Westminster Hall

Tuesday 7th March 2017 Westminster Hall

Tuesday 7 March 2017

[Sir Roger Gale in the Chair]

Beer Duty

Tuesday 7th March 2017 Westminster Hall

00:00

[Steve Double (St Austell and Newquay) (Con)]

I beg to move,

That this House has considered beer duty.

It is a pleasure to serve under your chairmanship, Sir Roger, and to open this debate on a very important matter. First, I must acknowledge and thank my hon. Friend the Member for Gower (Byron Davies), who secured this debate only to find that it clashed with other, unavoidable parliamentary business. He therefore asked if I would step in for him. His loss is my gain. I am sure he would want me to mention right at the very beginning Gower Brewery, which produces some excellent ales—I remember a very enjoyable evening with my hon. Friend, drinking Gower Gold. It is right to acknowledge that in his absence.

The debate is timely, taking place the day before the Budget. We hope once again for good news from the Chancellor and another cut in the much despised beer duty. There is no doubt that the brewing and pub industry has faced a great many challenges in recent years, which have brought a wind of change blowing through one of the oldest and best loved traditional businesses in the UK. Public houses—or, as we all more affectionately know them, pubs—and breweries have experienced enormous change and upheaval over the past 30 years or so. The vast and often overlooked brewing and hostelry industry is an icon of our nation, cited by tourists the world over as one of the reasons for visiting the UK. Almost 900,000 people work in pubs and the supply chain, from agriculture to brewing, logistics and the licensed trade.

[Dr James Davies (Vale of Clwyd) (Con)]

I congratulate my hon. Friend on introducing the debate. He rightly points to the vast number of jobs that the industry supports, many of which are in peripheral areas of the country such as our constituencies. Does he agree that action on beer duty, which is up to 10 times that of the duty paid in our neighbouring continental countries, is a vital step?

[Steve Double]

My hon. Friend is absolutely right. Whereas many other industries are centralised in very specific areas or regions of our country, the pub industry is spread right across it and provides much needed jobs in many of the more rural areas. He is also right that we need to reduce the gap between the duty we pay in this country and the duty paid in many other countries, and I will come on to that later.

[Mr John Spellar (Warley) (Lab)]

The hon. Gentleman rightly identifies the role of rural pubs, many of which serve those who come out to the countryside from our conurbations. What impact does he think the ill-thought-out proposals from the Local Government Association to cut the number from 2 pints or 1.5 pints to 1 pint will have on those pubs?

[Steve Double]

I assume the right hon. Gentleman is talking about the guidelines for alcohol consumption. I suspect that is a subject for another day, but I understand his point.

[Mr Spellar]

No, I am not talking about the guidelines; I am talking about the drink-drive limit. Most of the offences are recorded at the much higher level of about 150 mg. A reduction in the limit could have a dramatic effect on many rural pubs, let alone rugby clubs, Royal British Legion clubs and so on.

[Steve Double]

I now understand the point the right hon. Gentleman is making. I would never drink and drive at all. That attitude has become much more the norm in today’s society, where most people consider that drinking anything and driving should be avoided. I am not entirely sure that I agree with his point.

The brewing and pub industry not only employs 900,000 people but attracts many younger people to its workforce—in fact, 46% of those employed in the sector are under 25 years old. That level of employment among the young is a critical factor, especially in rural constituencies such as the one I represent in Cornwall. While many start out in basic roles, they go on to become professionals in the trade or elsewhere—for example, working as chefs, licensees or successful businesspeople in their own right, and employing others.

That said, the news has not always been good in recent times. Some 17,000 pubs have closed in the past three decades, and while the closure trend has slowed markedly of late, many communities will grieve the loss of their local, which all too often is the only pub in the area.

[Graham Stringer (Blackley and Broughton) (Lab)]

Although it is not the only factor, does the hon. Gentleman agree that cuts in beer duty increase investment and employment opportunities, particularly for the young, while increases do the opposite?

[Steve Double]

I wholeheartedly agree. Lower taxes generally encourage investment and growth in a sector, and I will press for that as the debate goes on.

[Claire Perry (Devizes) (Con)]

Does my hon. Friend share my sense of pride that it was a Conservative Government who in 2012 finally put an end to the beer duty escalator—a measure that had led to duty going up 42% between 2008 and 2012? Following that, in 2014 beer sales increased and an estimated 21,000 jobs were created in the industry.

[Steve Double]

My hon. Friend may have been reading my notes, because that is a point I will come on to highlight.

There are many reasons why pubs have closed. Some of them were badly managed, and some lacked investment to keep the facilities up to date. Although I believe that the smoking ban was the right thing to do, and it is popular among many pub goers, we have to acknowledge that it stopped smokers visiting the pub quite so often. There are also changing social habits, with more people drinking at home as a result of cheap alcohol available in supermarkets and other outlets.

Those factors have all contributed, but it is also undeniable that the dreadful and despised beer duty escalator introduced in 2008 had a devastating effect on the industry. Annual duty rises under the escalator led to beer duties rising to among some of the highest anywhere. Even now, following successive years of duty reduction by this Conservative Government, our pints remain heavily taxed at around 52p on a 5% alcohol by volume pint, compared with 4p in other key beer-brewing nations such as Germany and Spain—an enormous and disproportionate difference that needs to be addressed.

There is much more happening now, with a revolution in the old craft of brewing and selling beer to the UK’s 32 million beer drinkers. Numerous microbreweries have opened up and craft beer and real ale are rising in popularity. I have the great privilege of having a great example of a local family-run brewery in my constituency. St Austell Brewery has been a roaring success in recent years, particularly since the launch of its excellent Tribute ale. It now makes many excellent beers, and I spent an enjoyable day during the recent recess assisting master brewer Roger Ryman in making a batch of Proper Job. I count the fact that I managed to make more than I drank that day as a notable success.

While it is right to recognise concerns about alcohol abuse, we must note that the majority of people enjoy healthy levels of drinking. Given the social benefits that come with a visit to the local pub, it makes no more sense to celebrate pub closures than it does to close roads because some motorists speed.

[Mr Spellar]

On the subject of craft breweries, will the hon. Gentleman, who rightly attacks the beer duty escalator, acknowledge the very considerable role played by the duty exemption for small breweries that are getting off the ground? That was a major factor in the explosion of the craft brewery business and was introduced by my right hon. Friend the Member for Wentworth and Dearne (John Healey) when he was at the Treasury.

[Steve Double]

I will happily agree. The support given to microbreweries to develop right across the country—they are now producing very high-quality, excellent craft beer—is a success that should be noted.

[David Mackintosh (Northampton South) (Con)]

Does my hon. Friend agree that larger breweries, such as Carlsberg in my constituency, also play an important role in providing beer for people, but the beer duty also has an impact on them?

[Steve Double]

I wholeheartedly agree that the beer duty affects the whole industry. That is why I believe it needs to be addressed.

One interesting statistic I read was that communities that have a well loved pub are happier. Pubs have that very positive effect on local communities. I was dismayed when a local Liberal Democrat councillor in St Austell recently suggested tightening up the local licensing regulations and limiting the number of pubs to curb incidents of antisocial behaviour. That misses the point entirely, because well run pubs promote responsible drinking, and in my experience they have a positive impact by reducing crime and antisocial behaviour, rather than being the cause of the problem.

[Liz McInnes (Heywood and Middleton) (Lab)]

I am pleased that the hon. Gentleman has mentioned St Austell —I am very partial to a pint of Clouded Yellow myself. A family brewery, John Willie Lees, is a major employer in my constituency. I fully support the comments that the hon. Gentleman is making about social drinking. I am sure that he will agree that we should be promoting pubs, keeping them open and stopping people buying cheap alcohol and drinking alone at home.

[Steve Double]

I wholeheartedly agree. Not only are pubs great places for community cohesion, but they promote responsible drinking in a safe environment, which we should wholeheartedly support.

[Jessica Morden (Newport East) (Lab)]

I thank the hon. Gentleman for giving way again; he is very generous. On responsible drinking, another change has been the move to lower alcohol beer. Is the hon. Gentleman aware that beer with an alcoholic strength of less than 3.5% is subject to 66% more duty than very high-strength cider at 7.5%? Does he agree that we could do more to incentivise the consumption of beers under 3.5%?

[Steve Double]

I agree. We do need to look in particular at the amount of duty on high-strength ciders, because it is disproportionately low and should be increased. The duty on lower strength beers should also be looked at, to encourage their consumption. The industry was challenged by the Government to reduce consumption of alcohol units by 1 billion by 2015. By reformulating and introducing lower alcohol drinks, the industry surpassed that target ahead of schedule, which we should acknowledge and welcome. There is also a fall and clear downward trend in problems relating to under-age drinking in pubs, as licensees—pub landlords—have become more responsible in their approach to that matter.

The problems associated with drinking have less and less to do with pubs and more and more to do with sales of cheap alcohol in supermarkets and other off-licence establishments. It is clear that pubs can and do have a very positive impact on their local communities. Pubs are experiencing a revolution. They have caught the spirit of the times and of this Government: there is a belief and a strategy about getting best value for money and a happier, better outcome for everyone by making best use of what we have and combining our efforts.

Let us take as an example the village of Nanpean in my constituency of St Austell and Newquay. Once a bustling, busy community, almost solely reliant on the booming china clay industry, it has declined in recent years. That and changing shopping habits over the years meant that the Co-op supermarket, four general stores, the butcher’s, the bakery, the fish and chip shop and the post office all had to close. No shop remained—none was viable as a stand-alone unit; none could survive with separate overheads and wage bills. Thanks to innovation, though, the Grenville Arms pub in Nanpean now houses the post office and a shop, and the combination of the three has proved a great success. Each one helps the others to provide key services to the local community of about 2,000 people. The shop sells essentials and locally produced food, and the return of the post office is a real asset to the whole community. The scheme has created new jobs and, with its fresh role at the centre of village life, the pub has become a community meeting point.

All that was achieved by converting a disused room. Of course, there was a cost. That was met by the licensee and an organisation that was originally the inspiration of His Royal Highness the Prince of Wales. Pub is The Hub is a voluntary, not-for-profit organisation helps pubs in rural communities to innovate and thrive. By working with all interested parties—breweries, licensees, councils and local communities—it has had success in bringing together talents and opportunities and meeting needs. It gives guidance to groups seeking to buy their local pub to save it from closure. Besides advice, it gives grants—modest sums of money that make a big difference. Pub is The Hub says that, on average, for every pound in grant provided, an additional £1.60 is forthcoming from other sources.

I am very grateful to the Under-Secretary of State for Communities and Local Government, my hon. Friend the Member for Brigg and Goole (Andrew Percy), who is responsible for pubs. He continues to champion Pub is The Hub and has this year supported the organisation further with a £50,000 grant. Heineken matched the funding, giving Pub is The Hub further assistance to continue its excellent work across England and Wales and now, I believe, in Scotland.

A revolution is under way in the pub trade, and we need to do a lot more to support it. The simplest and best way to do that is by continuing the process of reversing the crazy, punitive, unfair and mean-spirited hikes in beer duty imposed by the previous Labour Government. The UK’s excise duty rate for beer is much higher than that in most European countries. Despite the three duty cuts by the Conservative Government in recent years, the UK has the third highest duty rate in the European Union. Forty per cent. of all beer duty paid in the EU is paid by the UK, yet we drink only 12% of the beer.

Tax on beer has been a sorry story. From 2008 to 2012, there were steep and relentless tax increases, with a staggering 9.1% hike in March 2008 and an 8% increase in December of the same year. Then came the beer duty escalator, which increased beer duty by 2% above inflation every year. By 2012, beer duty had increased by 42% since 2008. Although other factors played their part, that was a disaster for the industry, with thousands of pubs closing and tens of thousands of job losses. Despite the hike in duty, revenues rose by just 12%. Punitive taxes do not work.

In 2013 the beer duty escalator was, mercifully, dropped. Then came further relief with three 2% cuts and a freeze in 2016. There is revived confidence in the sector. Beer sales have increased, which in turn has led to higher levels of investment in pubs and breweries. Tax cuts work. They boost trade at home and give this major exporting industry extra confidence in its future. In 2016 the value of UK beer exports was a healthy £584 million; it was up 17% on the previous year. So there we have it: a multimillion-pound industry that exports the world over, employs the young in record numbers, attracts visitors to our shores and yet has in its sights ensuring that villagers still have a post office and the lonely have a place to go and be part of the local community.

I and many other hon. Members present want to thank the former Chancellor and the Government. Despite the enormous task of deficit reduction and the difficulties that lay ahead, they chose to reduce beer duty, seeing the beneficial effects that that would ultimately have. Confidence and investment are returning but now we need another hand up—we need a further reduction in beer duty. Seven out of 10 alcoholic drinks sold in pubs are beer, and 82% of those are brewed in the UK. The most effective way of keeping our community pubs open and trade buoyant is by continuing to support them and giving them the confidence they need. I am calling for a revival of the beer duty escalator, but escalators go in both directions. I want an escalator that goes the other way and reduces beer duty significantly.

09:50

[Christian Matheson (City of Chester) (Lab)]

It is a great pleasure to serve under your chairmanship, Sir Roger. I congratulate the hon. Member for St Austell and Newquay (Steve Double) on his speech; he told us that he was a substitute, but that was certainly not the introductory speech of a substitute. May I also take this opportunity to welcome my next-door neighbour and good friend, the hon. Member for Weaver Vale (Graham Evans), to his place? He is the chairman of the all-party parliamentary beer group. I was with him in the Terrace marquee the other night where, I must say, I enjoyed the award-winning beers from the Campaign for Real Ale, including Binghams vanilla stout, which I enjoyed—but only in moderation, of course.

I have had the pleasure of going to two pub openings in my constituency in the past couple of weeks. I went to the Handbridge pub, which has been refurbished by Punch Taverns, and I was very pleased to go to the Bull and Stirrup in Chester, which is a historic pub, particularly for the labour movement, to open it with the actor Ricky Tomlinson. It has been the beneficiary of a £2 million refurbishment courtesy of Wetherspoon’s. It employs 70-odd people—most of them very young—and is an excellent example of the fact that pubs and the industry provide employment, including at entry level, for people looking to make their way in their career.

I want to speak briefly about one of the big employers in my constituency, Admiral Taverns, which I am proud to represent. It employs 145 people in my constituency, has 850 pubs across the UK and is consistently winning awards. It was the leased and tenanted pub company of the year in 2013 and 2016, which makes it the current holder of that prestigious award, and I can tell Members this morning that it is again shortlisted for community pub operator of the year. The hon. Member for St Austell and Newquay talked about the importance of community pubs. I worked with Admiral Taverns when it closed the Centurion pub in Vicars Cross in my constituency. I worked with community leaders Trevor Jones and Bob Hindhaugh, and we managed to persuade Admiral Taverns to reopen it with community leadership. That was a tough business, because the numbers had to add up, and part of the reason for the closure was the high beer taxation levels. I have worked with Admiral Taverns on a couple of projects since, and I am proud to do so. It is keen to see a continued light touch in the taxation of the pub sector.

In this short contribution I want to draw the Minister’s attention to the conflict between beer duty and business rates. I am told that business rates for pubs are calculated on turnover, but that that turnover includes beer duty. As Admiral Taverns point out that is, therefore, a double whammy—I believe that is the phrase, Sir Roger. They are being taxed on taxation, because turnover includes beer duty. I ask the Minister whether levels of beer duty or the business rates calculations can be taken into account.

[Louise Haigh (Sheffield, Heeley) (Lab)]

I want to reflect on that briefly, because my hon. Friend is making an exceptionally important point. Even before the re-evaluation of business rates, which will hit pubs particularly hard, pubs were paying 2.8% of the total business rates bill but only accounting for 0.5% of total business turnover. That is a crucial area that I hope the Minister will take into account and feed into the Budget negotiations for tomorrow.

[Christian Matheson]

I am grateful to my hon. Friend for making that point. There does seem to be a discrepancy. I would not like to think that pubs, which play such an important part in communities, as we correctly learned from the hon. Member for St Austell and Newquay, are seen as a soft touch and an easy hit.

I am keen to convey on behalf of my constituents, particularly Admiral Taverns, with which I have an excellent relationship, that there needs to continue to be a light touch to allow the sector to flourish. We heard from my right hon. Friend the Member for Warley (Mr Spellar), who is no longer in his place, about the effect on microbreweries when there was a reduction in taxation—that sector of the business expanded. I believe that could also help in the pub sector and in community pubs, but there is a real problem in the conflict between business rates and beer duty, and I ask the Minister to look at it.

[Several hon. Members rose—]

[Sir Roger Gale (in the Chair)]

Order. Graham Evans, Jim Shannon, Helen Whately and Claire Perry are all seeking to speak, and I intend to call the Front-Bench speakers at 10.30 am. I am not going to impose a limit, but do the maths.

09:55

[Graham Evans (Weaver Vale) (Con)]

It is a pleasure to serve under your chairmanship, Sir Roger. I pay tribute to the Backbench Business Committee and the Chairman of Ways and Means for enabling the debate and to my hon. Friends the Members for St Austell and Newquay (Steve Double) and for Gower (Byron Davies) for their speeches. Indeed, I pay tribute to Gower Gold, which is an excellent beer, and to Tribute; I look forward to visiting St Austell brewery in my capacity as chairman of the all-party beer group. I pay tribute to my predecessor, my hon. Friend the Member for Burton (Andrew Griffiths), who did an excellent job in slaying the hated beer duty escalator.

I must confess that I have stopped many a barrel of beer going sour in my life. I met Mrs Evans in a pub when I was a wee slip of a lad in my 20s working behind a bar. My mother was a barmaid and she worked in a pub; my brother and sister worked in a pub; my father spent most of his time in the pub. My auntie and uncle had a pub in Chester on Northgate Street—I am sure the hon. Member for City of Chester (Christian Matheson) knows it well—and it is an excellent coaching inn. I used to stay there for my school holidays. It was haunted—I believe it still is—and it used to scare the life out of me, but that does not stop me going in whenever I visit Chester.

The economic value of pubs and beer is important. The industry employs nearly 1 million people, many of them young, and contributes £23 billion to UK plc and £10 billion in tax to the Exchequer. I welcome the steps taken in the last Parliament on the dreaded beer duty escalator, with the three successive cuts in beer duty before the freeze in the 2016 Budget. Although it is easy to think that a penny or two off a pint does not make any difference, it does make a significant difference, as right hon. and hon. Members have said. The turnaround in confidence since 2013 has seen more than £l billion invested by brewers and pub owners each year, with thousands of pubs across the country being able to keep their doors open.

Yet despite those positive steps, the UK still has the third highest duty rate in the EU. The amount paid per pint is almost three times the EU average. UK beer drinkers pay 52p of duty per pint, whereas those in other major brewing nations such as Belgium, Germany and the Czech Republic pay around 5p per pint. Having recently met the Minister, I know she will be aware of the cross-industry initiative to incentivise the production of low-alcohol beers benefiting from the duty reduction on products below 3.5%. Although the industry has taken some steps with low-alcohol beers, the lower the percentage, the less the flavour, so looking at a stronger strength up to 3.5% ABV gives brewers the opportunity to create tastier beers.

[Jessica Morden]

The hon. Gentleman makes a valuable point on lower-strength beers. Does he agree that AB InBev in my constituency, which is developing more of those products, has a laudable aim in trying to have 20% of its products in the lower strength range by 2025? Does he agree that that is a positive development?

[Graham Evans]

That is a good and powerful point, and I wholeheartedly agree with the hon. Lady. I grew up with a Manchester brewery called Boddingtons; we used to call it the “cream of Manchester”, but sadly it cannot be called that because it is brewed in Luton these days. AB InBev is producing it at 3.5%, which puts it in that low ABV category. I am keen to support the promotion of beers such as the ones made by the company in the hon. Lady’s constituency. At 3.5% Boddingtons is still a tasty beer, although it is not quite how I remember it from the ’70s and ’80s.

Few can argue that 3.5% beers should have 66% more duty imposed on them than 7.5% high-strength cider, which is more associated with problem drinking than any other drink. Hon. Members may remember the question that the hon. Member for North Tyneside (Mary Glindon) asked at last week’s Prime Minister’s questions about her constituent who tragically died while drinking high-strength cider.

We are in a difficult economic position and alcohol excise duty makes an important contribution to reducing our inherited deficit, but beer duty clearly remains a concern to publicans, constituents and hon. Members. I therefore urge my hon. Friend the excellent Minister to carefully consider beer duty’s impact on the profitability of pubs, responsible drinking and the future of our local communities. Some 90% of the beer we drink is brewed in the United Kingdom and supports UK jobs and industry. In a post-Brexit Britain, the Great British pint drunk in the Great British pub will be able to compete on a level playing field with our European and international competition. We are lucky that the Minister loves beer and pubs—she is a member of CAMRA—and I urge her to do whatever she can for the Great British brewing industry.

10:01

[Jim Shannon (Strangford) (DUP)]

It is a pleasure to speak in this debate, Sir Roger, and I congratulate the hon. Member for St Austell and Newquay (Steve Double) on presenting his case well. He was certainly a super-sub, so well done to him.

I have been contacted about the beer duty on numerous occasions—a few times by constituents complaining about the rising price of their well-earned beer at the end of a day, but mostly by the hospitality sector and industry, groaning with the weight of trying to inspire growth while being restricted by a seemingly never-ending duty increase, which happens year on year without fail. I would like to give Northern Ireland’s perspective and talk about how important the issue is for us and about the Minister’s responsibility.

I was contacted before the debate by Hospitality Ulster, which is the professional body that represents the hospitality industry in Northern Ireland—its membership consists of pubs, bars, café-bars, restaurants, hotels and major visitor attractions. Tourism is important for us in Northern Ireland, and the hospitality sector’s role is particularly important. Hospitality Ulster believes that it can transform the local economy and create additional wealth and job opportunities. The successful growth and expansion of the industry will have direct financial benefits, but only with the Government’s help and support. That is why the chance to set out the issues in this debate is important and why I am presenting this case on the industry’s behalf.

Figures indicate that there are 45,000 jobs in the hospitality sector in Northern Ireland. That may not seem a lot compared with similar job opportunities across the United Kingdom, but when we pare that down, it equates to one in 20 jobs being sourced in food and drink and the hospitality sector in Northern Ireland, so the importance of this debate is clear. The hospitality sector overall accounts for 60,000 jobs across Northern Ireland and generates some £88.4 million in tax. It contributes approximately £1.1 billion to the Northern Ireland economy and pays out £653 million in wages, keeping people in employment and creating opportunities. Its importance, therefore, cannot be underlined enough.

In my area of North Down and Ards and in my constituency of Strangford, the sector pays some £7 million in tax and provides just over 3,700 jobs. There is potential for so much more, but we need to put in place support networks and help. That is partly about addressing the issue of taxation and duty, which is the key reason why we are here.

The tourism industry in Northern Ireland is competing in a cost-sensitive marketplace locally and globally. High taxation and the additional costs of unnecessary, disabling regulations and outdated legislation directly affect its ability to compete. In addition, the lack of access into and around Northern Ireland limits not only the number of people visiting the country but its residents’ access to the evening economy. Tourism brochures and information indicate that Belfast is one of the best areas for nightlife in the United Kingdom, and there are tremendous opportunities to do much better on access to it.

Much of the responsibility for this issue lies with the Northern Ireland Assembly—these are devolved matters—and I hope that it will soon be up and running; we are in the middle of a process of talks at the moment. However, taxation and duty are major issues for this House to address. Duties on all alcohol products are forecast to raise some £11.2 billion in 2016-17. To split that up, the duties on beer and cider are expected to raise £3.6 billion, whereas the duties on wine and spirits are expected to raise £4.2 billion and £3.4 billion respectively. Receipts from beer and cider duties are expected to rise slightly to £3.8 billion in 2017-18. That is a massive amount of money, and we understand its importance to the Treasury in balancing the books. We also need sustainability for the industry, which is why we want this matter to be looked at.

