrate the public interest. Both are difficult to reconcile with the likely circumstances under which the powers could be exercised. The Government will likely need to act at pace to deliver an effective transfer. However, the Government will commit to publishing a Written Ministerial Statement following an exercise of the principal transfer powers, which would include details of how the public interest test has been met. I hope that provides some reassurance to the noble Lords, even if we cannot meet the full ambition of their amendments.
Finally, Amendment 4, also tabled by the noble Lords, Lord Sharpe and Lord Hunt, would require the Secretary of State to be satisfied that the exercise of the transfer powers would represent value for money for taxpayers. The Government are mindful of the potential costs that could be incurred in relation to the nationalisation of a steel company. This consideration is already taken into account in government decision-making under the usual public spending processes, as I have set out previously.
Additionally, as we discussed in the previous grouping, the Government are supportive of Amendments 7 and 9 from the noble Lord, Lord Fox, which would require the Secretary of State to consider costs prior to the exercise of the principal transfer of powers. These amendments go some way to addressing the concerns raised by the noble Lord Hunt, and I hope that will provide some reassurance.
Lord Hunt of Wirral (Con)
My Lords, I am grateful to my noble friend Lord Redwood and the noble Lord, Lord Fox, for their comments. I am grateful indeed to the Minister for his reassurances and the commitment that he has given, which meet many of the concerns I expressed earlier. In those circumstances, I beg leave to withdraw the amendment.
Lord Sharpe of Epsom
Member’s explanatory statement
This amendment would retain the ability for the Secretary of State to extend the principal transfer powers, but only in increments of up to two years at a time and only with the approval of both Houses under the affirmative procedure.
Lord Sharpe of Epsom (Con)
My Lords, these amendments stand in my name and that of my noble friend Lord Hunt of Wirral. As we stated in Committee, we cannot have a perpetual sunset clause. A sunset that can be extended indefinitely and for an unlimited period at a time is not a meaningful sunset at all.
I welcome the Minister’s engagement on this aspect of the Bill. The amendment would provide an important safeguard by ensuring that any extension of the principal transfer powers can be for no more than two years at a time. That would provide greater certainty for investors, greater assurance for taxpayers and a clearer expectation that these exceptional powers are not intended to become a permanent feature of the Government’s industrial policy. It is also important that we have a Government who are confident in their stated aim of securing private investment for British Steel so that it can thrive on a commercial basis. Regular parliamentary approval for any extension will help to ensure that Ministers continue to focus on that objective.
I thank the Government for recognising these concerns and for working constructively with us to ensure that this amendment can be accepted. I beg to move.
Lord Redwood (Con)
My Lords, two years is quite enough for these powers, and it is generous of my noble friend to suggest allowing another two-year extension. As I understand it, these steel matters are being considered under a £2.5 billion multiyear estimate, which was meant to be for the modernisation of the steel industry. When it was originally agreed, people had in mind that this was going to be grant aid for new electric arc furnaces and other such investments—not to pay continuous and high losses on an older technology plant that may not have the long future we would like.
To get into better order with the Treasury, the Government might want to have some self-imposed restraint on the duration of this. We have been led to believe that the rate of loss is at least £500 million a year on the two blast furnace activities that are currently under the Government’s control but not in their ownership. That would be a totally unacceptable continuing rate of loss and would eat into what should be modernisation money. That would mean they would get to the end of this Parliament with very little improvement to show.
Lord Fox (LD)
My Lords, I am in slight confusion that I hope the Minister can clear up. My understanding of Amendment 6A is that it offers a one-term renewal of two years, meaning a four-year total for any sunset clause. I might have misheard what the noble Lord, Lord Sharpe, said. I am assuming that is what Amendment 6A is seeking to achieve.
If we are reassured by the Government’s assurances on their intention, in a sense we do not need this—but it is certainly helpful to have it. If my reading of Amendment 6A is correct and it moves it four years as a maximum, it will move it into the next Parliament, where the Liberal Democrat Government will take a view.
Lord Leong (Lab)
My Lords, I am very grateful to all noble Lords for their contributions. I will respond to the point from the noble Lord, Lord Redwood, on financial assistance when we cover financial assistance in the sixth group.
I am grateful for the points raised regarding the sunset provisions in Clause 3. The noble Lords, Lord Sharpe and Lord Hunt, have tabled an amendment that would limit any extension of the sunset period to two years. I have had helpful discussions with them on this matter. Throughout debates on this Bill, we have emphasised that the Government are strongly minded to use the powers in the Bill to nationalise British Steel, subject to the public interest test, and do not currently see a need to use them for other steel undertakings. However, the steel sector faces challenges that can be beyond the control of government or companies themselves. It is important that we reserve the possibility of intervening in this way if it is needed in the public interest.
The amendment from the noble Lords, Lord Sharpe and Lord Hunt, strikes a good balance, allowing the Government to preserve the powers if absolutely needed while limiting any extensions of those powers to a limited period and subjecting them to an affirmative parliamentary debate. We recognise the need for this level of scrutiny, and it is appropriate that any extension be limited to a short period only. I am therefore pleased to lend my support to the noble Lord’s amendment.
Lord Sharpe of Epsom
Member’s explanatory statement
This amendment would provide that, where the Secretary of State extends the period during which a principal transfer power may be exercised, the extension may not be for more than two years.
“(3A) When deciding whether to make share transfer regulations under this section in respect of a steel undertaking, the Secretary of State must consider the costs that the Secretary of State thinks are likely to be associated with the exercise of the power.” Member’s explanatory statement
This amendment would require the Secretary of State to consider the costs associated with making share transfer regulations under clause 4.
Lord Hunt of Wirral
Member’s explanatory statement
This amendment would require regulations transferring securities of a steel undertaking to be subject to the affirmative procedure.
Lord Hunt of Wirral (Con)
My Lords, I rise to speak to Amendments 8, 10, 12 to 14 and 40, standing in my name and that of my noble friend. I thank the Minister for working constructively with us on Amendments 12 and 13. It is vital that where the Bill confers regulation-making powers of real consequence, the default should be the affirmative procedure. Amendments 8 and 10 would apply that principle to the core transfer powers, regulations transferring securities, and regulations transferring property rights and liabilities. We understand the Minister’s argument that in exceptional cases powers may need to be exercised.
Turning to Amendment 40, I ask the Minister for a clear assurance that a thorough impact assessment will be brought before both Houses of Parliament after the various powers in the Bill have been used. Given the potential effect on taxpayers, workers, investment and the wider steel industry, they must assess whether these exceptional powers have delivered the outcomes claimed for them.
Finally, Amendment 14 would remove Clause 50. The Constitution Committee was clear that the broad power allowing the Secretary of State to modify the law in relation to a share or property transfer
“should either be removed or significantly tightened”.
That is a serious recommendation from an important committee of this House. The Government should either accept the committee’s recommendation or make much clearer in the Bill the limited circumstances in which such a power may be used. I look forward, therefore, to the Minister providing some assurance on Amendment 40 and on the Henry VIII powers. I beg to move.
Lord Fox (LD)
My Lords, I rise to speak to Amendments 15 and 16 in my name, but first I speak in support of Amendments 12 and 13 in the names of the noble Lords, Lord Sharpe and Lord Hunt, which I have co-signed. Importantly, these would add necessary additional parliamentary control over continuity obligations and property transfer regulations. We moved similar amendments in the Commons that failed to attract sufficient support there.
Regarding Amendment 10, the Minister has convinced me that the need to quickly transfer property rights transcends the necessity of moving to an affirmative form of approval from a negative regulation. That is why I have not co-signed Amendment 10.
