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Oral Answers to Questions
(1 year, 7 months ago)
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Mr John Baron (Basildon and Billericay) (Con)
Ian Levy (Blyth Valley) (Con)
Karl MᶜCartney (Lincoln) (Con)
The Chancellor of the Exchequer (Kwasi Kwarteng)
My hon. Friend will know that the growth plan really was a very strong package for business and for small and medium-sized enterprises, and I am sure that many of his constituents will appreciate the strong measures that we introduced.
Mr Baron
I refer Members to my entry in the Register of Members’ Financial Interests.
I welcome the Government’s growth agenda, notwithstanding the lack of reassurance to the markets, but will the Chancellor seriously consider lowering taxation on smaller businesses, despite the package that has already been announced? They are the engine room of the economy and employ most people in the private sector, and if cost savings are necessary, High Speed 2 and the streamlining of myriad quangos could be the first option.
Kwasi Kwarteng
I am very pleased to tell my hon. Friend that we are going to introduce the medium-term fiscal plan in three weeks’ time, but let us consider the measures that we have already introduced. National insurance hikes have been reversed, the corporation tax rise has been scrapped and the annual investment allowance remains at £1 million. These are measures that small businesses up and down the land have been very appreciative of.
Ian Levy
As my right hon. Friend will be aware, small businesses are the backbone of our local economy—none more than Catling Bakery in Cramlington, which has expanded from running a bakery to running a café and now a dessert bar. Would my right hon. Friend please assure me that this Government will do all they can to help these businesses thrive?
Kwasi Kwarteng
Absolutely right. Of course, we have also supported Catling Bakery which my hon. Friend mentions through an energy package—£60 billion for households and businesses for six months—which we absolutely felt it necessary to do.
Karl MᶜCartney
Thank you, Mr Speaker; it is like I never went away. I refer Members to my entry in the Register of Members’ Financial Interests.
Supporting businesses will always be a key pillar for growing our economy and, by association, our small and medium-sized businesses, of which there are many in Lincoln and more across our county of Lincolnshire. They should be at the forefront of the Government’s growth agenda. Devolved areas such as Teesside and the West Midlands have continually been successful in delivering for their areas. Greater Lincolnshire stands ready right now for a maximum devolution deal. Therefore, will the Treasury support any such deal for Greater Lincolnshire?
Kwasi Kwarteng
My hon. Friend knows that devolution is at the heart of the Government’s plans to level up and strengthen communities, and in the levelling-up White Paper the Government have fully committed to offering a devolution deal to every area that wants one by 2030.
Mr Barry Sheerman (Huddersfield) (Lab/Co-op)
Can I declare an interest to the Chancellor? I have actually worked in a small or medium-sized business. Unlike many people on these Benches, I have actually worked in manufacturing industry, and the manufacturing SMEs in my constituency are absolutely up against it with the cost of energy. What is he going to do to relieve them right now?
Kwasi Kwarteng
I think the hon. Gentleman makes a very good point and represents his constituency ably. In respect of small businesses, we have introduced a package —an energy price guarantee not only for households but for businesses—to the tune of £30 billion in the first six months. This is something that was absolutely necessary, and I am very proud of the fact that we acted very swiftly to protect businesses such as those in his constituency.
Sarah Olney (Richmond Park) (LD)
The Government’s failed mini-Budget sent interest rates soaring, which is already causing mortgage pain for millions, but rising borrowing costs are now threatening our high streets too. Small businesses in Richmond Park and across the UK are seeing their loan repayments spiral and their financing options dry up. We have already seen the highest number of company insolvencies since the financial crisis—more than 5,600 businesses closed in the second quarter of this year—and SME debt is now at a staggering £204 billion. Most of those businesses will not see a penny from the cut to corporation tax. What is the Chancellor—
Kwasi Kwarteng
As I have stated a number of times already, the energy support package will help every single one of the businesses in the hon. Member’s constituency. I would be very pleased to see the Lib Dem growth plan. The anti-growth coalition carps from the side lines but it has nothing to say about growth.
Chris Bryant (Rhondda) (Lab)
The one thing businesses always want is security, and an understanding of what is going to happen for them next year. They are worrying about their borrowing costs for next year, and the Chancellor has already made that more difficult for them. He says he has a package for energy costs, but that lasts for only six months. Yesterday I spoke to a man who owns a leisure company. He said that his bill next year will go from £100,000 to £475,000, and that he will be closing. Why does the Chancellor not bring in a proper measure that will last more than six months?
Kwasi Kwarteng
The hon. Gentleman makes a fair point in respect of energy costs, and that is precisely why we intervened in the way that my right hon. Friend the Prime Minister announced only a couple of weeks ago. The package is £60 billion for households and businesses across the next six months. That is a generous package, and we are listening.
Alison Thewliss (Glasgow Central) (SNP)
Businesses of all sizes are struggling with Brexit, import costs, material costs, the weak pound against the dollar and the euro and increased wage and energy costs, and they still do not know what will happen when the Chancellor’s temporary reprieve ends in March. The clock is ticking. Calder Millerfield, a food manufacturing business in my constituency, has come back to me with its latest quote, with the relief applied. It is £944,000 per year, up from £160,000 last year. What will the Chancellor do to support manufacturing businesses now, because they will not survive those increases?
Kwasi Kwarteng
As I have stated, the energy price guarantee does help businesses in a large measure. Also, I am not going to take lectures from the SNP about growth. In Scotland, for every year from 2010 to 2019, growth was lower than in the rest of the United Kingdom. I will not take any lessons about supporting business from the hon. Lady.
Mr Laurence Robertson (Tewkesbury) (Con)
The Financial Secretary to the Treasury (Andrew Griffith)
The Chancellor speaks regularly to the Governor of the Bank of England on a wide range of matters. As my hon. Friend knows, the Bank of England sets monetary policy, including interest rates, independently of Government.
Mr Robertson
I thank the Minister for that response. Obviously, the world situation is the biggest cause of the rise in interest rates, but that rise is having a detrimental effect on mortgage payers and risks negativising the welcome help that the Government have provided through energy costs and tax cuts. Will the Chancellor and Ministers meet more regularly with the Bank of England to co-ordinate policy a little more closely?
Andrew Griffith
I thank my hon. Friend for his question. He is a passionate advocate in this place for his constituents. The Chancellor and I regularly meet the Bank of England and all the individual lending banks in the UK. My hon. Friend knows that interest rates have increased in every major economy, despite what the Opposition may claim. That is why it is so important that we provide help with energy costs and cutting taxes.
Dame Angela Eagle (Wallasey) (Lab)
Surely Ministers must now apologise for the chaos that their mini-Budget, with its £45 billion of unfunded spending commitments and tax cuts, caused to the bond markets. Is it not now a fact that there is a Tory premium on every interest rate rise for every borrower in this country? They are not going to forget that when the election comes.
Andrew Griffith
I think we all understand that there is a clear divide in this House. The Government are supporting growth, providing support for energy bills, giving the economy the confidence and certainty that it needs this winter, and bringing forward supply-side measures that will boost the economy, not being on the side of striking workers who are bringing this economy to a halt.
Mr Pat McFadden (Wolverhampton South East) (Lab)
With your permission, Mr Speaker, I wish to send my condolences to the families of all those killed in the tragic accident in Creeslough, County Donegal, last week. My parents came from quite nearby. It is a beautiful place with a close community, and they are very much in our prayers right now.
I welcome the Minister to his place. I am sure that he and the Chancellor’s team wanted their first Budget to be remembered, perhaps even studied in years to come. Well, they have certainly achieved that ambition. Two-year fixed mortgage rates are above 6% for the first time since 2008, and they have risen sharply since the Chancellor’s mini-Budget. Everyone coming off such a rate will face much higher payments over the coming year, possibly hundreds of pounds a month more. Why should people who have worked hard to buy their own home pay the price for the Government’s mistakes?
Andrew Griffith
I add my comments and thoughts to those on the incident in County Donegal last week.
We have already talked about our comprehensive energy support package, which will help not just every household this winter and prevent the uncertainty of energy bills that were forecast potentially to reach £6,500 per home, but help businesses. The Government are on the side of businesses and keen to improve the supply side of our economy, so that we can grow to create the tax revenues for our high-quality public services.
Mr McFadden
This morning, the Bank of England made a further intervention in the markets, warning of
“a material risk to UK financial stability”.
That risk comes directly from the Chancellor’s mini-Budget two and a half weeks ago. How much more will Government borrowing cost next year as a result of the rising gilt yields since the Chancellor’s statement on 23 September?
Andrew Griffith
As I have already observed, we are seeing interest rates rising in every major western economy. When Opposition Front Benchers are finished with their British exceptionalism, perhaps they will lift their eyes and notice that. What is more important is that we are protecting consumers and households through the difficult winter months ahead, and cutting taxes. Those are measures that Government Members support and Opposition Members oppose.
Alison Thewliss (Glasgow Central) (SNP)
Today, the International Monetary Fund observed that the Chancellor’s unfunded tax cuts have complicated the fight against inflation. As a result, the Bank of England is expected to increase the base rate to levels not seen since 2008. Families have already struggled with increasing energy prices, Kantar says that grocery inflation stands at 13.9%, and Santander is preparing for increased mortgage defaults. What is the Minister and his Treasury team doing to tackle the absolute chaos that they have created?
Andrew Griffith
I understand that the nationalist party likes to talk the country down at every opportunity, but the reality is that we are taking the action that we need, tackling the supply side, tackling the strikes that are grinding down the economy and building the energy supply that we need to help strengthen our economy and our currency. The hon. Member’s party opposes nuclear and opposes more oil and gas exploration.
Ben Everitt (Milton Keynes North) (Con)
John Stevenson (Carlisle) (Con)
The Chief Secretary to the Treasury (Chris Philp)
A critical part of the Government’s growth plan is road, rail and energy infrastructure. We will be introducing legislation shortly to ensure that the delivery of that critical infrastructure is massively sped up.
Ben Everitt
I am grateful for the investment in physical infrastructure, but those on the Treasury Front Bench will know that we need the skills for the future to deliver the jobs for the future to make that infrastructure investment sustainable. Will the Minister meet me to discuss the idea of MKU: a brand-new university in Milton Keynes? Every single Minister and Secretary of State I have spoken to about it thinks that it is a good idea. Will my right hon. Friend meet me to get it off paper and get boots on the ground?
Chris Philp
I thank my hon. Friend, who is a tireless champion for the great city of Milton Keynes. I would be delighted to meet him to discuss the idea along with colleagues from, perhaps, the Department for Education. I note that Milton Keynes has already received £23 million through the towns fund, but I am happy to meet him to discuss the idea.
John Stevenson
Growing the economy is about improving people’s lives as well as improving the success of places such as Carlisle. To achieve that, we need both public and private investment, and, in the case of public investment, it is infrastructure that will make the real difference. Given the rise in the cost of infrastructure projects, will the Minister confirm that where such projects have a shortfall in funding but are ready to go, the Government will step in and give additional funding to support them?
Chris Philp
It is very much our intention to speed up projects where they are ready to go. The growth plan announced a few weeks ago made clear our commitment to doing that. The last spending review provided, I think, about £100 billion of funding towards critical economic infrastructure. Where we can speed up projects, we will certainly be doing that. One project that we have in mind for exactly that is the A66 northern trans-Pennine route, which I believe goes not far from my hon. Friend’s constituency.
Nick Smith (Blaenau Gwent) (Lab)
In 2017, former Conservative energy Minister Charles Hendry conducted a review of the Swansea Bay tidal lagoon. He gave it the thumbs up, but since then successive Governments have not pursued it. Given the energy crisis we are in, will the Minister consider reopening the business case? It could be a fantastic source of green energy for our country.