We need to ensure that this is the last small rise in a series of rises that has seen the price of a pint rise to £3.46, which is 20 times the amount that it would have cost in the 1970s. The hon. Member for Weaver Vale (Graham Evans) referred to those free and easy days, and that is a fond memory of a time when I also had hair. Correct me if I am wrong, but wages have not increased at a similar rate, so people are missing out and publicans are seeing customers sitting at home with a tin of beer at half the price. We have to address that as well. I will come on to that point, because some of these issues could be dealt with in the Budget and, at the same time, the importance of the hospitality sector could be reinforced.

We want to encourage a society that enjoys a drink responsibly. That is what pubs do: people are refused drinks if they are too drunk and car keys are removed, and there are protective barriers when people leave the pub. Pubs and landlords are careful about what they do, and they are responsible. On the other hand, the alcopops sector can have special offers in supermarkets, allowing 20 shots of vodka from a one-litre bottle to be downed for a shockingly small price tag. That issue was highlighted at a reception in Westminster three weeks ago. I was not aware that a big, one-litre bottle—it looked like lemonade, by the way, but it clearly was not—was so cheap and was placed in supermarkets to make it more attractive for people to buy. We have to address these issues. We all have great respect for the Minister, as others have said; she has always done her best in the many portfolios she has held, and I know that she will do the same for us today.

Something is not quite right about how we are approaching this issue. I believe that the duty rises should be put on the alcopops sector, which is often a favourite of under-age drinkers and is often where alcohol abuse takes place. The hospitality industry should be given a break, which may well keep businesses open and attractive to consumers who can put money in the local economy as opposed to the pockets of supermarket shareholders. I am not against supermarkets making money, but something is unfair when there is a clear imbalance.

I oppose any rise on beer duty, and I ask the Government and the Minister to fully consider the needs of this industry, which brings so much into the local economy and has the potential to do so much more if encouraged to do so.

10:08

[Helen Whately (Faversham and Mid Kent) (Con)]

It is a pleasure to serve under your chairmanship, Sir Roger. I congratulate my hon. Friend the Member for Gower (Byron Davies) on securing the debate and my hon. Friend the Member for St Austell and Newquay (Steve Double) on his impressive opening speech, particularly given that he was a substitute. He covered an enormous amount of ground and made important points.

This debate is an opportunity for colleagues to talk about their experiences with the world of pubs, but I cannot possibly compete with my hon. Friend the Member for Weaver Vale (Graham Evans), who told us that his family have been in the pub trade. I have not been to a pub since Sunday. I can vouch for the health benefits of pubs in my constituency, because the best way to get my children to go on a long walk in the rain and hail is the promise of a pub at the end of it—however, I assure hon. Members that they have a packet of crisps while the rest of us may have some beer.

Beer, the pubs trade and brewing are important to my constituency and have enormous historical significance. Brewing in the area goes back to medieval times. I have been told that my constituency is the first place in England where hops were grown. At the time, they were a new-found and not entirely welcome import to the English brewing scene, but times have changed, and they are most certainly welcome nowadays.

As well as being part of our history, brewing and pubs are critical employers in my constituency. Shepherd Neame, our largest brewer and the oldest in England, employs about 700 people in the constituency. Its well-known brands include Spitfire, Whitstable Bay and Master Brew, with which I hope colleagues are familiar, along with many other own brands and beers brewed under licence for other breweries. Whitstable Brewery is also in my constituency, although Whitstable itself is not. We also have several craft breweries and microbreweries, such as Hopdaemon, the excellent Mad Cat Brewery, which I have visited, and many others. Brewing is important to my patch, providing at least 2,000 jobs including in pubs.

On top of that, there is the agricultural side of brewing. Kent was once renowned for its hops. Although we do not still grow hops on the same scale, the hop sector is still a significant part of the Kent economy, and British hops are experiencing a revival. Hop growing in the UK has increased by about 8% in the last couple of years, and at least half of that is in my constituency. We have renowned experts on hops, such as the farmer Tony Redsell, who recently produced an excellent video about hop growing; I point viewers to it on my Twitter feed.

Pubs themselves are also important to my constituency. We have 84 pubs, and hopefully there will be another one soon: the Harrow pub in Ulcombe. It is currently closed, but the community are getting together to revive the pub. Pubs are so much more than just a place to go and have a drink; they can be the heart of a community. In a small village, there are often no other amenities or facilities, and the pub is the one place where people can meet up. It is important that we look after our pubs.

I am grateful that the Government have been doing so. I know that the industry in my constituency has welcomed the reductions and freezes in beer duty over recent years. I ask the Minister to consider continuing that approach to support the industry, bearing in mind that at the moment, pubs and the brewing industry as a whole face rising employment costs as well as the challenge of increasing business rates, as other hon. Members have mentioned. In that context, this is a particularly important moment to consider whether the industry can be helped through beer duty.

As other Members have mentioned, we are mindful of the difference in beer duty between the UK and some other brewing countries. Belgium and Germany have both been mentioned as countries with lower beer duty for their brewers. We know that we want to increase our exports, and that beer exports have been growing. There is a significant connection: a strong and vibrant brewing industry at home provides a good platform for brewers to export successfully. I feel strongly about supporting it through the tax system. On behalf of my constituency, I welcome the support that the Government have given to the brewing and pub industry, and I urge the Minister to continue that support.

10:14

[Toby Perkins (Chesterfield) (Lab)]

I congratulate the hon. Member for St Austell and Newquay (Steve Double) on securing this important debate. Colleagues have already referred to pubs in their constituencies; if I started doing that, I would have more than 100 to read out, and no one else would get an opportunity to speak. I will not play favourites towards any of them, but I will say that in Chesterfield, our night-time economy is incredibly important to us. I welcomed the liberalisation of licensing hours as a punter, although I must say that as the parent of a 19-year-old I am less enthusiastic than I used to be about our pubs being open until 6 o’clock in the morning.

None the less, pubs are an important part of our economy. When we reflect on their importance, as other Members have done, we must reflect on the contribution that they make to the economy and the community, and the contribution that they make as employers. They employ young people, and predominantly women, which is important to areas where the economy needs more help.

This debate is specifically about beer duty. Understandably, hon. Members have taken the opportunity to reflect on some of the other issues facing pubs, but beer duty is an important issue, and I am glad that the hon. Member for St Austell and Newquay reflected on it. It sends a message from the Government about the importance of pubs to our communities, our society in Britain and our sense of national being. Beer is one of those iconic products of which I think all of us in Britain feel proud.

It is also important to reflect on the fact that if the Chancellor announces something about beer duty today but simultaneously puts pubs through the mill on business rates, not many will raise a glass. Beer duty needs to be seen alongside the impact of VAT and the potentially serious impact of business rates. The previous Chancellor deservedly got credit for cutting beer duty, but we should also remember that he raised it through the beer duty escalator. He came to power in 2010, and it was 2013 before he got rid of it; he milked it as well as abolishing it. It is important to see his record in that broader context.

As the chair of the all-party parliamentary group for pubs, I work closely with the hon. Member for Weaver Vale (Graham Evans) and his all-party parliamentary group on beer. We all collectively recognise the importance of pubs in our communities and our economy. In the spirit of working together with that group, I join him in calling for the Minister and the Chancellor to recognise the value of pubs in the Budget, and to ensure when considering beer duty and business rates that publicans will raise a glass to the Chancellor on Wednesday.

10:17

[Claire Perry (Devizes) (Con)]

I join others in congratulating my hon. Friend the Member for St Austell and Newquay (Steve Double), and my hon. Friend the Member for Gower (Byron Davies), who cannot be here, on securing this important debate.

I have spoken several times in similar debates over the years. As I am sure Members know, I am the proud representative of Wadworthshire. I have in my constituency Wadworth Brewery, which brews iconic beers such as 6X, Swordfish and Bishop’s Tipple. It has 240 pubs in its chain and employs about 500 people. Nobody who visits Devizes can fail to be struck by the incredibly iconic brewery building, in which brewing has taken place since 1875, and Max and Monty, its two dray horses, who often cause traffic chaos when delivering to local pubs, although nobody minds, because they are a symbol of a wonderful local business. As well as Wadworth, I have Ramsbury Brewery, Shed Ales, World’s End Ales, Three Castles Brewery, Stonebridge Ales and Eastbury Brewing Co. in my constituency, all of which report that things are definitely looking up.

Why did I come along today to support the call for a cut in beer duty? I must confess that I was a little sceptical about what the impact might be when the original tax cuts were announced, for many of the reasons that have been mentioned: we drink in a different way; we often prefer to drink at home; supermarkets have historically used alcohol as a loss leader to generate foot traffic; the smoking ban has hurt businesses; and the drink-driving laws, which I absolutely and heartily support, have changed people’s way of being entertained. However, it is obvious that since we abandoned the beer duty escalator and cut beer duty in 2013—I am thinking of the billboard outside the Red Lion pub that day with a big sign saying, “Cheers, George!”; the former Chancellor should indeed be applauded for it—there has been a material impact on the industry.

I know that the Opposition Members present would not have voted for this, but in 2008 taxes on beer were hiked twice: by 9% in March and then by 8% in December. The escalator was then whacked on at inflation plus 2%, which led to a whopping 42% increase in overall duty between 2008 and 2012. As we have heard today, thousands of pubs exited the industry. It was a significant hit to an industry that we all know and love, and that had a major impact on employment in many of our constituencies.

Since then, with relatively modest measures—the abandonment of the escalator and a reduction in duty—we have seen some really rather extraordinary things. In 2014, beer sales increased for the first time in a decade. Oxford Economics has estimated that more than 20,000 more new jobs have been created in the sector than there would otherwise have been. That shows that very small changes in taxes can have a material impact. I submit that what the Exchequer is giving up in tax duty is being more than recouped from the increased income tax paid by the now thriving businesses and the employment contributions coming in.

On the subject of employment, let me mention a couple of very important things that are happening in my constituency. As a result of the change in the business climate, companies such as Wadworth are now substantially increasing their own investment programmes; indeed, investment in Wadworth’s 240 pubs will increase by 30% this year. I am proud to have been associated with the reopening of some wonderful pubs that are now thriving, such as the Three Crowns in Devizes: morning, noon and night, groups of people are going in for coffee and sampling the wonderful beers and delicious food. That is happening not just in my constituency but right across the country. I was fascinated to hear from my hon. Friend the Member for Faversham and Mid Kent (Helen Whately) that it is also having an impact on the supply chain—a piece of good news for hop production that I did not know about.

I support future investment and the increase in apprenticeships. Wadworth now has 62 apprentices—it has been investing hugely in my area—but it is facing pressures, including the apprenticeship levy and the increase in rates that we have discussed. It seems to me that to support the industry, stimulate demand and encourage companies to invest their own capital so that we can have a thriving beer, pub and hospitality industry, this relatively small adjustment in the Budget would be very welcome indeed.

10:22

[Owen Thompson (Midlothian) (SNP)]

I congratulate the hon. Member for St Austell and Newquay (Steve Double) on introducing this debate and the hon. Member for Gower (Byron Davies) on securing it.

It is clear from hon. Members’ contributions today that there is a large degree of agreement among us all. We have heard about the benefits of the local pub in our constituencies—I certainly support the pubs in mine as much as I possibly can. A strong case has been made this morning for minimum alcohol pricing, given the dangers from the very high levels of alcohol in alcopops and other such drinks.

I have recently noticed an increase in the number of craft beers being produced with 0% alcohol, including Tennent’s Hee Haw and BrewDog’s Nanny State—I think the brewers were having a deliberate go at the establishment when they came up with that name. Many such beers are coming into the market, demonstrating that a 0% alternative that still retains flavour is possible.

It is clear that there are many points that we agree on, and the one thing that we can be absolutely certain of agreeing on is that beer is good. It is good for our economy, it is good for our communities and it is definitely best served while watching Scotland win the rugby. Like most worthwhile inventions, it has been suggested that it was invented in Scotland, in some form at least; evidence has been discovered of fermented beverages being brewed in Scotland, possibly as early as 400 BC. In my constituency, Midlothian, there was a brewery in Dalkeith that had been there since at least 1789. The last remaining brewery, McLennan and Urquhart, brewed what I am led to believe was a very fine selection of sweet ales, and the business thrived in Midlothian for the best part of a century. Unfortunately, it closed in the late 1950s and was demolished in the 1960s, and sadly brewing left Midlothian for quite some time.

That was a common picture in Scotland. The economic situation in the ’60s and ’70s made it impossible for breweries and pubs to survive, and closures were savage. The ’60s may have been swinging, but there was not much for brewers to smile about. High unemployment, shipyard closures and the decline of traditional industries were common throughout Scotland, and for breweries the picture was just as bleak. In 1920, there were 62 breweries in Scotland; by 1960, there were just 26, and in 1970 only 11 remained. What we must learn from that period is that not nurturing the right business environment for breweries creates consequences that can be far-reaching across communities, have an impact on national, local and micro-economies and have knock-on effects on pubs and jobs.

We are now witnessing something of a beer revolution, as the hon. Member for St Austell and Newquay put it. More consumers are searching for new flavours, or simply for good beer, and new breweries are starting up more and more frequently. I am pleased that new breweries are flourishing and growing in Midlothian. I positively encourage all hon. Members to visit my constituency, have a look around the breweries and taste their products. The first brewery to rekindle Midlothian’s brewing history is Stewart Brewing in my home town of Loanhead. It was founded in 2004, led by a team of ambitious, passionate and hardworking beer enthusiasts, and its business has grown and expanded considerably—some may suggest that my own contribution and appreciation of its very tasty craft IPAs has contributed to that. I have also been fortunate to have the opportunity to visit the newly established Cross Borders brewery in Eskbank. It was clear from speaking to the team there that they have an absolute desire to expand, to contribute to the local and national economy and to be a key player in the beer market.

In fact, all over Scotland there is a rapidly growing industry, which we are embracing. The food and drink sector is vital to Scotland’s economy, with one in five people in Scottish manufacturing working in it. The SNP Scottish Government have been working hard to support this key sector: since 2008, they have supported 173 food and drinks companies and organisations to achieve a 77% improvement in their access to local suppliers and a 62% increase in new market penetration. Scottish food and drinks exports are now worth some £4.8 billion every year. In February, the SNP Scottish Government announced business rates relief for the hospitality sector, which will save Scottish pubs around £6 million. The package also included a one-year cap on business rate increases in Scotland for the hospitality sector at 12.5%, which will benefit a further 8,000 businesses. Brigid Simmonds, chief executive of the Scottish Beer and Pub Association, said:

“The introduction of a business rates cap, set at 12.5 per cent, is welcome, and shows that the Scottish Government has listened to the concerns of Scottish pubs and other hospitality businesses.”

The association’s analysis suggests that the cap will save Scottish pubs around £6 million, with pubs standing to benefit by an average of £4,700. Many microbreweries may also benefit from the small business bonus scheme, which will give up to 100% relief in many cases.

What can we do to help this very important industry, and what can we learn from Scotland’s approach? I agree with many hon. Members that a cut in beer duty is essential, but I fear that that alone may not be enough. I would like the UK Government to go further. The evidence is compelling. Of course businesses should pay their share in tax, which should be fair, but in 2015 beer duty comprised 49% of a brewer’s turnover, and the British Beer and Pub Association calculates that the beer and pub sector is one of the most highly taxed in the country. Brewers also face more tax: business rates, employment taxes and corporation tax are added on top. Once costs of production are taken into account, a brewer makes an average profit of just 2p or 3p a pint. For all brewers, but particularly the types of brewer in my constituency, this situation stifles the potential for growth and the ability to employ more staff.

The SNP supports a better, fairer, evidence-based way of taxing alcohol. We need to find the right balance. I very much hope that today’s debate will provide the Chancellor with beer for thought for his Budget tomorrow.

10:30

[Peter Dowd (Bootle) (Lab)]

It is a pleasure, as always, to serve under your stewardship, Sir Roger. I too congratulate the hon. Member for St Austell and Newquay (Steve Double) on bringing this matter to our attention.

Tomorrow’s Budget day is also International Women’s Day, so I thought it would be apt to begin my remarks by quoting the great female poet of the 20th century, Sylvia Plath:

“The beer tastes good to my throat, cold and bitter”.

At the other end of the spectrum, we have Frank Zappa, who said:

“You can’t be a real country unless you have a beer and an airline—it helps if you have some kind of football team, or nuclear weapons, but at the very least you need a beer.”

That probably sums matters up. They are just two of two of the vast number of people who, like us, have enjoyed what is widely believed to be the oldest and most consumed alcoholic beverage in the world.

According to estimates by the British Beer and Pub Association, around 30 million adults visit a pub at least once a month, and beer accounts for around two thirds of alcohol sold in pubs. In economic terms, the pub sector contributes £23.1 billion to the British economy and £12.6 billion in tax to the Exchequer. It also supports nearly 900,000 jobs, 42% of which are for under-25s. Brewing alone employs over 100,000 people, as many Members have referred to today.

Of course, that picture has to be counterbalanced by the health impacts of alcohol, which have already been touched on by Members today. Public Health England estimates that alcohol harm costs about £21 billion a year generally and specifically costs the NHS £3.5 billion. Consequently, when we debate this issue, we really must consider it in that wider context.

Of course, many traditional drinking establishments are now under threat, not least because business rates revaluation is coming into effect, as my hon. Friend the Member for Chesterfield (Toby Perkins) said. In fact, in my constituency we have had to say goodbye to several novel establishments, including the Talbot, the Elm House, the Wyndham Hotel, St George’s Tavern and the Stand Park, some of which I have drunk in myself in the past. We tried to make the Priory a community pub but could not succeed, and the story is the same right across the country. None the less, we still have many great pubs and long may it remain so. In my constituency, in the Crosby area, there is a micro-pub called the Liverpool Pigeon. That has given a really good boost to the sector and to the confidence of the local community, so I say “Well done” to the Liverpool Pigeon.

Pubs are more than just small businesses. As many Members have said today, they are often community hubs. Increasingly, they offer other goods and services, such as food, hot drinks and meeting spaces, and even libraries and postal services in some places. In my constituency—and, I am sure, in many others across the country—we have church parish clubs, including St Benet’s and St Elizabeth’s and even one called the Holy Ghost, which play a similar role to community pubs. The Holy Ghost is not the top of the pile, except perhaps in theological terms. My constituency also has the Royal British Legion and the Royal Naval Association comrades clubs. All those establishments help to support our communities in a whole range of ways.

I think all hon. Members would acknowledge that pubs are an important community asset and that we must do all we can to help them to succeed, not withstanding the health issues. We always need to have those issues in mind, but we should not let them overshadow all other considerations.

As hon. Members have said, it was announced in the 2016 Budget that the duty on beer, spirits and most ciders would be frozen for 2016-17; that freeze followed three consecutive years of duty cuts on a typical pint of beer. On the other hand, duties on all other alcoholic drinks, such as wine at or below 22% alcohol by volume and high-strength sparkling cider, rose in line with the retail price index. Will the Minister say what effect that has had on prices for customers and what mechanisms are in place to monitor the effectiveness of these measures?

Of course, the industry welcomed the duty freeze, and Oxford Economics has produced research supporting the argument for a beer duty cut, to protect jobs and investment during uncertain times as the UK leaves the European Union. Labour was not opposed to the freeze on beer duty. However, in distributional terms the freeze favoured those who consume more of the relevant types of drinks. The equalities impact statement relating to last year’s freeze noted that

“any changes to alcohol duties will have an equalities impact that reflects consumption trends across the adult population”,

but it failed to outline what the specific equalities impact is with regard to gender. It would be helpful to get that assessment at some point. Data from the Office for National Statistics show that wine, the tax on which was not frozen, is the most popular type of drink among women, while the most popular types of drink among male drinkers of all ages are normal-strength beer, lager, cider and shandy. We must take that factor into account as well. Additionally, many trade bodies have questioned why wine has been singled out for a duty rise, and I invite the Minister to comment on that issue, either today or in the future.

Of course, it is only proper to point out the Government’s continuing duty of health care, and I will re-emphasise that. It is absolutely crucial, but having said that, let us strike a balance. The Government acknowledged in their policy paper that the freeze last year was

“likely to lead to a minor increase in overall alcohol consumption”.

Will the Minister provide information on whether such an increase did occur and, if so, what mechanisms are in place to monitor it?

As I have said before, Labour is committed to securing the long-term future of pubs and the wider hospitality sector. Action must be taken to give pubs a fair chance to be profitable and to make a go of things, as well as give some of the independent small businesses a chance to grow, which is absolutely crucial. My hon. Friend the Member for Chesterfield raised the issue of business rate revaluation, which needs thorough examination. I point the Minister in the direction of Labour’s five-point plan, which will be a good starting point for her. We are calling for an overhaul of business rates to support local high streets and small businesses, including pubs and clubs, and I hope she will take these ideas on board, because this debate is not all about beer duty. It is also about helping pubs in a range of other ways.

10:37

[The Financial Secretary to the Treasury (Jane Ellison)]

I thank colleagues from all parties in the House for what has been a typically vivid and enthusiastic debate. It has been wonderful to hear so many fantastic pubs and breweries—both large and small—getting a name- check today in the House, which they deserve. I will not repeat them all, because there were so many mentions of people’s local star businesses, but I pay tribute to all of them. Debates such as this one are so valuable, because they allow Members to bring real colour to a debate about duty by demonstrating the impact that duty has had or could have on businesses in their own area.

I particularly thank my hon. Friend the Member for St Austell and Newquay (Steve Double) for opening this debate on behalf of our hon. Friend the Member for Gower (Byron Davies). I know that my hon. Friend the Member for St Austell and Newquay and others here are advocates for the important role that pubs can play; we have heard today about pubs’ community role, as well as their wider economic role.

I congratulate both the all-party group on beer and the all-party group on save the pub for the work they do. Of course, the all-party group on beer is led by my hon. Friend the Member for Weaver Vale (Graham Evans), who took us through his own extensive history of pubs. However, bearing in mind that he was born in 1963, I hope that his experience of Boddingtons in the 1970s came very much at the end of that decade and not at the beginning.

I noted that my hon. Friend the Member for St Austell and Newquay said that it was important that this sector was not overlooked. I can reassure the pub and brewing industries that their interests are never overlooked in Parliament; they have fantastic advocates in Parliament, who are passionate and articulate champions, and they come from up and down the country and from all parties. As a result, industry concerns are regularly brought to the attention of Ministers. I myself have taken part in debates such as this one as a Back Bencher; I responded to similar debates as the Minister with responsibility for public health; and now I am responding to this debate today as the Minister with responsibility for tax.

I will try to respond to as many of the issues raised this morning as I can without repeating some of the points that others have made. As I am sure Members will realise, I cannot pre-empt anything that my right hon. Friend the Chancellor will announce tomorrow. [Interruption.] I will resist all blandishments on that front.

Turning to beer duty rises, the Government of course recognise the importance of the UK pubs sector and its contribution to promoting responsible drinking. I mentioned my previous role as Public Health Minister. In that role I made the case for pubs as advocates of responsible drinking. That was not always the most straightforward thing to do, because there is always a balance in reconciling the undoubted problem our country has with alcohol in some regards against the fact that we love our pub and brewing industry. Actually, pubs are very much the answer in that regard. They bring together those two ambitions: they encourage people to drink responsibly while at the same time doing all the other good things they do, such as providing employment and contributing to community life.

As we have heard, the sector’s footprint covers every constituency across the country. If I am allowed one namecheck, it is for the fantastic Sambrook’s Brewery in my constituency. Along with other Members, I managed to get one of my local ales into the Strangers Bar. I know that many of us have taken that opportunity over recent years. We appreciate the contribution that all breweries—large and small—make to local economies and the wider beer market. The rise in the number of small breweries has increased diversity and choice in the beer market and promoted consumer interest in a much larger range of beers, which has benefited all brewers and the industry as a whole.

We have heard about the action taken on the beer duty escalator since 2013. My right hon. Friend the Member for Tatton (Mr Osborne) deserves the praise he has been given for that. A pint of beer is 10p cheaper than it would have been had the beer duty escalator not been ended in 2013. That has disproportionately benefited pubs, given that two thirds of the alcohol sold in pubs is beer. The British Beer and Pub Association—it stays closely in touch with Members and briefs them—feels that the action taken since 2013 has increased confidence. I heard that in person from the head of a well known brewery who came in as part of the delegation led by my hon. Friend the Member for Weaver Vale last week. As my hon. Friend the Member for Devizes (Claire Perry) said, when we talk to people involved in the industry, we can hear the impact that confidence has. Sometimes it is hard to put an exact figure on its impact on a particular part of our economy, but I have heard that from people.