I tabled Amendments 15 and 16 as it is important that Parliament must be kept informed once any nationalisation is effected. Amendment 15 would create a new clause causing there to be a report on principal transfer powers from the point at which those powers are exercised under the Act. It says that the Secretary of State must
“make a written statement to each House of Parliament setting out … the progress, and the operational and financial performance, of the steel undertaking in respect of which a transfer power has been exercised, and … the impact of this Act, including (so far as it is possible to assess) its effects on the steel industry in the United Kingdom, on employment and on the public finances”,
and that this duty
“continues until no steel undertaking remains in public ownership”.
I hope the Minister has something positive to say on this, which includes reflecting on how the communities and skills requirements are being met in whichever part of the UK is affected by any nationalisation and subsequent changes.
It is a shame that the noble Lord, Lord Empey, was not with us in Committee, because he would have participated in a debate on an amendment that was very similar to Amendment 15, which covers not only the territory of Northern Ireland but the whole of the United Kingdom. I feel that the noble Lord’s point is important, but if it is important for Northern Ireland then it is important for the rest of the UK. I think he will see that Amendment 15 seeks to bring that across our entire country.
Amendment 16 seeks to create a stakeholder advisory committee. I will not repeat my speech from Committee, but its aim is to have stronger input into the steel strategy from steel users. The Minister responded with news that the steel council may be augmented by additional new members. I hope he can elaborate some more on how the voice of steel users is reflected more effectively in order for the Government to avoid such issues as those that have been created by the steel tariffs.
Lord Wigley (PC)
My Lords, I draw attention to a part of Amendment 16. I am delighted to see that the noble Lord, Lord Fox, has included the words
“industries that rely on the supply of steel, including the defence sector”.
That is one of the themes that is running, perhaps in the undergrowth, behind much of the thinking on the Bill. We must have a steel industry that is capable of responding, and quickly, in an emergency to the needs of the defence industry. The model has to be developed with that in hand. That is why I very much welcome the fact that that is written in the amendment.
Lord Empey (UUP)
My Lords, my Amendment 45 arises from an exchange in the other place last week with the Minister, Sir Chris Bryant. Members will be aware that Northern Ireland’s situation is different in so far as, for goods, it is covered by the Windsor Framework. Therefore, EU quotas on steel obviously apply. The issue is that we have the preposterous situation of having quotas of steel flowing from one part of the United Kingdom to the other. These two regimes are clashing.
The Minister in the other place indicated that HMRC is
“taking steps to confirm the arrangements with industry”.
Bearing in mind that this was happening with about 36 hours’ notice, it was a huge challenge for businesses and so on to get their heads around it. He went on to say:
“The Government will continue to provide guidance and support to traders moving goods from Great Britain to Northern Ireland through the trader support service”.—[Official Report, Commons, 30/6/26; col. 764.]
That is another example of why we do not have a free internal market within the United Kingdom. Can the Minister confirm whether both these matters have taken place: has HMRC taken the steps to confirm arrangements with industry, and is the Trader Support Service providing that guidance? It was not available last week, which is why I tabled this amendment.
The other issue arising is speciality steels, because of the United Kingdom’s current limited ability to produce them and because some firms which intend to produce them are not actually doing so. I will give the Minister an example of our concerns. If a European company has a branch in our jurisdiction in Northern Ireland—for instance, Harland & Wolff—and has access under its quota arrangements to speciality steel for, say, the defence sector, which the noble Lord, Lord Wigley, mentioned and which is a particular issue in my mind, and it bids for defence work that will require a significant amount of speciality steels, those steels may not be able to be sourced within the United Kingdom. Our anxiety, therefore, is that competitiveness, price and other things could create difficulties.
I fully understand the rationale for having quotas, because there is huge surplus capacity throughout the rest of the world. We understand that that has to be managed but, given that we cannot necessarily get the steels from within the United Kingdom, can the Minister give an assurance that those steels will be available, that the quotas are adequate—whatever we say about having them in the first place—and that there is sufficient headroom to ensure that companies’ competitiveness will not be significantly damaged by the unavailability of those products within the United Kingdom?
Lord Elliott of Ballinamallard (UUP)
My Lords, I support the amendment from my noble friend Lord Empey and will speak to the issue raised by the noble Lord, Lord Fox, in Amendment 15, which unfortunately does not cover the specific circumstances of Northern Ireland. I support Amendment 15, but my noble friend’s amendment goes further to, I hope, give protection to Northern Ireland.
The UK introduced a new steel trade measure on 1 July—
Lord Fox (LD)
I have a point of information. The Bill has nothing to do with steel tariffs. We have had several Statements on steel tariffs in your Lordships’ House, to which I do not think the noble Lord spoke. I am happy to debate the effect of nationalisation on the Northern Irish market and to dispute that issue. However, the issue of tariffs is not covered in this legislation.
Lord Elliott of Ballinamallard (UUP)
I recognise the noble Lord’s point about the tariffs, but the issue is that we need some protection, and my noble friend Lord Empey believes the only way to have that protection is through this amendment. There is no other mechanism for protection. We have had Statements and I have asked Written Questions, but the answers we have had are unsatisfactory. Why is it not reasonable to table an amendment to this legislation that could assist the processors and manufacturers in Northern Ireland?
Maybe the Minister will find another way of doing this. If he can then that would be extremely helpful to us, but we want to raise the issue and it is not beyond our reasoned power to do so. At the moment, there is no other way of doing that except through this legislation.
The tariffs are extremely important. We now have dual tariffs. We have not only EU tariffs, because we are part of the EU economic base, but UK tariffs. This is important in Northern Ireland, and we and our processors, fabricators and manufacturers will have to deal with it. It is unfair for the noble Lord to indicate that it is unreasonable for us to table this amendment—
Lord Fox (LD)
I am just confused, because the wording of Amendment 45 from the noble Lord, Lord Empey, asks for an impact assessment on the likely effects on Northern Ireland, and the wording of paragraph (b) of my proposed new clause in Amendment 15 asks for an impact assessment of the effects on the United Kingdom, which, of course, includes Northern Ireland. I wonder what Amendment 45 brings in addition that is not covered by Amendment 15. Thereafter, I will shut up.
Lord Elliott of Ballinamallard (UUP)
I thank the noble Lord for his intervention, but will he not agree that we are in a different situation in Northern Ireland from that in GB? We are under a double tariff. We are under a tariff from not only the European Union but the United Kingdom, which does not impact on those processors, fabricators and manufacturers in GB. So why is it not reasonable to ask for a special impact assessment for Northern Ireland? I think that is quite reasonable. I am surprised that the noble Lord has indicated that he does not want that. Surely, if he wants transparency and a reasonable outcome to this, it is only reasonable that we would have that impact assessment for Northern Ireland. I am happy to give way to the noble Lord if he wants to argue and demonstrate why that is not reasonable. If you are a Northern Ireland fabricator, like I have in my area in Northern Ireland, you will possibly have a double tariff now: one from the European Union and one from the United Kingdom. That is totally unfair and totally different—
Baroness in Waiting/Government Whip (Baroness Blake of Leeds) (Lab)
My Lords, I think we have given the noble Lord a fair hearing. I ask him to bring his comments swiftly to a close so that we can get on with the business in hand today.
Lord Redwood (Con)
My Lords, I support my noble friends on the issue of the affirmative resolution. I think it is a superior device, given the importance of the matters that could be brought before us. I also fully support the idea of a proper impact assessment, which should of course include the impact on Northern Ireland, which may well be different because of the Windsor Framework—an arrangement which, in another life, I opposed very strongly.
Lord Leong (Lab)
My Lords, I thank all noble Lords for their contributions and for ensuring the ongoing scrutiny of any steel undertaking that is subject to the use of the powers in the Bill. Before turning to the amendments tabled by the noble Lord, Lord Fox, I will reflect on conversations I have had with noble Lords from across the House in recent weeks as we have sought to secure agreement on the drafting of the Bill.