Chris Philp
The Government are extremely interested in all forms of new energy generation. We are determined to make sure that the United Kingdom is electricity-independent. We are looking at all kinds of projects, including of course marine projects. I understand that when the Swansea scheme was investigated there were questions about value for money, but I am sure that we would be very happy to take a careful look at any proposition that is put forward, if the hon. Gentleman wants to do so.
Stephen Flynn (Aberdeen South) (SNP)
When it comes to the delivery of projects, I cannot help but admire the speed at which the Government managed to transform Downing Street from a nightclub into a casino. I have one ask that is not a gamble. When are the Government going to deliver the Acorn project in the north-east of Scotland?
Chris Philp
My right hon. Friend the Chancellor says that that is something we are examining carefully. The hon. Gentleman’s characterisation of the growth plan is extremely unfair. The real risk is in not having a growth plan. The real risk is in having taxes that are too high. The real risk is not investing in infrastructure. It is clear that this Government have a growth plan and the Opposition have no plan.
Kevin Hollinrake (Thirsk and Malton) (Con)
Of course it is always right to look for efficiencies and try to get better value for money for the taxpayer. As we look for spending cuts, could my right hon. Friend confirm that they will not come at the expense of reductions in vital infrastructure spending in our regions, not least in the north of England?
Chris Philp
I am pleased to say, as my right hon. Friend the Chancellor said when he introduced the growth plan, that expediting critical infrastructure was an important part of that plan. Without critical infrastructure, we are not going to see the growth in jobs or wages and the prosperity that we all want. The Government will do everything that they can to speed up the delivery of those projects.
Mr Clive Betts (Sheffield South East) (Lab)
We do not know much yet about the Government’s new investment zones, but in order to achieve success for the primary investment in them, will the Government have specifically targeted funds for infrastructure projects in those zones? If so, will this be a further unfunded expenditure commitment?
Chris Philp
I think the Chancellor set out the investment zone concept very clearly. There will be, by agreement with local authorities, planning freedoms and very significant tax cuts. Infrastructure investments are being handled separately to that, but it would be reasonable to expect a degree of co-ordination between the Department for Levelling Up, Housing and Communities and the Department for Transport, as they consider the way investment zones interact with transport projects.
Marsha De Cordova (Battersea) (Lab)
The Financial Secretary to the Treasury (Andrew Griffith)
Reforming the EU’s directive on the bonus cap is not about paying people more. All it ever did was increase base pay, regardless of performance. It was never a cap on total remuneration, and no one should pretend that it was.
Marsha De Cordova (Battersea) (Lab)
That was total nonsense. As some families in Battersea struggle to keep up with the rising cost of living, the Government have chosen to help bankers by removing the cap on their bonuses, while maintaining the cap on household social security. Despite soaring bills and growing inflation, the cap has remained stagnant since 2016, plunging hundreds of thousands of families into deep poverty. The cap on social security is cruel. How can the Chancellor seriously justify removing the cap on bankers’ bonuses but not the social security cap? Will the Minister have a word with his colleagues at the Department for Work and Pensions and change that?
Andrew Griffith
The hon. Lady has fully booked her place as a member of the anti-growth coalition. The Government are not afraid to be on the side of the people who create the wealth that funds our public services. In 1979 the top 1% of earners paid about 10% of income tax; they now pay 29.1%. That is three times as much.
Andrew Bridgen (North West Leicestershire) (Con)
Does my hon. Friend agree that scrapping the cap on bankers’ bonuses will increase not only competitiveness, but tax receipts?
Tulip Siddiq (Hampstead and Kilburn) (Lab)
At a time when my constituents are struggling to make ends meet, struggling to put food on the table and struggling to put the heating on, the Government have decided that the way to increase growth in the economy is to lift the cap on bankers’ bonuses. Not a single person or a single bank that I spoke to in the City as shadow City Minister said that this was the right policy to drive growth in the economy. Does the Minister really think that the policy will drive growth in the economy, or will we see yet another U-turn from his Government?
Andrew Griffith
I can assure the hon. Lady that this Government are going to grow the economy. We will grow the economy by releasing the burden, or the yoke, of taxation, whether that is on ordinary people by cutting the basic rate of tax from 20p to 19p, or by today reversing the increase in national insurance, or by cutting the taxes on the businesses that she has been meeting—I welcome that—by reversing the increase in corporation tax next year.
Anthony Mangnall (Totnes) (Con)
The Financial Secretary to the Treasury (Andrew Griffith)
This Government will back first-time buyers by increasing the level at which they start paying stamp duty. A young couple can now purchase a property for up to £425,000 without paying tax.
Anthony Mangnall
A core tenet of our belief is to help everyone on to the housing ladder, so what assessment has the Minister made since the growth plan about helping people and areas to build houses for those who need and want them?
Andrew Griffith
My right hon. Friend the Secretary of State for Levelling Up, Housing and Communities will make a statement to the House in the coming weeks.
Florence Eshalomi (Vauxhall) (Lab/Co-op)
A constituent wrote to me and said, “What world do the Tories live in? I guess one where you protect the rich and wealthy. The suggestion that the Treasury thinks that a person on £30k a year can buy a home in London is frankly laughable and salt in the wound.” How does the Minister expect my constituents in Vauxhall who are already struggling to pay their rent to save to buy a new home on a salary of £30k?
Andrew Griffith
I will be very happy to write to the hon. Lady and to talk to her constituents about the unprecedented intervention that we have made to protect them this winter from their energy bills, putting valuable certainty and confidence not just into every household, but into every business and the economy. That is why the International Monetary Fund has today increased its growth forecast for the United Kingdom.
Jamie Stone (Caithness, Sutherland and Easter Ross) (LD)
The Chancellor of the Exchequer (Kwasi Kwarteng)
The hon. Gentleman will have seen that I have brought forward the publication of the medium-term fiscal plan to 31 October.
Jamie Stone
I think the House will agree that the uncertainty over the date has not exactly helped forward planning on benefits. Any real cut in benefits will mean people not having enough money to buy food and clothing for their children, so does the Chancellor agree that increasing benefits in line with inflation is the only fair way forward? Indeed, it would be immoral to do otherwise. As the chief executive of Inverness citizens advice bureau pointed out to me, such benefit money is spent in the local economy and is a boost to what the Chancellor has talked about many times: growing the economy.
Kwasi Kwarteng
I am delighted to see that one member of the anti-growth coalition is focusing on growth. However, on the hon. Gentleman’s specific question, he will understand that the medium-term fiscal plan is coming out on 31 October, and I will not prejudge any measures in it.
Robert Halfon (Harlow) (Con)
Does my right hon. Friend agree that the levelling-up fund is an important part of the plan for growth, and has he seen Harlow Council’s levelling-up fund bid, which I wholeheartedly support? It would transform a derelict area of our town centre into a thriving cultural quarter with jobs and investment, tackling antisocial behaviour. Those abandoned buildings have blighted the heart of our town for far too long.
Kwasi Kwarteng
My right hon. Friend is a redoubtable and highly persuasive representative of his constituents. I would be happy to talk to him about what we can do together to help his great constituency.
Stephen Doughty (Cardiff South and Penarth) (Lab/Co-op)
The Bank of England has had to intervene not once, not twice, but three times now. The impact on pension funds is very significant, and many of my constituents will be deeply worried. What assessment has the Chancellor made of the impact of potential additional pressures on the economy on public sector pensions and the damage to pension funds for pensioners up and down this country? Is that another reason why he did not want to publish the OBR’s forecast at the time of his mini-Budget?
Kwasi Kwarteng
The OBR will be fully scoring and giving a forecast ahead of the medium-term fiscal plan. I speak very frequently to the Governor of the Bank of England, who is absolutely independent and is very effectively managing what is a global situation.
Mel Stride (Central Devon) (Con)
I very much welcome my right hon. Friend’s decision to bring forward the medium-term plan and the OBR forecast; he has listened, and he is right. However, may I caution him to reach out as much as he can across both sides of the House, to be certain that he can get through this House the measures he puts forward to underpin that forecast? Any failure to do so will unsettle the markets.
Kwasi Kwarteng
My right hon. Friend is absolutely right. He does a brilliant job of chairing his Committee and is full of wise counsel; he is absolutely right that we will and should canvass opinion widely ahead of the publication of the plan.
Alison McGovern (Wirral South) (Lab)
The OBR was the creation of a Conservative Government and was designed to curtail wishful thinking in economic policy, so does the Chancellor agree that it is unfortunate, to say the least, that we seem to have Cabinet Ministers briefing against the economic expertise of that independent institution?
Kwasi Kwarteng
As far as I am concerned—I speak to investors regularly about this—the OBR is an institution that commands wide respect, not only in the UK but across the world. Its independence, to me, is absolutely sacrosanct.
Guy Opperman (Hexham) (Con)
The energy price guarantee is an outstanding part of the growth plan. It is key, but far too few businesses and households know about it. May I urge the Chancellor to have a nationwide mail-out campaign, coupled with the Government taking the lead on the reduction of energy in all public buildings, as Germany and other countries are doing? That would have the twin benefits of saving consumers money and reducing taxpayer subsidies.
Kwasi Kwarteng
My hon. Friend makes an excellent suggestion. Obviously I am very careful not to make unfunded spending commitments on the Floor of the House, but his suggestion is very well made and we should look into it.
James Murray (Ealing North) (Lab/Co-op)
The Chancellor’s refusal to publish OBR forecasts just over two weeks ago played a key role in falling confidence in the pound, rising borrowing costs and market panic. His woeful decision to avoid scrutiny by gagging the OBR helped to increase mortgage costs for working people, who are now paying the price for Conservative failure.
The Chancellor’s behaviour has been described by the former Bank of England Governor Mark Carney as “undercutting” economic institutions. Jonathan Haskel, a member of the Monetary Policy Committee, has made it clear that a
“sidelined OBR generates more uncertainty”.
Does the Chancellor accept that they are right?
Kwasi Kwarteng
As I have repeatedly said today, the OBR will have a fully forecasted and scored response to the medium-term fiscal plan in less than three weeks.
George Freeman (Mid Norfolk) (Con)
The Economic Secretary to the Treasury (Richard Fuller)
At the 2021 spending review, the Government announced an increase in public expenditure on R&D to £20 billion a year by 2024-25, including funding for association to EU programmes.
George Freeman
I thank the Chancellor and his team for making the Treasury a growth Department. Do they agree that innovation-led growth is particularly important if we want to drive up productivity, competitiveness and inward investment, and that our high-growth sectors such as space, agritech and fusion have a big role to play? Will the Economic Secretary specifically reassure those in the R&D community that he will not be tempted to reduce the allocation for Horizon or for science and research in the comprehensive spending review? That would reassure the markets.
Richard Fuller
Very few Members can look back on a track record of commitment to R&D as significant as that of my hon. Friend, both as a Minister and as a Back Bencher. I am happy to confirm to him that we will abide by the spending review 2021 decisions, and that that includes funding for core Innovate UK programmes, for association to Horizon Europe and for the Advanced Research and Invention Agency.
Valerie Vaz (Walsall South) (Lab)
The Minister needs to be much more specific about the Horizon Europe programme. Is he aware that the Nobel laureate Sir Andre Geim has said that top academics are leaving the country in despair because the Government are not negotiating on Horizon Europe? When will the Government do something—now?
Richard Fuller
The right hon. Lady is right about the importance of this issue. The United Kingdom absolutely wishes to move forward, and we would hope that the European Union would move forward apace with us to reach an agreement.