The BBPA estimates that more than £1 billion is being invested by brewers and pub owners each year, and that impacts on employment decisions across the supply chain. I draw the House’s attention to the ways in which the Government have supported the innovative domestic brewery industry other than by duty cuts and freezes. The shadow Minister noted them in his contribution, and they include supporting the employment of younger people through some of the changes made there, boosting research and development for small and medium-sized enterprises and reducing corporation tax on company profits from 28% in 2010 to 19% from April. In 2020, it is moving to 17%. Cutting the tax on profits encourages reinvestment and innovation.

[Toby Perkins]

Does the Minister recognise that there is a real debate about the value of a reduction in corporation tax on the profits that businesses make as compared with the fact that we have the largest corporate property tax in all of Europe? We are expecting businesses that often are not making a profit to see their business rates tax bill go up and up.

[Jane Ellison]

The hon. Gentleman brings me to the next section of my speech, which is about business rates. I am not surprised that colleagues across the House have raised that issue. We recognise that business rates can represent a high fixed cost for some businesses. I will not rehearse all the facts about the 2017 revaluation. I think we all acknowledge that there was a long gap between revaluations, but I emphasise that for those who face an increase in business rates as a result, there is a £3.6 billion transitional relief scheme. It will support them by capping and phasing in rises in bills. The Chancellor has already said that he is working with the Secretary of State for Communities and Local Government to provide additional support for the hardest hit businesses.

As the hon. Member for City of Chester (Christian Matheson) and others have said, pubs are valued for business rates around the idea of a fair maintainable turnover. An approved guide on the valuation of public houses for business rates has been agreed between the Valuation Office Agency and all five bodies representing pubs, including the British Beer and Pub Association and the Association of Licensed Multiple Retailers. That formula has been agreed, and that is a welcome step that provides more certainty for pub operators over their business rates bill.

It is also worth noting that in the Budget 2016, the Government announced a £6.7 billion business rates reduction package to benefit all ratepayers. I draw the House’s attention to the switch of the annual indexation of business rates from the retail prices index to the main measure of inflation, the consumer prices index, from April 2020. That will represent a cut every year from 2020. In 2020-21, that benefit will be worth £370 million, and it will grow significantly thereafter.

I will turn to a number of the issues raised by Members. A number of people have made the case—I am familiar with it and recently had the chance to hear it in person from industry representatives—that duty cuts boost Exchequer revenues. It is fair to say that even if we allow for other additional tax revenues, the industry analysis we have seen shows that duty cuts still have a net cost to the Exchequer. For example, because the public finances assume an increase by RPI each year, the duty changes from Budget 2013 onwards are estimated to have reduced total alcohol duty receipts by £800 million for 2016-17. That implies that to make up for that, Government would have to raise taxes in other areas of the economy, cut spending elsewhere or increase the deficit. I put it on record that cuts and freezes have a real impact on how the public finances account for things.

A number of Members have raised the issue of lower duty rates on low-strength beer. I recognise some of the challenges around the point at which that line is drawn and around brewing to that level. High-strength beer is taxed more than the equivalent low-strength product, but the 2.8% threshold is set by European Union law and is being reviewed by the Commission at the moment. In the industry meeting, we explored the impact and discussed where the threshold should be.

Members have rightly discussed the challenge around the on-trade and the off-trade and discussed how pubs can encourage responsible drinking. Current rules do not permit the Government to apply a different tax treatment to the same product. We cannot tax alcohol sold in shops at a different rate to alcohol sold in pubs, but we recognise the role that pubs play in promoting responsible drinking. In 2014, we took action on very cheap alcohol by banning sales below duty plus VAT in England and Wales.

[Liz McInnes]

I appreciate the point that the Minister is making about different rates of tax, but is it not true that minimum pricing for alcohol would apply only to alcohol sold in supermarkets and retail outlets, and not to alcoholic drinks sold in pubs? Is that not correct?

[Jane Ellison]

I suspect that is a debate for another time. It is certainly a debate in which I took part in my previous role. If the hon. Lady will forgive me, I will stick to the topic of the debate, lest we get drawn into minimum unit pricing, as it is a complex issue.

My hon. Friend the Member for Faversham and Mid Kent (Helen Whately) spoke about the long history of the brewing industry in her constituency. She is another strong advocate for the brewing industry, and she rightly mentioned beer exports, which were worth £531 million in 2015, up 10% on the previous year. I reassure her that no duty is payable on exported alcohol, so the link between duty cuts and exports is not a direct one, although I take her point about general confidence within the industry.

The issue of high-strength alcohol has been challenged. I think the House is unanimous in wanting to tackle excessive alcohol consumption and the related health harms associated with the strongest products. The question is how we do that, but the point has been well made and the Government are of course reflecting on that.

I hope I have covered most of the points raised. I have not been able to respond to the whole thrust of the debate, although more will be said tomorrow in the Budget. The debate has been a valuable opportunity to discuss the issues, and it has been interesting to see so much common ground.

[Jim Shannon]

In my contribution I talked about alcopops—I know that might be a separate issue—and the advantage that high-street supermarkets have over the pubs. Do the Government intend to address that imbalance, the unfair advantage that high streets have over pubs, and the control of the alcohol that is sold?

[Jane Ellison]

Again, that is perhaps for a wider debate, but, as I recollect from my time as Public Health Minister, the industry was rightly praised for the extent to which it stepped up to address issues with certain products. A lot of alcopop products have been phased out by some producers who decided to change their portfolio. One or two speakers referred to the bigger chains and the fact that they have tried to shift their portfolios as they recognise the challenges that certain products pose, especially for younger drinkers. It is worth putting on the record a recognition of the industry’s actions in that regard, although there is always the challenge to do more.

I hope that I have been able to reassure Members on some issues. In opening the debate, my hon. Friend the Member for St Austell and Newquay said that the industry wanted to make sure it was not overlooked, and I can reassure him that it is not. Its voice is rightly heard loud and clear across the House and within Government. We have regular meetings and dealings with the industry and we listen very carefully to all the points made.

[Peter Dowd]

Will the Minister give way?

[Jane Ellison]

Very briefly.

[Peter Dowd]

I take the point that the Minister makes about the industry not being overlooked, but it is important to put this in context. For example, according to the industry, the business rates rise will put a 15% increase on pubs’ costs and 23% on restaurants’ costs. That is an additional £300 million to £500 million a year. The Minister should perhaps give more consideration to that.

[Jane Ellison]

If the shadow Minister thinks that the Government have not given consideration to business rates in recent weeks, he has not been looking at the newspapers. Of course it is an important issue and we have given consideration to it. Many establishments in different parts of the country will gain from the business rates revaluation. More businesses will see their rates cut or frozen than will see an increase. For those that see an increase, transitional relief is available, so it is important for people to look at that. No doubt people will look at the impact of that fiscally neutral revaluation in their own areas.

To return to my previous point, the industry’s voice is rightly heard loud and clear in Government. It has powerful advocates in all parties in this House. The debate has been constructive and has brought out important issues. I have heard all hon. Members’ contributions today and will take them as representations ahead of tomorrow’s Budget.

10:53

[Steve Double]

I thank all hon. Members for their contributions to this debate, which has been positive. There has been a great deal of unity among all parties on the importance of the sector to our economy, to jobs particularly for our young people, to our communities and to the Exchequer, and on the vital role that pubs play. I can reflect on the comment that the Minister made and recognise the reduction in beer duty and the drop in the amount of beer duty going to the Exchequer because of that. However, because the industry has grown and employed more people, I suspect that the overall tax take by the Exchequer has not dropped too much because extra income tax, national insurance and other taxes have been paid as a result of the growth. So there is a balancing act.

There has been a clear message from the debate today. Lowering beer duty has a positive effect on the industry. We have heard about an increase in confidence and about increasing investment to enable the industry to produce better beer and more beer more efficiently. That contributes to the overall growth of our economy and will become even more important once we have left the EU. We must ensure we have a very robust beer and pubs industry in this country that can play its part in making sure our economy is strong going forward.

I am grateful to the Minister, who has listened and taken on board the points made. I am grateful for her reassurance that the industry is in the minds of Government as they make decisions. I am sure we all look forward to—let us hope—good news tomorrow from the Chancellor.

Question put and agreed to.

Resolved,

That this House has considered beer duty.

10:55

Sitting suspended.

Coast to Coast Walk

Tuesday 7th March 2017 Westminster Hall

11:00

[Rishi Sunak (Richmond (Yorks)) (Con)]

I beg to move,

That this House has considered the Coast to Coast Walk.

It is a pleasure to move this motion for debate today. In 1973 the legendary fell walker Alf Wainwright set out from St Bees in Cumbria on a walk he called the Coast to Coast. Stretching 190 miles from the North sea to the Irish sea, his route took him through no less than three national parks: Cumbria’s Lake District, my constituency’s Yorkshire Dales and the North York Moors. In the 40 years since, not a day has gone by when those footsteps have gone unfollowed.

In Yorkshire, we are perhaps not renowned for our generosity, but when it comes to our nation’s most precious treasure of all, there is surely nowhere on Earth that is more giving. With polls regularly naming the Coast to Coast walk one of the world’s greatest, I would venture to say that there is no better showcase of Britain’s peerless natural beauty.

We all know that our new Prime Minister is a great walker and, in yet another sign of her excellent judgment, on her visit to Germany last year she chose to present Chancellor Merkel with a copy of Alf Wainwright’s Coast to Coast book. I understand that Chancellor Merkel is herself a keen hiker, so although Tony Blair and President Bush may have preferred the golf cart in Camp David, surely it is only a matter of time before Chancellor Merkel and the Prime Minister negotiate while strolling together on the Coast to Coast. I would recommend that when they do, they take to heart Wainwright’s very wise advice:

“There is no such thing as bad weather, only unsuitable clothing.”

With all the fame and prestige, it might seem self-evident that the Coast to Coast walk would be one of Britain’s 15 official national trails. However, it is with regret that I report that this remarkable route is yet to be officially recognised and has not taken its rightful place alongside what are, in many cases, far less celebrated walks. Despite its renown and the thousands who walk it every year, the Coast to Coast does not even appear on Ordnance Survey maps. That means that as popular as the walk is, attracting the visitors that it does, there is much less opportunity to promote it and attract even more visitors, which the rural economy needs. More concerning still, its lack of official status means that none of the official funding provided to national trails such as the Pennine Way and Offa’s Dyke is available to the Coast to Coast. That is why in April last year I met members of the Wainwright Society at Surrender bridge in Swaledale, to launch the Coast to Coast “Make it National” campaign.

I am privileged to say that since that day, the campaign has garnered a coalition of formal support from no fewer than 53 local, district and county councils along the route, the national parks and, of course, members of the Wainwright Society, custodians of the legendary walker’s legacy. The Minister will no doubt be excited to learn that the campaign has also attracted two celebrity backers, in the form of Julia Bradbury from “Countryfile” and Eric Robson, host of the BBC’s “Gardeners’ Question Time”. I am also privileged and thrilled to have received the support of colleagues here in Westminster—indeed, from every Member of Parliament along the route, including the hon. Members for Workington (Sue Hayman) and for Middlesbrough South and East Cleveland (Tom Blenkinsop), my hon. Friends the Members for Penrith and The Border (Rory Stewart), for Scarborough and Whitby (Mr Goodwill) and for Thirsk and Malton (Kevin Hollinrake) and my hon. Friend the newly elected Member for Copeland (Trudy Harrison). I am delighted that three of my colleagues are here today.

My hon. Friend the Member for Penrith and The Border is a particularly keen user of the Coast to Coast, so I can only hope that his famous two-year trek across Afghanistan and Pakistan has provided him with the necessary skills to deal with the more cantankerous locals he might encounter. I understand that the Coast to Coast even has its friends in the Cabinet. The Secretary of State for Exiting the European Union, my right hon. Friend the Member for Haltemprice and Howden (Mr Davis), makes regular use of his SAS training and walks the 190-mile path in just eight days.

Our campaign has three simple aims: first, to preserve one of our best-loved national treasures; secondly, to help more people discover this iconic walk; and lastly, to give a helping hand to the north’s rural economy. I will speak first about preservation. As I mentioned, national trail status comes with a modest amount of public funding of about £100,000 a year. That may not be much in the budget of a country or even a county council, but for the Coast to Coast, that sum could make the difference between the slow erosion of rain, wind and bracken and an iconic walk that is preserved for the next generation.

The money could be used to signpost the route, keep bogs off the path and check the creeping advance of hawthorn, making the path easier for walkers to follow. To the credit of the local authorities, the route has been relatively well maintained and is mostly in great condition, but as the years go by, more and more issues arise that they do not have the resources to fix. The crossing point at the A19 dual carriageway at Ingleby Arncliffe is one example. At the end of a hard day’s trek, carrying a heavy pack, walkers have to dodge traffic travelling up to 70 mph to get across. With national trail status, we could make a strong case for a footbridge to be built.

[Kevin Hollinrake (Thirsk and Malton) (Con)]

I congratulate my hon. Friend on securing this debate and on his tremendous campaign, which I and many colleagues are very happy to support. Does he agree that, as tourism is so critical in both our constituencies these days, and as the route passes over the North York Moors and through Rosedale, which is the most beautiful part of the North York Moors, it is critical to the public houses and restaurants in those areas that we get designation as a national trail?

[Rishi Sunak]

I thank my hon. Friend for his support. He is absolutely right: the rural economy is vital. As I will touch on later in my speech, it is worth billions and billions of pounds to constituencies such as his and mine. If we want to make sure that the countryside is not just a museum but a living, breathing place where people can live and have jobs, we need to ensure that businesses can thrive. National trail status would help with that.

At Nine Standards Rigg in Cumbria, the bog has become so bad that areas of the path have become virtually unwalkable. With national trail status, we can ensure that the Coast to Coast is kept as safe as possible, giving people the confidence to undertake one of Britain’s most magnificent journeys.

That leads me to the second objective of our campaign, which is to help more people discover the Coast to Coast. Funding would help keep the path accessible to everyone from fell walking fanatics to young families such as my own, but national trail status would also be an enormous asset in promoting the Coast to Coast in the UK and abroad. Indeed, for proof of the impact that official status and well organised promotion can have in rural areas, we need only look to our national parks. Since their creation in the 1950s, they have boomed. Receiving about 100 million visitors a year, national parks sustain 68,000 jobs while generating more than £10 billion for the economy.

That brings me to the final objective of our campaign, which my hon. Friend the Member for Thirsk and Malton mentioned: supporting rural prosperity. In constituencies such as ours, the Coast to Coast is more than an institution that is close our hearts. It is one of the most vital arteries of our rural economy. Lining the path’s 190 miles are not only spectacular views but hundreds of communities and businesses. Texas has oil, Australia has gold mines and north Yorkshire has its countryside.

[Tom Blenkinsop (Middlesbrough South and East Cleveland) (Lab)]

I congratulate the hon. Gentleman on securing this really good debate. Of course, north Yorkshire, the Esk valley and East Cleveland had ironstone and alum mines. Part of the Coast to Coast route includes historic sites such as Kildale and Rosedale. It also goes through my constituency from Guisborough all the way to Eston. Westminster also has a local link, because, of course, the ironstone in Big Ben more than likely came from those mines. In my constituency, we have the Cleveland Ironstone Mining Museum. Does the hon. Gentleman agree that if the Cleveland Way and the Coast to Coast walk received funds and recognition, that would boost tourism to that mining museum, which is a crucial link to our historical lineage as a North Yorkshire community?

[Rishi Sunak]

I thank the hon. Gentleman for informing us of that wonderful link between the ironstone mines in his constituency and Big Ben. I did not know about that museum, and I would be delighted to visit it with him. I agree wholeheartedly that promoting the walk would have many knock-on benefits and bring people to our areas to enjoy all the things that we know about and take for granted, and which we would like to open up to the rest of the country and the world. I hope that will be the case.

VisitEngland estimates that those who go on walking holidays spend about £2 billion annually. For businesses in our constituencies, that makes the iconic status of the Coast to Coast a vital source of custom. During the election campaign I called into one such business—a local pub like only Yorkshire makes—in the village of Danby Wiske near Northallerton. The landlord told me just how important the walk is to the prosperity of his business. The hundreds of walkers who stop by for a well earned pork pie and a cold pint of Yorkshire bitter in the summer months are the difference between a loss and a profit for his business. He is not alone. Coast to Coast Packhorse in Kirkby Stephen is a successful local start-up that transports walkers’ luggage to their next stop. Businesses along the Coast to Coast, perhaps including the museum that the hon. Gentleman mentioned, tell the same story.

When we talk about infrastructure investment in this House, as the Government rightly do, we all have a similar image in our minds—gigantic bridges, high-speed railway and motorways—but for rural areas, infrastructure such as the Coast to Coast can be just as vital because it allows communities to capitalise effectively on their national assets. I know public money is tight, but national trail funding is an investment that would be repaid many times over, both in the long-term economic benefits it would generate and in the communities it would help to sustain—communities whose hands repair our dry stone walls, tend our forests and keep our fields green and lush. If they were to disappear because of a lack of jobs of investment, every one of us would be poorer.

Natural England is currently focused on its coastal path project, due to open in 2020—an ambitious national trail that showcases the best of our coastal areas. As that programme moves towards completion over the coming years, I urge Natural England to look closely at finally giving the Coast to Coast the recognition it deserves. For now, a feasibility study would reflect the widespread support that the campaign has received and support the message of so many businesses from St Bees to Robin Hood’s Bay. Officially promoting and protecting the route would do so much for their prosperity.

The Coast to Coast route is part of the legacy of a unique man whose contribution to the natural world is unparalleled. Across mountains and fells, wandering through valleys and villages, it is an inspirational crossing of the north of England. In the words of Alf Wainwright himself:

“Surely there cannot be a finer itinerary for a long-distance walk!”

I hope the Minister will consider the case that the “Make it National” campaign has put forward and do all he can to encourage Natural England to launch a feasibility study as soon as possible. The Coast to Coast is already a national treasure. It is time to recognise it as a national trail.

[Sir Roger Gale (in the Chair)]

Before I call the Minister, let me take the opportunity to welcome the hon. Member for Copeland (Trudy Harrison) to her first excursion into of the joys of Westminster Hall. Sadly, as she knows, she is bound by parliamentary convention and will not be able to intervene until she has made her maiden speech, but we look forward to her doing so in the near future. It is a pleasure to see her here.

11:14

[The Minister of State, Department for Environment, Food and Rural Affairs (George Eustice)]

May I also say that it is a pleasure to see my hon. Friend the Member for Copeland (Trudy Harrison) attending this debate, which is obviously of great importance to her constituency as the Coast to Coast walk starts there? I congratulate my hon. Friend the Member for Richmond (Yorks) (Rishi Sunak) on securing this debate to highlight his long-running campaign for the well known Coast to Coast path. As he explained, the path was set out by the pioneering fell walker and author Alfred Wainwright in 1973, and my hon. Friend made a very strong case for it to become a national trail.

All hon. Members agree on the importance of the existing family of national trails in England, which were designated as such under the National Parks and Access to the Countryside Act 1949. They are long-distance routes that are maintained to a higher standard than other public rights of way, and they cover more than 2,000 miles in England. All have rights for walkers, and some are also open to horse riders and cyclists. I know that people care a lot about our national trails, and I recognise the value and the range of benefits that they bring. There can be no doubt that they are an important means of connecting people with nature. They are popular: there are at least 70 million visits each year to places that a national trail passes through. Visitors include local people, day visitors and international visitors to England. People come to enjoy some of our finest landscape and scenery, to get fresh air and hopefully to enjoy our finest weather. National trails are important to walkers and users, as they provide health and exercise benefits. They are also major tourism assets and attract a variety of visitors, who spend money that makes a significant contribution to local economies and rural regeneration.

My hon. Friend spoke of his campaign for the designation of the Coast to Coast path as a national trail. The path goes from St Bees to Robin Hood’s bay—a length of just over 190 miles. I am told it can be walked in about 11 to 15 days, although I wonder whether my hon. Friend the Member for Penrith and The Border (Rory Stewart) might do it slightly faster, given his enthusiasm for walking. It takes walkers from the north-west coast, through the Lake District and parts of the Yorkshire dales, and then finally through the North York Moors before finishing on the east coast. About 70 miles of the total 190 miles is within the constituency of my hon. Friend the Member for Richmond (Yorks), which highlights its importance for him.

My hon. Friend said that local people have a long-standing interest in the designation of the path. I congratulate him on the local support he has obtained for his campaign and on the enthusiastic responses received from various local authorities whose areas the path crosses. He has also made it clear that every hon. Member representing a constituency along the route of the path supports his campaign.

As my hon. Friend is aware, the key responsibility for making any proposals to designate the Coast to Coast path as a national trail lies with Natural England, which is responsible for the provisions of the 1949 Act. Under section 51 of the Act, Natural England has a power to propose new national trails to the Secretary of State. To make such a designation, all the local authorities, including any national park authorities, within whose boundaries the route will pass have to be consulted. Natural England must then prepare a report setting out various matters such as the route, maintenance costs and likely capital outlay for creating a trail. The report is submitted to the Secretary of State, who may approve, modify or reject Natural England’s proposals.

My hon. Friend has been in contact with officials at Natural England since late 2015 or early last year, and he has met Natural England’s chairman, Andrew Sells, to discuss the matter further. Natural England has provided my hon. Friend with information about its powers under the 1949 Act with respect to national trails and the process for designating a path. Natural England has said that any proposal for a path to be designated as a national trail would need to secure a considerable amount of local support from all of the access authorities through which the new national trail would pass, as well as from landowners and land users.

As is often the case, and as my hon. Friend mentioned, money is the issue with the designation of new national trails. Natural England has indicated to him that while it supports the idea of designating the Coast to Coast path as a national trail, it has no plans to designate any new national trails. At the moment the Government’s priority is to develop coastal access proposals under the Marine and Coastal Access Act 2009 for the England Coast path, which is to become a national trail as each stretch of the coastal walk is completed. Resources are now focused therefore on the delivery of the England Coast path, which we are committed to completing by 2020. To date, we have opened up public access along 338 miles of the English coast, along with additional spreading room for people to use for recreation and enjoyment. Once complete, the England Coast path will double the total length of national trails in England. Recently, I met local representatives of Natural England to discuss proposals to complete the coastal path around Cornwall.

My hon. Friend asked whether Natural England, working alongside the relevant authorities, would undertake a feasibility study to scope out the actual route of the Coast to Coast path and to see what is required for it to be designated as a national trail. As I have said, Natural England has no plans to designate any new national trails other than the England Coast path, and any such feasibility study might divert Natural England’s existing resources away from its work on that path. Once a decision is taken to designate, there is under the process provided for by the 1949 Act something akin to a feasibility study, including, for example, exhaustive consultation with local authorities and an assessment of the required maintenance costs. That is what I believe my hon. Friend is asking for, which would be the first stage of designation, rather than a separate feasibility study.

Once the England Coast path has been implemented in 2020, Natural England might be able to look at options for the Coast to Coast walk. I am sure that hon. Members with an interest in that will want to look at whether future party manifestos might include issues of this sort. In the meantime, I point out that other funds are available, such as those to promote tourism in rural communities. Perhaps alternative sources of funding can help to raise the profile of the Coast to Coast path in preparation for possible designation. It should also be remembered that nothing prevents local authorities along the path from increasing either their level of support for it or the amount they are willing to spend on its maintenance. There is no requirement to leave such activity to Natural England; in the interim, local authorities may invest in the path.

I recognise the value that users place on the experience of the Coast to Coast walk and the tourism value that it can bring to local communities. As I have pointed out, many other long-distance regional and trans-regional paths in England have the support of local communities and access authorities along their route in recognition of their value, although not all of them are national trails. I commend my hon. Friend the Member for Richmond (Yorks) for his lively campaign, however and for setting out so ably the case for the walk to become a national trail. I hope that he understands that limitations on our budget mean that we cannot consider that yet, but I encourage him and other colleagues to maintain pressure on local authorities and perhaps, in a few years’ time, once we have completed the England Coast path, to revisit the issue with Ministers.