The noble Lords, Lord Sharpe, Lord Hunt and Lord Fox, have provided detailed feedback on and suggestions for how parliamentary scrutiny can and should continue following any acquisition. Following consideration of their feedback, I am pleased to confirm the following government commitments, which reflect the importance of transparency and parliamentary scrutiny.
I confirm that a debate will take place in both Houses on the steel strategy and the impact of the Bill, within 12 months after Royal Assent. Alongside this, the Secretary of State will lay a quarterly Written Ministerial Statement for at least the first year that a steel undertaking is in public ownership, reverting to a slower rate after that. Where a Minister considers it appropriate, the Written Ministerial Statement may provide an update on jobs, communities and other issues; I will detail this further in subsequent groups. As I have already set out, the Government will lay a Written Ministerial Statement following the acquisition of a company, setting out how the public interest test has been met.
In addition to these commitments on the impact of the Bill, I can confirm that, following any acquisition of a steel company, the company’s new chair would be able to attend a Select Committee to set out their plans for the publicly owned steel undertaking. I hope that that reassures the noble Lord, Lord Redwood. Alongside the chair’s attendance, the Government will write to Select Committees, including the Business and Trade Select Committee, with information following any acquisition, and subsequently on any future plans for any steel undertaking that falls within the scope of the Bill’s powers, and to respond to any specific requests from a Select Committee. I emphasise that it is for the Select Committees to set their agenda. If the Government, or the chair of a nationalised company, are asked to provide information and attend meetings, we will of course do so. These commitments build on the statutory reporting requirement on financial assistance in Clause 59, the company’s annual report and accounts, and the quarterly Written Ministerial Statements, which I have already set out.
Any nationalised steel undertaking would not be exempt from the corporate reporting requirements set out in the Companies Act 2006. This Act contains various reporting requirements that vary depending on the size of the entity. The Government will work closely with the company and, where necessary, if there are any material changes to the company’s circumstances outside the regular reporting cycle, the Government will be able to ask the company to produce an interim report on that particular issue.
Noble Lords have also raised a concern about ensuring that stakeholders are appropriately engaged in decision-making. I will provide further detail on this later, but I emphasise that the Steel Council will continue following the publication of the steel strategy. The council is made up of representatives from across the sector, and they would include a representative from any publicly owned steel company.
In addition to our continued engagement with the sector, I recognise the importance of ensuring that there are opportunities for Parliament to engage with the sector. I therefore confirm that the Government will convene an ad hoc round table on the future of the steel sector six months after Royal Assent. I hope that this series of commitments reassures noble Lords that the Government are committed to ensuring that Parliament can scrutinise any publicly owned steel undertaking where appropriate.
I thank the noble Lord, Lord Wigley, for his continued engagement with the Bill. I reassure him that Minister McDonald, the Minister for Industry, recently met with Minister Price from the Welsh Government, and my officials continue to engage with Welsh Government officials to try to secure a recommendation of legislative consent for agreement on the Bill. I am grateful to the noble Lord, Lord Wigley, for the discussions on these matters, and I hope to update the House on the outcome of these conversations at Third Reading.
I thank all noble Lords who have taken part in debates on Amendments 12 and 13, and particularly the noble Lords, Lord Sharpe and Lord Hunt, for their constructive engagement with me over the past few weeks. The Government respect the concerns that have been raised. Throughout the passage of the Bill, we have been clear that the Government are committed to as much transparency as possible with regard to the powers in the Bill. We have listened carefully to the cases made during our debates to date and have considered where it may be possible to amend the procedure for the power without harming the Government’s ability to carry out their objective under the Bill.
I am therefore delighted to confirm that the Government will support Amendments 12 and 13, which amend parliamentary procedure for continuity of obligations and enforcement powers. Under these amendments, the power to make regulations in relation to certain aspects of continuity obligations will change from the negative procedure to a draft affirmative procedure unless the Secretary of State considers the made-affirmative procedure necessary, and the power to make regulations on the enforcement of obligations will change from the negative to the made-affirmative procedure respectively. This compromise reflects your Lordships’ House at its best.
I shall address the other amendments in this group. Amendments 8 and 9, tabled by the noble Lords, Lord Sharpe and Lord Hunt, set out the opposition to the parliamentary procedure associated with the exercise of the share and property transfer powers in Clauses 4 and 15 respectively. While I recognise the magnitude of these powers, I must emphasise that any use of the principal transfer of powers would need to be exercised promptly to ensure operational and legal certainty. I cannot overstate the importance of this. In a scenario where the Government chose to use these powers, they would need to be exercised at pace in a commercially sensitive environment. The affirmative procedure would introduce significant delays to the transfer process and create a lack of clarity regarding ownership. This in turn would significantly affect the business, particularly supply chains and third-party contracts. This must be prevented.
Amendment 14 was tabled by the noble Lords, Lord Sharpe and Lord Hunt, and they have indicated their opposition to Clause 50 remaining part of the Bill. I am afraid that I have to disagree unequivocally in this case. I have previously set out that removing the clause would risk undermining the effectiveness of the Bill. The Bill confers powers that interact with the complex area of commercial company and insolvency law in a way that was not anticipated during the drafting of the legislation concerned. There will therefore be some tension in the way that the powers are applied. Clause 50 allows us to smooth over those challenges and avoid any unintended consequences or obstacles to a successful transfer.
I am sympathetic to the fact that it is difficult to justify a power of this nature when its potential use is quite abstract at this stage. By its nature, it is intended to deal with unforeseen circumstances in non-consensual, highly atypical transfer scenarios, and I remind noble Lords that it was necessary in the Banking Act context as well. As an example, the power could be used to modify or disapply certain corporate laws, such as disapplying shareholder voting or approval requirements to prevent any delay to the transfer. That is not to say that we plan to use it in this way but merely to illustrate its potential utility. It is worth repeating that the power can be used only to ensure that the transfer of power can be exercised effectively. It cannot be used outside the context of nationalising a steel undertaking to change or amend other laws. The use of the power will be subject to the draft affirmative procedure except in particular circumstances that justify proceeding on a “made affirmative” basis. I hope that this provides some comfort regarding the issue.
Amendment 5, also tabled by the noble Lord, Lord Fox, would require the Secretary of State to provide quarterly Written Ministerial Statements to Parliament updating on the progress of the nationalised steel undertaking and the broader impact of the Bill. I thank the noble Lord for our discussions on this point, and I recognise the appetite for further parliamentary scrutiny of the approach to a nationalised undertaking. As I have already set out to the House, I can confirm that the Government will commit to provide quarterly Written Ministerial Statements to Parliament for at least the first year of a steel undertaking in public ownership. This reflects the Government’s commitment to ensuring that Parliament is appropriately informed about the progress of any publicly owned steel undertaking.
I turn to Amendment 16, and thank the noble Lord, Lord Fox, for his continued discussions on stakeholder engagement throughout the passage of this Bill. This includes the amendment he has tabled, which would require consultation with the stakeholder advisory committee on whether an intervention was in the public interest before exercising the powers in the Bill. I believe that the noble Lord and I agree that stakeholder engagement is critical to supporting the Government’s vision for the future of the steel industry and to ensuring appropriate scrutiny. As previously mentioned, I am pleased to confirm that we will shortly be inviting the UK Metals Council to join the Steel Council, which will ensure that the views of downstream users can be fed into engagement and discussions.
However, as I previously set out, any decision to exercise the transfer powers would need to be made at significant speed. The amendment would delay the exercise of the transfer powers, creating additional risks to the business viability and ongoing operations and uncertainty over ownership. In addition, there are commercial sensitivities associated with any decision to exercise the transfer powers, making it extremely difficult to consult in advance of a decision. While I cannot accept the amendment tabled by the noble Lord, Lord Fox, I will reflect on the range of ongoing engagement that Ministers and officials from my department undertake with industry and stakeholders.