Mike Amesbury (Weaver Vale) (Lab)
The Economic Secretary to the Treasury (Richard Fuller)
The loan charge was announced in the 2016 Budget as part of a package of measures to tackle disguised remuneration tax avoidance. In the 2022 spring statement, it was estimated that the package would produce an overall Exchequer yield of £3.4 billion. The changes resulting from the 2019 independent review of the loan charge have reduced the Exchequer yield by an estimated £620 million.
Mike Amesbury
Too many ordinary people are facing huge bills, untold distress and, in some cases, personal harm and indeed suicide because of the loan charge scandal. Can the Minister and the Government now commit themselves to finally commissioning a truly independent review to deal with this mess?
Richard Fuller
I do not think that any Member who has met constituents who have been affected by the loan charge can have failed to be moved by the emotional and psychological impact that it has had on many of them. It is therefore right for me, as a Minister, to look at the issue carefully, and I can say to the hon. Member that I will engage all interested parties.
Dan Jarvis (Barnsley Central) (Lab)
Judith Cummins (Bradford South) (Lab)
The Exchequer Secretary to the Treasury (Felicity Buchan)
It is a pleasure to answer my first question at the Dispatch Box, and to reply to the hon. Member for Barnsley Central (Dan Jarvis), who responded to my maiden speech.
The White Paper “Levelling Up the United Kingdom” set out a clear plan to level up every corner of the UK by 2030. We are also driving growth and unlocking housing across the UK with our new investment zones, and we are continuing to invest billions in regional infrastructure. That includes £1.7 billion allocated under the levelling-up fund, of which £500 million went to the north.
Dan Jarvis
It is a pleasure to see the Minister at the Dispatch Box, and I congratulate her on her appointment.
Previous Chancellors have not delivered the level of transformative resource required for levelling up. I know that the present Chancellor understands the huge potential that exists throughout the north of England, but it seems to many of us that the levelling-up agenda is sipping in the last chance saloon. Can the Minister say what will be done differently under this new Chancellor?
Felicity Buchan
We are absolutely committed to the levelling-up agenda. South Yorkshire received £570 million through the regional cities transport scheme, £95 million through the levelling-up fund and £46 million through the shared prosperity fund, and our ambitions for levelling up continue.
Judith Cummins
Building on Bradford’s city of culture win and in a momentous year for Rugby League, I am supporting the plan for the transformation and regeneration of the home of the Bradford Bulls, the iconic Odsal stadium, to become a world-class sports, music and culture arena. This plan would be an incubator for the ambitions of the entire Bradford district, delivering more than £1 billion of socioeconomic benefits. Following the Bank of England’s repeated interventions, can the Minister confirm that round 2 of the levelling-up fund will still be going ahead in full, and will she and the Chancellor demonstrate that by meeting me, Bradford Council, the Bradford Bulls and the Rugby Football League to discuss our catalyst for growth?
Felicity Buchan
I can confirm that we will be going ahead with the second round of the levelling-up fund. There should be decisions by the end of the year, and I wish the hon. Lady well with her bid. An independent assessment of the bids is going on at the moment, but if that meeting is possible, we will do it. Clearly we would need to decide if that was appropriate. I congratulate her on her success in the first round of the levelling-up bids, where she got £20 million for the Squire Lane leisure centre.
Martin Vickers (Cleethorpes) (Con)
The renewable energy sector is vital to my constituency and the neighbouring area, and it has done a great deal to level up the local economy. Can the Minister give me an assurance that support for the sector will continue?
Felicity Buchan
We are very much committed to the sector, and I would be delighted to sit down with my hon. Friend to discuss this further.
Mark Pawsey (Rugby) (Con)
A key part of levelling up is the creation of investment zones, and the Chancellor will be aware of the proposals for a gigafactory at Coventry airport to support UK automotive manufacturing. Does the Minister agree that the joint application by the Labour Coventry City Council and the Conservative Warwickshire County Council for an investment zone at Coventry airport should be encouraged?
Felicity Buchan
We are encouraging all higher and local authorities to look at the investment zones and to apply. I think they are a great tool for development, so I would absolutely encourage that application.
Pete Wishart (Perth and North Perthshire) (SNP)
“Never has so much chaos been inflicted on so many by so few” will be the motto that will reverberate down the eons from this Government. Do they actually still believe in this fairy tale of levelling up? Is it not now just a matter of how far they are going to level us all down?
Felicity Buchan
Everything we are doing is being driven by a growth agenda so that we can level up all the way across the United Kingdom.
David Morris (Morecambe and Lunesdale) (Con)
The Eden Project North is, as far as I am aware, the only project in the second phase of the levelling-up round that has planning permission and land allocated. I would like to know when the decisions will be made so that we can get this shovel-ready scheme going. Eden has £50 million to put on the table, and we are asking for £50 million as match funding, in effect.
Felicity Buchan
Decisions on the second phase of the levelling-up round will be made by the end of the year, and I wish my hon. Friend well.
David Linden (Glasgow East) (SNP)
The Chief Secretary to the Treasury (Chris Philp)
I have regular discussions with my right hon. Friend the Secretary of State for Work and Pensions. If the hon. Member’s question relates to the operating budget of the DWP, we expect Departments to live within their existing CSR21 allocations. If his question relates to the level of benefits more generally, a statutory process is undertaken every year and no decisions have yet been made. They will be made in due course in the normal way.
David Linden
I thank the Minister for his answer, if not for his recent tweets. Has he had any representations from the Secretary of State for Work and Pensions to increase social security payments in line with inflation? Far too often, this Government talk about their agenda for growth, but failure to increase in line with inflation will result only in a growth in food banks in Easterhouse, in fuel poverty in Carmyle and in child poverty in Baillieston. When is the Minister going to do the right thing and commit to raising social security in line with inflation and not with earnings?
Chris Philp
I am obviously not going to offer any kind of running commentary on the ongoing internal discussions. I have said that the normal ordinary statutory process is ongoing, but the Government are mindful of the cost of living pressures that people are facing. I would draw the hon. Member’s attention to the large increase in the national minimum wage—I think about 7%—that took place last April or May, and there are now more vacancies in the economy than there are people on unemployment benefits.
Julian Smith (Skipton and Ripon) (Con)
Can the Minister confirm that the Government will not balance the forthcoming tax cuts on the backs of the poorest people in our country?
Chris Philp
The Government’s first objective is to ensure that the economy is growing. That will help to lift wages and to create new jobs and a sustainable tax base for our public services, but as we make the decisions that my right hon. Friend refers to, we are going to balance considerations of fairness and the cost of living pressures that people suffer with the interests of the taxpayers who are working hard to pay tax.
Mr Speaker
I call the Chair of the Public Accounts Committee, Dame Meg Hillier.
Dame Meg Hillier (Hackney South and Shoreditch) (Lab/Co-op)
The Minister talks about vacancies in the job market. There are vacancies, of course, but many of my constituents earn under £12,000 a year. They will not benefit from the tax cut, so they rely on universal credit to make up the gap. They cannot afford to work because of the high cost of childcare. They are already on the poverty line. What is his advice to them? Will he give us some comfort that the Government will make the right decision on uprating benefits?
Chris Philp
I have already explained that the normal statutory process is under way. When it comes to helping people on lower incomes, I mentioned the very significant increase in the minimum wage just a few months ago. We made an unprecedented intervention this year, amounting to £37 billion, which is disproportionately directed towards people on lower incomes. The one third of households on lower incomes are receiving an extra £1,200 this year.
The hon. Lady also referred to the fact that people earning £12,570 or less pay not a penny of national insurance and not a penny of income tax, which is thanks to the action of this Conservative Government.
David Simmonds (Ruislip, Northwood and Pinner) (Con)
The Economic Secretary to the Treasury (Richard Fuller)
The Government are encouraging business innovation in many ways, of which I will enumerate four. As I mentioned to my hon. Friend the Member for Mid Norfolk (George Freeman), there is a significant uplift in R&D expenditure, with £150 million of innovation loans over the spending period, research and development tax relief, long-term investment in technology and science—a competition is providing up to £500 million in Government support—and the British Business Bank is supporting innovative businesses, including through the future fund.
David Simmonds
Owners and entrepreneurs behind small businesses such as Code Ninjas in Bridge Street in my constituency are a key part of the Government’s growth agenda. What steps does my hon. Friend have in mind to enable such small and medium-sized enterprises to create further jobs and growth?
Richard Fuller
I am not sure if I got the name quite correct. Was it Comms Ninjas?
Richard Fuller
Oh, right. Perhaps I can visit my hon. Friend’s constituency to learn what the company does.
More generally, the growth plan focuses on important measures to support small businesses that wish to grow, including by making the £1 million annual investment allowance permanent, by looking to expand the amount of money that can be given through the seed enterprise investment scheme to help small businesses to grow and, most importantly, through the Government’s energy price support this winter.
Stephanie Peacock (Barnsley East) (Lab)
The Chancellor of the Exchequer (Kwasi Kwarteng)
This Government are relentlessly focused on growing the economy. Putin’s barbaric war in Ukraine continues to put pressure on gas prices so, with predictions of typical bills reaching between £4,000 and £6,500 a year, people needed immediate support to get them through this winter.
Last month we set out the growth plan, which will focus on breaking out of the high-tax, low-growth cycle in which we are currently trapped. This will put more money into people’s pockets and raise living standards for all our people. This week I wrote to my right hon. Friend the Member for Central Devon (Mel Stride) to inform him that I will set out the medium-term fiscal plan on 31 October, and I wish to remind the House that it will be accompanied by a full economic and fiscal forecast published by the Office for Budget Responsibility.
Stephanie Peacock
The Chancellor sat in a Cabinet that committed to increasing social security payments in line with inflation. Why will he not honour that promise?
Kwasi Kwarteng
As my right hon. Friend the Chief Secretary to the Treasury and I have repeatedly said, no decisions have been made. The usual statutory process is being undertaken, and we will have more detail at the time of the medium-term fiscal plan.
Priti Patel (Witham) (Con)
The Chancellor will know that Essex is a pro-growth county and a hub of economic growth. To support job creation and more economic growth, will he commit to funding the dualling of the A120 between Braintree and Marks Tey and, importantly, along the route that the county council, businesses and the local community have specified?
Kwasi Kwarteng
I pay tribute to my right hon. Friend for her role in the Cabinet and the Government. She is a fantastic colleague. I wish to confirm that the A120 between Braintree and the A12 remains under active consideration, alongside the rest of the third road investment strategy pipeline.
Rachel Reeves (Leeds West) (Lab)
Since the Chancellor’s disastrous mini-Budget just 18 days ago, we have seen wild swings in the value of the pound, gilt yields up 100 basis points in a single day and the Bank of England stepping in because of, in its words,
“a material risk to UK financial stability”.
The International Monetary Fund has now said that UK growth is to slow further next year. This is a British crisis, made in Downing Street; no Government are sabotaging their own country’s economic credibility as this Government are. Are the Chancellor and the Prime Minister the last people left on Earth who think their plan is working?
Kwasi Kwarteng
To pick up on a point, the IMF said today that the plan—the mini-Budget—has increased the forecast for growth. That is precisely the opposite of what the hon. Lady has said. It is very clear where we stand on this. We have pro-growth, pro-enterprise, pro-business Conservatives on one side and the anti-growth coalition on the other—they want to tax more and commit us to low growth.