Question put and agreed to.

11:24

Sitting suspended.

O’Neill Review

Tuesday 7th March 2017 Westminster Hall

[Mr Gary Streeter in the Chair]

14:30

[Mr Gary Streeter (in the Chair)]

Before I call Mr Hollinrake to move the motion, I shall let you know that eight colleagues are trying to catch my eye, in addition to the Front Benchers and the mover of the motion, so I will impose a voluntary time limit of four minutes on Back-Bench speeches. Please—I beg you—keep interventions to a minimum. We will see how it goes. I may have to impose a compulsory limit as we go along, but I hope not.

[Kevin Hollinrake (Thirsk and Malton) (Con)]

I beg to move,

That this House has considered the O’Neill review into antibiotic resistance.

It is a pleasure to serve under your chairmanship, Mr Streeter. In advance of this debate, I penned an article for PoliticsHome titled, “Antibiotic resistance—the new Black Death?” As I was writing that headline, I could sense outraged people saying, “A typical politician grabbing a sensational headline to terrify the public once again,” but it reflects the devastating conclusions of the review on antimicrobial resistance, which involved some of the world’s leading scientists, academics and economists, including its chair, Lord O’Neill, the world-leading economist and former Treasury Minister.

The O’Neill review’s report states that bacteria are gradually becoming more resistant to antibiotics, and its most grim prediction is that 10 million lives will be lost globally every year by 2050. That is more than are lost to cancer and similar to the number of deaths caused in the 14th century by the black death, which killed some 75 million people between 1346 and 1353.

[John Howell (Henley) (Con)]

My hon. Friend cites 10 million deaths, but the effect will not be the same everywhere. Was he as shocked as I was to discover that the figure for Africa is more than 4 million? Does he think that more research should be done to ensure that the right resources are in the right places?

[Kevin Hollinrake]

My hon. Friend makes an excellent point. The key element of the fight against antimicrobial resistance is its global nature. We absolutely must not isolate ourselves from the rest of the world—we must collaborate—but we must take national action, too, and I will come on to that shortly.

That figure is of course a prediction—it could be lower, but it could also be higher. Predictions have been made about other contagions, such Ebola, Zika, HIV and Creutzfeldt-Jakob disease, and our scientists, academics and clinicians thankfully have managed to mitigate the worst effects and worst predictions for those diseases. But there are three reasons for us to be more alarmed this time: first, antimicrobial resistance is already happening; secondly, the problem is spreading rapidly and by all available means; and thirdly, research is not being carried out on anything like the scale required.

[Nick Herbert (Arundel and South Downs) (Con)]

A quarter of all the deaths that are predicted to happen as a result of drug resistance will be caused by tuberculosis, a disease that already kills 1.8 million people a year. Does my hon. Friend agree that research and development is essential if we are to develop a vaccine to prevent tuberculosis? No epidemic has ever been fully beaten without a vaccine.

[Kevin Hollinrake]

I absolutely agree. The difficulty is that due to the reward mechanisms in the system, such research and development is not happening. I will turn to that shortly.

This is not an apocalyptic prophecy. Antimicrobial resistance causes some 700,000 deaths globally and an estimated 12,000 deaths in the UK every year—similar to the number of people who lose their lives from breast cancer. Quite simply, if the bacteria that cause infections become resistant to antibiotics, people die. This issue is listed in the national risk register of civil emergencies, a five-year Government register, which states that an

“increasingly serious issue is the development and spread of”

antimicrobial resistance and points out that much of modern medicine will become unsafe. Minor surgery such as organ transplants, bowel surgery, cancer treatments and caesarean sections will become high risk—there will be more illness and more deaths.

Dame Sally Davies, our chief medical officer, pointed out that antibiotics have extended life by an average of 20 years—20 years of our lives may therefore be lost—and 40% of our population could die prematurely if this situation is not resolved. Operations would become unsafe due to the risk of infection during surgery or chemotherapy. Influenza pandemics would become much more serious. The national risk register states:

“The numbers of infections complicated by AMR are expected to increase markedly over the next 20 years. If a widespread outbreak were to occur, we could expect around 200,000 people to be affected by a bacterial blood infection that could not be treated effectively with existing drugs”.

[Mrs Theresa Villiers (Chipping Barnet) (Con)]

Does my hon. Friend agree that it is vital that we heed the O’Neill review’s recommendation that antimicrobial use in farming must reduce if we are to address the frightening consequences that he is outlining? In particular, we need to move away from intensive farming, which is reliant on the prophylactic use of antimicrobials.

[Kevin Hollinrake]

My right hon. Friend is right that bacteria can move from animals into humans, and the O’Neill review was clear that we need to take action in agriculture as well as our health services.

The national risk register states that we will be unable to treat some 200,000 people with existing drugs and

“around 80,000 of these people might die.”

That is a Government report.

[Julian Sturdy (York Outer) (Con)]

My hon. Friend is making a powerful argument. Is it not true that it takes about 15 years for a new antibiotic to get to the marketplace? Given the position that he has just laid out—deaths and resistance are happening already—that is quite frightening.

[Kevin Hollinrake]

My hon. Friend makes a very good point. We need to take action now because of the delays in producing new drugs.

[Mr Andrew Smith (Oxford East) (Lab)]

I congratulate the hon. Gentleman on securing this important debate. Is it not self-evident that the prevention of the occurrence and spread of infection must be in the first line of the battle against this problem, and screening people on admission to hospital to determine who might be resistant and carrying infections would be very useful?

[Kevin Hollinrake]

The right hon. Gentleman is right. Some 50% of prescriptions are needless, and diagnostics would mean that a lot of drugs were no longer prescribed.

We talk glibly about tens of thousands of deaths—Stalin once said, “One death is a tragedy; a million is a statistic” —but the reality is that these are our partners, our brothers, our sisters and our children, so we must act.

[Rebecca Pow (Taunton Deane) (Con)]

My hon. Friend is making a powerful point, but is not the key to find new antibiotics? Is he aware that several antibiotics originated from organisms in soil? That is how penicillin was found, and the first lead on a new antibiotic was recently found in soil. Does he agree that protecting our soil is key to our future? Given how much soil is being eroded and degraded, the Government should treat that as an important issue.

[Kevin Hollinrake]

My hon. Friend is a fantastic champion of the natural environment, and she makes a very good point.

The World Health Organisation has stated that antimicrobial resistance is

“one of the greatest challenges for public health”

and that the problem is increasing and we are

“fast running out of…options.”

Antibiotic resistance is just one form of antimicrobial resistance—others concern viral and fungal infections—but my focus is antibiotics, which the public more readily understand and should have real concerns about. Bacteria undergo an eternal battle for survival, and natural resistance occurs as a result of bacteria fighting that battle, but when we use antibiotics—particularly when we overuse them—that natural resistance accelerates significantly and becomes super-charged, and we end up with many more antibiotic-resistant bacteria.

[Dr Daniel Poulter (Central Suffolk and North Ipswich) (Con)]

I congratulate my hon. Friend on bringing the debate. He is right to highlight the scale of the challenge not just here but globally: it is difficult for countries to bring forward large-scale programmes to deal with the problem of antimicrobial resistance. Does he agree that, apart from inappropriate prescribing, one of the key issues in this country is people not always completing courses of antibiotics, which increases the challenges and problems of bacteria developing resistance?

[Kevin Hollinrake]

I defer to my hon. Friend’s in-depth knowledge in this area. I recognise my father’s habits in taking antibiotics when he felt a bit unwell—he had a little cupboard in the corner of his lounge. That is a problem, and that is why we need to improve the education on treatment of illnesses for which people are prescribed antibiotics.

The point about antibiotic resistance spreading is that it can be spread in so many ways: on aeroplanes; in our water; from contact with unwashed hands of people who carry bacteria resistance; coughing and sneezing; and from animals to humans. Some Members may have come across the excellent BBC Radio 4 drama “Resistance” —the first episode was aired on Friday and the second episode is this Friday—which talks about the transference from animals to humans. That means we must tackle this problem both in agriculture and in our health services.

Bacteria do not recognise national borders, so, as many hon. Members have already pointed out, this is a global problem. We would think that with those apocalyptic visions of the future we would be spending an awful lot of money on tackling this issue, but that is not the case. About $100 billion is spent every year on cancer research, but only about $5 billion is spent every year on tackling antimicrobial resistance. The reason for that is the commercial return that large pharmaceutical companies will get from bringing forward a new antibiotic to tackle this issue. Almost by definition, any new drug is held as a last line of defence, so there is not a significant commercial return for the pharmaceutical companies who we rely on for such new drugs. About $50 billion a year is spent on antibiotics but only about $5 billion a year is spent on patented antibiotics, which is equivalent to one cancer drug. It is a better commercial activity to be involved in cancer research and cancer drug development than in antimicrobial resistance. There has been a huge reduction in the number of pharmaceutical companies involved in research and development—in 1990 there were 18 and in 2010 there were only four—and no new classes of antibiotic drugs have been developed in the past 25 years.

Of course, the O’Neill review has studied that and come up with clear and compelling recommendations such as rapid diagnostic testing, which the right hon. Member for Oxford East (Mr Smith) referred to. Yesterday we had a Twitter debate, which was interesting, listening for an hour to people’s experiences. Many clinicians got involved in that particular Twittersphere, and we trended nationally at one point, which was certainly a new experience for me. One thing that came across was the pressure that clinicians were under to prescribe antibiotics to people who felt ill. Obviously, if we had diagnostics that could show people that they did not carry something that could be treated by an antibiotic, they would be much less likely to put that pressure on doctors.

[Maggie Throup (Erewash) (Con)]

My hon. Friend makes a good point about educating patients so that they appreciate that they do not have to come out of the GP surgery with a prescription in their hand if a diagnostic test can be carried out to prove that antibiotics will not work in their case.

[Kevin Hollinrake]

That is right. I had a test myself at a drop-in session in Portcullis House that showed me that I was not ill—I did not think I was ill, but they told me that I was not, which was reassuring. Again, we need to ensure that prescriptions are given when they will be effective. One other area that we do not seem to have control over at the moment is the online sale of antibiotics: whether through UK-based pharmacies or those based overseas, it is too easy to access drugs without a proper prescription.

The second key point that the O’Neill review highlights is the need for a global public awareness campaign so that people are aware of the issues. Again on Twitter yesterday, a student who had undertaken some analysis said that 80% of the people she had spoken to had no awareness of antibiotic resistance. We need a significant national and international effort to draw public attention to the problem. As people have already said, we need a reduction of usage in agriculture. That is clearly set out in the O’Neill review as one of the four main recommendations.

[Chi Onwurah (Newcastle upon Tyne Central) (Lab)]

The hon. Gentleman is making an important point about the dangers of antibiotic resistance. Does he agree that as well as not prescribing antibiotics for illnesses, it is important to recognise when there are alternatives that will reduce the use of antibiotics overall? For example, there is research being done at Newcastle University into using antiseptics for urinary diseases.

[Kevin Hollinrake]

Yes, what we need is a mixture of solutions. The UK by its own admission is mid-range across Europe in its use of antibiotics in agriculture. That is one thing, but we have been world leaders on this issue and for me mid-range is not where we need to be; we need to be at the forefront and world leaders in terms of best practice, whatever aspect of this issue we are dealing with.

There are four key recommendations in the O’Neill review’s 10 main recommendations. The last one is on market entry rewards to solve the problem of pharmas not investing in research and development, as well as a possible levy on drug companies that do not invest in research.

[Alex Chalk (Cheltenham) (Con)]

The World Health Organisation has made it clear, chillingly, that resistance to last resort antibiotics is present globally, so we have to act. Does my hon. Friend agree that we will not create vital new drugs until we align better the public health needs with the commercial incentives, and that Governments need to correct what is the most dangerous market failure in history?

[Kevin Hollinrake]

That is correct, and the review sets that out clearly. At the moment, if there is not a commercial return, it is difficult for pharmaceutical companies to invest in this field, although some are. For example, AstraZeneca recently sold its late-stage small molecule antibiotic business to Pfizer and so stepped out of research and development, but others, such as MSD, are still investing. It cannot be right that some companies are willing to invest—perhaps for altruistic purposes—when others are not. The O’Neill review discusses whether there should be a reimbursement or an insurance model, so that pharmaceutical companies can be sure that they will get a certain amount every year for drugs if they do develop them. It cannot be right that some contribute and some do not, so a levy for those that do not seems sensible to me. I do not think it should be left simply to big pharma to solve the problem.

The O’Neill review talks about a global AMR innovation fund—GAMRIF—to make funding available for smaller third sector organisations. Having Antibiotic Research UK, the world’s first charity in this field, in my constituency is how the issue was brought to my attention. It is doing fantastic research. From donations made by individuals, it has got hundreds of thousands of pounds that it is investing in “resistance breakers”, which is blending drugs together to repurpose existing antibiotics. That again is one of the recommendations in the report. Yes, big pharma, but we have also got to make some funding available to the smaller organisations, too.

[Mr George Osborne (Tatton) (Con)]

Will my hon. Friend give way?

[Kevin Hollinrake]

I am happy to give way my right hon. Friend, who has been a leader on this issue globally.

[Mr Osborne]

I congratulate my hon. Friend on highlighting this issue, and the wide range of Members here shows the degree of support across the House. He is now on the nub of the problem: there will not be an international levy unless Britain leads the argument internationally; no other country will do it. David Cameron established the review and Jim O’Neill has provided the answers. The British Government now need to double up their efforts and make sure that this is one of the major things we campaign for at the UN, the G20 and the like. We have made a good start and we have an extremely capable Minister, but now we need to finish the job.

[Kevin Hollinrake]

I am grateful for that intervention and for my right hon. Friend’s work on the issue in the past. He gives me an ideal opportunity to close my comments; I know you are keen to get other Members in to speak, Mr Streeter.

The UK is a world leader on this in both words and actions, but we need to do much more. The former Prime Minister—and the current Prime Minister, I am sure—and the former Chancellor of the Exchequer are leaders on this on the world stage and have drawn it to the world’s attention, as has Lord O’Neill. It is hugely important that we maintain that leadership. I look forward to hearing the thoughts of colleagues and the clear plans of Ministers for how we will act now to meet today’s challenge, because the fear is that tomorrow will be much worse than today.

[Mr Gary Streeter (in the Chair)]

I remind hon. Members of the voluntary four-minute time limit. There are about to be Divisions in the House.

14:51

[Kerry McCarthy (Bristol East) (Lab)]

I congratulate the hon. Member for Thirsk and Malton (Kevin Hollinrake) on securing the debate. For time reasons, I will focus only on the use of antibiotics in farming. We know that, just as there is a clear correlation between rising levels of human use of antibiotics and growing antibiotic resistance among humans, higher use in farm animals undermines antibiotics’ effectiveness in human medicine.

Too many of the superbugs listed by the World Health Organisation as posing the greatest threat to human health are also found in retail meat and food animals. At the end of last year, yet more studies found antibiotic-resistant E. coli in British supermarket pig and chicken meat and MRSA in UK supermarket pork. It is encouraging that DEFRA has now—after being rather complacent about the routine use of antibiotics in farming, it has to be said—committed to a 20% reduction by 2018, in line with the O’Neill review’s recommendations, but more action is needed.

The Government have said that the Veterinary Medicines Directorate is working closely with the sector to embed responsible use of antibiotics, but we know that is simply not happening. Routine mass medication of groups of animals, either on a purely preventive basis or when a few animals within the group are sick, is still far too frequent, particularly in the pig industry. Last March, the European Parliament voted through proposed new regulations that included a ban on preventive group treatments, but the trialogue between the Parliament, the Council and the European Commission has been delayed yet again until September. At the time of that vote, the then shadow Health Secretary, my hon. Friend the Member for Lewisham East (Heidi Alexander), and I, in my then capacity as shadow Environment Secretary, wrote to our counterparts to ask them to respond positively to the proposals, but we received a pretty opaque response. Will the Minister say whether the Government fully back the European Parliament’s position? It may take several more years before an EU ban, so I urge the Government to take action now and follow the Netherlands and the five Nordic countries, which do not permit such treatments.

There have been welcome moves by the British Poultry Council, but the British pig industry has not moved as fast. Colistin, which is a last resort treatment for life-threatening infections in humans, is now one of few options doctors have left for treating carbapenem-resistant Enterobacteriaceae—CRE—which has been described as the nightmare bacteria. It is important to me because my niece and several of my constituents have cystic fibrosis, and colistin is used for treating lung infections arising from CF. The Cystic Fibrosis Trust described growing colistin resistance as a

“matter of life and death”

for such patients. Only last year, new products were licensed by the Veterinary Medicines Directorate in a move that Professor Timothy Walsh, one of the scientists who originally discovered colistin resistance, described as “sheer, utter madness”. He says that that last resort antibiotic will become useless as a drug within 10 years if its usage in veterinary medicine is not stopped.

The Government also urgently need to set specific targets for “critically important antibiotics” because of their importance to human health. The Alliance to Save Our Antibiotics has called for an 80% reduction in the use of CIAs in farming in five years, and a 95% reduction in 10 years—a call I endorsed this time last year—but sales fell by only 5% in 2015. We need far greater reductions. We also need more ambitious sector-specific targets. As I said, the poultry industry is doing more but antibiotic use is extremely high in the pig industry—more than five times higher per pig than in Denmark and the Netherlands, which are our competitors. As has already been said, intensive farming goes hand in hand with the overuse of antibiotics, which is something the Government need to encourage farmers to move away from.

14:55

[Maggie Throup (Erewash) (Con)]

I congratulate my hon. Friend the Member for Thirsk and Malton (Kevin Hollinrake) on securing this important debate. I will focus on Lord O’Neill’s call for antibiotic prescriptions to be informed by a rapid diagnostic test “wherever one exists” by 2020. Such tests do exist and have for probably at least 25 years. I know that because I tried to launch such a test previously. At that stage it was about better prescribing, but it is now more about tackling the huge problem of antimicrobial resistance, which Dame Sally Davies has said is as big a risk as terrorism and climate change.

Why are we still only talking about these point-of-care and diagnostic tests, which could make a huge difference? I think it is partly due to the way that in vitro diagnostic tests are block funded through centralised hospital labs. In Scandinavia, point-of-care tests are a lot more widespread, including for C-reactive protein—CRP—and funding is decentralised. There is not yet a mechanism for such tests to be funded in the UK. It is so important to look at how such tests will be funded, whether they are to be used in a GP surgery or local pharmacy. It has been calculated that £56 million could be saved in prescribing and dispensing costs alone if point-of-care tests were introduced, as they can be vital in deciding whether to prescribe antibiotics.

Let me explain. High levels of C-reactive protein are found in somebody with a bacterial infection. The level is normally only slightly raised when the patient has a viral and not a microbial infection. When my hon. Friend was tested, the results showed that he was either healthy or had a viral infection. Point-of-care CRP tests are available and can be carried out by GPs, practice nurses and community pharmacists, and they take just four minutes to determine whether a patient needs antibiotics or not. It sounds very simple, and it can be. As I said earlier, patients feel they have only had their money’s worth from a GP appointment if they come out with a prescription, but studies have shown that giving them a point-of-care test can also leave them feeling satisfied and as though they have had their money’s worth. In one study, 90% of respondents felt reassured by a point-of-care CRP test if they were not prescribed an antibiotic.

The tests are very simple. Patients have their finger or thumb stabbed and a small drop of blood is taken. It is then tested within four minutes, while the patient waits in the doctor’s surgery. Lots of studies have shown a reduction in antibiotic prescribing, including by 30% in one and 23% in another project, which was cost-neutral; the cost of carrying out the tests versus prescribing is very effective. I am mystified as to why we have this problem yet are not tackling it with tests that are already on the market, which is in line with current National Institute for Health and Care Excellence guidelines. I ask the Minister: why can we not change the funding streams for these tests to make sure that they are carried out exactly where they are needed?

14:59

[Patrick Grady (Glasgow North) (SNP)]

It is a pleasure to serve under your chairmanship, Mr Streeter. I was not expecting to be called so soon—[Interruption.]

[Mr Gary Streeter (in the Chair)]

Despite your pleasure, Mr Grady, there is a Division in the House.

15:00

Sitting suspended for Divisions in the House.

15:30

On resuming—

[Mr Gary Streeter (in the Chair)]

We will recommence even though the Minister and the mover of the motion are not present. Sir Kevin Barron will speak now, and we will come back to Patrick Grady’s speech later. The debate will end at 4.33 pm.

15:33

[Sir Kevin Barron (Rother Valley) (Lab)]

I congratulate the hon. Member for Thirsk and Malton (Kevin Hollinrake) on securing this very important debate. We will all be aware that the World Health Organisation says that antibiotic resistance is one of the most significant threats to safety in Europe. Resistance is driven by overusing and inappropriately prescribing antibiotics, and it leads to higher medical costs, prolonged hospital stays and increased mortality. The aim of appropriate use is to ensure that patients receive the treatment that is most likely to treat their condition without increasing antimicrobial resistance. That includes ensuring that courses of antibiotics are completed and are not prescribed unnecessarily, and reducing the spread of infection through vaccines and other early interventions.

One area that is often overlooked is dentistry, which accounts for up to 10% of all antibiotics prescribed in the UK. It is essential that dentists play their part in reducing antibiotic prescribing, and I believe that they are willing to do that. The British Dental Association tells me that many patients are not aware that antibiotics cannot cure decay or dental abscesses and that surgical intervention and painkillers are more often the appropriate treatment for tooth-related pain. The briefing sheet that the BDA sent me gives this good example:

“Hundreds of thousands of patients show up at GP surgeries and A&E departments every year with dental pain, but these places are not equipped to help them, and they are sent home with antibiotics to tide them over until they can arrange to see a dentist.”

There should be awareness of that throughout the medical profession.

I agree with Lord O’Neill’s statement that diagnostic technology needs to be improved to ensure that antimicrobials are used appropriately. I am no expert in this area, but the chair of the review board called on the Governments of rich countries to ensure that, by 2020, all prescriptions for antibiotics will be on the basis of surveillance information and a rapid diagnostic test where one is available. The review recommended a diagnostic market stimulus to support the diagnostic technology market. The Minister is not in the Chamber at present, but I hope that the Government will look at diagnostics.

The Government must also look at the factors that have hampered investment in antibiotic development, particularly the low commercial returns on investment. With high costs and long lead times for developing new medicines, there is a need to create an attractive environment for companies to invest in antibiotic development, in order to increase research and development. The current system of antibiotic reimbursement does not provide companies with a fair return on investment. That is driving companies out of the anti-infection market.

Pharmaceutical companies and Government are developing a delinked domestic reimbursement model. That will remove the incentive for companies to promote antibiotic sales, which can accelerate the development of resistance. The proposed model will deliver a return on investment for antibiotics that is delinked from the volume of sales. It will also encourage the appropriate use of new antibiotics by ensuring that they are prescribed based on clinical need and in line with stewardship goals.

I see the time, Mr Streeter, and I am about to conclude. A delinkage model is proposed in the O’Neill report, and we must put our minds to it, but it is very much for the future. What we have to examine now is how we manage patients’ expectations on when antibiotics are and are not appropriate. We should be doing that daily in all parts of the health service.

15:37

[David Tredinnick (Bosworth) (Con)]

The O’Neill report focuses on many things, but I would like to focus on three key points. One is unnecessary prescribing. The second is the so-called disappeared antibiotics—those that should be available, but are not. The third is alternatives—something that Jim O’Neill talks about, but does not elaborate on.

Jim O’Neill says:

“Huge quantities of…antibiotics, are wasted globally on patients who do not need them”.

That is a key challenge for us, but he also says that a study in 2012 of 38 high-income countries found that

“two thirds of the antibiotics surveyed were not available in more than half of the countries. The main reason for this is that drugs manufacturers and distributors discontinue the stock where it is not profitable enough to maintain it.”