A notable forum for engagement is the Steel Council, which I have already confirmed will continue following publication of the steel strategy. The council will support the delivery of the strategy by providing evidence and feedback on evolving or emerging policies that affect the sector’s competitiveness, and by providing strategic oversight of the working groups on research and development, investment and skills. Having considered the amendments tabled by the noble Lord, Lord Fox, I can confirm that the Government will convene an ad hoc parliamentary round table on the future of the steel sector six months after Royal Assent. I hope this reassures the House that the Government regard stakeholder engagement as critical to the revitalisation of the steel sector.
The noble Lords, Lord Sharpe and Lord Hunt, have tabled Amendment 40, which would require the Secretary of State to publish an impact assessment of the operation and effect of the Bill within two years of Royal Assent. This is straightforward for me to address. As the Government have already published an impact assessment for the Bill, in line with our Better Regulation Framework requirements, further impacts will be assessed as part of a post-implementation process or review. I reassure noble Lords that if the powers under the Bill are exercised, we will publish further impact assessments to accompany any transfer regulations. Following this, the Government will consider any further impacts in the post-implementation review. As I have already set out, the Government will ensure that a debate on the steel strategy and the impact of the Bill takes place in both the House of Commons and the House of Lords within 12 months of Royal Assent. This reflects our commitment to ensuring that parliamentarians remain well informed about our plans for the steel sector.
Lord Hunt of Wirral (Con)
My Lords, this has been an important debate. I pay tribute to the Minister. His approach to the Bill has been exemplary. We may disagree, and we do disagree, but the Minister has set an example that will be difficult for his ministerial colleagues to follow. He has listened and cared deeply about all the points we have raised. I am sure I speak for the noble Lord, Lord Fox, as well as for my noble friend and friends across the House, when I say that the Minister has not only listened to us but responded in positive terms, and, where he has not been able to agree, he has explained why he cannot agree.
I thank the noble Lord, Lord Wigley, for making sure that we do not forget the vitally important Welsh dimension. I thank my noble friend Lord Redwood for always scrutinising the public expenditure side of the Bill.
I say to the noble Lord, Lord Fox, that, with him, I believe we have now received from the Minister a series of comprehensive assurances, particularly on the impact assessment, which will enable us to proceed in a positive way.
The noble Lords, Lord Empey and Lord Elliott of Ballinamallard, have raised issues that—as the noble Lord, Lord Fox, pointed out—do not fall directly within scope, but they do fall within the impact assessment. That is why it was important that those points were raised.
The Minister will argue that there is a case for a Henry VIII power in an emergency Bill of this kind. We remain concerned about the breadth of Clause 50 and the precedent it may set, but I am grateful to the Minister for his engagement with this debate, and I thank him. In the meantime, I beg leave to withdraw Amendment 8.
“(3A) When deciding whether to make property transfer regulations under this section in respect of a steel undertaking, the Secretary of State must consider the costs that the Secretary of State thinks are likely to be associated with the exercise of the power.” Member’s explanatory statement
This amendment would require the Secretary of State to consider the costs associated with making property transfer regulations under clause 15.
Lord Sharpe of Epsom
(a) the affirmative procedure, or(b) if the Secretary of State thinks it necessary to make regulations without using the affirmative procedure, the made affirmative procedure.”Member’s explanatory statement
This amendment would upgrade, from negative to affirmative or in some cases made affirmative (see clause 61), the procedure for regulations about consideration and terms for the performance of continuity obligations (see clauses 33 to 38).
Lord Sharpe of Epsom
Member’s explanatory statement
This amendment would upgrade, from negative to made affirmative (see clause 61), the procedure for regulations about the enforcement of obligations under share transfer or property transfer regulations.
Lord Leong
Member’s explanatory statement
This amendment would require (rather than enable) compensation scheme regulations to make provision for the role of an independent valuer and would focus more explicitly on their role in carrying out valuations for the purposes of the regulations.
Lord Leong (Lab)
My Lords, I am pleased to introduce a set of amendments that the Government have tabled. I hope that we have demonstrated throughout this Bill’s passage a willingness to listen to and engage with the concerns raised by your Lordships and to consider potential solutions. In tabling these amendments, we seek to address the concerns raised by the noble Lord, Lord Fox, regarding the discretionary nature of the appointment of an independent valuer. I previously noted that the Government intend to appoint a valuer whenever the principal powers in the Bill are exercised. We therefore consider the noble Lord’s suggestion to make this mandatory reasonable.
Amendment 17 will therefore make the required change by ensuring that any compensation scheme regulations must provide for the appointment of an independent valuer. The amendments that follow to Clause 54 make minor consequential changes clarifying that the valuer’s role is to carry out valuations for the purposes of the regulations, which is a critical step in determining any amounts of compensation. I hope that these amendments demonstrate the Government’s constructive approach and that noble Lords will support them.
Turning to Amendments 20, 21 and 23 from the noble Lord, Lord Fox, I am grateful to him for his engagement over the past few weeks on this and other points. These amendments would ensure that compensation scheme regulations must require the independent valuer to take into account environmental and health and safety liabilities when assessing the value of the relevant steel undertaking. I refer also to the points made by the noble Lord, Lord Redwood, earlier. I have said during the Bill’s passage that the Government will seek to address concerns from noble Lords as far as possible.
Many companies operating in heavy industries such as steel operate as normal with contingent liabilities. The precise cost associated with environmental liabilities would depend on many factors, including the extent to which land will be retained for future steel-making, kept safe or remediated for alternative light industrial use. None the less, we agree that the environmental and health and safety liabilities are likely to be an important part of any compensation determination and that this should be made clear in statute. I am therefore pleased to confirm that the Government will support these amendments, and I hope the House will support them too.
Lord Fox (LD)
My Lords, that was a very positive response from the Minister, and I thank him and his team for really listening to what we have been saying. Amendment 17 is an important step forward and I am pleased that he has tabled it. Amendment 21, as the Minister pointed out, makes something that might happen mandatory, taking on board fully the issues raised on another group by the noble Lord, Lord Redwood, and absolutely taking on board the issues I raised in Committee. I thank the Minister for his enthusiasm and look forward to this being added to the Bill.
Lord Sharpe of Epsom (Con)
My Lords, I echo my noble friend Lord Hunt’s comments on the previous group. I thank the Minister for his engagement, and the Minister and the noble Lord, Lord Fox, for their amendments in this group. Amendment 17 is very welcome. It ensures that compensation regulations must provide for valuations to be carried out by an independent valuer rather than leaving that as an optional feature of the scheme.
I also welcome the Government’s work with opposition parties to ensure that relevant liabilities are properly reflected in the valuation process. In particular, Amendment 21 ensures that environmental and health and safety liabilities must be taken into account, as my noble friend Lord Redwood powerfully articulated on an earlier group.
Lord Redwood (Con)
My Lords, I too welcome this from the Government. I think they will find it very helpful because, should we move on to the full acquisition of British Steel at Scunthorpe, there remain, as I understand it, financial issues outstanding with the current Chinese owners. It will be very important to have an accurate and full account of all these long, deep-rooted and sometimes very expensive liabilities to provide some counter to what we read in the press is their rather extravagant idea of how much they ought to be paid.
Lord Leong (Lab)
I thank all noble Lords for their support. I want to share with noble Lords that the issue of health and safety is definitely a priority. At British Steel there has been a clear improvement in health and safety standards since the introduction of the special measures Act last year. This will remain a central priority going forward. Indeed, since the passage of the Act we have already spent some £8.1 million on essential improvements in this area, so we do take health and safety seriously and it is a priority for the Government.