Rachel Reeves
The Chancellor is in a dangerous state of denial, but the costs of these mistakes are all too real for everyone else: borrowing costs up; growth down; and mortgage payments set to increase by £500 a month. Now the Government scrabble around looking for cuts, hitting the most vulnerable and our public services. It does not need to be this way. Will the Chancellor put aside his pride, do the right thing for our country, end this trickle-down nonsense and reverse the Budget?
Kwasi Kwarteng
Which of the tax cuts do the Opposition want to stop? Do they want to stop the cut in the basic rate? Are they committed to having a high tax economy? The other thing I suggest is that the hon. Lady should get her facts right; the IMF today has said that our growth is going up, not down.
Caroline Ansell (Eastbourne) (Con)
The Economic Secretary to the Treasury (Richard Fuller)
Eastbourne is indeed beautiful, as are North East Bedfordshire and many other parts of the country. My hon. Friend is right to talk about the importance of VAT to the hospitality industry, particularly as we moved through the period of covid recovery. As we now move towards the growth plan, we need to look at the level of taxes on small businesses in general. That is a key part of the work I will be looking at as part of the tax simplification plan.
Kirsten Oswald (East Renfrewshire) (SNP)
The Financial Secretary to the Treasury (Andrew Griffith)
Push payment fraud is a growing problem, which the Government take very seriously. That is why we will be taking powers in the Financial Services and Markets Bill that will mandate reimbursement to consumers.
Theresa Villiers (Chipping Barnet) (Con)
Kwasi Kwarteng
My right hon. Friend was 100% right to notice that the energy intervention was exactly the right thing. We are going to have a commitment to fiscal responsibility, which will stabilise the economic situation and picture, and I am sure that her constituents will fully understand what the growth plan is all about: putting more money into their pockets so that we can have a growing and dynamic economy.
Allan Dorans (Ayr, Carrick and Cumnock) (SNP)
Kwasi Kwarteng
As my right hon. Friend the Chief Secretary said earlier, most of the measures that constitute the £37 billion intervention were targeted directly at the vulnerable constituents of all of us in this House. The energy price guarantee will also be greatly beneficial to people across our country who are suffering because of the cost of living. The Government are committed to a huge amount of intervention, and our top priority is making sure that everyone gets through challenging times as best they can.
Laura Trott (Sevenoaks) (Con)
Kwasi Kwarteng
Absolutely. I am in frequent contact with my right hon. Friend the Business Secretary, and we have sequestered and dedicated a pot to help people who are off the gas grid. We are happy to help my hon. Friend and her constituents in this challenging time.
Rachael Maskell (York Central) (Lab/Co-op)
Kwasi Kwarteng
My hon. Friend the Financial Secretary to the Treasury and I are engaged with all the regulators, particularly the Prudential Regulation Authority, and we will be absolutely committed to getting to the bottom of what has happened, particularly in the long-dated gilt market, which has been over-levered in the past few weeks.
Mr Mark Harper (Forest of Dean) (Con)
Kwasi Kwarteng
As I have said repeatedly, I am not going to prejudge what is in the medium-term fiscal plan, which will be fully scrutinised not only by the OBR but, I am sure, by my right hon. Friend. I do not think that it is right for me to prejudge or anticipate those measures today.
Christine Jardine (Edinburgh West) (LD)
Despite the Chancellor’s confident words, the IMF is predicting that inflation will last longer in this country than in other similar economies. In my constituency of Edinburgh West, which has half the national average rate of unemployment and claimants, people are so concerned that more than half of them are talking about cutting their essential budgets, and, according to recent reports, 20% are concerned that they might have to turn to food banks for the first time. When will the Chancellor reassess the potential impact of this growth plan and accept that maybe he has got it wrong?
Kwasi Kwarteng
The IMF specifically said this morning that the 2023 forecast for growth in this country has gone up as a direct consequence of the mini-Budget. In respect of helping constituents up and down the land, we have already committed £37 billion of energy support this year and a further £60 billion to houses and businesses over the next six months, and we are committed to making sure that every one of our constituents gets through this winter as best they can.
Sara Britcliffe (Hyndburn) (Con)
Numerous residents such as those at Harwood Bar caravan park have been in touch with me about the £400 energy support scheme. The previous Chancellor confirmed that there was an equivalent scheme for those in caravan parks and park homes. Could the Chancellor please provide an update for my constituents in Hyndburn and Haslingden?
Kwasi Kwarteng
As I said in relation to heating oil, a pot of money is going to be reserved to help people who are off the grid. We have already made announcements about that, but I would be very happy to speak with my hon. Friend and my right hon. Friend the Business Secretary.
Christian Matheson (City of Chester) (Lab)
The upkeep of the Chester city walls costs about £600,000 a year, but that money has to come out of the local authority’s highways budget. Can the Government set aside a small amount of money to help local authorities with the stewardship of internationally important heritage assets?
The Exchequer Secretary to the Treasury (Felicity Buchan)
The Government continue to support the heritage and cultural sector. There are several sources of funding from Government arm’s length bodies such as the National Lottery Heritage Fund and Historic England’s repair grants, so I encourage the hon. Gentleman to look into those.
Paul Holmes (Eastleigh) (Con)
Since the 1970s, residents in Eastleigh have long been expecting, and have been promised at times, funding for the Chickenhall Lane bypass, including being allocated funding in the 2015 Red Book. Will the Minister agree to meet me and Hampshire County Council to discuss getting this sorted for people who have simply waited far too long?
The Chief Secretary to the Treasury (Chris Philp)
My hon. Friend is a tireless advocate for that and other projects in his constituency. I and perhaps colleagues from the Department for Transport would be delighted to meet him and his county council colleagues to discuss that important project.
Rushanara Ali (Bethnal Green and Bow) (Lab)
The Chancellor was warned that unfunded tax cuts would force the Bank of England to increase rates and that is exactly what has happened. The Bank of England has said today that, in effect, the mini-Budget has caused a material risk to Britain’s financial stability. Can the Chancellor explain how people are supposed to pay their mortgages, which have gone up by £500 on average and £900 in London? What is he going to do about it, because it is not acceptable that his incompetence is risking people’s livelihoods?
Kwasi Kwarteng
I have two points to make on that. First, the Bank of England certainly did not say that the mini-Budget increased risk. Secondly, as rates are rising throughout the world, there is exposure. That is precisely why we thought that it was absolutely right to have the energy intervention, which is for two years—let us not forget that the Labour plan was for only six months —and to reduce the burden on people by reducing taxes.
Steve Brine (Winchester) (Con)
Talking to people working in the housing industry in Winchester, I have found that they are not convinced that the stamp duty reduction will help first-time buyers while inflation and particularly mortgage rates are creeping up. Lenders are coming back with some good rates, and the Chancellor will know that, but when he delivers his statement on 31 October, will he ensure that it has confidence at its heart and that it is—knowing him, it will be—a relentlessly positive statement, so that we can push confidence right the way through the market?
Kwasi Kwarteng
It will be relentlessly upbeat. These are challenging times, but we have to live within our means and there will be an absolute iron commitment to fiscal responsibility.
Steve McCabe (Birmingham, Selly Oak) (Lab)
Will the Minister admit that, if the Government do not increase the guarantee credit component of pension credit in line with inflation this year, they are effectively cutting the incomes of our poorest pensioners when they need help most?
Kwasi Kwarteng
We are absolutely committed to fairness and to helping the most vulnerable in our society—we are always committed to that—and I will not prejudge or anticipate measures in the medium-term fiscal plan this afternoon.
Dr Ben Spencer (Runnymede and Weybridge) (Con)
Will my right hon. Friend confirm that the cuts to national insurance will help not only working households, but businesses and the public sector, such as schools?
Kwasi Kwarteng
My hon. Friend and constituency neighbour is absolutely right. The reversal of the planned increase in national insurance will help businesses, individuals and the institutions to which he refers.
Emma Hardy (Kingston upon Hull West and Hessle) (Lab)
Can the Chancellor state how much the investment zones are worth and how they will be funded?
Kwasi Kwarteng
There will be more detail about investment zones. My right hon. Friend the Secretary of State for Levelling Up, Housing and Communities will be updating the House on the specifics of the zones.
Kevin Hollinrake (Thirsk and Malton) (Con)
Thank you, Mr Speaker. The UK has rightly frozen around £30 billion of Russian foreign currency reserves. A number of countries are moving from freezing those assets to seizing them to pay reparations to Ukraine. Will my right hon. Friend look at similar measures from the UK?
Kwasi Kwarteng
Those measures have been discussed in the past; I think my right hon. Friend the Member for Surrey Heath (Michael Gove) talked about that earlier in the year. Those schemes are always being looked at in the light of what is an increasingly bleak and volatile situation in Russia and Ukraine.
Ukraine
(1 year, 7 months ago)
Commons ChamberRead Full debate Read Hansard Text Watch Debate Read Debate Ministerial Extracts
Mr Tobias Ellwood (Bournemouth East) (Ind)
(Urgent Question): To ask the Secretary of State for Defence to make a statement on our policy to deter and, if required, respond to the use of nuclear weapons by President Putin.
The Minister of State, Ministry of Defence (Alec Shelbrooke)
Russia’s continuing assault on Ukraine is an unprovoked and premeditated attack against a sovereign democratic state and it continues to threaten global security. This week, my right hon. Friend the Secretary of State for Defence is meeting with Defence Ministers in Brussels to discuss further support for Ukraine, and later today my right hon. Friend the Prime Minister will be speaking to members of the G7.
I can assure the House that the UK and our allies remain steadfast and united in our support for Ukraine. As previously set out to the House, Defence is playing a central role in the UK’s response to the Russian invasion, providing £2.3 billion-worth of military support and leading in the international response.
We were the first European country to provide lethal aid to Ukraine. To date, we have sent more than 10,000 anti-tank missiles, multiple-launch rocket systems, more than 200 armoured vehicles, more than 120 logistics vehicles, six Stormer vehicles fitted with Starstreak launchers and hundreds of missiles, as well as maritime Brimstone missiles. In addition, we have supplied almost 100,000 rounds of artillery ammunition, nearly 3 million rounds of small arms ammunition, 2,600 anti-structure munitions and 4.5 tonnes of plastic explosive.
Defence is also providing basic training to Ukrainian soldiers in the UK. To date, we have trained over 6,000 Ukrainian recruits in the UK, and we continually review and adjust the course to meet their requirements. Defence will continue to respond decisively to Ukraine’s requests and the equipment is playing a crucial role in stalling the Russian advance and supporting our Ukrainian friends.
President Putin’s comments on nuclear are irresponsible. No other country is talking about nuclear use. We do not see this as a nuclear crisis.
Mr Ellwood
Thanks to our support and that of allies, Ukrainian forces have done the unthinkable in pushing back Russian force. However, with Putin now on the back foot and the third largest military in the world humiliated, this conflict has entered a darker chapter and we cannot be bystanders. Putin cannot be seen to lose this war and, as his response to the Kerch bridge attack shows, he is stooping to ever more unconventional tactics. The threat of Putin’s turning to tactical low-yield nuclear weapons remains low, but it has increased, posing questions for Britain and the United States that must be addressed before, not after, that line is crossed.
Russian military doctrine allows first use of nuclear weapons in response to conventional attacks on Russian soil. That is why the sham referendums took place in the Donbas region—so that Putin could claim it was part of the motherland. In response, as things stand, our formal position is so-called strategic ambiguity: the promise of a response, but no public clarity on what that might be.
We gained a reputation for blinking when it came to Georgia, on chemical weapons use in Syria and when the Crimea was annexed. I believe we should state now what our conventional response would be to Putin’s either deploying nuclear weapons directly or targeting hazardous infrastructure such as chemical or indeed civil nuclear plants. Such clarity could be the very deterrent that helps to prevent such hostile actions from taking place, rather than the vague position we have now.