The point is that those antibiotics are available, but are not being used because of economic factors.

We looked at this issue in the Select Committee on Science and Technology, of which I was a member in the previous Parliament, and we found:

“Of the 18 to 20 pharmaceutical companies who were the main suppliers of new antibiotics 20 years ago, just a handful of companies persist in this field.”

It is all down to money, and we will clearly have to address that with funding.

If we go through the back of the O’Neill report, we find that there are hardly any contributions from anyone who knows anything about anything other than mainstream medicine. Between one third and one half of the world’s population live in China and India, where there is integrated healthcare using herbal medicine and mainstream medicine. There are 60,000 hospitals in China, and there will be a larger number of herbal clinics. In India, the Ministry of AYUSH regulates Ayurveda of different types, yoga and homeopathy, of which there are 200 colleges —we probably will not get on to that this afternoon.

In the previous Parliament, the then Minister, my hon. Friend the Member for Central Suffolk and North Ipswich (Dr Poulter), asked a group led by the deputy chief medical officer, and me as his deputy, to look at regulation of herbal medicine. My hon. Friend the Minister has just published her response. I congratulate her on it and am very much in favour of the idea of getting better regulation through the Professional Standards Authority. However, I have to tell her that she has been badly advised in one respect. She says, on herbal pharmacies:

“Allowing people with no qualifications to put together medicines and carry this out on unregulated premises conflicts with everything else the MHRA does”.—[Official Report, 28 February 2017; Vol. 622, c. 8WS.]

I have to tell her that that is not the case. Professor David Walker, who wrote to her predecessor, my hon. Friend the Member for Mid Norfolk (George Freeman), made this clear:

“The idea of herbal dispensaries was to allow the preparation of herbal remedies on behalf of individual practitioners, for individual patients, but at a distant location by a third party. This would be safer than unskilled practitioners making products in unsuitable environments.”

So that is completely the opposite. He said:

“We consulted the MHRA about the feasibility of this change in our deliberations and the advice that we received was that it was feasible but…would take considerable work”.

That is the problem—the MHRA do not want to do the work. He went on:

“We felt that this effort would be worthwhile and that dispensaries would improve access to herbal medicines, generate business and improve patient safety.”

If we marry that with the new regime that the Professional Standards Authority has put in place, and if we give the herbal pharmacists from China and India and the phytotherapists in this country oversight of regulation through the PSA, my hon. Friend the Minister will have a powerful tool. However, that will not be the case if she does not have another look at the herbal pharmacies proposal, which we worked on for nearly 18 months. The former Minister, who commissioned the report, is not in his place at the moment, but he would agree.

15:41

[Patrick Grady]

It is still a pleasure to be serving under your chairmanship, Mr Streeter.

Antimicrobial resistance was described earlier by another Member as a market failure. I have also seen it described as a “tragedy of the commons”, which is a phrase that some of us might associate with the hassle we have to go through because of the antiquated voting systems in this House. It is actually an economic term describing where individual users acting independently according to their own self-interest behave contrary to the common good by depleting a resource that should be there to serve everyone. That is precisely what has happened through the misuse of antibiotic medicines over the years. It shows that the resistance we are discussing today is an avoidable and man-made problem, and it is therefore in our gift to overcome the challenge.

[Chris Green (Bolton West) (Con)]

One of my concerns is that we view this as though there should be a proper market functioning. Does the hon. Gentleman agree that we do not actually want a functioning market, in that we want a new generation of drugs to become available and then, as far as possible, not to be used? We do not want the market to operate; we want the use of such drugs to be in reserve.

[Patrick Grady]

Absolutely. I wholeheartedly agree. That leads me nicely on to my first point about the particular challenge faced in developing countries.

All Governments in the world have an obligation under the sustainable development goals—it is in SDG 3—to ensure health and wellbeing for all, which includes access to safe, effective, quality and affordable medicines and vaccines. That is about access to medicines; it is not about the right to buy or sell them on the market, it is about treating them as a common good. That is precisely what we want to do, otherwise there is a real risk of backsliding on progress that has been made in tackling neglected and tropical diseases. We heard earlier about TB being responsible for more than 5,000 deaths per day, and about malaria, which is often treated by very strong antibiotics and affects more than 200 million people worldwide a year. That is why there needs to be a broad, co-ordinated response. Drugs that treat TB are often used to treat other infections as well, so in boosting research into neglected diseases there is an opportunity to supercharge the pipeline of development and make more drugs available for treatment as we need them.

I am glad the Minister is back in the Chamber. It would be interesting to hear what further commitments the Government can make. We welcomed the commitment to the global fund, but how is the Department for Health working with the Department for International Development on these issues? In particular, how much of her Department’s spending will be counted as official development assistance when it comes to tackling antimicrobial resistance? The Ross fund was set up by the former Chancellor, the right hon. Member for Tatton (Mr Osborne), who is no longer in his place, and I congratulate him on it. What progress is being made on that fund, and what support will there be for researchers on the ground in developing countries? I am not opposed to using the ODA budget to fund Departments other than DFID, but wherever possible it should be used to support research on the ground in developing countries.

I want to speak briefly about domestic responses. I recently met a constituent, Linda Brooks, who has become the chair of the Scottish steering committee for synthetic biology—an initiative supported by Scottish Enterprise. She is also a manager at the company Thermo Fisher, which supports research in the life sciences sector including pioneering work on antimicrobial resistance and, in particular, the technology of genome editing, which has huge potential. It would be interesting to hear whether the Government provide any support in those areas.

We all have responsibility for the effective use of antibiotics. During the hiatus in this debate I was able to sign up online to become an antibiotic guardian, which Public Health England supports with the encouragement of all the devolved Administrations. It includes a range of pledges to treat symptoms, to talk to pharmacists, to dispose of unused antibiotics carefully, to take the flu vaccine and to always complete the course—I hope everyone will sign up to that pledge.

[Several hon. Members rose—]

[Mr Gary Streeter (in the Chair)]

Order. I am afraid we now have to go down to three minutes per speaker. I am sorry about there being no notice of that.

15:46

[Dr Caroline Johnson (Sleaford and North Hykeham) (Con)]

It is a pleasure to serve under your chairmanship, Mr Streeter. First, I thank my hon. Friend the Member for Thirsk and Malton (Kevin Hollinrake) for bringing this crucial issue forward for discussion. Keeping it in the spotlight is vital, to ensure that there is sufficient political will to carry forth the recommendations in the O’Neill report on antimicrobial resistance.

Having worked in the NHS as a consultant paediatrician, and having treated many patients with antibiotics, I have seen at first hand the work the NHS is doing to ensure that they are prescribed responsibly. I have also used the CRP test, which my hon. Friend the Member for Erewash (Maggie Throup) mentioned, many times. However, I would caution that the result of that test is only a small part of a much larger clinical picture, and we should be mindful that a normal result does not exclude serious infection.

Over the years of my clinical practice, many measures have come into force to ensure that the right antibiotic, appropriate for the infection and the patient, is used. One of those is limiting access to the newest antibiotics, and using them only in specific circumstances after discussions with the hospital’s consultant microbiologist. The measures have resulted in a more responsible use of antibiotics within the health service. However, as the O’Neill review identified, such stringent measures do not exist within veterinary medicine, and the use of antibiotics in farming accounts for about 40% of the UK’s consumption of antibiotics.

As a Member for a rural constituency and the wife of a farmer, I believe that minimising the growth of antimicrobial resistance through our agricultural practices is of great importance and must be tackled with the same vigour with which we have addressed the use of antibiotics in human medicine. The O’Neill review made a number of recommendations, including the responsible use of antibiotics in animals, restricting the use of antibiotics that are critical to human medicine, and disease prevention. An effective antibiotic monitoring system can have a huge impact on reducing the use of antibiotics, as shown by the implementation of such a system in the British meat poultry sector, which resulted in a 44% reduction from 2012 to 2015. Restricting the use in agriculture of antibiotics that are of the most critical importance to human medicine is vital to ensure their continued effectiveness. The Department of Health requires continued support to bolster the regulatory oversight of veterinary antibiotics, to ensure that they are used responsibly and to keep back the priority antibiotics.

Finally, we must support our farmers in methods to prevent disease by emphasising improvement in overall biosecurity and herd health, including through vaccination. It is important that we do our part to deal with antibiotic resistance, but we also need to recognise, as my right hon. Friend the Member for Tatton (Mr Osborne) said, that this issue can only really be solved with international co-operation and a push for awareness of the problem, not only at home but within the international community, to help develop the regulatory framework. Much talk is made of a cliff edge where drug-resistant bacteria will be able to defeat the entire arsenal of antibiotics, but we have already reached that cliff edge.

15:49

[Mr Virendra Sharma (Ealing, Southall) (Lab)]

It is a great pleasure to see you in the Chair, Mr Streeter, and I congratulate the hon. Member for Thirsk and Malton (Kevin Hollinrake) on securing this important debate.

The O’Neill review is a fundamentally important look at the future of medical treatment not just in this country, but globally. TB is one of the most dangerous diseases worldwide and the most lethal infectious disease in history. As has been mentioned, 5,000 people die from it every day around the world and, as the review indicates, more than 10 million people will die from it annually by 2050 if we are not careful and do not contribute to the development of future research and vaccinations.

I am proud of the work of the all-party group on global tuberculosis and that of my co-chair of the group, the right hon. Member for Arundel and South Downs (Nick Herbert)—I think he has left the Chamber. We have had fantastic support from the Global TB Caucus and RESULTS UK. Both groups worked tirelessly to ensure the proper replenishment of the global fund last year. Eighty per cent. of the funding for the global fight against TB comes from the fund and Britain is the second largest donor. Still, at current rates, eradication will only be possible by 2167, which is not good enough—the speed we are going means that it will take 150 years to eradicate the disease. We have committed to eradication by 2030 but we are not doing enough to achieve it. Hopefully, the O’Neill review will be enough to drive forward the agenda that we need.

We have to work towards not just treatment, but vaccination. The standard treatment currently takes six months and 4,000 pills; it is no wonder that fewer than half of those who start the treatment complete the course. The difficulty of treatment drives AMR and the widespread nature of the epidemic. Hopefully, Lord O’Neill’s review will go some way towards raising awareness of how acute the issue of AMR is for some of the world’s poorest, even in this country. This and previous Governments have led the world on action on resistance. Let them again take up the mantle and drive forward the fight against AMR and help to secure a real vaccination against TB.

15:49

[Sir Paul Beresford (Mole Valley) (Con)]

I am delighted to serve under your guidance, Mr Streeter, and I congratulate my hon. Friend the Member for Thirsk and Malton (Kevin Hollinrake) on securing the debate. A disadvantage of being the only practising dentist in the House is having to remember that the Commission is watching, so I have to declare it, Mr Streeter.

As the right hon. Member for Rother Valley (Sir Kevin Barron) will know, as a dentist I am instantly lobbied by the likes of the British Dental Association, and I will stick to that area. As he said, around 10% of the antibiotics that are dispensed are for dental pains and dental problems. Hundreds of thousands of people swarm into GP surgeries and A&Es and they are given pills like lollipops to take away, but the solution is only temporary and does not solve the problem. To ask the Minister one small thing, will she think about working on a system to increase the number of emergency dentists that are available, because dental action, not pills, is needed?

Dental action can take many forms. Part of stopping the broad provision of antibiotics is straight prevention. In the case of dentistry, that is relatively simple. The cause of the majority of dental pain requiring antibiotics is decay and that is totally preventable. I am delighted that Sara Hurley, the new chief dental officer, is really moving on that issue. She is making changes so that kids are taught, from the moment that their teeth arrive right the way through to their school years, about brushing their teeth and using fluoride toothpaste to prevent decay. Many of the hundreds of thousands of patients who go into A&E are children suffering from swollen faces, pain, sleepless nights and so on. They are given antibiotics to tide them over until they have teeth taken out. In England, some 900 kids a week are given general anaesthetics to have their teeth out. That is appalling and preventable. I encourage the Minister to work with the chief dental officer, the health and wellbeing bodies and charities to prevent the need for any antibiotics—or at least, to reduce the antibiotics used—in dentistry by simply preventing dental decay.

15:49

[Jim Shannon (Strangford) (DUP)]

It is a pleasure to serve under your chairmanship, Mr Streeter, and I thank the hon. Member for Thirsk and Malton (Kevin Hollinrake) for setting the scene.

I could not help but be shocked by the figures in the information that hon. Members received from the Library. The briefing stated:

“If we are unable to slow the acceleration of AMR, future consequences will be worse still.”

It also stated that

“10 million people a year could be dying as a result of AMR by 2050”.

Professor Dame Sally Davies has said that we could well

“return to a time where 40 per cent of the population die prematurely from infections we cannot treat.”

Those are the facts, so what do we do to solve the problem? I will try to hit on some solutions, and I look to the Minister for encouragement.

I want to highlight the work that has been done on the boundary of my constituency at the world-renowned Queen’s University Belfast. Researchers there are leading a €50 million Europe-wide project to develop new drug treatment to improve the lives of patients with cystic fibrosis and bronchiectasis. The inhaled antibiotics in bronchiectasis and cystic fibrosis consortium—the iABC—which is made up of world-leading lung specialists from across Europe, will develop new inhaled antibiotics to manage chronic lung infection, which is the main cause of disease and death in patients with cystic fibrosis and bronchiectasis. If we look across the United Kingdom of Great Britain and Northern Ireland for solutions and how to address the problem, we can see that we are doing a grand job on moving forward on this issue. The new antibiotics, which are being trialled over a five-year period and are being developed in response to the urgent need for new forms of inhaled antibiotics, are expected to improve patients’ quality of life by reducing lung infections and flare-ups, improving lung function and overcoming antibacterial resistance, which frequently occurs in patients with those conditions.

The consortium is also funded by the European Commission and involves some 20 organisations from eight countries across Europe. As Professor Stuart Elborn, dean of the school of dentistry, medicine and biomedical sciences at Queen’s University, said:

“There are limited antibiotics available to treat lung infection in cystic fibrosis and bronchiectasis, and the bacteria causing them are becoming increasingly resistant to current antibiotics.”

The work being done by Queen’s University has the potential to deliver inhaled antibiotics that will improve the quality of life and survival rates of cystic fibrosis and bronchiectasis patients. It is the latest example of the commitment of the researchers and staff at Queen’s University to advancing knowledge and changing lives by working with international experts.

We are looking at how we can best address these issues, so I ask the Minister to tell us what has been done on the partnerships that clearly operate between big business, universities and Government to ensure that the giant steps being taken by the likes of Queen’s University in Belfast can be replicated across the whole United Kingdom. If that can be done, we can solve the problem.

15:49

[Jeremy Lefroy (Stafford) (Con)]

I declare an interest as a member of the board of the Liverpool School of Tropical Medicine. Indeed, I talked to Dr Adam Roberts who is a senior lecturer in antimicrobial chemotherapy and resistance there; he gave me some pointers to the things that he believes are extremely important in this work. I will touch on four of them.

The first thing, as others have mentioned, is to revitalise drug discovery. We are not talking about one or two drugs but 10, 20 or 30 new drugs. That is the scale of what is needed, particularly in the area of anti-Gram- negatives, because there is the least resistance to those drugs at the moment.

The second point, which has been made, is that the pharmaceutical industry as a whole should be involved. My hon. Friend the Member for Thirsk and Malton (Kevin Hollinrake) rightly said that many treatments, such as more intense chemotherapies, rely on the availability of good antibiotics so that patients do not suffer when their resistance levels are lower. Why should those companies not contribute to the development of antibiotics, if they are not doing so already? As we said, that is challenging commercially. Perhaps we could even look at a tax on those drugs to pay for antibiotics or some other way of raising revenue from those that do not participate.

Thirdly, a public education campaign, which has been mentioned, would help people recognise that antibiotics are not to be taken at every opportunity and that we should consider who is using them, particularly in meat production. I believe that one or two major companies in the United States have already started using meat reared without antibiotics, which I welcome. The fourth area, which has also been mentioned, is regulation of the sale of antibiotics online. It is a major loophole that must be closed, and the United Kingdom can play a role.

Finally, I draw a parallel with malaria, which the hon. Member for Glasgow North (Patrick Grady) mentioned. As a result of the development of rapid diagnostic tests for malaria, the use of the very effective anti-malarials has declined, because people no longer see anti-malarials as the only treatment that can be provided when their child gets a fever. Consequently, although resistance exists, it has become less of a problem in some places. Also, initiatives such as the Medicines for Malaria Venture have created a much stronger pipeline of anti-malarial drugs through co-operation among the pharmaceutical industry, charities such as the Gates Foundation, the United Kingdom and other Governments and the Global Fund to fight malaria, HIV/AIDS and tuberculosis. Such co-operation is critical.

[Mr Gary Streeter (in the Chair)]

I remind colleagues that this debate must conclude at 4.33 pm. Our winding-up speeches will begin now, but I hope that we will be able to give two or three minutes at the conclusion of the debate for the mover of the motion to have a final say.

16:01

[Martyn Day (Linlithgow and East Falkirk) (SNP)]

It is a pleasure to serve under your chairmanship, Mr Streeter, and to take part in this important debate, which has been well informed and highly consensual. I am grateful to the hon. Member for Thirsk and Malton (Kevin Hollinrake) for securing it. This issue is one of the greatest global health challenges facing our generation. I agree thoroughly that it is potentially devastating and that it is already happening.

[Mr Philip Hollobone in the Chair]

Worldwide, antimicrobial resistance currently kills an estimated 700,000 people annually, and approximately 70% of known bacteria have developed resistance to one or more antimicrobials. The O’Neill review sends a clear and stark warning to us all that we must act for the sake of our economy and, more importantly, our health. Lord O’Neill estimates that by 2050, 10 million people globally could die each year because antibiotics are losing their power to tackle common infections, and that a quarter of those deaths will be caused by tuberculosis, whose attributes make TB bacteria more likely to develop resistance. It is worth noting that the O’Neill review final recommendations highlighted that

“tackling TB and drug-resistant TB must be at the heart of any global action against AMR.”

It is also projected that antimicrobial resistance could cut global GDP by 3.5% in the same time period, which amounts to $100 trillion. I am not even sure how many zeroes that is, but it is a frightening sum. Action is needed at a local, national and global level to improve knowledge and understanding of antimicrobial resistance, to conserve and steward the effectiveness of existing treatments and to stimulate the development of new antibiotics, diagnostics and therapies.

To those ends, the Scottish National party-led Scottish Government are taking their role seriously. Last March, the Scottish Government announced a £4.2 million research grant to investigate the prevention and control of healthcare-associated infections, as well as to research new ways of using existing antibiotics more effectively and efficiently. Scottish Government funding was provided to a consortium of researchers led by the University of Glasgow, working with other Scottish universities, to establish a new Scottish Healthcare Associated Infection Prevention Institute.

Antibiotics are not only critical for treating bacterial infections, they are a cornerstone of routine healthcare, as they prevent infections following surgery and cancer chemotherapy. In Scotland, more than 80% of antibiotic use is within primary care. Overuse and inappropriate use of antibiotics can unnecessarily increase the development of AMR. As limited new antibiotics are under development, it is vital that health professionals and the public work together to optimise how antibiotics are used to preserve their effectiveness for future generations.

Some progress is being made. The latest Scottish figures for 2015 show a 2.4% fall in one year in the number of antibiotics prescribed in primary care, a reduction of 84,490 items compared with 2014. As per the recommendations of the UK five-year antimicrobial resistance strategy, a Scottish “One Health” report will be published in 2017. The report will contain antimicrobial use and resistance data for humans, animals and the environment, in line with the aims of the global “One Health” approach, which spans people, animals, agriculture and the wider environment. There is little doubt that a present and serious challenge faces us; what is less clear is how best to tackle it.

It seems to me that we have two principal problems, both of which have been covered by hon. Members who have spoken in the debate. First, pharmaceutical companies do not have a financial incentive to develop new antibiotics. Even if a company invests in developing a new antibiotic, it needs to be held back until we are resistant to other antibiotics. However, while the antibiotic is being held back, the time on its patent is still ticking down, meaning that the company has less time to recoup the money that it has invested developing it. Therefore, the SNP would like the UK to accelerate its leading role in developing solutions to incentivise the development and management of new antibiotics, promote re-investment in antibiotics and appropriate use and reduce the risks for both payer and investor. I look forward to any comments that the Minister might have on that aspect.

Our second major problem is the use of antibiotics in livestock, which we then consume via the food chain. The evidence suggests that the amount of antimicrobials used in food production internationally is at least the same as in humans, and in some places is higher. For example, in the US, more than 70% of antibiotics that are medically important for humans are used in animals. This form of antimicrobial usage is likely to rise as a result of economic growth, increasing wealth and food consumption in the emerging world.

When properly used, antibiotics are essential for treating infections in animals, but excessive and inappropriate use of the drugs may be a problem. It is therefore important that we play our part in working towards the O’Neill recommendation of

“a global target to reduce antibiotic use in food production to an agreed level per kilogram of livestock and fish, along with restrictions on the use of antibiotics important for human health.”

The SNP encourages everyone to play their part in reducing the unnecessary use of antibiotics, raising awareness and pledging to be an antibiotic guardian. I have not yet followed the example of my hon. Friend the Member for Glasgow North (Patrick Grady) and registered, but now that I know it is easy to do, I will do it today.

In November 2015, Scotland’s Health Secretary, Shona Robison, said that the rise of drug-resistant infections is an issue that must be tackled in Scotland and around the world. Marking European antibiotic awareness day, Robison also pledged to be an antibiotic guardian, in a scheme run by a joint UK initiative to encourage everyone to become an antibiotic guardian by making a personal pledge. As part of European antibiotic awareness day, the Scottish Antimicrobial Prescribing Group, alongside UK partners, launched a target of 100,000 people signing up to become antibiotic guardians, including one in 10 prescribers and one in 100 other healthcare professionals.

Inevitably, any solution will have to be multi-factorial and involve a large range of stakeholders including Governments, non-governmental organisations, industry, the pharma, food and agriculture sectors, academia, research, health professionals and the public at large. If we become completely resistant to antibiotics, operations and procedures currently considered routine will become a lot more dangerous. The medical profession in Britain has become a lot better at not prescribing antibiotics unnecessarily. We must maintain that stance, develop it further and encourage others to follow.

My final plea to the Minister is not to allow UK contributions to international efforts to tackle AMR to become diminished. I seriously hope that the issue does not become a casualty of any post-Brexit isolationism.

16:07

[Mrs Sharon Hodgson (Washington and Sunderland West) (Lab)]

It is a pleasure to serve under your chairmanship, Mr Hollobone. I congratulate the hon. Member for Thirsk and Malton (Kevin Hollinrake) on bringing this important debate to the House. He gave an eloquent and knowledgeable speech clearly setting out the issue and the matters to be discussed following the O’Neill review. I thank him for that.

An estimated 50,000 deaths occur every year due to untreatable infections, rising to 700,000 globally. That is why it is only right that we do all we can to address antibiotic resistance. It is believed that the number of deaths will rise to 10 million a year by 2050 if no significant action is taken. As we have heard from a number of Members, deaths from drug-resistant infections could exceed deaths from cancer.

This is an incredibly timely debate. Only a couple of weeks ago, the World Health Organisation published a list of 12 bacteria for which new antibiotics are now needed. Some strains of bacteria have built-in abilities to find new ways to fight off treatments that can then be passed on to other bacteria via genetic material to make them drug-resistant too. I find it a bit scary to consider what we are up against. This is a battle that we have to win.

I also thank other hon. Members who have spoken in this debate. My hon. Friend the Member for Bristol East (Kerry McCarthy) gave a very knowledgeable speech about the use of antibiotics in farming; other hon. Members touched on the subject as well. I really think we need to get a firm grip on it internationally, with the UK leading the way. Ten other Members spoke in this very active debate: my right hon. Friend the Member for Rother Valley (Sir Kevin Barron), my hon. Friend the Member for Ealing, Southall (Mr Sharma), the hon. Members for Erewash (Maggie Throup), for Bosworth (David Tredinnick), for Glasgow North (Patrick Grady), for Sleaford and North Hykeham (Dr Johnson), for Mole Valley (Sir Paul Beresford), for Strangford (Jim Shannon) and for Stafford (Jeremy Lefroy), and the hon. Member for Linlithgow and East Falkirk (Martyn Day), who speaks for the Scottish National party. Their speeches were all thoughtful and knowledgeable, albeit brief because of time constraints.