Lord Leong
Member’s explanatory statement
This amendment is consequential on my amendment to clause 53(1).
Member’s explanatory statement
This amendment is consequential on my amendment to clause 53(1).
Member’s explanatory statement
This amendment is consequential on Lord Fox’s amendments to clause 54(4).
(a) must require;”Member’s explanatory statement
This amendment would make it mandatory for an independent valuer to take environmental and health and safety liabilities into account when making a determination.
Lord Leong
Member’s explanatory statement
This amendment is consequential on my amendment to clause 53(1).
Member’s explanatory statement
This amendment is consequential on Lord Fox’s other amendment to clause 54(4).
Lord Leong
Member’s explanatory statement
This amendment is consequential on my amendment to clause 53(1).
Member’s explanatory statement
This amendment is consequential on my amendment to clause 53(1).
Member’s explanatory statement
This amendment is consequential on my amendment to clause 53(1).
Member’s explanatory statement
This amendment is consequential on my amendment to clause 53(1).
Member’s explanatory statement
This amendment is consequential on my amendment to clause 53(1).
Member’s explanatory statement
This amendment is consequential on my amendment to clause 53(1).
Lord Hunt of Wirral
Member’s explanatory statement
This amendment would limit the financial assistance that can be provided under the Act.
Lord Hunt of Wirral (Con)
My Lords, in moving Amendment 31 I will also speak to Amendments 32, 33, 35 and 36 standing in my name and that of my noble friend. I support the similar sentiments and approach expressed in Amendment 37.
I do not wish to repeat the arguments made in Committee, but on these Benches we remain gravely concerned by the open-ended cost to the taxpayer that the Bill potentially permits. The Government have already announced £2.5 billion of taxpayer funding for the steel sector. That is the figure that Ministers have chosen to present as a demonstration of their commitment to rebuilding and modernising British Steel and the steel sector. Yet in this Bill they seek an unlimited power to provide financial assistance with no statutory ceiling whatever. I believe this is bad economics, bad politics and, unless some clarity is forthcoming, quite possibly bad faith too. If £2.5 billion is not enough, how much is? Is there any maximum figure at all that Ministers are prepared to put before us and then stand behind?
Lord Redwood (Con)
My Lords, I am so glad my noble friend has raised once again this crucial and fundamental point. It is of great importance and of help to the Government.
When I have in the past had some responsibility for trying to recover the financial position of the odd distressed company—although nothing nearly as distressed as British Steel at Scunthorpe—I have always found it was an essential discipline to first of all institute very frequent reporting, because you need to signal to the executives undertaking the day-to-day work that the financial state of the company is at risk and that they need to give great priority to this. You need to help them get clarity over why cash is draining out of the business. This business, British Steel, which is under the operational control of the Government, is draining cash, we believe, at £500 million a year. That is a phenomenal rate of loss, which is going to have an obvious impact on the public accounts, at a time when we know that government money is scarce and there are many other priorities. We need to know rather more about why it is £500 million.
Is there any residual investment programme left? That would be the first thing to go when you are trying to save cash. Is it still committing money to raw material stocks? It clearly should not be allowing more material stocks. Does it have a very large stock of finished product which it is not able to sell? If that is the case, what is the plan for trying to move that stock on? What is the reality of the price level it is going to get for that stock? Obviously, stock is a mixture of volume and value, and you have to try to maximise the cash you can get for the stock you have got before you would normally go on to produce more. This plant has the particular problem that it has to keep producing, even if it is not able to sell enough of the product at a sensible price. You would expect regular reporting, certainly to the chief executive appointed by Ministers, but I would have thought that the Minister with day-to-day responsibility for this would know what is going on, and on the trading accounts, because a lot of the cash going out may be trading losses. You would want to see an urgent plan for selling more and economising on costs wherever you can, whether that is bought-in materials, the productivity of labour or other overhead costs that the business is incurring.
During the debates so far, I have not felt the Government’s urgency around this financial problem. Every pound that goes out of the door on losses that you are responsible for as a steel-maker is a pound that cannot be spent on the new and better industry that you really need in order to take the country forward. I am not blaming the Minister, who has been exemplary in his conduct and helpfulness—I am sure he wants, as we all do, a good outcome to this—but in those conversations within ministerial offices, it would be good if a Minister in the other place, for example, could make more Statements which showed that there was a plan and a determination to rescue this industry that we all wish to rescue.
In this group of amendments, there is talk of quarterly reporting. That is a big enterprise in terms of people and scale of loss. Quarterly reporting is quite common and normal now in the public quoted sector. It is a good discipline, even for the most profitable businesses in the world, because people like to make sure the trends are still good and the managers are in charge of it. I would have thought that quarterly reporting was the bare minimum, and if it was somebody’s day-to-day responsibility then they would obviously need rather more frequent reporting than that.
The public deserve quarterly reporting from this industry, which they now have a substantial operational stake in. I urge the Minister to think about more regular public clarity. I hope that such detailed, short-term regular reporting is going on. It would be good to get some good news out of the Government that they are applying the right kind of financial disciplines to control the outflow of cash. If they do not control the outflow of cash, it will end in tears and redundancies.
Lord Sentamu (CB)
My Lords, I want to simply question Amendment 31. In Clause 58(2), there are many different ways in which the Government can provide assistance, such as
“by way of grant, loan, guarantee or indemnity … by the acquisition of shares or any other interest in, or securities of, a body corporate, … by the acquisition of any undertaking or of any assets … pursuant to a contract, or … by incurring expenditure for the benefit of the person assisted”.
I am one who believes that we should plan for the future and make sure we do not spend above our means. However, it seems to me that, in a Bill of this nature, putting a tag of £2.5 billion by the end of 15 August 2029 is a restricting element and it does not give me confidence that we are actually interested in nationalising steel.
There are so many unknowns. During the debate when we were all summoned by the Prime Minister to rescue the steel industry in Scunthorpe, it was quite clear that the books were not very encouraging—but this is a national asset, so what do you do? It seems to me that to put that amount in the Bill is almost legislating for failure. If, for example, it is £2.6 billion, not £2.5 billion, what would happen? Would the whole thing collapse? Putting figures in the Bill is not good for legislators. We have got the Exchequer and all kinds of other people for that. Let us not try to conduct this Report as if we are the Treasury—we are not. I urge the noble Lord, having flagged it up, to nevertheless withdraw his amendment. I would find it difficult to support.
I remember being in Birmingham when Rover collapsed. BMW announced that it would build the Mini there but left the other plant. The Government were being asked for only £600 million to keep the plant. They were already in agreement with China to sustain it, but, because of the laws around government support for businesses from the EU, the Government found that they could not, and the plant went.
I always respect the noble Lords, Lord Hunt and Lord Sharpe, because of their wisdom. However, if they do not mind me telling them this, as a Cross-Bencher rather than one of those rarefied Lords spiritual, I think that they are losing a little of what I have always taken them for—just no.
Lord Fox (LD)
My Lords, I welcome the noble and right reverend Lord’s descent from the spiritual to the temporal, and indeed the financial. His contribution is appreciated. I also welcome all those who have not had the joy of participating in the steel Bill debate so far.
Before I speak to Amendment 31, I am going to speak to Amendments 34 and 37, which are in my name. I am happy to say that the Minister pulled the rug from under my feet with respect to Amendment 34 when he spoke to a previous group of amendments. Amendment 34 seeks to promote a role for Select Committees going forward. I am happy to say that the Minister has taken that suggestion on board to a large extent. It is important that Select Committees are able to get under the bonnet of this, to look at the nature and amount of financial assistance, the beneficiaries of that financial assistance, the purpose and the effect of that financial assistance, and the conditions of repayment. I am happy to say that the points the noble and right reverend Lord made about the nature of any support were covered by previous comments.