Our adversaries—not just Russia—must know and fear the military consequences of daring to resort to using nuclear weapons, even if they are low yield. This is not an operational decision but a political call. We have a duty to do all we can to deter Putin from going nuclear. Let us not leave it to chance. Let us exhibit the robust statecraft and engagement that this unpredictable war now requires.
Alec Shelbrooke
I am grateful for my right hon. Friend’s comments. I reiterate what I said at the start: President Putin’s comments are irresponsible. No other country is talking about nuclear use, and we do not see this as a nuclear crisis. President Putin should be clear that, for the UK and our allies, any use of nuclear weapons at all would break the taboo on nuclear use that has held since 1945 and lead to severe consequences for Russia.
President Putin has launched an illegal and unprovoked invasion of Ukraine. His forces continue to commit senseless atrocities. The people of Ukraine seek only to restore their sovereignty and territorial integrity, and we will continue to support Ukraine’s right to defend.
My right hon. Friend speaks of tactical nuclear missiles, but nuclear is nuclear. I reiterate what the Secretary-General of NATO said:
“President Putin’s nuclear rhetoric is dangerous. It is reckless. NATO is of course vigilant. We monitor closely what Russia does. Russia must understand that nuclear war can never be won and must never be fought. And it will have severe consequences for Russia if they use nuclear weapons. And this has been very clearly conveyed to Russia. So we will continue to support Ukraine. And we will continue to support them in their efforts to liberate even more territory, because they have the right to do so.”
It is not and never has been tactically smart to outline exactly what the response would be to any potential situation. We will continue on the lines that this Government and, indeed, the Secretary-General have outlined.
Luke Pollard (Plymouth, Sutton and Devonport) (Lab/Co-op)
I welcome the new Minister to his place. It is because Ukraine is winning that Putin’s behaviour is becoming so volatile. The sham referenda, the irresponsible nuclear sabre-rattling, the missile attacks on civilians—these are the hallmarks of a tyrant on the ropes and a tyrant who is losing.
Labour stands with our friends in Ukraine. With our unshakeable commitment to NATO, the Minister knows that he has our full support for the actions the Government are taking to help Ukraine win. Yesterday’s missile attacks on civilians are a significant escalation. The NATO Secretary-General was right to describe the attacks as “horrific and indiscriminate”.
Ministers have Labour’s full support in countering Putin’s aggression. In that spirit, I ask the Minister when he will set out a long-term strategy of support for Ukraine, so that we can make sure that Putin’s war ends in failure. Can he confirm that the NLAW—next generation light anti-tank weapon—replacement orders have finally been placed? When does he expect to replenish our depleted weapons stockpiles? What assessment has he made of the worrying statements by Lukashenko and the continued presence of Russian troops and armour in Belarus?
I would be grateful if the Minister addressed the concerning media reports of the withdrawal of almost 700 British troops currently deployed to our NATO ally Estonia, without any planned replacement. That risks sending the wrong message at the wrong time, and it has worried our international allies. We cannot walk away until the job is done. With that in mind, will he reassure the House that he will not withdraw any further UK troops from our allies, and that the UK will meet our NATO commitments?
Finally, as more bodies are unearthed at the sites of war crimes, we remember them and we remember those killed yesterday in Putin’s criminal missile strikes. Does the Minister agree that the best justice for those killed is victory for Ukraine, a free and sovereign nation, and war crime tribunals for those responsible?
Alec Shelbrooke
I am grateful to the hon. Gentleman for his kind comments and I look forward to working across the Dispatch Boxes on these vital issues.
On the hon. Gentleman’s comments about the horrific war crimes we have seen unfold every time there is a Russian retreat, I think that every decent human being is appalled. I am proud that the UK Government are funding the International Criminal Court, and we will do everything we can to support Ukraine in bringing the perpetrators of these horrific crimes to justice.
I hope the hon. Gentleman will forgive me if I come back to him with a written answer on the postures from Lukashenko.
On Estonia, the overall capability of our commitment there is far more important than the number of troops alone. We have committed to strengthening that capability over the forthcoming years. I was in Estonia, and indeed Latvia and Lithuania, in my previous role in the NATO Parliamentary Assembly. I have seen at first hand the work that takes place there. All our NATO allies can be reassured that we are committed to making sure that the NATO frontline is secure. We work with colleagues and there will be variation in how that is done.
With regard to support, the hon. Gentleman will have noticed that my right hon. Friend the Secretary of State for Defence has set up the international support fund. This country contributed £250 million to that, and I believe the total figure is now above €400 million. That is in place to help support Ukraine as this war moves forward and the conflict carries on, so that it can use that money not only in the conflict but to rebuild and, of course, ensure it has the ammunition supplies and things it needs.
With regard to NLAW and our weapons supply, we are working with industrial supply chains and are confident that we will have the ability to defend ourselves and to give support, but we do not comment on operational capability beyond that.
Sir Iain Duncan Smith (Chingford and Woodford Green) (Con)
I welcome my right hon. Friend to his position. What has happened over the past few days is a war crime if ever there was a war crime, and I hope that the Government and the whole alliance will now commit to the pursuance of all those responsible for the deliberate targeting of civilian areas. There can be no respite and we should be sanctioning anybody we think has had anything to do with it.
I agree that ambiguity is not the same as no plan. The purpose behind what Putin is doing now is to split the alliance—everything he does is to split the alliance. What he wants is for part of the alliance to get wobbly and worried about the potential use of nuclear weapons and to start calling for negotiations. The critical issue here is that all of the alliance must remain united on the idea that we have a plan, but it is for the Minister to judge whether we would ever use nuclear weapons, not for us to say whether we would, and the alliance would stay together.
Alec Shelbrooke
I am most grateful to my right hon. Friend for his kind comments. On his point about nuclear rhetoric, we have seen this pattern before. President Putin uses it as a sabre to rattle, to try to deter us and distract our efforts in Ukraine. It simply will not work because, fundamentally, NATO is a nuclear defensive alliance, and it will be for all the time that nuclear weapons exist. It is one that has been successful, and it is one that President Putin should take notice of. What is important at this moment in time, as we talk about the nuclear sabre-rattling, is that we stay calm, analyse the situation as it is and demand that he steps back from this dangerous nuclear rhetoric, so that there cannot be any miscalculation on any side as we move forward.
On war crimes, I fundamentally agree with what my right hon. Friend said. We will do everything to bring to justice those who have perpetuated these horrific crimes, which go against every aspect of the Geneva convention. Every day that this war goes on, more and more war crimes are committed.
Dave Doogan (Angus) (SNP)
I am pleased to welcome the new Minister to his place. These barbaric attacks by Russia on Ukraine’s civilian population and infrastructure, together with its extremely unwelcome nuclear rhetoric, demonstrate the renewed urgency with which Ukraine’s defensive capabilities need to be upgraded, particularly its air defences, such as that which Germany and the United States are sending. What anti-air assets is the UK sending, and how can that be accelerated and increased?
Moreover, is the UK, like Estonia, preparing to send more winter equipment to assist defensive operations in Ukraine throughout its long, harsh winter? Similarly, what further assistance will the world-leading cold weather combat specialists 45 Commando, based in Arbroath, be tasked with to support Ukraine’s defence forces in their winter combat operations? The Minister attempted to justify the halving of numbers in Estonia by saying that this is not a numbers game, but of course force strength is all about the numbers, and I wonder how he thinks they will be viewing that in Estonia and Moscow. Perhaps he can explain to the House what recent behaviour from Russia has indicated a lessening threat to our NATO allies on the eastern flank, from whom the UK appears to be shamelessly walking away.
Alec Shelbrooke
I thank the hon. Gentleman for his kind comments. On Estonia, we are not talking about the UK walking away from a NATO ally; this is about NATO defence, and NATO operations that vary over time. We work with our allies. I have recently been to these countries, and have seen the exercises taking place and how we play a part in them. We should not focus on just one area and then suggest that we have walked away; we have not.
On the hon. Gentleman’s air defence questions, of course we have Stormer vehicles and Starstreak missiles. We remain committed to delivering what Ukraine needs, when it asks for it, in the light of how, tactically, it can best be used. Operational capabilities are the subject of constant conversation between the Ukrainian and British Governments. On cold weather preparation, we are working exceptionally closely with the Ukrainians to supply them with the equipment and training that they need to get through this winter.
Dr Liam Fox (North Somerset) (Con)
I am delighted to see my right hon. Friend in his position. He talked about the coalition of countries that have been helping Ukraine to defend itself, which includes the United Kingdom—something of which we should be very proud. Will he confirm that Iran has supplied Mohajer-6 and Shahed-series unmanned aerial vehicles to Russia? What other countries are giving logistical support and weaponry to Russia in its war of choice against the Ukrainian people?
Alec Shelbrooke
I am grateful to my right hon. Friend for his comments. I hope that he will forgive me if I cannot answer that question directly; I will write to him when I have the facts and the answers.
Ellie Reeves (Lewisham West and Penge) (Lab)
Yesterday, I was talking to Natalia, a Ukrainian teacher who came to my constituency with her seven-year-old twins when the war broke out. She watched in horror over the weekend as bombs rained down on her home city of Kyiv. Her husband and mother are hiding in a bomb shelter. Natalia’s six-month placement under the Homes for Ukraine scheme is at an end, and she is terrified of having to return with her children. What conversations has the Minister had with his colleagues in the Home Office and in the Ministry of Housing, Communities and Local Government to ensure that those who have fled war do not face homelessness as placements come to an end?
Alec Shelbrooke
The hon. Lady raises an important issue, which was mentioned earlier. If she sends me the exact details, I will talk to colleagues in the Home Office.
Richard Graham (Gloucester) (Con)
Events on the edge of Ukraine have become more and more alarming over the last few days. Clearly there is a major role for NATO in trying to bring back a peaceful situation. What information can the Minister, whom I congratulate on his new position, share with us today on talks that we have had with countries such as China and India, which may have useful leverage with Putin?
Alec Shelbrooke
Of course, the response to the situation in Ukraine is Government-wide; it involves the Foreign Office as much as the Ministry of Defence. Responsibility for the relationships that my hon. Friend mentions sits in the Foreign Office, and I am sure that my right hon. Friend the Foreign Secretary will have heard his comments.
Hilary Benn (Leeds Central) (Lab)
Do the Government regard the Kerch bridge, which links Russia with Ukrainian territory seized by Russia in 2014, and which was attacked over the weekend, as a legitimate military target? Would the Minister care to contrast that target with the pictures we saw yesterday of a large missile crater in Kyiv, right next to a children’s playground?
Alec Shelbrooke
Of course, Crimea is Ukrainian territory that has been invaded. Any allegations about what happened at the bridge, and any questions about what is behind the attack, are for the Ukrainians to answer, but what happened at Kyiv is simply a war crime. We will make every effort to hunt down the people responsible and to bring them to justice.
Dr Julian Lewis (New Forest East) (Con)
My right hon. Friend is a reassuring presence at the Dispatch Box, and I congratulate him on his recent appointment to his post. Does he agree that all that will deter Putin from the use of nuclear weapons is the thought that: a) they may be ineffective; and b) their use may not result in the west withdrawing its military support for Ukraine, which is what has enabled it to resist successfully so far? Is it not therefore imperative that the west makes it clear that the support will continue? Did he note the remarks of General David Petraeus, who said that western support, in conventional terms, would be redoubled if Putin made any such move?