I will touch on two key points: raising public awareness, and supporting research and innovation to combat antibiotic resistance. It is generally accepted that antibiotic resistance is a natural process—bacteria naturally evolve to become resistant to certain drugs used to fight them off—but it has been exacerbated by humans. As Dr Hsu of the Singapore Infectious Diseases Initiative has said, the causes come down to

“a single axiom—abuse and overuse of antimicrobial drugs.”

Concerns have also been raised that the development of new antibiotic drugs has dried up, contributing to the situation. According to the World Health Organisation, we are left in a precarious position. The WHO’s director general, Dr Margaret Chan, describes antimicrobial resistance as

“a crisis that must be managed with the utmost urgency.”

That urgency applies here in the UK, too. In 2014, the chief medical officer, Dame Sally Davies, said that

“we could be taken back to a 19th century environment where everyday infections kill us as a result of routine operations.”

We could be taken even further back: as the hon. Member for Thirsk and Malton said, this could be the new black death. That is not as melodramatic a statement as people may first think. Antimicrobial resistance is a really serious problem that we need to address here and now, so that those predictions do not come true.

I do not always do this, as I am sure you have noticed, Mr Hollobone, but I must give credit to David Cameron’s coalition Government, who were global leaders when they announced Lord O’Neill’s review into antimicrobial resistance. The review’s 10 recommendations show just how complex and multifaceted the issue is and how wide-scale the actions needed to address it are. The review’s final report was published in May 2016 and the Government responded at the end of last year, so now is a good time to ask the Government for an update.

One of the review’s key recommendations was to introduce a large-scale global awareness campaign to reduce the demand from patients to be prescribed antibiotics when they are diagnosed with an illness. I am a firm believer in public awareness campaigns relating to health issues, especially cancer. My hon. Friends and I fully support such a campaign for antimicrobial resistance and we want to see the Government working hard to achieve it. The review’s recommendation was for an international awareness campaign, but what does the Minister plan to do here in the UK to complement that international work? That is a pertinent question because a 2015 Wellcome Trust study found that people in the UK did not fully understand antibiotic resistance and how it affects their health. They did not understand that antibiotic resistance is to do with the bacteria in people’s bodies, rather than a lack of antibiotics or the cost of them; it is not just a case of doctors being awkward. I would therefore be grateful if the Minister told us what relatable public awareness campaigns she is planning to ensure that people understand more about the problem and about what they can do personally.

I have already mentioned the problems with combating antibiotic resistance caused by the drying up of innovative developments in drug technologies. The O’Neill review identifies that the low commercial return on research and development for antibiotics makes them less attractive to pharmaceutical companies and reduces the chance of new drugs being developed. To reverse that situation, it recommends considering market entry rewards to encourage companies to develop new or improved drugs, especially in areas of urgent need. I hope the Minister will explore that issue further in her reply.

Public and private funding is being made available to help to combat these issues. On 20 December, the Minister referred to

“international programmes to tackle AMR, including the Fleming fund and the Global AMR innovation fund, which represent more than £300 million of investment over the next five years.”—[Official Report, 20 December 2016; Vol. 618, c. 1294.]

There is also the incredible work of the Longitude Prize, which is in the middle of its competition to develop

“a cheap, accurate, rapid and easy-to-use point of care test kit for bacterial infections”

to help to address antibiotic resistance. That is important work and we support it.

In summary, we cannot afford to get antimicrobial resistance wrong. Millions of lives depend on our tackling it. It is not far away; it is happening right here, right now, and it affects us all, so it is important that we do all we can to address this growing problem, both in the UK and internationally.

[Mr Philip Hollobone (in the Chair)]

If the Minister will be kind enough to finish just after 4.30 pm, that will give Mr Hollinrake time to sum up the debate.

16:16

[The Parliamentary Under-Secretary of State for Health (Nicola Blackwood)]

I congratulate my hon. Friend the Member for Thirsk and Malton (Kevin Hollinrake) on securing this very well attended debate and on his ongoing commitment to highlighting this issue. I pay tribute to the all-party group on antibiotics, my hon. Friend the Member for York Outer (Julian Sturdy) and the right hon. Member for Rother Valley (Sir Kevin Barron) for their leadership. I also commend my right hon. Friend the Member for Tatton (Mr Osborne), who is no longer in his place. He really set the issue squarely on the international agenda during his time as Chancellor.

As many hon. Members have described well today, antimicrobial resistance has the potential to lead to 10 million deaths by 2050—more than are caused by cancer—and a loss to global productivity of £100 trillion. As my hon. Friend the Member for Thirsk and Malton said, the figures are on a scale that is hard to comprehend, but the good news is that the ramifications of AMR are now widely acknowledged, and we can be proud that the UK has played no small part in that. Our chief medical officer, Dame Sally Davies, has led a global campaign to get AMR and the lack of new drugs in the development pipeline high on the global political agenda.

We have used the UK’s antimicrobial resistance strategy and our response to the O’Neill review, which we published last September, to drive change at home and abroad. This has led to the landmark UN declaration on AMR in September, which was adopted by 193 countries. The declaration recognises that AMR is an issue that relates not just to human health, but—as my right hon. Friend the Member for Chipping Barnet (Mrs Villiers) and the hon. Member for Bristol East (Kerry McCarthy) rightly said—to animal health, agriculture and the environment, with a significant social and economic impact. It puts AMR squarely not just on the global development agenda, but on the global security agenda.

As numerous hon. Members have mentioned, a key Government commitment in response to the review was to work with international partners to develop a global system that rewards companies for bringing new, successful products to market and makes them available to all who need them. There are a number of options for addressing the market failure, but the O’Neill review suggests using a system of market entry rewards to incentivise companies to bring new products to market. A number of international organisations, including the Boston Consulting Group, commissioned by the German Government, have looked at the issue more recently and come to similar conclusions, which is helpful in building an international consensus.

The UK supports that approach, particularly options that involve private sector contributions, but although a global solution is needed, different countries have different perspectives. In some countries, lack of access to effective antimicrobials is as great a risk as resistant bugs. The WHO estimates that 30% of people in developing countries do not have access to essential medicines, rising to 50% in sub-Saharan Africa. The UK is working to reach an agreement at the G20 to acknowledge market failure. The G20 has commissioned the OECD to consider potential solutions, and it will consider a range of options. The UK will support alternative systems that can effectively tackle market failure in a cost-effective and sustainable manner that ensures a long-term, sustainable supply of new antibiotics but also provides access to all.

While Lord O’Neill made it clear that interventions to stimulate the antimicrobials market should be administered at global level, he was also clear that at national level we must have better purchasing arrangements that conserve antimicrobials and do not incentivise unnecessary use. That is why the Department of Health is working with industry, through a joint working group with the Association of the British Pharmaceutical Industry and the National Institute for Health and Care Excellence, to consider reimbursement approaches that support these aims and how reimbursement models that de-link revenue from volume can be operationalised. It is essential that such a scheme is workable, so I will report back to Members when I am able to do so.

Colleagues are right that we will not make progress if we do not improve our stewardship and diagnostics, and cut avoidable infections and inappropriate prescribing. One of our ambitions in that regard is to halve the number of healthcare-associated Gram-negative blood stream infections by 2020. Delivery of that ambition is being led by NHS Improvement. Our initial focus is a 10% reduction in E. coli infections by 2017-2018, because there are established interventions to prevent such infections, and we are making some progress in this area.

A second ambition is to halve inappropriate prescribing by 2020. This work is now being led by the chief pharmaceutical officer at NHS England, with support from Public Health England, but the challenge is to identify the proportion of current prescribing that is inappropriate, so that we can safely reduce our use. Our experts are working to set a baseline, so that we can clarify our ask to prescribers. This will build on work that is already under way to reduce unnecessary prescribing.

I can report that there has been some progress in this area. In November 2016, data showed that total consumption of antibiotics by humans in England fell by 4.3% between 2014 and 2015, which is the greatest change that we have seen since the early 2000s. We are making progress, but our experts believe we can go further so we have put incentives in place through the NHS quality premium and commissioning for quality improvement schemes—which is quite a mouthful—to encourage further reduction, and we will maintain that system for a further two years, so that we can embed those changes.

My hon. Friend the Member for Thirsk and Malton also said that over-the-counter antimicrobials were a key area. It is illegal for websites based in the UK to sell antibiotics online without a prescription. Some websites offer online consultations with doctors, but they must abide by the General Medical Council guidance on remote prescribing, and it is extremely important that people exercise caution in how they use online care providers, especially when it comes to seeking medicines or treatments that may not be appropriate for them.

Regulatory agencies, such as the Medicines and Healthcare Products Regulatory Agency and the Care Quality Commission, are monitoring the safety and efficacy of prescription medicines and those selling them. Following an internal review of all 43 online services that are registered, the CQC has brought forward a programme of inspections, prioritising those services that it considers might pose a risk to patients. It will obviously report soon on that work.

My right hon. Friend the Member for Chipping Barnet and the hon. Member for Bristol East were absolutely right that the Department of Health needs to work closely with the Veterinary Medicines Directorate to reduce the use of antimicrobials in livestock and in fish farmed for food. Between 2014 and 2015, we saw a drop of 10% in sales of antibiotic for food-producing animals, but we know that we need to go further. So we are now in the process of setting sector-specific targets, as my right hon. Friend the Member for Chipping Barnet said, to ensure that we achieve our ambition of 50 milligrams per kilogram weight of animal by 2018.

My hon. Friend the Member for Erewash (Maggie Throup) was also right to highlight the need for better diagnostics if we are to achieve our stewardship ambitions. O’Neill was clear that that was necessary for better clinical decision making in both animal and human health. There is great potential to make better use of the diagnostic tests that are already available in a range of settings, including for self-care and monitoring in pharmacies and other high-street services. So NHS England has a programme in place not only to improve the use of the diagnostic tests that we already have but to identify the priority needs for new tests, so that we can work with researchers and industry to support the development and uptake of those tests. NHS England is also working with NICE to identify how its programmes could support more rapid uptake of effective diagnostic tests. If my hon. Friend would like us to, we will write to her with the details of that work.

In the end, this challenge is a global one that requires global leadership, as my right hon. Friend the Member for Tatton has said. The UN declaration was the start of a longer process to make sure that all countries develop and implement a national action plan, and it is essential that the follow-up process, which was agreed in the declaration, is put in place as soon as possible, to ensure that no time is lost in getting to where we want to be before we go back to the UN General Assembly in 2018. Within that timeframe, we will continue to support other countries to tackle antimicrobial resistance, including providing help to build capability and capacity to develop good surveillance systems in low and middle-income countries, through our £265 million Fleming fund and our £1 billion Ross fund, exactly as the hon. Member for Glasgow North (Patrick Grady) has said.

Lord O’Neill also recommended the establishment of a global innovation fund of $2 billion by 2020. The UK co-hosted a side event at the UN in September 2016 that brought together a package of pledges from Governments around the world to tackle AMR, totalling more than £675 million, which is a really considerable start in achieving that recommendation.

All of this work means that we now have unprecedented levels of global collaboration in research in the UK, co-ordinated by the AMR Funders Forum and supported by the Medical Research Council. We are now working hard to promote research and innovation in AMR globally, which includes making a further £50 million commitment towards setting up a global AMR innovation fund, to increase global investment in AMR and support the development of new drugs and diagnostics.

In closing, I thank all Members—

[David Tredinnick]

On that note, will the Minister give way?

[Nicola Blackwood]

I will close now but follow up later.

I thank all Members who have attended today. The high turnout and the quality of debate speaks to the fact that AMR is more than a domestic health challenge and more than a global development challenge. It is truly a global security challenge, of a scale that requires long-term political leadership to drive through the international change, the up-front investment to break the cycle of market failure in drugs development and the urgent action needed to improve diagnostics and cut inappropriate prescribing, and to ensure that patients complete their courses of medicines in an appropriate way.

We can be proud of the genuinely leading role that the UK has already taken, both domestically and on the international stage, but my commitment to all Members here today is that we shall not miss a step in driving forward on research and development, on stewardship and on international co-operation. As a science superpower with an integrated healthcare system, we are uniquely well placed to meet this challenge and we are determined to do so.

[Mr Philip Hollobone (in the Chair)]

Before I ask Kevin Hollinrake to sum up, I detect that there may be some Members in the Chamber who are here for the debate on social care in Liverpool. We have a half-hour debate on student loans before we get to that debate; everything has been held up by the Divisions in the main Chamber. I am just trying to be helpful to Members who might here for another debate.

16:26

[Kevin Hollinrake]

It is a pleasure to serve under your chairmanship, Mr Hollobone.

I thank the many colleagues who have contributed this afternoon to a very constructive debate; there has been a lot of consensus in this Chamber about what needs to be done. I also thank the Minister for her clear and comprehensive response to the many points that have been made; for the commitment she expressed at the end of her response, which is very reassuring; and, of course, for her great knowledge of this area.

It is quite clear from all the contributions that we have heard today that there is no one solution to this issue. There will have to be a holistic solution—a mix of solutions— across both the health and agriculture sectors; that point has been very clearly made this afternoon. That will also involve the different research laboratories that can contribute to this process. Obviously, the big pharmaceutical companies are a key element in making sure that we have the right remuneration mechanism for them and of course, our world-leading universities will also be involved, as well as other clinical institutions.

However, as I said earlier, the third sector is also important. Having the world’s first and only charity that specialises in combating antibiotic resistance in my constituency, I obviously feel honour-bound to support its fantastic activities. It is a collection of some of the UK’s top scientists. It has put an awful lot of work and money into this area, and its initial research has gone very well, using resistance breakers to repurpose antibiotics. Again, that is a key recommendation in the O’Neill review. As I say, the charity is making this progress and it is absolutely desperate to get the right kind of support. Any help we can give, in terms of pointing Antibiotic Research UK in the right direction to get the sources of funding it needs, would be useful. Its approach is innovative. It perhaps does not meet all the criteria that would normally be applied for this kind of research, but I absolutely believe that ANTRUK is certainly part of the short-term solution to this problem, if not the longer-term solution.

As others have already done, it is right that I thank Lord O’Neill for his tremendous work, as well as all the other people who contributed to his report. It is fair to say from what we have heard this afternoon that all the questions and answers are in the report; we just need to ensure that we execute well and follow through on the recommendations in the report.

As my right hon. Friend the Member for Tatton (Mr Osborne) said, leadership is a key part of this issue. We were very lucky with the former Prime Minister and the former Chancellor, who put it front and centre. They took global action and showed global leadership on it, which is critical. With leadership, all things are possible; there is no question about that. It is incredibly important that we continue to show that leadership in Parliament and Westminster.

It was tremendous to have so many contributions to this debate, not only from the Minister and former Ministers, who have so much knowledge of this area, but from those who have shown leadership at the highest possible level. It is great to see the UK front and centre, speaking out on this important issue on the world stage.

I thank you again, Mr Hollobone, for your time. It has been a pleasure to serve under your chairmanship and to contribute to this very important debate.

Question put and agreed to.

Resolved,

That this House has considered the O’Neill review into antibiotic resistance.

Sale of Student Loans: Regulation

Tuesday 7th March 2017 Westminster Hall

16:31

[Mr Philip Hollobone (in the Chair)]

Would those not staying for the half-hour debate on the regulation of the sale of student loans please be kind enough to leave quickly and quietly? This debate can last until 5.3 pm.

[Mr Jim Cunningham (Coventry South) (Lab)]

I beg to move,

That this House has considered regulation of the sale of student loans.

It is a pleasure to serve under your chairmanship, Mr Hollobone. I think this is the first time I have been involved in a debate when you have been in the Chair. On your past record, I know that you will be fair and lenient.

I have two universities in my constituency, Coventry University and the University of Warwick. I have come across Members who have attended the University of Warwick, and some who have attended Coventry University. Many students at those universities have expressed concern to me regarding the sale of student loans. It is possible that to a certain extent, the Government are heaping more debt on students that they can ill afford, against a background of further education budgets receiving a 27% cut. The education allowance and the bursaries for midwifery have been abolished. Those things raise questions about the Government’s real intentions regarding skills, whether in the national health service or manufacturing.

On 6 February, the Government announced plans to sell off student loans taken out between 2002 and 2006. Conservative Governments have previously tried to introduce that policy, but they have never been successful. Indeed, the former Business Secretary, Vince Cable, scrapped the move in 2014, saying that it would not help the aim of reducing Government debt. Why are the present Government continuing to pursue the policy? With the sale of Royal Mail, we have seen how difficult it can be to achieve value for taxpayers. It could be argued that the taxpayer lost out in past privatisations. It can be controversial if the price paid seems too low, with short-term profit put ahead of the public interest. If the student loans are expected to be profitable, why are the Government not keeping them and helping the taxpayer?

The market has little experience of buying such debt, and it will be priced conservatively. It is therefore questionable whether value for money can be achieved. It has been widely acknowledged that the Government will make a loss on the sale. The price the loans are sold for is expected to be lower than the face value. It has been described by the Financial Times economic correspondent, Martin Wolf, as “economic illiteracy”. As I said, I have two universities in my constituency, so I am very concerned about the proposal, as are the students.

[Paul Blomfield (Sheffield Central) (Lab)]

My hon. Friend knows that like him, I represent two universities. He is a powerful advocate for universities and students, and he will know that students are worried about the impact on their repayments. The Government have given assurances that the repayment terms will not be affected, but there is an enormous lack of trust given that they have already retrospectively changed those terms. Does he agree that the best way for the Government to reassure students would be to use the opportunity of the Higher Education and Research Bill to give a cast-iron guarantee in law that no retrospective changes to terms of repayment will be made?

[Mr Cunningham]

I agree with my hon. Friend. Frankly, retrospective law is always bad law. The three previous sales were of mortgage-style student loans. There have been no sales of income-contingent loans. In 2013, the Government announced that the final sale of outstanding loans had been made to Erudio Student Loans for £160 million. There have been problems with those loans and a number of complaints about their handling. Can the Minister guarantee that the loans we are discussing will not be resold to overseas buyers? What mechanisms will be put in place to protect students?

[Mr Barry Sheerman (Huddersfield) (Lab/Co-op)]

My hon. Friend knows of my interest in this issue. I have only one university in my constituency, the University of Huddersfield. My students, too, fear that the sale is an ideological fix. We heard this morning in Justice questions that the Government are selling off a young offenders prison—it is ideology that is behind this. Does he agree that we should have an independent commission to look at the issue? I have never seen a compelling economic case for the sale.

[Mr Cunningham]

I totally agree with my hon. Friend. It is about time we stopped social engineering with education. We are getting to a point where we want some sort of commission established. I hope the Minister will announce that when he responds to the debate.

Will the personal details of students be secure? How will repayment work for European Union students? How will Welsh students be affected? The National Union of Students has consistently expressed concerns that such a sale is not in the interests of students, graduates or taxpayers. What implications will the sale have for students?

[Dr Rupa Huq (Ealing Central and Acton) (Lab)]

I have the University of West London in my constituency. I do not have as many universities as my hon. Friend, but has he received emails, as I have, from students who are concerned that the indecent haste to sell off the family silver will mean that students who thought they were taking out debt that could go back to the state to fund public services will now be lining the pockets of private companies? It makes no financial sense, as the Financial Times has pointed out.

[Mr Cunningham]

My hon. Friend has put her finger on it. The Government are clearly taking an ideological approach, rather than a logical approach.

Can the Minister tell us whether there will be protection from adverse terms and conditions? In the future, we may find ourselves in a situation where the terms and conditions of student loans are designed with future buyers in mind, rather than the interests of students. The sale will not protect post-2012 students from further retrospective changes to repayment terms. That is a source of anxiety for many students and may have an impact on people’s decision to go to university. Students are questioning who is really benefiting from their education.

Selling student loans represents a dangerous precedent. It paves the way for future privatisation of the education sector—I hope my colleagues will note that. The NUS is strongly opposed to the idea that profit is made from student debt. Privatising public assets should not be done for short-term profit.

Finally, the Government never learn any lessons. The sale will do nothing to ease the burden of debt piled on students who have faced trebled tuition fees and the scrapping of maintenance grants and bursaries. The Government have already changed the terms of post-2012 loans. How will the sale instil any confidence that more changes will not be made that are detrimental to students?

16:40

[Mr Adrian Bailey (West Bromwich West) (Lab/Co-op)]

rose—

[Mr Philip Hollobone (in the Chair)]

Order. Mr Bailey, are you wishing to speak? Do you have the permission of the Minister and the proposer of the motion to do so?

[Mr Bailey]

I do, Mr Hollobone. I apologise—I was under the impression that you knew.

[Mr Philip Hollobone (in the Chair)]

There has been some confusion. I am delighted that you are able to speak, Mr Bailey. We must allow the Minister at least 15 minutes to reply, so if you could, temper your remarks accordingly.

[Mr Bailey]

Thank you, Mr Hollobone. It is a pleasure to serve under your chairmanship. I congratulate my hon. Friend the Member for Coventry South (Mr Cunningham) on securing the debate, and I thank him and the Minister for allowing me to make a short contribution.

I wanted to contribute because I was Chair of the Select Committee on Business, Innovation and Skills in 2014 when it examined the Government’s proposals on this issue, which were mooted by the then Business Secretary. The Committee’s report posed a number of questions and made a number of assertions, which are as relevant now as then. Arising at least in part from the Select Committee’s contribution to the debate, the sale was subsequently withdrawn as the then Minister said he did not consider it to be value for money. The basis on which he made that observation is probably as relevant to this sale as it was to that previous attempt.

I would like to pose a number of questions to the Minister about the sale. I understand that the structure of the sale will be different from the previous one—it is not a whole loan sale going to a single investor, but is to be packaged up in the form of bonds. That is what I read in the Financial Times of 7 February. It seems to me that that process will redistribute the risk involved in the sale from a particular company to the bondholders. In view of that, I wonder whether the discount that the Government will give will have to be even greater to attract would-be bondholders to buy.

The arguments about discounts and the potential revenue to the Government were highlighted by a number of academics, and Rothschild, prior to the previous sale. The basic problem is that the dividend stream—the revenue stream—is now determined as 0.25% plus 1%, and of course the retail prices index is running at 3% and is projected to be between 3% and 3.2% in the next three years. It will be difficult to persuade any investors to invest when the return will be less than the rate of inflation.

Rothschild said that the Government would have to give some sort of “synthetic hedge” in order to attract purchasers of the debt. The crucial underlying paradox that comes with marketing the debt underlines the value for money principles that we should be looking for in such a sale. Rothschild estimated that it would realise only £2 billion of the £12 billion that the Government projected—ironically, I see that they are projecting £12 billion on this occasion. If the calculations were done, I suspect that that may well be scaled down to the sort of figure that Rothschild projected before.

Is the Minister prepared to guarantee that the current loan terms will not be changed as a result of the loans being privatised? What are the estimates of future income that the Government would have if this loan book were not sold? What sort of discount would be offered, and what would the total revenue be if they were sold under the processes that appear to be outlined at the moment? Finally, given that Government projections can be wrong—heaven forbid—what processes will be put in place to evaluate the Government’s approach and ensure that there is value for money for the taxpayer?

16:40

[The Minister for Universities, Science, Research and Innovation (Joseph Johnson)]

It is a pleasure to serve under your chairmanship, Mr Hollobone. I congratulate the hon. Member for Coventry South (Mr Cunningham) on securing this debate. It provides a useful opportunity for me to set out the Government’s approach to the proposed sale of part of the student loan book. I would like to explain the rationale for the sale and make sure that some important points, particularly those relating to the protection of students and graduates and to our commitment to securing value for money for the taxpayer, are firmly on the record.

We are all aware that tomorrow the Chancellor of the Exchequer will make a statement to the House on the Budget. I have been re-reading the statement he made in November of last year. He set out then his commitment to fiscal responsibility, and as part of that, he was clear that public sector net debt must be falling by the end of this Parliament. It is vital that the public finances continue on the path to sustainability.