Amendment 37 would insist on a report to outline the impact of financial assistance provided under Clause 58, with a focus on the short-term and long-term investibility of any nationalised steel undertaking. In tabling this amendment, I hope the Minister can put on record again what he told us in Committee about the long-term aim of the Government regarding returning these public assets into private hands. It would help your Lordships if the Minister were able to repeat that.
On Amendment 31, the Liberal Democrats in the Commons tabled an amendment to cap financial assistance, but we are now dealing with a different Bill. The Government have accepted Amendments 7 and 9, where value for money is accepted as a criterion in the Bill. We have inserted rigorous quarterly reporting. The noble Lord, Lord Redwood, will remember from two groups back that that amendment has been accepted and we will have quarterly reporting. As we have just said, we have ensured a role for Select Committees in scrutinising any nationalised industry, and we have implemented mandatory valuation of contingency liabilities. That Bill is not the Bill we are talking about.
I am persuaded that flexibility is required. The noble Lord, Lord Hunt, put in a spirited performance and, at one point, was possibly auditioning for the role of Chancellor—when he talked about magic money trees, I thought he was pushing his name forward to become the next Chancellor of the Exchequer. But then, he seemed to very freely talk about spending £2.5 billion here and £2.5 billion there. My worry is that his £2.5 billion would become a target, rather than the limit. Given the controls that we have put into the Bill, we will not be supporting Amendment 31.
Lord Leong (Lab)
My Lords, I thank all noble Lords for their contributions, and I thank the noble and right reverend Lord, Lord Sentamu, for his support.
Amendment 32, in the names of the noble Lords, Lord Sharpe and Lord Hunt, would require that details of any proposed financial assistance under Clause 58 be provided to Parliament before the assistance can be granted. The noble Lord, Lord Fox, has raised the issue of parliamentary scrutiny in respect of this clause in Amendment 34, which would require detailed proposals to be put forward before Parliament for a 90-day period and allow the Select Committee to make recommendations which the Government must respond to before any assistance is forthcoming. I understand that these amendments address the concerns of all noble Lords about the potential to incur costs in relation to the powers in this Bill.
As I have noted previously, there is a framework of public-spending principles and governance, designed to ensure that public funds are well managed, and the Public Accounts Committee holds government to account in this respect. Where the Government use the powers in the Bill to transfer a steel undertaking into public ownership, costs may be incurred from day one and will need to be funded to maintain an ongoing operation. It is vital that a steel company that is running production continuously does not face disruption due to funding shortfalls. That is why these two amendments cannot be accepted by the Government, despite the good intentions behind them. As set out in Clause 59, we will provide annual reports to Parliament detailing the costs incurred under the financial assistance provided. A nationalised company will also need to publish an annual report and accounts, as the department does, so this information will be available in several places.
Lord Hunt of Wirral (Con)
My Lords, I am very grateful to the Minister, in particular for those additional comments. I and my noble friend Lord Sharpe—as well as, I believe, the noble Lord, Lord Fox—have been reassured by how the Minister has termed the positive future that we all want to see. However, as my noble friend Lord Redwood pointed out, the Government have still not provided Parliament with a clear limit on the potential exposure facing taxpayers. I do not know whether the Minister has any aspiration to become a Treasury Minister. To become one, you have to believe in caps—there is no other way to become a Treasury Minister.
I say to the noble and right reverend Lord, Lord Sentamu, that the Government just have to come to Parliament. If they require more money, they should ask Parliament for more money. At the moment, they have said that £2.5 billion is necessary. If there is a need for more money, it is perfectly open to the Government to come to Parliament and ask for it. Without a clear limit, there is a real risk that the cost could run into tens of billions of pounds.
Lord Sentamu (CB)
Therefore, if they can come to Parliament to ask for it, do not put the limit in the Bill. That is what the noble Lord seeks to do in his Amendment 31.
Lord Hunt of Wirral (Con)
If the noble and right reverend Lord does not support this amendment, it will be unnecessary for the Government to come and ask for more money. It is only when there is a cap that the Government have to be accountable to Parliament. For the reasons I have outlined, and because taxpayers should never be asked to sign a blank cheque, I wish to test the opinion of the House.
Captain of the Honourable Corps of Gentlemen-at-Arms and Chief Whip (Lord Kennedy of Southwark) (Lab Co-op)
My Lords, before we divide the House, I need to inform the House that there have been intermittent network issues on the estate. Because of the small risk that this may cause temporary disruption to the pass readers and the Division system, I have agreed with the usual channels to extend the time for Divisions from eight to 10 minutes.
I ask all noble Lords to ensure they firmly tap their pass on the pass reader. If in doubt, they should tap their pass a second time. The system will only record a vote once. If we all remember that beep means you have voted and no beep means no vote, we will all be fine.
Lord Sharpe of Epsom
“Report on the impact any nationalisation of steel undertakings has had on inward investment to the United KingdomWithin six months of the day on which this Act is passed and every subsequent six months, the Secretary of State must lay a report before Parliament which sets out the impact that nationalisation of any steel undertaking under this Act has had on inward investment to the United Kingdom.”Member’s explanatory statement
This new clause would place a duty on the Secretary of State to report to Parliament on the impact any nationalisation of steel undertakings has had on inward investment to the United Kingdom.
Lord Sharpe of Epsom (Con)
My Lords, I will speak to Amendments 38 and 39, standing in my name and that of my noble friend Lord Hunt of Wirral. On Amendment 38, I hope that the Minister can give a clear assurance that the future impact assessment will include an assessment of the effect of nationalisation on investment in the domestic steel sector.
On Amendment 39, the Minister gave assurances in Committee that financial assistance would comply with domestic and international subsidy control rules. I would be very grateful if he could put that reassurance more clearly on the record. Could he please confirm that the Government have assessed whether any proposed support could give rise to concerns under the domestic subsidy control regime, including any conversations that they have had with the Competition and Markets Authority? Could he also confirm that Ministers are satisfied that the proposed support will comply with the World Trade Organization’s subsidy rules? I look forward to the Minister’s response. I beg to move.
Lord Leong (Lab)
My Lords, the amendments in this group address inward investment and a level playing field. I emphasise at the outset that the Government are committed to ensuring that any publicly owned steel undertaking is subject to the same requirements and standards as any privately owned steel undertaking.
Amendment 38, in the names of the noble Lords, Lord Sharpe and Lord Hunt, would place a duty on the Secretary of State to report to Parliament on the impact of any nationalisation of a steel undertaking on inward investment in the UK. I reassure your Lordships that the Government are committed to revitalising the steel sector and to establishing an investible and competitive business environment. To date, we have had positive feedback from industry on the Bill and the Government’s approach to nationalisation.
To be clear, public ownership is not an end in itself; it is a means of safeguarding our strategic domestic capability in exceptional circumstances. Our intention behind any intervention would be to make the changes necessary to put the steel undertaking on a sure footing and, where possible, return it to a position where it could attract private investment.
As I have set out previously, any use of the transfer powers would require an impact assessment. This would set out the impact of a nationalisation on the economy and, where appropriate, the Government would undertake post-implementation reviews. As I have confirmed, the Government will ensure that a debate on the steel strategy and the impact of the Bill takes place in both the House of Commons and the House of Lords within 12 months of Royal Assent.
Amendment 39, again in the names of the noble Lords, Lord Sharpe and Lord Hunt, seeks to require the Secretary of State to maintain a level playing field between publicly and privately owned steel companies. I sympathise with the concern expressed by the noble Lords and want to make it clear that the governance and regulatory treatment of any nationalised steel company will seek to ensure a level playing field.