Alec Shelbrooke
I am grateful to my right hon. Friend for his kind comments. Indeed, General Petraeus really just outlines the situation overall that NATO is united. It is a defensive force and a nuclear defensive force. I am proud that this country has had a constant at-sea nuclear deterrent for almost 54 years. Statistically, that is deemed to be impossible, but it is something we have achieved and continue to achieve. That acts as a major counterbalance to any leader of a country who may be thinking that nuclear weapons may be something to use. The policy has been shown to work, but we have to calm down and take the air out of the talk about where we are moving with the nuclear rhetoric. It is highly irresponsible of the Kremlin to be upping the rhetoric on nuclear weapons, and I hope that it will draw back from those comments, because the last thing we want to see is any miscalculation and we must make sure that it does everything to take it out. Fundamentally, to answer my right hon. Friend, the NATO alliance is showing just how united it is and that it will stand up to this level of nuclear threat.
Richard Foord (Tiverton and Honiton) (LD)
I thank the right hon. Member for Bournemouth East (Mr Ellwood) for tabling this urgent question on the enormously important issues that we have been discussing. I must disagree with his suggestion in newspapers today that we reconsider no-fly zones over Ukraine’s cities and critical national infrastructure, and expediting Ukraine’s membership of NATO. Putin is ever weaker at home in Russia, and while this is a failed operation in Ukraine against Ukraine, his popularity could grow significantly in Russia if his attempts to paint this as a NATO-Russia conflict are successful. Can the Minister outline what further steps the Government intend to take to ensure that we and all of our NATO allies are as one in deciding what additional support can be provided to Ukraine?
Alec Shelbrooke
I am grateful to the hon. Gentleman for his comments, and I think his attitude to no-fly zones and NATO membership is based in reality. What we are seeing is the NATO alliance and other allies around the world determined to give the support that we can give to Ukraine. There is no suggestion of backing down on that support, and we have support from outside the NATO allies. It is an international coalition that is helping to train Ukrainian troops, helping to contribute towards the international funds and, indeed, supplying lethal and non-lethal aid, and that alliance is growing stronger.
David Mundell (Dumfriesshire, Clydesdale and Tweeddale) (Con)
I refer to my entry in the Register of Members’ Financial Interests.
During the recess, I had the opportunity to travel to Lviv and Kyiv to see the work of the HALO Trust, which is a charity based in my constituency that focuses on de-mining and attempting to bring areas back to a degree of normality. I was struck by two things in Ukraine. One was the gratitude of the people for the support that this country has given during the conflict, but the other was their efforts to bring about a degree of normality. Does the Minister agree that yesterday’s events were a deliberate attempt by Russia to disrupt the normality that civilians are trying to achieve in these cities and across Ukraine? Does he acknowledge that they are indeed war crimes because they are focused on civilians? Does he also agree with me that, given the resolve that the people of Ukraine have shown to date, they will not succeed?
Alec Shelbrooke
I am grateful to my right hon. Friend and, yes, I agree with what he has said. Indeed, last Tuesday I visited Ukrainians being trained by our forces in north Yorkshire, and I managed to speak to some who were on day one of their training. What struck me was their determination, no matter their age, to make sure that their country, their sovereign land, their families and their lives will be returned to normal, and they will fight back against this enemy, so I completely agree with what my right hon. Friend said.
Chris Bryant (Rhondda) (Lab)
I warmly congratulate the Minister. He looks very comfortable at the Dispatch Box, although obviously we do not want him to feel too comfortable there. He is right to say that Putin’s targets yesterday were either deliberate or deliberately indiscriminate, and either way that amounts to a war crime.
May I ask him about Elon Musk, who seems to be playing a double game at the moment, and whose tweet earlier this week was profoundly unhelpful? There are also questions about why there have been outages of the Starlink system, which may have made bigger difficulties for Ukraine. Is there a moment at which we might have to consider sanctioning Elon Musk?
Alec Shelbrooke
Sanctions remain under review at all times, and everything will be taken into consideration in the round. We must always ensure that we are well aware of all the facts rather than just reacting to social media, and then those things can be looked at, including whether any sanctions would be appropriate.
Alex Chalk (Cheltenham) (Con)
I warmly welcome the Minister to his post.
Today is Ukraine Day at Cheltenham literature festival, and this morning I had the extraordinary privilege of meeting musicians, poets and writers who have travelled from bombarded cities to come to Cheltenham to perform. Will the Minister join me in thanking the British Council and Cheltenham literature festival for ensuring that our support is not just military, but extends to supporting the culture of that great country?
Alec Shelbrooke
I am delighted to do that. I know my hon. and learned Friend will have been deeply involved with his constituents and the Ukrainians, and that his office will have given them the warmest welcome possible.
Mr Toby Perkins (Chesterfield) (Lab)
Putin’s murderous actions over the weekend are a surefire sign of his desperation, which comes partly from the host of desertions among the Russian military, including from an army, thought to be his pride, that is in retreat. Should we be making the point that every person in Russian uniform who commits a war crime will be sought, not just those in positions of power, and should we be doing everything we can to increase the scale of Russian desertions and undermine Putin’s campaign that way?
Alec Shelbrooke
I am grateful to the hon. Gentleman and I completely agree with him. We must not underestimate the scale of the atrocities that are being committed, which are war crimes. Many Members of the House have served in the military, and many have been in the battlefield. They are trained to the laws of the Geneva convention and the laws of the battlefield, as are many people in Russia—certainly the Russian leaders will know those laws. There are consequences to breaking them, and I am proud that we are putting funding, investment and resources into the International Criminal Court to bring those who do so to court. I know that whatever we do will have support across the House. We have to say that it does not matter who someone is, from a squaddie to a general—if they have committed a war crime, we will find them and send them to prison. If they do not believe that, they should remember that we are still sending former SS officers who are almost in their hundreds to prison today.
James Gray (North Wiltshire) (Con)
The Russian doctrine of escalate to de-escalate almost certainly means that when the rats are cornered—and the rat Putin and his rat-like friends are cornered right now—they will lash out. That is almost without question. I hope the Minister is right in thinking that that will not necessarily be a nuclear lash-out—I think that is unlikely, although we must be ready for it—but there are many other ways he could lash out, including with cyber, chemical and biological weapons, or economic weapons. That might involve covert operations beyond Ukraine, not necessarily in Ukraine itself. What preparations has the Ministry of Defence made? I do not want details, which the Minister will quite rightly not tell us, but I hope the MOD is making careful preparations for all sorts of hybrid warfare that may now occur, including in places other than Ukraine.
Alec Shelbrooke
My hon. Friend raises points that we have spoken about many times in the NATO Parliamentary Assembly, and he will be aware that chemical, biological, hybrid and cyber warfare are certainly in our military planning and strategy, as indeed are nuclear weapons. Huge amounts of resources go into cyber capability and other such areas. Indeed, part of the memorandum that the former Prime Minister signed with Finland and Sweden was to give support in those areas if they were to be attacked. Overall, I assure my hon. Friend that all those issues are discussed in the round. I could not comment on specific operational capabilities, but I hope I can reassure him that those issues are treated just as seriously.
Fleur Anderson (Putney) (Lab)
I went to Kyiv recently with a group of other parliamentarians, and there was no conversation that did not include the need for justice and the need to take all war criminals to court. What discussions has the Minister had about not just freezing assets but seizing and repurposing them to rebuild Ukraine? Has he had discussions about a special tribunal to work alongside the ICC to prosecute acts of aggression and bring more perpetrators to justice?
Alec Shelbrooke
I am grateful to the hon. Lady for the intent of her questions. I have not had those discussions—obviously, I am early in the role—but I will take those comments back to other Ministers. Overall, that question goes to allies and the international community—it is not just about our approach, because it is not just this country seizing assets and sanctioning, and it is not just this country that will be involved in taking things forward with the ICC. I cannot answer her questions specifically, but I am sure that colleagues have heard her and, if she would like to write to me with more details, I would be happy to respond.
Mr Jonathan Djanogly (Huntingdon) (Con)
As Russia loses on the battlefield, it seems to be engaging in retribution through missile attacks on civilian areas. When the all-party parliamentary group on Ukraine recently went to Kyiv, the Defence Minister said to us that if refugees are to be encouraged to move back to Ukraine and internally displaced persons are to be encouraged to move back to reoccupied areas, defence against missile attack will become essential. Other countries are looking at that seriously and providing anti-missile support. Will we do so as well?
Alec Shelbrooke
Indeed, and we are already supplying levels of air support. What I said earlier remains relevant: we will continue to work with the Ukrainians to try to deliver what they need to defend their country. We are already supplying air defence systems.
Gavin Robinson (Belfast East) (DUP)
I wish the Minister well as he takes up his new role. He is right to say that we have engaged with and are responding to the requests from Ukraine, but he should know that when we provided Starstreaks and NLAWs, which are made in my constituency, we did so in the face of a request for the imposition of a no-fly zone, and we did not go that far. Even though we are giving surface-to-air missiles and air defence capabilities, Ukraine is, today and yesterday, still asking for more. This morning, the US announced that it would provide new high mobility artillery rocket systems for greater air defence capacity. Will the Minister assure us—if not today on the Floor of the House then in the coming days—that he will engage to ensure that we are responding to the requests that Ukraine is making?
Alec Shelbrooke
We are indeed responding to as many requests as we can from Ukraine. The Government’s policy on no-fly zones remains the same; it has not changed. However, wars and conflicts develop over time and we are seeing large advances. We will also see a change in the weather as winter sets in. All of those things create a different operational demand from what was taking place three months ago. We therefore work closely with our Ukrainian colleagues to try to deliver to them what they need to carry out operations successfully.
Andrew Bridgen (North West Leicestershire) (Con)
Does my right hon. Friend agree that despite President Putin’s heightened rhetoric and threats to use nuclear weapons irresponsibly in Ukraine, that may just be further maskirovka? His track record shows that, in desperation, he is far more likely to resort to chemical weapons. What should NATO’s response be to that?
Alec Shelbrooke
I am grateful to my hon. Friend, who characterises the actions of President Putin in desperation quite well. The reality is that NATO treats all weapons of mass destruction with the same seriousness and that, operationally, how to respond to such things is discussed constantly. Again, I may have to disappoint my hon. Friend. It would be foolish to outline exactly what the response would be to any weapon of mass destruction because, if President Putin does not know what the consequences would be, he cannot make calculations about using them in the first place.
Dame Diana Johnson (Kingston upon Hull North) (Lab)
I congratulate the Minister on his new role. Further to the question put by my hon. Friend the Member for Lewisham West and Penge (Ellie Reeves), may I ask whether there have been any discussions with the Department for Levelling Up, Housing and Communities, which is responsible for the Homes for Ukraine scheme? Many councils are worried that they will have to deal with homelessness among many of the Ukrainians who are here on that scheme.
Alec Shelbrooke
I am grateful to the right hon. Lady. That has not come across my desk at this stage, but we will make sure that the Home Office and DLUHC pick up on it.
Dan Jarvis (Barnsley Central) (Lab)
I welcome the Minister to his new role. Specifically in response to the war in Ukraine, the Prime Minister made a commitment to update the integrated review, and we now know that Professor John Bew is leading a process from Downing Street that aims to report before Christmas. Given the concern expressed by Members across the House about potential loss of capability and personnel, does the Minister think that it would be prudent not to make any cuts to defence until we know what the outcome of that review is going to be?
Alec Shelbrooke
As the hon. Gentleman knows, it is a commitment of the Government to increase spending on defence—to move to 3% by the end of the 2030s, with 2.5% on the way—but we have already increased defence spending by £24 billion in real terms since 2020, and there are no plans to cut the defence budget at this time.