Selling assets can reduce fiscal pressures and allows the Government to invest in other policies with greater economic or social returns. The Government’s policy is to sell assets where there is no policy reason to own them and where it is value for money for the taxpayer to do so. There is clearly no policy purpose to continuing to hold the student loan book on the Government’s balance sheet.

When we provide student loans, our purpose is to ensure that people who want to pursue higher education and have the qualifications that come from it are able to do so, regardless of their personal financial situation and with no limit, now, on their numbers. As soon as a loan is issued to support a student as they study, its purpose has been met. As I will explain in more detail, the planned sale would have no impact on the position of students or graduates.

A comprehensive assessment indicates that we have a good prospect of achieving value for money. The sale process is designed to achieve the best possible price to benefit taxpayers. As additional reassurance, I must emphasise that we will only proceed with the sale if market conditions remain favourable and the final value-for-money assessment is positive.

I know there is interest in the reasons why a private investor might be interested in the student loan book. The student loan book generates a long-term, inflation-linked set of cash flows, through an efficient and established collection mechanism. Our engagement with the markets has shown that that is attractive to investors—crucially, at a price that represents value for money for the taxpayer.

[Mr Sheerman]

Could the Minister tell us who the Department has been consulting—which experts, City firms or organisations have been giving the advice that this is a viable enterprise?

[Joseph Johnson]

There has been a process of engagement with the market, which has been conducted on behalf of the Department by a number of financial advisers, including Barclays and Rothschild among others. Our engagement has shown us that this is attractive to investors at a price that represents value for money for the taxpayer.

The private sector is willing to take on the risk and uncertainty of future repayment cash flows because it values this long-dated asset, while Government are looking to transfer that risk and generate cash for reinvestment in policies with greater economic and social returns. I hope hon. Members will therefore agree that there is a strong rationale for selling part of the student loan book. It is good financial management by the Government; it can help support policies with greater economic and social returns; and can be achieved without affecting the position of students or graduates.

Hon. Members, including the hon. Member for West Bromwich West (Mr Bailey), asked whether terms might be changed. I can tell them that investors have no rights whatever to change terms as a result of any sale process.

[Paul Blomfield]

The Minister will understand why students find his reassurances quite weak, given his track record. Would it not be easier simply to accept the amendment to the Higher Education and Research Bill, which would embed in law a requirement to make no retrospective changes to the terms of repayment?

[Joseph Johnson]

As I said, as a result of this privatisation process, investors will gain no right to change the terms and conditions of the student loans they hold, so students will not be impacted by the sale.

[Steve Rotheram (Liverpool, Walton) (Lab)]

I am worried that the Minister seems reluctant to agree to the suggestion of my hon. Friend the Member for Sheffield Central (Paul Blomfield), which would assure students that the terms will not be changed in the future.

[Joseph Johnson]

I have just given exactly those assurances. After the sale of this part of the student loan book, terms and conditions will not change as a result of any actions by the investors who go on to own them.

The sale process we have launched covers loans issued under the previous system, which operated before 2012. Specifically, the loans in scope are those issued by English local authorities only, and which entered repayment between 2002 and 2006. A loan enters repayment the April after the student leaves his or her course, so most of the loans in the scope of the sale were taken out between 1998 and 2002. Some loans taken out after that date might also be in scope if they entered repayment in 2006. Loans issued by the devolved Administrations are not in scope, and nor are loans to EU borrowers, who became eligible to apply for a student loan from an English local authority only in 2006.

[Dr Huq]

Has the Minister has seen the Financial Times article from 8 February, which says that the Government are in a unique position to be the lender because they are able to monitor graduates’ earnings? How will private companies do that? The article’s headline is, “Selling off student loans makes no sense”. Does the Minister have any comments on that? That was not the Socialist Worker, but the Financial Times.

[Joseph Johnson]

I cannot be held accountable for the views of the FT. The Government have made it clear that we will proceed with a sale only if it represents value for money. There will be a rigorous assessment, and, as per the Sale of Student Loans Act 2008 passed by the last Labour Government, the Government will be obliged to produce a report to Parliament within three months of the sale explaining the whole process. Parliament will have an opportunity to assess that point in great detail.

The sale will comprise the future repayments on the outstanding balances on a selection of these loans, which have a total face value of about £4 billion. The retention value to the Government is lower and is calculated using the standard Treasury Green Book methodology that was developed for asset sales. It also accounts for Government subsidy of the student loan system. The loans that are being sold have already been in repayment for 10 years or more, and therefore much of their original value has already been paid back to the Government.

A securitisation structure will be used for the sale to enable the Government to maximise value for money for the taxpayer. Under that structure, the loans will be sold to a new independent English-domiciled company known as the issuer, whose sole purpose is to own the loans on behalf of investors. Investors will purchase notes issued by the issuer, and the issuer will make payments on the notes using the repayments made on the underlying loans. The sale is a competitive process open to all eligible investors. Market testing reassures us that the different tranches of notes are expected to be attractive to a range of potential investors, thereby promoting an efficient market and optimal pricing.

I emphasise that the sale will not affect the position of graduates or students. Her Majesty’s Revenue and Customs and the Student Loans Company will continue to service loans in the scope of the sale on the same basis as equivalent unsold loans. As I said earlier, investors have no right to change any of the current loan arrangements or directly to contact people with student loans, including those in the scope of a sale.

[Paul Blomfield]

Will the Minister give way on that point?

[Joseph Johnson]

I have dealt with that point.

The sale will categorically not result in private investors setting the terms or operating the collection of student loans. Furthermore, it will not alter the Government’s policies towards student finance and higher education. Under the current system of student support, whose framework has been in place since 2012, we will continue to offer a comprehensive package of financial support to eligible students. That is part of ensuring our economy works for everyone. The current system is and will remain fair and sustainable. That is why the OECD praised our student loan system and said that we are one of few countries in the world to have figured out a sustainable approach to higher education finance.

I am happy to explain where we go from here. The sale process began on 6 February and will last for several months. The final timings and the number of loans in the scope of the sale remain subject to market conditions. As announced in last year’s autumn statement, the sale is expected to be the first in a series of pre-2012 English student loan sales, targeting £12 billion of total proceeds by the end of financial year 2021. Each sale will be subject to an assessment of value for money.

I am very grateful to the hon. Member for Coventry South for giving me the opportunity to discuss the proposed sale of part of the student loan book. I am clear that it represents an opportunity for the Government to reduce fiscal pressures and invest in other policies with greater economic or social returns. I am unequivocal in my commitment that we will do it without the sale changing the position of students and graduates. I look forward to engaging with the hon. Gentleman and colleagues in this House in the coming months on this important process.

Question put and agreed to.

Social Care (Liverpool)

Tuesday 7th March 2017 Westminster Hall

16:57

[Mr Philip Hollobone (in the Chair)]

Would those who are not staying for the next debate please be kind enough to leave quickly and quietly? I see we have some of Liverpool’s finest in the Chamber.

[Mrs Louise Ellman (Liverpool, Riverside) (Lab/Co-op)]

I beg to move,

That this House has considered social care in Liverpool.

It is a great pleasure to serve under your chairmanship, Mr Hollobone. This is the third occasion on which I have raised the issue of adult social care in Liverpool in this place over the past two months. That is because major cuts in Government funding combined with rising needs are creating a situation where too many people are left feeling vulnerable in their own homes. Scarce hospital beds are occupied by people who are clinically fit to be discharged but cannot leave the hospital because social care is not available. That is bad for those individuals and for the national health service.

I realise that this is a national issue, but the debate puts the focus on the specific challenges that Liverpool and the Liverpool city region face. Mayor Anderson and Liverpool City Council have done their very best to protect the people of Liverpool from the impact of unprecedented Government cuts, but adult social care has not escaped the consequences of the Government’s actions over a long period.

Adult social care covers a wide range of services, including domiciliary support—helping to dress, feed and bathe people in their own homes and, where appropriate, ensure that the correct medication is taken. Depending on the individual situation, that could involve several visits a day to an individual’s home. In other cases, it might require one visit a day, but whether it is one visit or several, it is absolutely essential to allow that individual to lead an independent life. The provision of adequate adult social care enables many people to remain safely and confidently in their own homes, rather than feeling vulnerable or having to move to more expensive and much less satisfactory residential care. Adequate adult social care can bring peace of mind and provide a lifeline.

Let us look at what has been happening to Liverpool City Council’s funding. Liverpool has now lost 60% of revenue support from the Government since 2010, and by 2020 that figure will have risen to 68%. Furthermore, having looked at revenue support systems, the Government plan to eliminate revenue support entirely under a new funding settlement. That will have serious consequences for a city with a low tax base and with 80% of its population in council tax bands A and B.

Liverpool council is a very responsible authority and has already identified £90 million of additional cuts that it is required to make in the coming financial year. The council continues to do its best to protect services, but it has not been able to stop substantial cuts to its spending on adult social care, which has been reduced from £220 million in 2010 to £154 million in 2016. It is anticipated that that figure will be reduced to £130 million by 2020.

Yes, the Government have their better care fund and yes, the local authority has a limited ability to raise an extra precept. The better care programme is expected to allocate £39 million to Liverpool when its funding is due to be reduced in such a significant way, but that will still leave a massive gap. Neither the Government’s better care fund nor the council’s ability to raise extra tax can fill the gap caused by the withdrawal of central Government funding. The scale of that withdrawal is unprecedented.

At the same time as the Government are reducing support, demographic pressures and costs are increasing. The Office for National Statistics estimates that the percentage of people in Liverpool aged 65 years or more will rise from 14.6% in 2015 to 16.1% in 2024. It is wholly unrealistic to expect people in the fourth most deprived local authority in the country to fill the gap. The sums simply do not add up. To illustrate the situation, a 1% increase in council tax in Liverpool will raise £1.4 million; a 1% cut in central Government funding means a loss of £3 million. That is a totally unacceptable situation and one that cannot continue without inflicting severe cuts on services that are very important to the people of Liverpool.

I said that Liverpool was the fourth most deprived local authority in the country, which is correct, and there is great poverty in the city, but Liverpool City Council, through its pioneering spirit, its enterprising approach and its ability and willingness to innovate and work with others has been able to move Liverpool from being the most deprived local authority in the country to that No. 4 position. It is bad to be the fourth most deprived authority, but it is a tribute to the city council and its partners that they have been able to make progress in Liverpool. Furthermore, that progress has been made without proper funding from Government—indeed, Government funding has reduced, and that is the critical feature.

Social care packages in Liverpool have already been cut from £14,000 to £9,000, which has affected many vulnerable people, and many more are anxious. Many people in great need are being reassessed to see whether the care they receive can be maintained, which often induces great anxiety and apprehension, even if ultimately their care remains similar to what it was. That, too, is an important factor that is not always considered.

On the day that I visited the Royal Liverpool university hospital, 135 patients who were clinically fit to be discharged remained in their beds because social care was not available for them at home. That was in spite of the efforts of hospital and local authority staff to find suitable care packages for them—the money was simply not there. That figure, the accurate one for the day I visited the hospital, reflects the general situation and shows one of the problems caused by the cuts to social care in Liverpool. Those cuts have arisen solely because of cuts in Government funding.

The situation affects many people, and it can only deteriorate unless action is taken. What should be done? Let us look at what is happening now. Mayor Joe Anderson, cabinet member Paul Brant and Liverpool City Council as a whole must be commended for their work to promote partnership with the NHS and innovation, which involves new work with the clinical commissioning group and GPs to integrate health and social care. “Step Up” centres for intermediate care are being pioneered and the council plans to promote innovatory joint work with community health services. A joint working party is considering new ideas.

All those things are extremely important and demonstrate the city council’s willingness to innovate and work with other partners. Such work should be supported better by central Government. Whatever innovation takes place in Liverpool and however much the council is willing to work with other people and for integration, Ministers cannot escape the fact that more funding is needed. The issue is long term, but the crisis is now and immediate action is required. It is a crisis that Liverpool City Council cannot resolve on its own, nor can the people of the city fill the financial gap unaided.

I call on the Government to recognise their responsibilities and to announce an immediate allocation of targeted funding for adult social care in Liverpool. I recognise that that must be part of a national approach, but funds must be targeted to meet the needs of local communities. That will enable vulnerable people to live independently and safely in their own homes, as well as enabling the NHS to deploy its resources efficiently. Liverpool City Council should be congratulated on the resilience, innovation and flexibility that it has displayed, but it cannot resolve the crisis alone. I call on the Minister to act as a matter of urgency.

[Mr Philip Hollobone (in the Chair)]

I am required to call the Front Benchers at 5.40 pm and the debate may run until 6.03 pm. That gives us 32.5 minutes of Back-Bench time and three Members have given me their names, the first of whom—who wrote a very nice letter—is Maria Eagle.

17:07

[Maria Eagle (Garston and Halewood) (Lab)]

It is a pleasure to serve under your chairmanship, Mr Hollobone.

I congratulate my hon. Friend the Member for Liverpool, Riverside (Mrs Ellman) on obtaining this crucial and timely debate. She set out in full and with great clarity the situation facing Liverpool and other local authorities in the city region, as the council seeks to set a lawful budget while desperately trying to keep going the public services on which so many of our constituents depend. She set out in great detail and with pertinent facts and figures many of the things that I was going to say about Liverpool. I endorse her speech fully—it was excellent.

Liverpool has had £420 million cut from the city budget since the Lib Dem-Tory coalition imposed cuts in 2010. There has also been the never-ending slashing of public services provision by this Government and their predecessor, and another £90 million has to be found. To illustrate that, Liverpool raised £147 million in council tax in the last financial year, but it spent £151 million on adult social care. I will emphasise that: Liverpool is having to spend more on adult social care alone than it can raise in council tax.

My hon. Friend set out some of the other concerns and problems. The demand for social care assessments is rising. Despite the cuts she described to the money that can be spent on adult social care, the demand for help of those depleted services from our citizens and constituents has increased by 15%. The demand for social care assessments in Liverpool has gone up from 18,000 a year in 2020 to 21,000 a year now. As she set out, Liverpool supports 9,000 people annually to some degree with a care package at home. That is fewer than half of the people who have asked to be assessed, so it is clear that only those with the highest needs get help, and they may well not get a level of support from which they benefit and which might keep them out of more acute services for longer with a better quality of life.

Liverpool City Council announced in its budget proposal that it intends to increase council tax. It will of course do so reluctantly, because many of our fellow citizens will find it difficult to afford an increase, but that course of action must be taken. I say in all sincerity to the Minister that it is not credible to claim that the shortfall that results from resources being cut by 70% can be made up by efficiency savings. I could not lose 70% of my resources and make up the difference in efficiency savings.

My constituency of Garston and Halewood also covers part of the Knowsley metropolitan borough, which is a smaller authority but, thanks to this Government and the Lib Dem-Tory coalition Government that preceded it, it faces financial challenges that are just as severe. Its revenue is currently £148 million. It has had to make cuts of £86 million since 2010 and will have to find a further £17 million over the next three years. That is a total loss for a small authority of more than £100 million. Both Liverpool and Knowsley are among the top five hardest hit local authorities. Knowsley’s income will have gone down by 56% by the end of this process.

Knowsley raised £43.2 million in council tax in the last financial year, yet it spent £47.1 million on adult social care alone. Are we seeing a pattern here? Just like Liverpool, Knowsley had to spend more on adult social care alone than it was able to raise in council tax this year. The pressures on the social care budget are huge. Because the population is ageing and people are living for longer—something we should all celebrate—Knowsley expects to face additional pressures of £10 million in the next three years for adult social care alone.

[Mr George Howarth (Knowsley) (Lab)]

Does my hon. Friend agree that the picture she paints is grim, particularly for Knowsley? Does she, like me, envisage a time in the not-too-distant future when Knowsley simply will not be able to meet its legal responsibilities unless additional funds are found to ensure that adult social care is available?

[Maria Eagle]

I well understand my right hon. Friend’s concerns. Indeed, the fear is that it will simply be impossible. Knowsley has not had 56% of its statutory obligations removed—just 56% of the money with which it is supposed to meet them. Knowsley, too, is looking at a council tax increase of 4.99%, with 3% ring-fenced for adult social care. This will be the first time that it has increased council tax in five years, and it will do so reluctantly, but that will generate just £1.9 million a year—a total of £3.8 million over the three-year period. That will pay for only just over a third of the pressures that are expected in adult social care alone.

Some additional money will come through the improved better care fund, and there will be one-off allocations—albeit of less than £1 million—through the adult social care fund, but none of that will meet the pressures that are apparent now. I say again to the Minister in all sincerity that one-off payments cannot deal with permanent pressures that are increasing relentlessly day by day when budgets have been cut so drastically.

Unfortunately, Government actions elsewhere mean that those pressures could easily increase rather than decrease because of what is happing in the health service, as my hon. Friend the Member for Liverpool, Riverside mentioned. Greater pressures on our NHS hospitals and acute services, which have financial problems, the Government’s never-ending austerity mania and real-terms reductions in resources for the NHS over the next few years mean that our NHS services, too, are under enormous pressure. That is where the Merseyside and Cheshire sustainability and transformation plan comes in, but that aims to offset £908 million of financial pressures on the local NHS. It has changed from something that was welcome as a way of improving co-operation and transforming our services into something that is simply about saving money over the next few years. I am afraid that that will not make things easier.

There has been a lack of consultation between the STP leaders and the councils. Neither of the councils that I have mentioned feels like they have been consulted at all about the proposals that are supposed to be going ahead for the NHS, despite the fact that they will face pressure from hospitals that want to get people back into the community—but to what? There is ever-decreasing resource in the community to help look after them.

Tomorrow’s Budget is a chance for the Chancellor to tackle some of those problems with vigour. We hope that he will, but if the Government’s briefing in the newspapers is to be believed, it looks like he will not. It is reported that he will announce an emergency fund of £1.3 billion to tackle the social care crisis. That is only half of the £2.6 billion that the Local Government Association estimates the spending gap will reach by 2020, and it appears that the Chancellor will direct it at schemes that aim to tackle bed-blocking. Knowsley will not benefit from such money, because it has tackled that problem already. Indeed, the Minister always prays Knowsley in aid when he tries to say that bed-blocking is not a problem in some authorities. Knowsley has lost 56% of its resource, and it now looks like it will be punished for being efficient while less efficient local authorities get a slice of the money that the Chancellor will give out tomorrow.

Apparently, the Chancellor will also establish another long-term review of social care funding. Although that is welcome, because this needs to be tackled in the end as a proper long-term policy issue, it will not tackle the problems that Liverpool and Knowsley face now. I must also observe that both Governments the Minister has been a member of have done the same, and they simply ignored the proposals that ended up emerging. The shadow Cabinet of which he was a prominent member before 2010 sabotaged the attempts by my right hon. Friend the Member for Leigh (Andy Burnham) to have cross-party talks about a solution seven years ago for a cheap election poster alleging that Labour was proposing a death tax. So we will see.

Meanwhile, the social care crisis in Liverpool and Knowsley worsens and the Government simply pass the buck, play politics and offer zero leadership—I am afraid we have come to expect that from them. Those who lose out are the elderly and the vulnerable, who rely most on the services that this Government’s actions decimate the most.

17:17

[Luciana Berger (Liverpool, Wavertree) (Lab/Co-op)]

It is a pleasure to serve under your chairmanship, Mr Hollobone. I apologise for being a moment late in coming over from the Select Committee on Health. I congratulate my hon. Friend the Member for Liverpool, Riverside (Mrs Ellman) on securing this important and timely debate on behalf of all our constituents.

[Mr Philip Hollobone (in the Chair)]

Order. If the hon. Lady would like to sit, she is most welcome to do so.

[Luciana Berger]

That is kind, but I am fine. Thank you so much.

This is a pertinent and serious issue that affects thousands of people across the area that my hon. Friends and I are privileged to represent. I also endorse the comments made by my hon. Friend the Member for Garston and Halewood (Maria Eagle). I will seek not to reiterate but to add to the comments that have already been made. I will raise some of the additional pressures that Liverpool has faced in the nearly seven years since the cuts were first introduced in 2010 and add some personal reflections from constituents who are experiencing those cuts at first hand. We are ultimately here on behalf of our constituents, and we should share their experiences with the House so that we understand the tragic human element and implications of the cuts. I will also reflect on my own experience of being in an accident and emergency department in Liverpool on a Friday night just a couple of weeks ago and seeing the number of ambulances waiting there. At least 10 paramedics were waiting to book people in, many of whom were older people. We know from the figures that delayed discharge is a significant challenge, and I believe that issues in accident and emergency departments are compounded by cuts to social care.

As we heard from my hon. Friends the Members for Liverpool, Riverside and for Garston and Halewood, 5,000 fewer people in Liverpool are receiving support via care packages than in 2010. I have connected with two constituents about that issue in the past week alone. One, a lady called Sobia, is paralysed. She used to receive overnight care, but despite her condition becoming worse and even though her children are now of an age when they are going to university and are not as available to care for her as they were previously, she has seen that care stopped because of the cuts to social care in Liverpool.

In the past few weeks I have intervened on behalf of one of my constituents called Veronica, who had additional support to help her with various things. She is still waiting for some of that care to be reinstated. I have every sympathy with Liverpool City Council for the difficult decisions it is having to make in the current circumstances; the council is under significant pressures, as we have heard. Those pressures do not look set to get any easier. In particular, in the Liverpool city area we have demographic pressures—as many places do across the country—with the growing, ageing population. We know that the 65-plus age group is set to grow by 50% in the next 20 years. That is a significant challenge for any area to contend with, particularly given the cuts that have been incurred so far.

Liverpool City Council faces financial pressures as a result of the introduction of the national living wage. It is to cost £13.9 million in 2017-18, rising to £24.7 million by 2019-20, which is not an insignificant sum for the council to contend with. The Law Commission is also reviewing a specific piece of legislation, and I hope that changes will come forward soon to help Liverpool City Council cope with the 400% increase in deprivation of liberty safeguards applications, which cost £1 million a year. We know that that needs some attention, and I hope that changes to the legislation will have some impact, because that is £1 million of the significantly larger sum that the council has to contend with.

The demand pressures we see locally are also significant. We know that every week Liverpool City Council is arranging care packages for up to 100 people leaving hospital, which is a 51% increase compared with last year. There are also a lot more complex home care cases, which cost a significant sum and may require two carers calling four times a day. We know that adult social care assessment requests have risen by 15% since 2010, up from 18,000 a year to 21,000, and are expected to rise to nearly 23,000 by next year. There were also 5,715 requests for support from new clients, which was a 10% increase on the previous year.

We as constituency MPs, on behalf of our constituents, are contending with the challenges today. I have shared just a few of the additional challenges—financial pressures, demand pressures and demographic pressures—that mean that Liverpool City Council faces even more challenges as the years progress. It is on that basis that I endorse the comments made by my hon. Friends. We need the Government to give serious attention to this matter.

Social care cannot be dealt with separately from our wider health service. The two go hand in hand. It is no surprise that more people are turning up to our accident and emergency departments or our GP surgeries when 5,000 fewer people get care packages today than did in 2010, given that we know need has increased. The Chancellor will give the Budget tomorrow, and I look forward to hearing in the Minister’s response what representations he and his Department have made to ensure that social care is given the attention and resource that it desperately needs and deserves on behalf of the thousands of constituents who do not receive care but deserve it and the thousands more elderly people who will need it in the future.

I have not reflected specifically on constituents who might need mental health support but are not getting what they need and deserve today and going into tomorrow. This situation cannot be allowed to continue. We see and experience in our surgeries and weekly visits constituents who have to contend with the daily realities of not getting the support they need and deserve. We anticipated something in the autumn statement but there was nothing. On behalf of all our constituents, I sincerely hope that the Minister will give us some glimmer of hope that tomorrow there will be something that positively impacts on all of our constituents’ lives.

17:25

[Steve Rotheram (Liverpool, Walton) (Lab)]

It is a pleasure to serve under your chairmanship, Mr Hollobone. I congratulate my hon. Friend the Member for Liverpool, Riverside (Mrs Ellman), my constituency neighbour, on securing this important debate and on her speech, during which she laid bare any claim by the Government that they have any intention other than passing the buck for the health and social care crisis.