To emphasise this, I state that any financial assistance would be time-limited, targeted and proportionate to avoid market distortions. The provision of any funding would comply with domestic and international subsidy control obligations. I hope this reassures noble Lords that the Government are committed to ensuring that any publicly owned steel undertakings will not be unfairly advantaged.
Lord Sharpe of Epsom (Con)
My Lords, I am very grateful to the Minister for his remarks. It was particularly pleasing to hear that the Government have received positive feedback from the industry. It is not for now, but I wondered whether the Minister might be in a position to be a little bit more specific and perhaps write to noble Lords who have taken part in the debate, outlining some of those positive comments. That would help to contextualise our future debates. I am also pleased, as we have discussed in earlier groups, that we will deal with post-implementation reviews and that there will be a debate within 12 months in both Houses. That is a very welcome development.
As regards Amendment 39, I listened to what the Minister said. I am particularly pleased that he assured us that the Government will seek to pursue a level playing field quite explicitly and to avoid market distortion. Those are incredibly important things for so many reasons, particularly when it comes to encouraging inward investment and ensuring that existing operations are not disadvantaged by anything that the Government do on behalf of the taxpayer. In the light of those assurances, I beg leave to withdraw my amendment.
Lord Hunt of Wirral
“Exemption of iron and steel carbon border adjustment mechanism goods(1) Section 143 of the Finance Act 2026 (charge to carbon border adjustment mechanism) does not apply to emissions embodied in a CBAM good which is an iron and steel good for the purposes of Schedule 16 to that Act where the good is imported by a transferred steel undertaking for use in connection with the carrying on of its business.(2) In subsection (1), “transferred steel undertaking” means a steel undertaking in respect of which the Secretary of State has exercised a principal transfer power.” Member’s explanatory statement
This new Clause would exempt iron and steel CBAM goods imported for use by a steel undertaking brought into public ownership under this Act from the carbon border adjustment mechanism.
Lord Hunt of Wirral (Con)
My Lords, I will also speak to Amendments 42 and 43 standing in my name and that of my noble friend.
As we stated in Committee, the carbon border adjustment mechanism and emissions trading scheme will have a material effect on the domestic steel sector. The Government will no doubt argue that the CBAM and ETS are necessary to meet their net-zero objectives and that they will not harm British industry. We may have significant disagreements on that point. However, what cannot be disputed is that these measures will affect steel undertakings in this country. The question is whether that effect will be positive or negative on costs, production, exports and international competitiveness.
In Committee, Ministers suggested that the business environment, including the ETS and CBAM, would be relevant to valuation. But that is not the same as a clear assessment of the practical effect of these policies on the future of domestic steel-making. I therefore invite the Minister to confirm that the future impact assessment to which the Government have referred will include a full assessment of the effects of the CBAM and ETS on the domestic steel sector.
If the Government are right that these measures will protect industry, support investment and improve competitiveness, they should have no difficulty at all in providing that assurance. If, however, that assessment shows that these measures are damaging production, exports, investment or competitiveness, that would also give the Government the evidence needed to change course, and that is why I wish to move this amendment. I beg to move.
Lord Redwood (Con)
My Lords, I am very grateful that my noble friend has raised this important point. We would probably not be having these big debates about steel nationalisation if the United Kingdom in recent years had had competitive energy pricing, and if it had not gone in for carbon pricing and carbon taxes that can have an adverse bearing on energy-using industries. However, we are where we are, and so my noble friend is right to ask the Minister to give some reassurances. We seem to be involved in overtaxing carbon and then having to subsidise those businesses that suffer as a result.
Of course, the CBAM is an EU-designed scheme which we are copying, to try to offset the impact that very high carbon and energy costs have on domestic economies and industries, by imposing a similar tax or tariff on the imported goods from countries that do not impose such carbon taxes and carbon additions to the energy they are using in industrial plant. That does help in some way for the domestic steel-producing industry; it becomes a problem for the domestic steel-using industry where it is having to import steel beyond the tariff-free quota provided under the CBAM. We note that the tariff-free quota is skewed to favour European producers, rather than other producers around the world who might be otherwise cheaper or more advantageous.
Lord Fox (LD)
My Lords, we debated CBAM and the ETS in Committee, so I will not add to that debate, but I will ask a question of the proposers which I did not ask then: how is a steel business affected differently by CBAM or the ETS, whether it is publicly or privately owned? The answer is that it is not. The Bill is about the potential public ownership of steel. We will have to have a debate about CBAM and the ETS. The Liberal Democrats often talk about energy prices but not in the context of this Bill, because it is about whether a steel entity is in public or private ownership, and frankly, the CBAM will affect them the same way, no matter where that ownership lies.
Lord Leong (Lab)
My Lords, I thank noble Lords for their contributions to this debate on the emissions trading scheme and the carbon border adjustment mechanism, which I will refer to as CBAM, and their impacts on the steel sector.
Notably, these amendments seek to exempt a publicly owned steel undertaking from both these environmental measures, thereby undermining the level playing field that the noble Lord mentioned in the previous group. At the outset, I emphasise the Government’s commitment to their industrial decarbonisation policies and to moving towards a green, decarbonised steel sector. Although I appreciate that there may be differing views on this issue, these amendments would completely undermine the Government’s objectives for these measures.
These commitments build on the statutory reporting requirement on financial assistance in Clause 59, the company’s annual report and accounts, and the quarterly Written Ministerial Statements, which I have already set out. Any nationalised steel undertaking would not be exempt from the corporate reporting requirements set out in the Companies Act 2006. That Act contains various reporting requirements, which vary depending on the size of the entity. Where relevant or material, our Written Ministerial Statements may refer to any wider contextual or regulatory impacts. In addition, as previously mentioned, the Secretary of State would have the ability, if needed, to request an interim report on a particular issue.
Amendment 41 seeks to exempt a publicly owned steel undertaking from CBAM. I understand the concern expressed by the noble Lord; however, I emphasise that CBAM’s purpose is to ensure that imported carbon-intensive goods face comparable carbon prices to those of domestically produced goods. It gives industry confidence to invest in the UK, knowing that its decarbonisation efforts will not be undermined. CBAM makes no exemptions for particular UK firms. Its intent is to target the problem of carbon leakage and ensure that highly traded, carbon-intensive goods from overseas, including steel, pay a comparable carbon price to that paid by UK manufacturers.
I understand the intention behind Amendment 42 and the desire to ensure that Parliament remains informed about the impact of carbon pricing policies on the steel sector. The Government are committed to supporting a competitive and sustainable steel industry while delivering our decarbonisation objectives. However, the UK emissions trading scheme and the carbon border adjustment mechanism are economywide policies designed to address carbon leakage and support the transition to net zero across industry as a whole, rather than for any particular company or ownership model.
The UK ETS Authority already keeps the operation of the scheme under review. The scheme contains statutory review mechanisms. The authority has committed to continued monitoring of both free allocation policy and the interaction between ETS and CBAM. The authority has also recently confirmed the extension of the UK ETS beyond 2030 and will continue to engage with industry and consult on future scheme design, ensuring that the impacts on affected sectors are properly considered. Given these existing review mechanisms, it is not necessary to create a separate statutory requirement for a particular transferred steel undertaking.
Amendment 43 seeks to exempt a publicly owned steel undertaking from the emissions trading scheme. I am sympathetic to the fact that this imposes a cost on activities that have significant emissions. However, as with Amendment 41, accepting Amendment 43 would grant preferential treatment based on ownership and undermine a level playing field across the industry. The transition to low-carbon steel must be fair, credible and consistent across all operators, whether publicly or privately owned. I emphasise that the ETS includes targeted protections for energy-intensive, trade-exposed industries, including steel. Further protections will be introduced through CBAM from 2027.