Mike Amesbury (Weaver Vale) (Lab)
I welcome the Minister to his place. I had a conversation today with the Local Government Association, which informed me that 1,915 Ukrainian families have presented as homeless—a point that my hon. Friends have raised. Will the Minister have urgent conversations with the Secretary of State for Levelling Up, Housing and Communities and the relevant Home Office Minister? It really is life or death for many, and housing them will help motivate the troops in Ukraine.
Alec Shelbrooke
My colleagues and I will indeed take up the issues that are being raised on the Floor of the House with the relevant Departments. We will make sure that those conversations are taking place.
Sammy Wilson (East Antrim) (DUP)
Under Putin, Russia has become a terrorist state and a terrorist sponsoring state, whether it is killing people in our own country whom it regards as dissidents, blowing up infrastructure or now, of course, rape and pillage across Ukraine. The latest act of terror, of course, is terror from the skies. Can the Minister give us an assurance that he will work with our Government and with Governments across Europe to ensure that, if no-fly zones are imposed across Ukraine, we will at least provide Ukraine with the necessary defences to ensure that the terror from the skies is dealt with effectively?
Alec Shelbrooke
I can give that assurance to the right hon. Gentleman, because that is indeed what we are doing. As I made clear earlier, the Government’s position on no-fly zones remains unchanged, but we are delivering air defence capability to the Ukrainians. We will continue to deliver on that capability, along with other international allies. As I know the hon. Gentleman appreciates, a mix of equipment is going into Ukraine from various allies, and that has to be in reaction to what the Ukrainians need. I am trying to give him the reassurance that we are doing everything we can with all international partners to deliver what the Ukrainians need on the ground.
Neil Coyle (Bermondsey and Old Southwark) (Ind)
I congratulate the Minister on his new role. Given the situation in Ukraine and wider volatility, will he at least agree to review the decision to remove UK forces from Estonia, or is he unable to do so because it forms part of wider armed forces cuts by his Government, which are alarming our allies, undermining our security and directly breaking a 2019 Conservative manifesto commitment?
Alec Shelbrooke
As I made clear earlier, we remain committed to the NATO alliance and to providing what resources NATO needs, where and when they are needed. The UK has not withdrawn from Estonia. We are still involved in the Baltic states. We are involved in the joint expeditionary force and the forward presence. It is not fair to say that Britain is walking away from these countries, because we are simply not.
Mr Barry Sheerman (Huddersfield) (Lab/Co-op)
I welcome the Minister to his place; I think he is doing very well this afternoon. This is probably the most perilous time that I can remember, as a long-standing Member of the House. It is dangerous and we should be very careful. He said that we should lower the rhetoric and show quiet determination. On that note, can we see more presence with the United States and the rest of the NATO allies meeting together and showing quiet assurance firmly against what is happening? This weekend, we saw the shift politically of Russia to the extreme right, with the appointment of a new general in charge. We are in perilous times.
Alec Shelbrooke
I thank the hon. Gentleman—those are kind words from somebody of his experience—and he is absolutely right to speak about the real danger that the world is in, with Russia raising the nuclear rhetoric, which does need to be brought back down. The most important thing in defence and international affairs is patience, calmness and deterrence. Not outlining clearly what our reactions would be is an important part of a deterrent. The hon. Gentleman is absolutely right that it is important that we carry on working with allies, and the Secretary of State for Defence will meet other Defence Ministers shortly. All those issues are about making sure that we are united, have the best strategy and, of course—I hope this reassures the hon. Gentleman —that we try to de-escalate. We can all imagine some of the terrifying consequences, but we hope that we can continue with what have been successful policies for decades now and calm down the rhetoric.
Matt Rodda (Reading East) (Lab)
I welcome the Minister to his place. Following the dreadful attacks this week, many Ukrainian families in Britain will understandably be thinking again about when they will return home. Further to the questions from my hon. Friend the Member for Lewisham West and Penge (Ellie Reeves) and my right hon. Friend the Member for Kingston upon Hull North (Dame Diana Johnson), what additional support is the Government considering for councils and local Ukrainian community centres in the UK, which are doing so much to support families at this very difficult time?
Alec Shelbrooke
As I said, I cannot answer that question from the Dispatch Box, but I will look into it and respond to the hon. Gentleman in writing.
Margaret Ferrier (Rutherglen and Hamilton West) (Ind)
With reports of nuclear plant employee, Valeriy Martynyuk, being kidnapped by Russian forces and facing potential torture, what support is the UK providing to secure his release?
Alec Shelbrooke
We are getting back into the question of the horrific war crimes that are taking place; we are working as closely as we can with international allies in that area. This is of course a diplomatic—as well as an MOD—issue, but across the alliance, we are determined to pursue the perpetrators of kidnapping and mutilation, which are clearly defined in the Geneva convention as war crimes. We will prosecute, as the hon. Member for Chesterfield (Mr Perkins) made clear. Whether it involves someone of the most junior rank or the most senior officer, we will pursue everybody. They should know and fear that, because if they commit these crimes, the international community will pursue them. It is still pursuing Nazi war criminals, bringing them to justice and still imprisoning them. We will not stop.
Jim Shannon (Strangford) (DUP)
Thank you, Mr Speaker—it is always good to know that the Shannon name is growing and, obviously, that will help in 18 years’ time whenever they come to vote.
I welcome the Minister to his place, wish him well and thank him for his answers. Has an assessment been done of how effectively food and medical supplies are entering into the communities that are on the outskirts of battle zones? How can we further step up to help Ukrainian citizens who are fighting for freedom and liberty and for their very lives?
Alec Shelbrooke
I congratulate the hon. Gentleman on the new addition to his family; I know that his grandchild will not have any problem in having someone to give them a bedtime story.
The hon. Gentleman will appreciate that he asks a technical question, and I will seek to answer him in writing on those specific details.
Speaker’s Statement
Mr Speaker
Nominations for the elections of the Chairs of the Select Committees on Science and Technology and on Foreign Affairs closed at 3.30 pm.
For Chair of the Science and Technology Committee, one nomination was received. A ballot for the position will therefore not be held. I congratulate Greg Clark on his election as Chair of the Science and Technology Committee.
Four candidates have been nominated for Chair of the Foreign Affairs Committee. The ballot will take place from 11 am to 2.30 pm tomorrow in the Aye Lobby.
Mahsa Amini
(1 year, 7 months ago)
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Theresa Villiers (Chipping Barnet) (Con)
(Urgent Question): To ask the Secretary of State for Foreign, Commonwealth and Development Affairs if he will make a statement on what representations he has made to the Iranian authorities about ongoing protests regarding the death of Mahsa Amini.
The Parliamentary Under-Secretary of State for Foreign, Commonwealth and Development Affairs (Gillian Keegan)
The death of Mahsa Amini in Iran was a shocking reminder of the repression faced by women in Iran. The protests across the country that have followed show us that the Iranian people are not satisfied with the path that their Government have taken.
I commend the bravery of ordinary Iranians seeking to exercise their right to peaceful assembly and freedom of expression in the face of appalling police violence. We condemn the Iranian authorities’ crackdown on protesters, journalists and internet freedom: the use of violence in response to the expression of fundamental rights by women or any other members of Iranian society is wholly unjustifiable.
Yesterday, on 10 October, we announced sanctions on senior security and political figures in Iran and the so-called morality police. We have sanctioned the morality police in their entirety, as well as their chief, Mohammed Rostami Cheshmeh Gachi, and the head of the Tehran division, Haj Ahmed Mirzaei. For decades, the morality police have used the threat of detention and violence to control what Iranian women wear and how they behave in public.
The UK is also imposing sanctions on five leading political and security officials in Iran for committing serious human rights violations in suppressing fuel protests in Iran in 2019. The UK maintains sanctions designations against a further 78 individuals and one entity under our Iran human rights sanctions regime. In all, there are more than 200 sanctions designations in place against Iran, including in relation to human rights, nuclear proliferation and terrorism.
Theresa Villiers
These protests show that there are thousands of women in Iran who are not prepared to put up with violent human rights abuses. Will the UK Government stand with those brave women as they call for justice, for freedom and for democracy? Will Ministers meet opposition groups? Will they ban the Islamic Revolutionary Guard Corps? Will they rule out sanctions relief under the joint comprehensive plan of action process?
Gillian Keegan
As the Foreign Secretary has said, the protests send a clear message that Iranian people are not satisfied with the path that their Government have taken; Iranian leaders must now listen. Of course, we stand by those people: the use of violence in response to the expression of fundamental rights by women or any other members of Iranian society is wholly unjustifiable. We continue to keep everything under review, and the UK has called for a full and transparent investigation into the shocking death of Mahsa Amini.
Bambos Charalambous (Enfield, Southgate) (Lab)
Like many Members of this House, I have been heartened to see the bravery of the protesters in Iran in the past few weeks, and particularly the women and girls who are spearheading these protests. Iran has a young population—a population which is clamouring for change against an oppressive regime that aims to restrict the liberty and vitality of its people
The Opposition stand in solidarity with those protesting for an end to state violence from the morality police, and in solidarity with the friends and family of Mahsa Amini and all those who have been killed or injured in the protests. These protests are about more than compulsory hijab; they are about ordinary Iranian people’s demands for fundamental freedoms to live their lives as they choose.
We are seeing a flourishing of Iranian civil society, and the UK must support it. While I am pleased that the Government have increased the sanctions on Iran following the Labour party’s calls for them to do so, the UK must do more to support Iranian civil society and independent journalism. BBC Persian Radio, despite being illegal, is accessed by millions of Iranians, but the BBC has announced that it will be closed down.
May I ask the Minister what the Government are doing to support access to independent news in Iran?
If the current regime in Iran ends, the UK Government will need to be ready to work with Iranian partners. The UK, today, should be building links with progressive forces within Iran, supporting all those who speak up for human rights. Will the Minister tell us how the UK intends to build relationships with Iranian civil society? There is a sense that change is coming, and we need to be on the right side of history.
Gillian Keegan
I thank the hon. Gentleman for his comments, and agree very much with his sentiments. BBC Persian is a legitimate journalistic organisation with editorial independence from the UK Government, and we condemn some of the things that have been happening in relation to the persecution of its employees and ex-employees and members of their families. It is very important that those people continue their work, and we are of course continuing to support the BBC and the BBC World Service in that regard.
We are very concerned about Iran’s human rights record. We raise the issue of human rights at all appropriate levels of the Iranian Government and at all appropriate opportunities—at all levels, at all times—and we will continue to take action with the international community to press Iran to improve its poor record, for instance through the Human Rights Council in Geneva and the United Nations General Assembly in New York. Iran’s record has been of serious concern to the UK for a long time, and we will continue to work with the Iranian Government and others at all levels.
Dr Liam Fox (North Somerset) (Con)
While the malignant regime in Iran is terrorising women in that country as they seek basic human rights, it has also been shipping drones to Russia to help it to suppress the human rights of people in Ukraine. Given that Iran Air, an instrument of the Iranian state, was used to take those drones to Russia, and given the activities that we have seen in recent weeks on the streets of Iran, is it not time that the Government banned Iran Air from flying to UK airports? An instrument of the Iranian state should not be operating freely in the United Kingdom, given its behaviour, which insults the norms of international law.
Gillian Keegan
I thank my right hon. Friend for his question, and, indeed, wish him luck with his application to become Chair of the Foreign Affairs Committee. We cannot comment on future sanctions, including the banning of planes, at this point; I apologise to him for that.