The Minister will be aware that, in the past few weeks, one of the main local hospitals in Liverpool has reported that an almost unprecedented 20% of its capacity has been taken up by people who do not need to be there. That, of course, has a knock-on effect and reverberates across the whole NHS system. The Government’s myopic approach has led to cancelled elective surgery, delays in A&E and ambulances backing up at hospital entrances, resulting in an incredibly inefficient use of already overstretched NHS resources. More importantly, it is not in the best interests of patients and patient care.

Keeping people who do not need to be in hospital in expensive NHS beds, instead of making provision for their illnesses to be treated at home or through other resources, is a wasteful and nonsensical way to spend taxpayers’ money. The Secretary of State has claimed that delayed discharge is not just about social care funding. Perhaps when the Minister responds, he would care to identify a single local authority that has had the same Government funding cuts inflicted on it as those in Liverpool and yet has managed to avoid a delayed discharge crisis. I await his response with anticipation.

A recent report by the Chartered Institute of Public Finance and Accountancy and the Institute for Government identified that people were waiting longer for critical hospital services such as A&E and cancer treatments. It highlighted the fact that delays in transferring people from hospitals into social care have risen by 40% since 2014. The Government cannot wash their hands of the crisis that has been created in Downing Street. They cannot simply shift the blame for the shambles they have presided over for the past seven years on to the shoulders of councils such as those in our area.

I should declare an interest in what I will say next, as a candidate in the Liverpool city region metro Mayor contest. If I am elected in May, I offer to work with the Minister’s departmental officials and the leaders of the six districts in the Liverpool city region to convene a health and social care summit, to examine the current situation and look at how we might work together across the piece at what could be done better. As my hon. Friend said, there are some innovative approaches and best practices in our area, and the Government might even learn something if they took part. Councils in our area have already shown the leadership on social care that the Government are singularly failing to, so that summit is a chance for the Government to answer their critics, see for themselves the pressures that local authorities are having to contend with on a daily basis and work to tackle the problem at source.

We have a duty of care to ensure that health and social care work is as seamless and joined up as possible within the current structures of responsibility and funding restrictions. However, the Government need to accept their duty in relation to health and social care. In our area, the so-called social care precept would not even go close to backfilling central Government cuts to date, as we have heard, and it is seen as a scam to shift the burden of funding on to the shoulders of local taxpayers. Liverpool has a predominance of terraced streets—what we used to call two-up, two-downs—so the imbalance of band A and B properties means that for every 1% increase in council tax in our area, we raise about £1.4 million to £1.5 million. However, with a similar 1% increase in some of the leafy suburbs down here, councils can raise more than £5 million. That situation perpetuates the growing gap between the haves and the have-nots, and we will see tomorrow whether the Chancellor recognises that the cuts being inflicted on councils such as Liverpool, Halton, Knowsley, St Helens, Sefton and Wirral have gone too far, and whether a fairer settlement is offered.

We are doing our bit in our city region. The Government now need to accept their responsibility to the elderly and their families and carers. They have often tried to use a sticking plaster to offer a solution, but they know that a sustainable solution must be found to this growing problem. I hope that all the relevant factors—including demographic, socioeconomic and health inequality data—are included in any formula that the Treasury uses to calculate additional funding need. Perhaps tomorrow’s Budget will see yet another sticking plaster applied to the crisis in social care and in our hospitals, but mark my words: it will be no more than a temporary measure at best. At worst, it will be more smoke and mirrors that will fall apart just days afterwards upon further scrutiny. I cannot believe the Government will allow that to happen.

At Prime Minister’s Question Time, the Leader of the Opposition mentioned that Liverpool’s director of adult social care, Samih Kalakeche, had handed in his notice because he was tired of being held responsible for axing services for the elderly and vulnerable in our city. Mr Kalakeche told The Observer:

“Frankly I can’t see social services surviving after two years. That’s the absolute maximum. If we don’t do something within the next six months, I believe social services will not exist by 2018-19. This isn’t scaremongering, this isn’t me asking you to feel sad for me—whoever is making decisions out there has looked at social care as the Cinderella of the service…People are struggling, people are suffering, and we’re really only seeing the tip of the iceberg.”

I think those comments are directed fairly and squarely at the Government’s door.

However, it is not only Samih who claims that. Last month, the Conservative chair of the Local Government Association, Lord Porter, said that services supporting the most vulnerable people in our communities were at breaking point. He said that

“extra council tax income will not bring in anywhere near enough money to alleviate the growing pressure on social care both now and in the future. The social care precept raises different amounts of money in different parts of the country. Social care faces a funding gap of at least £2.6 billion by 2020. It cannot be left to council taxpayers alone to try to fix this crisis. Without genuinely new additional government funding for social care, vulnerable people face an ever uncertain future where they might no longer receive the dignified care and support they deserve. This is not only worse for our loved ones but will also heap further pressure and wasted expense on the NHS.”

Opposition Members could not agree more.

I know that our area, like the other 150 councils in England, will not get a sweetheart deal from the Government—sorry, I of course mean a memorandum of understanding allowing for a pilot of business rate retention. In any case, such deals are yet another example of the Tory approach that “to those that hath shall be given”. For example, Westminster City Council raises so much money in business rates that it could probably afford to actually pay its residents to live there instead of taxing them. However, there are certainly limits to what can be achieved in our area at a local or even sub-regional level with the current inadequate resourcing.

I slightly disagree with my hon. Friend the Member for Garston and Halewood (Maria Eagle), who welcomed the Government’s social care commission. I do not think we need another commission; I think we all know what is happening in our areas. The Government need to start listening to people—to patients, carers and families who have to go through terrible circumstances on a daily basis. It is time for action, not for commissions. Our elderly family members and our overstretched and all-too-often under-rewarded social care workers deserve nothing less. I hope the Minister will talk about action in his response.

17:34

[Barbara Keeley (Worsley and Eccles South) (Lab)]

It is a pleasure to serve under your chairmanship, Mr Hollobone. I congratulate my hon. Friend the Member for Liverpool, Riverside (Mrs Ellman) on securing the debate and on the excellent way in which she opened it. We have heard about the real pressures on social care in Liverpool from my right hon. Friend the Member for Knowsley (Mr Howarth) and my hon. Friends the Members for Garston and Halewood (Maria Eagle), for Liverpool, Wavertree (Luciana Berger) and for Liverpool, Walton (Steve Rotheram). We have heard about the 5,000 people who have lost care packages, about cancelled surgeries and about patients stuck in hospital.

To be clear, the funding crisis in social care is, in my view, one of the Government’s own making. The Chancellor failed to recognise the crisis and provided no extra social care funding from central Government at the autumn statement. Indeed, Ministers continued what they had already started in shifting the burden on to councils and council tax payers through increases in the social care precept. I will say more about that, but we have heard very well in the debate how that is not a sustainable solution.

As my hon. Friend the Member for Liverpool, Riverside said, Liverpool still has to make a further £19 million of cuts by 2020, taking the cuts to its Government funding to a staggering £420 million—the equivalent of a 68% reduction since 2010. The cuts to grants and the increased reliance on council tax have hit cities such as Liverpool very hard; we have heard about some of the impacts. As my hon. Friend the Member for Liverpool, Walton said, a serious weakness of using council tax to fund social care is that both demand for social care and the relative value of the council tax base vary so much across the country.

[Mr Philip Hollobone (in the Chair)]

Order. I am sorry to interrupt the hon. Lady when she is in full flow, but there is a Division in the House. We will come back in 15 minutes and carry on where we left off.

17:37

Sitting suspended for a Division in the House.

17:50

On resuming—

[Mr Philip Hollobone (in the Chair)]

Welcome back. The revised finish time is now 6.18 pm.

[Barbara Keeley]

As I said, a weakness of using council tax to fund social care is that both the demand for social care and the relative value of the council tax base vary across the country. Census data show that in Surrey 40% of over-65s have a long-term condition that limits their day-to-day activity, but in Liverpool that figure is much higher, at 62%, and there is a strong link between long-term conditions that limit day-to-day activity and care needs. A 1% increase in council tax would raise £6.2 million in Surrey, whereas an equivalent rise for the same size population in Liverpool would raise only about half that sum—£3.4 million. Therein lies the problem.

As we heard in the debate, this year the 2% social care precept raised £2.8 million in Liverpool. That is not enough to cover the £9 million that Liverpool reports is needed in the care sector just for increases in the national living wage. Liverpool’s Mayor did some months ago suggest a 10% council tax increase to pay for social care, which would have needed a referendum. That proposal was similar to the one for a 15% increase from Surrey County Council. As we know, Surrey appears to have got a sweetheart deal from the Government when it suggested that increase in council tax, so I would like the Minister, when he responds, to tell us where Liverpool’s deal is.

As we heard, last month Liverpool’s director of adult social care resigned, stating that councils are in danger of failing to meet their statutory requirements. He said:

“People are struggling, people are suffering, and we’re really only seeing the tip of the iceberg.”

Only those with the highest needs are getting help. I worry that financial pressures in social care are now leading to failures and serious reductions in the quality of care that people receive. That was underlined by the Care Quality Commission bringing prosecutions against the owners of Mossley Manor, in the constituency of my hon. Friend the Member for Liverpool, Riverside. The neglect and poor care of residents at that care home was shocking. The CQC said that there was

“a continued and serious risk”

to the lives, health and wellbeing of residents. It is welcome that the owners have been prosecuted by the CQC, but I am worried that failures such as that are now a symptom of a wider problem.

The number of care home providers forced to cease operations because of deregistration has increased from 34 two years ago to 54 this year. A recent BBC “File on 4” programme reported that 23,000 allegations of abuse had been made against care staff working in people’s homes. In the programme, the new local government ombudsman, Michael King, said that there is a growing problem with standards of home care. The CQC says that more than one quarter of care homes require improvement or are inadequate, and that figure rises to 41% for nursing homes. The King’s Fund has said that adult social care is rapidly becoming a “threadbare safety net” for the poorest and most needy older and disabled people.

Falls in the quality or availability of social care are clearly having a knock-on effect on the NHS. We heard, rightly, about examples of that from Liverpool. My hon. Friend the Member for Garston and Halewood talked about sustainability and transformation plans and the need for STPs to make savings, which is the ridiculous position we seem to be in, but as the Health Foundation has said:

“The vision contained in many STPs…on preventing ill health and deterioration of illness, of care delivered closer to people’s homes…will be impossible without a vibrant social care sector.”

As we heard in the debate, it is impossible to have a vibrant social care sector with the funding issues in Liverpool. The Government have tried to shift the burden of funding social care on to councils. In the Budget tomorrow, I hope that the Chancellor of the Exchequer takes responsibility and both makes available the £2 billion needed immediately and suggests a longer-term plan, which is needed to put social care on a more stable footing.

Those who lose out are the thousands of people who need social care in cities such as Liverpool, but are now living with unmet care needs. That also hits their families, particularly the unpaid family carers, and the thousands of people in the care workforce, who are now working under very poor terms and conditions. A very large proportion of them are on zero-hours contracts; often, they are not even paid the minimum wage, are not paid for their travel time and have very poor prospects or no pension.

My hon. Friend the Member for Liverpool, Walton has offered to convene, if he is elected Mayor—I wish him all the best in the forthcoming election—a health and care summit to look at the issues and explore solutions. I hope that he is able to do that, but I know that my hon. Friends and I are not happy to accept a threadbare safety net. We want a decent and fair social care system, and we want it to be funded.

[Mr Philip Hollobone (in the Chair)]

If the Minister would be kind enough to conclude his remarks no later than 6.15 pm, that would allow Mrs Louise Ellman three minutes to sum up the debate.

17:57

[The Parliamentary Under-Secretary of State for Health (David Mowat)]

I thank all those who have spoken in the debate. This is a serious subject, and we have had a number of serious contributions. I will answer some of the points that have been made, before talking more generally about the Government’s approach to adult social care, both now and for the remainder of this Parliament.

I congratulate the hon. Member for Liverpool, Riverside (Mrs Ellman) on bringing this debate to the Chamber, because this subject matters. If there is one thing on which we can all agree, on both sides of the political divide, it is that the whole care agenda is very important to very large numbers of people. The care industry employs more people than the NHS: it employs 1.5 million people. As the hon. Member for Worsley and Eccles South (Barbara Keeley) said, many of them are not well paid. I think she said that some of them do not get the minimum wage. If she has evidence of that, she needs to come forward with it and we need to prosecute, because that is illegal.

However, it is right to say that 1.5 million people work in social care—more than in the NHS—and that number will grow over the next decade or two decades. Depending on how he gets on in the forthcoming election, the hon. Member for Liverpool, Walton (Steve Rotheram) may find that his responsibility in that regard is increased greatly. As well as those 1.5 million people, to whom we should all be grateful—I do not think I could do that work very well—6 million people across our country give informal care. Of those, some 300,000 are aged under 18. It is estimated that one in 30 people in schools are giving informal care to an adult or sibling. We should all reflect on that, because that number will also increase over the next decade or so.

A number of Members have made the point that the precept raises less in Liverpool than it does in Surrey. The hon. Gentleman said that many more houses are in council tax bands A or B, and the consequence is that the precept will raise less. That is self-evidently true, and the Government accept that. That is why the way in which the improved better care fund is and will be allocated to councils takes into account the moneys that are available from the precept, so that the total is in accordance with the relative needs formula.

There is one thing I want to get absolutely straight. I do not want to spend the next 18 minutes bandying numbers around, and I am happy to write to all the Members here about the numbers that I am about to give. The hon. Member for Liverpool, Riverside correctly said that the Liverpool spend on social care was £154 million in 2015, and she said that it is budgeted to be £130 million by 2020. I think those were the numbers she used. The number that we have in cash terms—I will write to Members with this—is £194 million by 2020. That is a real-terms increase of 18% between now and 2020. I have spent quite a long time with officials today to make sure that those numbers are correct. The amount that Liverpool City Council will receive from the improved better care fund in 2019-20 is £26 million. That dwarfs the amount that the precept will raise.

[Barbara Keeley]

The Minister said that he does not want to keep on bandying figures about, but as we all know, the difficulty is that the funding that he and the Government keep talking about is back-loaded. The problem is happening now—5,000 people have lost their care packages now, and the problem has been happening since 2010. It is not helpful, in this totally stressed situation, to talk about money in 2019-20.

[David Mowat]

I was just making the point that the figure the hon. Member for Liverpool, Riverside used was £130 million and the figure I have is £194 million. I accept that that number is not for today, and I also accept, as I have said many times in the Chamber, that the social care system is under pressure throughout the country, and Liverpool is part of that.

[Steve Rotheram]

I am trying to be helpful to the Minister. I quoted a former director of adult social care in Liverpool, Samih Kalakeche, who said:

“If we don’t do something within the next six months, I believe social services will not exist”

by the time that the Minister believes we will get the additional funding.

[David Mowat]

Today is not Budget day. I accept that the systems are under pressure. The precept has raised something, and Liverpool’s budget for social care is increasing next year, but it is fair to ask whether it is increasing enough given the pressures we are under—that is a reasonable point. My point about the £194 million figure was in response what was said earlier. Although I and the Government accept that there are pressures, it is important that we share accurate numbers with each other.

The hon. Member for Liverpool, Riverside also made the good point that there is now an increasing tendency for care to be provided in people’s own homes. If we look at the care home market over the past decade, we see that roughly speaking there are the same number of beds today as there were 10 years ago, and that is clearly in the face of a considerable increase in demand. That is because far more people are now being looked after through domiciliary packages in their own home, and that is the market we need to get right and make effective.

The hon. Member for Garston and Halewood (Maria Eagle) raised the potential issue of councils being punished in the Budget for being efficient. I will be very disappointed if that is the case—it is not my understanding of what will happen—but it is a fair challenge, and we will have to see about that when the Budget comes out.

The hon. Lady raised a number of points about the STP. We all share the STP area, and there is work to do on it. I will make this point, however: she talked about cuts of £908 million, but those are cuts against an increase in demand—they call it the counterfactual—of 4% or 5% over the next period. The truth is that Cheshire and Merseyside will be getting real-terms increases in funding for every year up to 2020. Nevertheless, that does not mean that there are not challenges, for some of the reasons we have heard, such as demographics and all that goes with that.

The hon. Member for Liverpool, Wavertree (Luciana Berger) asked for a glimmer of light and hope; hopefully, between myself and the Chancellor tomorrow, we can achieve that. She also raised the cases of Sobia and Veronica and their care packages. It is difficult for me to respond to that, other than to say that the Care Act 2014 set out statutory requirements for what councils need to do. If those statutory requirements are not being met, and the way she described those cases implied that might be the case, that is clearly against the law and there is recourse either to the local authority itself or to the ombudsman. I would be happy to talk to her about that in more detail.

The hon. Member for Liverpool, Walton made a number of points and started by talking about delayed transfers of care. He rightly said that I have talked on a number of occasions about variations between councils in delayed transfer of care performance. I will say that DTOC is not the only measure of the effectiveness of a social care system; it just happens to be one the easier ones that we can get a metric around. The fact is that if we look at the 10% worst and the 10% best councils in the country—Liverpool is round about the middle—the level of delayed transfers differs by a factor of around 20 or 30. I absolutely concede that social care systems work better with more money, but it is not just about money, because that is about different working practices and different people doing things in different ways. It is right that we have the debate about that, as well as about the need for more money.

The hon. Gentleman challenged me to name some councils that were much better than Liverpool in terms of delayed transfer of care, within a similar budget environment. I do not know what the budget environment is, but I have a list I can give him of councils that have fewer delayed transfers of care. As I said, Liverpool is not a particularly bad council, and I do not want to imply that it is, but Durham, Kirklees, Sunderland, Barnsley, Newcastle-upon-Tyne and St Helens all have at least 10 times less delayed transfers of care than Liverpool. I was taken to task at a recent Conservative councillors meeting, in which people said that having a good social services department is not just about delayed transfer of care; it is to do with a whole lot of other things. I absolutely accept that, but in a sense the hon. Gentleman started it, so I wanted to give him those figures.

[Steve Rotheram]

Will the Minister therefore pay tribute to Liverpool for what it has done and its innovative approach? My question was about councils that have had similar cuts to Liverpool of around 60%. None of the councils that he mentioned has had the same degree of cuts as Liverpool City Council.

[David Mowat]

The hon. Gentleman mentioned some councils that were in the south and I picked some that were not, but fair enough—I accept his point. He mentioned that, depending on the result of his election, he would have a summit. I would be delighted to attend, if he were to invite me—although who knows where I will be by then.

[Steve Rotheram]

It’s only in May!

[David Mowat]

Indeed. On Thursday, I am going to Liverpool to give a talk at a care conference. I would be very happy during that visit to come along and talk to the council about some of the issues raised here today. As the hon. Gentleman rightly said, I am sure that the Government can learn from Liverpool. Frankly, we can all learn from each other. When I went to Whiston hospital and saw discharges to St Helens and to Liverpool, I saw some wonderful things happening there. Anyway, the offer stands.

[Maria Eagle]

I am sure that all councils in Merseyside would be happy—I know that Knowsley would—to see the Minister on Thursday if he has a bit of spare time. Does he agree that it will be a bit of a blow if the Chancellor’s reported actions tomorrow reward those with a poorer record with smaller cuts to their resources than Knowsley’s? Knowsley has a good record on delayed discharges, but according to the formulation listed in some of today’s newspapers, it will end up getting very little, if anything.

[David Mowat]

I thought that I had said that I agree with the hon. Lady that it would be wrong to punish those that are doing better. She mentioned that Knowsley is one of the stronger councils in that regard; St Helens is even stronger. It would be completely wrong if that were the basis of the allocation. Frankly, that is not my understanding.

I want to talk a little about what the Government plan to do on social care. Part of that involves recognising the pressures that exist. One thing that we get into quickly in social care discussions is a debate about adult social care and frail people—people on the borderline between being ill and being old. If they are ill, they are in hospital under the NHS, and if they are not, they are old, and care is either means-tested or provided by the council. That is a difficult area.

One third of the pressure on councils such as Liverpool arises not from older people but from people with severe learning difficulties, autism and disabilities more generally. Over the past decade, thankfully, the health inequality from which that cohort suffers has decreased considerably, and the life expectancy of people in those categories has increased. The cost to local authorities is clearly severe. In addition, the Government are determined to press ahead with a programme called Transforming Care, which came out of the Winterbourne View case. Too many people with severe learning difficulties were in institutions and long-term hospitals, with all that goes with that. We are moving them into communities with the help of local authorities. There is a plan to move some 3,000 people out of institutions—places hopefully much better than Winterbourne View—and into care. All of that creates pressures of the sort that we have been hearing about in this debate, but that does not mean that it is not the right thing to do.

[Luciana Berger]

Does the Minister acknowledge that those 3,000-plus people should have been moved a lot sooner? According to various reviews, we should not be in the present situation, with too many people still in that type of accommodation who should not be there.

[David Mowat]

That is a fair challenge. We have a plan, and we are implementing it in that process. Winterbourne View was about seven years ago now. I have met a number of parents of the children affected and there has been a lot of pressure from them to go as far and as fast as we can. I make the point that every one of those facilities is a project of its own in terms of finding other accommodation and putting in place care—sometimes round-the-clock care. To answer the hon. Lady’s question directly, I would like us to go faster, but I think that we are doing as well as could be expected given the starting point. However, it is a fair challenge.

[Barbara Keeley]

I do not know whether the Minister watched last week’s Channel 4 “Dispatches”, “Under Lock and Key”, which showed some serious cases of young people who were not better off in their institution, a private hospital. It seemed very difficult to get them moved out into the community. I know that it was a different part of the country, but there were young people in that institution from across the country. It is great to have a plan, but we see programmes week in and week out showing failures, as I have highlighted.

[Mr Philip Hollobone (in the Chair)]

In responding to the intervention, the Minister needs to make his last point.

[David Mowat]

Mr Hollobone, are we finishing at 6.18?

[Mr Philip Hollobone (in the Chair)]

You have until 6.15.

[David Mowat]

I beg your pardon. I will finish at 6.15.

I saw the programme, and it gave us great food for thought. It is a Government priority to get those people moved. We have done some 1,500, but yes, there are 3,000 left in places like the one in Northampton, and it is not good enough. It is a long process, and it is not something that any of us from either side of the House can do just by clicking our fingers.

I will now sit down. This has been a good debate. I will write to all Members here with the figures that I have given, because the figures are right. It is fair to have this discussion, but it must be had on the basis of correct numbers. Even with those correct numbers, I accept that some of the pressures that we have heard about exist.

18:15

[Mrs Ellman]

I am very pleased that so many of my hon. Friends who represent Liverpool are here today; in fact, we almost have a full house. My hon. Friend the Member for Liverpool, West Derby (Stephen Twigg), although he is abroad with the International Development Committee, which he chairs, is here with us in spirit and in thought. It shows how important the issue is to Liverpool and to the city region. We may dispute specific figures, but there is undoubtedly a massive gap in the funding to meet the needs of people in our area, and the biggest reason for it is the massive and ongoing cuts in Government funding. Whatever individual figures we might dispute, those are the basic facts, and they are not in dispute.

I thank the Minister for much of what he said, for his recognition that there is a problem and for his willingness to meet representatives of Liverpool City Council when he is in Liverpool on Thursday. I accept that invitation on their behalf; I am pretty sure that they will agree. It is a welcome move, but nothing can detract from the fact that we need significant additional funding to make services available to all the people who need them. The problems are in two areas. The issue relating to the NHS and discharges from hospital is very important, but it is not the only issue. Care packages that enable people to live independently in their own homes are essential, but in Liverpool the number of packages has already been drastically reduced from 14,000 to 9,000, and we do not know how much lower the figure will fall.

I was pleased to hear the Minister talk about light and hope—I thought that it was very encouraging—but the first test will be tomorrow in the Budget. I am sure that we will all scrutinise what is said carefully; let us hope that it brings light and hope to the people of Liverpool.

Question put and agreed to.

Resolved,

That this House has considered social care in Liverpool.

18:17

Sitting adjourned.