The Government remain firmly committed to both a competitive steel sector and our decarbonisation objectives. Exempting a publicly owned steel undertaking from ETS or CBAM would create an uneven playing field, weaken the integrity of these schemes and undermine efforts to tackle carbon leakage. Steel producers, regardless of ownership, should operate within the same fair and consistent framework. I hope that my comments reassure noble Lords.
Lord Hunt of Wirral (Con)
My Lords, I am very grateful to my noble friend Lord Redwood for highlighting the importance of ETS and CBAM. I say to the noble Lord, Lord Fox, that the British taxpayer has a right to know the effect of ETS and CBAM. I take his point that it would apply whether it was in the private or the public sector, but we are now dealing with a nationalised industry which is funded by the taxpayer, and the taxpayer has a right to know exactly what the effect of the UK ETS and CBAM will be on the costs, production, exports and competitiveness of the transferred steel undertakings.
However, I recognise that the Minister has done much to explain the method by which the Government are approaching this situation. We will keep it under careful scrutiny but, in the meantime, I beg leave to withdraw the amendment.
Lord Sharpe of Epsom
“Industrial action affecting a transferred steel undertaking(1) Where the Secretary of State has exercised a principal transfer power in respect of a steel undertaking, the Secretary of State may prohibit or restrict industrial action affecting that undertaking if the Secretary of State considers that the industrial action creates, or is likely to create, a sufficient risk to the public interest in respect of which the principal transfer power was exercised.(2) An act done in contravention of a prohibition or restriction under subsection (1) is not protected by section 219 of the Trade Union and Labour Relations (Consolidation) Act 1992 (protection from certain tort liabilities).(3) Industrial action in contravention of a prohibition or restriction under subsection (1) is not protected industrial action for the purposes of section 238A (participation in official industrial action) of that Act.”Member’s explanatory statement
This amendment would enable the Secretary of State, following the exercise of a principal transfer power, to prohibit or restrict industrial action only where it creates a sufficient risk to the public interest grounds on which the steel undertaking was brought into public ownership.
Lord Sharpe of Epsom (Con)
My Lords, when we debated this amendment in Committee, the Minister suggested that it was somehow about industrial relations. It is not. This amendment is about our national security. The Prime Minister himself has warned the House and the country that we may face aggression from Putin’s war machine against a NATO ally before the decade is out. Let that sink in. It is not “if” but a real and growing risk, on our watch, in this decade.
What is the Government’s answer when it comes to the very steel from which we forge our warships and our defences? Their answer, apparently, is that production could grind to a halt whenever a strike is called—no matter the stakes, no matter the moment, no matter who benefits from Britain’s weakness. This amendment does not abolish the right to strike. Let no one on the Benches opposite pretend otherwise. It says something far narrower and far more reasonable: that, where the Secretary of State has taken a steel undertaking into public ownership precisely because of its importance to the public interest, industrial action which threatens that public interest cannot simply proceed as though nothing were at stake. Where the risk is sufficient and where the ground for public ownership was the public interest itself, the Secretary of State may act to protect it.
We are told again and again that this Bill is about safeguarding a strategic national asset. Very well, we accept those arguments—but let us mean them. You cannot claim with one hand that steel production is too vital to be left to the market and with the other hand leave that same production exposed to disruption whenever it suits a dispute wholly unconnected to the nation’s defence. You cannot have it both ways.
If a strike stopped the plates and the girders needed for a Royal Navy hull at the very moment that the Prime Minister’s own warning came to pass, would the Government stand by, hands tied by statute, and watch it happen? If the answer is no, the Government should accept this amendment today rather than legislate the problem into existence and hope it never arrives.
In an earlier group, the Minister used as a defence how difficult the industry is and the massive external pressures that it faces. This is an issue that is within the Government’s potential control. They should accept this amendment. We on these Benches are not afraid to say what needs to be said. In an uncertain and dangerous world, national security must remain a priority. I urge the Government, in the interests of national security, to accept this amendment. I beg to move.
Lord Fox (LD)
My Lords, the noble Lord, Lord Sharpe, raises a serious issue. There was a moment when I thought I had passed through the looking glass. Your Lordships on that side of the House were sitting on this side, and those Lordships who were here were sitting on that side of the House. The only thing that broke me from that reverie, far from it being the noble Lord, Lord Sharpe, at the Dispatch Box, was the noble Lord, Lord Callanan. He was proposing the Strikes (Minimum Service Levels) Act 2023, with which the Government of the day sought to do exactly as the noble Lord, Lord Sharpe, seeks with this amendment.
I ask the noble Lord, Lord Sharpe, how many times that Act was applied. How effective was it? The issue that he raises is important. Of course the security of the country is important, but this is not the way to ensure the security of our country. Having a proper partnership with the workers in the industry is the way in which you secure the security of this country.
Lord Leong (Lab)
My Lords, I thank all noble Lords for their contributions and the noble Lord, Lord Fox, for those words. As this is the last group of amendments, I thank all noble Lords for their constructive approach to the scrutiny of this Bill. In particular, I thank the noble Lords, Lord Sharpe, Lord Hunt and Lord Fox, for taking the time to meet me over the last few weeks. The way in which we have been able to collaborative to refine and improve the Bill truly shows your Lordships’ House at its very best.
Amendment 44 is in the names of the noble Lords, Lord Sharpe and Lord Hunt. Before I speak to it, I state that the Government take national security seriously; it is a priority. The amendment seeks to prohibit or restrict industrial action where there is a sufficient risk to the public interest grounds on which the steel undertaking is brought into public ownership. I understand that the intent of this provision is to ensure that any publicly owned steel undertaking can operate effectively without delay.
However, this is not the appropriate means to achieve this goal. I emphasise the absolute importance of workers’ rights. The steel workforce is the backbone of this industry. This Government are committed to protecting their rights and working with the trade unions and the workforce to ensure that operations are as effective and secure as possible. Noble Lords will know that I was closely involved in the delivery of the Employment Rights Act. Workers’ rights is an issue that is close to my heart. While political differences remain, we are not in the business of counterproductive approaches to industrial relations. As part of delivering the Employment Rights Act, our plan to make work pay, we are continuing to consult with businesses, trade unions and civil society to make sure we get the detail right. Several consultations are still live, including on reforms to zero-hours and similar contracts. This amendment is neither necessary nor appropriate to ensure that a publicly owned steel undertaking can operate effectively.
I hope I have convinced noble Lords of the reasons why the Government cannot support this amendment. I therefore respectfully ask that it be withdrawn.
Lord Sharpe of Epsom (Con)
My Lords, I am very grateful to the Minister for his response and, in particular, for the recognition of the central importance of national security in this matter. That is very welcome, but recognition is not the same as resolve. If the Minister truly accepts the force of the argument, the surest way to demonstrate that is not warm words at the Dispatch Box but acceptance of the amendment. I gently say to him that he could have strengthened his own case considerably by doing just that.
I am grateful to the noble Lord, Lord Fox, for pointing out my party’s admirable consistency, which sometimes we are criticised for. I suggest that nothing in this amendment would prevent any sort of proper partnership—to use the noble Lord’s words—with the workforce, which of course we would approve of and endorse as a first and foremost. The simple fact of the matter is that this is a different set of circumstances. We are talking here about the national interest and national security. They are of fundamental importance as regards this entire Bill, and that is why we have proposed this amendment.
To finish there would be to finish on a slightly discordant note, and I do not wish to. I am enormously grateful to the Minister for all his engagement and for accepting so many of our arguments. We are very grateful for the reassurances we have received from the Dispatch Box and the acceptance of some of our amendments, and we wish the Minister well in his future endeavours. I beg leave to withdraw the amendment.