Kirsten Oswald (East Renfrewshire) (SNP)
The SNP condemns the Iranian regime’s violent crackdown on protesters, particularly women, in the strongest possible terms. We are deeply concerned by the regime’s vow to crack down further “with no leniency”, which appears to be an ominous indication of further mistreatment.
The bravery of Iranian citizens, especially Iranian women, is inspiring, and we stand in full solidarity with them. We wish to hear the UK Government explicitly recognise the death of Mahsa Amini as femicide. I am also keen to understand how they intend to go forward with international partners, for instance in calling for an independent investigation and raising the mistreatment and killing of protesters at UN level.
We would welcome clarity on how the UK Government are able to support the free flow of information to help to protect protesters—particularly women—and on what plans are in place to support ethnic minorities such as Kurds amid this regime crackdown.
Gillian Keegan
As I mentioned before, the UK has called for a full and transparent investigation of the murder of Mahsa Amini, and we continue to work with our international partners and others to explore all the options for addressing Iran’s human rights violations. As the hon. Lady knows, we never comment on possible future designations or on our future work, but we will continue to work closely with our international partners.
Sir Iain Duncan Smith (Chingford and Woodford Green) (Con)
I think that the Government have somehow got themselves into a position of being conflicted over their stance on Iran. This terrible case—the murder of a young woman—calls into question all the actions of Iran, across a wide spectrum. We talk about the morality police, but it is not the morality police but the Iranian Government who have imposed this desperate situation on Iran. Will the Minister assure us that the Government will pursue full criminal actions against the appalling abuses that are taking place, and take this to the United Nations at once?
Gillian Keegan
I understand the request from my right hon. Friend, but at this point we cannot comment on any further actions that we will take. We have clearly condemned the human rights record, we have clearly condemned the murder and we have clearly asked for a full and transparent investigation.
Valerie Vaz (Walsall South) (Lab)
Brave young women are being beaten to death just for wanting to be women and to conserve their human rights. We also have British citizens, Morad Tahbaz and Mehran Raoof, who are still incarcerated in Iran. What are the British Government going to do to release them?
Gillian Keegan
Of course we have ongoing discussions about many different cases, but I am afraid I am not able to comment on those at this point.
Mrs Flick Drummond (Meon Valley) (Con)
The death of Mahsa Amini is a tragedy, and once again Iran has shown a disregard for women’s rights. Women should be able to make their own decisions and not live in fear. Does my hon. Friend agree that every woman and man around the world should act in solidarity and speak out loudly in support of women in Iran and in other countries, such as Afghanistan, where women are oppressed? What more can we do to support them?
Gillian Keegan
I completely agree with my hon. Friend. The UK has joined the international community in clear condemnation of Iran’s response to the protests. My noble Friend Lord Ahmad of Wimbledon released a statement on 21 September. On 28 September, Lord Ahmad also condemned publicly the shocking police violence against protesters. We summoned Iran’s most senior diplomat in the UK to the FCDO on 3 October. In a statement on 3 October, the Foreign Secretary underlined how the UK was working with our partners to hold Iran to account, and on 5 October he underlined in remarks to the media that the Iranian leadership should take note that the people were unhappy with their direction. Then of course we had the follow-up action with sanctions. So there have been a number of parts of the action, but I am afraid that I cannot comment any further at this stage.
Sarah Champion (Rotherham) (Lab)
I stand in solidarity with the women and girls who are protesting just to be recognised and respected in Iran. Following the deaths of at least 185, including 19 children, what steps is the Foreign Secretary taking to work with the Iranians and with international partners to secure justice, and also to make sure that it is safe for women and girls in Iran?
Gillian Keegan
In his statement announcing the sanctions on 10 October, the Foreign Secretary said:
“The UK stands with the people of Iran”
and underlined to the Government of Iran that
“we will hold you to account for your repression of women and girls and for the shocking violence you have inflicted on your own people.”
And of course we have called for that full and open and transparent investigation.
Andrew Bridgen (North West Leicestershire) (Con)
Can my hon. Friend confirm that the UK Government will hold Iran’s Government fully responsible for all their human rights abuses—be they past, present or in the future?
Gillian Keegan
Yes; my hon. Friend makes a good point. Iran’s human rights record has long been of serious concern to the UK, and the FCDO has designated it as one of its human rights priority countries. The continued use of the death penalty, the weak rule of law and the restrictions on freedom of expression, religion and belief are deeply worrying.
Martin Docherty-Hughes (West Dunbartonshire) (SNP)
I feel sure that the entire House will thank the Minister for her words regarding the brave actions of the indomitable women of Iran, and I was glad to be at the SNP conference at the weekend, where members passed a motion by acclaim condemning the death of Mahsa Amini. Can I ask the Minister whether the Government are therefore planning to make it UK policy to condemn all countries across the middle east that use the pretence of morality to police the bodies of women and compel them to wear certain coverings?
Gillian Keegan
We continue to work with many, including our international partners, on many countries where we see human rights violations, but we do not comment on operational matters or ongoing discussions.
Mr Jonathan Djanogly (Huntingdon) (Con)
I congratulate the Minister and the Government on the decisive and meaningful action on sanctions. Sanctions often work best when done on a multilateral basis, so what contacts are she and the Government having with other countries, in order that we can concert the actions on sanctions?
Gillian Keegan
My hon. Friend makes a very good point, and the UK has been robust in its response to Iran’s repression of protesters. We have summoned the most senior Iranian diplomat in the UK to express our concern, we have engaged at senior levels in Iran and, yesterday, we issued new sanctions against a number of individuals responsible for human rights violations. We expect other countries, and the EU, to follow suit in the coming weeks.
Steve McCabe (Birmingham, Selly Oak) (Lab)
I welcome the Government’s sanctions, but the Minister should take a leaf out of the book of the right hon. Member for Chingford and Woodford Green (Sir Iain Duncan Smith). Instead of treating Ebrahim Raisi as if he is an elected Head of State, we should refer him to the United Nations as a mass murderer. This man is responsible for the death of between 5,000 and 30,000 people he describes as “enemies of God”—his God. Why do we not take appropriate action and make it obvious that we cannot deal with these people? This is not a normal democratically elected regime—they are a bunch of mass murderers—and that is how we should respond to them.
Gillian Keegan
As I outlined to my right hon. Friend the Member for Chingford and Woodford Green (Sir Iain Duncan Smith), we cannot comment on this action or on any future discussions that may take place.
Liz Saville Roberts (Dwyfor Meirionnydd) (PC)
Today is the International Day of the Girl and, of course, everybody in this Chamber stands firm against the violent oppression of women in Iran. We have seen similar brutality in other countries such as Afghanistan, where the Taliban have cracked down on gender-based rights and where 53 Hazara girls were recently killed in a terrorist attack. Many women and girls wish to flee these violent regimes for their own safety. Will the Minister support women in Iran, Afghanistan and elsewhere by creating a dedicated UK asylum and resettlement route for women at risk of persecution solely for asserting the rights that we take for granted?
Gillian Keegan
We continue to work closely with like-minded partners to ensure that Iran and other countries are held to account, including via the Human Rights Council in Geneva and the UN General Assembly in New York. Our permanent representative in Geneva, Ambassador Simon Manley, specifically raised the death of Mahsa Amini at the 51st session of the Human Rights Council, and he called on Iran to carry out an independent transparent investigation into her death. We joined 52 other countries in a joint statement to the Human Rights Council urging restraint. Of course, we will continue to work with those partners when we see human rights abuses in other countries.
John Spellar (Warley) (Lab)
Last month, at Foreign Office questions, I challenged the then Minister to follow our allies in the United States by proscribing the Islamic Revolutionary Guard Corps—the IRGC. In reply, I got the usual Whitehall waffle. The IRGC is crucial to the survival of Iran’s appalling clerical fascist regime. Will the latest outrages now shame the Government into proscribing the IRGC?
Gillian Keegan
We have been clear about our concerns about the IRGC’s continued destabilising activities throughout the region. The UK maintains a range of sanctions that work to constrain the destabilising activities of the IRGC, and the list of proscribed organisations is kept under constant review. We do not routinely comment on whether an organisation is or is not under consideration for proscription.
Chi Onwurah (Newcastle upon Tyne Central) (Lab)
Many constituents have contacted me, awed by the bravery and determination of the women and girls of Iran and disgusted by the actions of the regime. Indeed, on Saturday there was a large demonstration against the regime in the centre of Newcastle.
Newcastle certainly stands in solidarity with the women of Iran, but the regime seeks to cut off the protestors from each other and from the wider world using their control of communications such as the internet, as well as through fear and intimidation. What steps is the Minister taking with our international allies to shine a light on what is happening in Iran, such as through the International Criminal Court, in the case of the murder of Mahsa Amini, or through an international independent committee of investigation?
Gillian Keegan
I thank the hon. Lady for her question, and I am sure that many people will have been shocked and horrified at the scenes we are witnessing today following the death of Mahsa Amini. As I said, the UK has called for a full and transparent investigation at this point. We condemn the Iranian authorities, not only for the crackdown on protestors, but, as she points out, in respect of internet freedom and journalistic freedom. Iranians must be able to have peaceful assembly and to protest, and restraint must be exercised. We have also called on the authorities to release those who have been unfairly detained during the process.
Christine Jardine (Edinburgh West) (LD)
Dr Martin Luther King Jr reminded us that none of us are free until we are all free, and the scenes in Iran following the death of Mahsa Amini should remind us that women across the world are not yet free, which is why I welcome the sanctions laid out by the Minister.
The Minister also acknowledged the work and importance of BBC Persian. One thing that will be particularly significant is its expressing the solidarity we have stated here today to the women of Iran and their getting access to the support from across the world. With that in mind, will the Minister take back to the Department for Digital, Culture, Media and Sport that point about the importance of BBC Persian and ask it to reconsider the cuts facing the BBC World Service and that service in particular?
Gillian Keegan
I agree with the hon. Lady that BBC Persian and the BBC World Service play a vital role in delivering high-quality, accurate and impartial broadcasting across the globe. The Foreign, Commonwealth and Development Office is providing the BBC World Service with more than £94 million annually for the next three years, supporting services in 12 languages and improvements to key services in Arabic, Russian and English—that is in addition to nearly £470 million. Of course the BBC is operationally and editorially independent from the Government, and decisions on how its services are delivered are a matter for the BBC. However, at times such as this all of us see the value of some of these vital services, with the BBC World Service being one of them.
Florence Eshalomi (Vauxhall) (Lab/Co-op)
On this International Day of the Girl, I stand in solidarity with every woman and young girl fighting for their freedom—fighting for the freedom to be heard, fighting for the freedom to live, and fighting for the freedom to have an education and achieve their ambition. We stand in solidarity with the women in Iran. The Minister outlined the sanctions that the Government have taken so far against the Iranian authorities, but how are they going to ensure that the burdens of these sanctions do not fall on ordinary Iranians, who are protesting at the killing of their sisters and girls?
Gillian Keegan
The hon. Lady makes a very good point. Today is the International Day of the Girl, and many of us have been celebrating at events today, which is why this is a shocking reminder of the repression faced by women in Iran. To many young girls, it is a shock that this goes on in the world. All the measures we have taken are there to apply increasing pressure and to say that the Iranian people are speaking and their leaders must now listen. These protests are very clear and their voices must be heard.
Ruth Cadbury (Brentford and Isleworth) (Lab)
I do not know whether other Members share my concern that Opposition Members’ anger about what is happening in Iran is not reflected in the number of Members on the Government Benches—perhaps the lunches with the Prime Minister are overrunning. These protests reveal a thriving opposition among Iranian people, despite the oppression they face. How is the UK building relationships with civil society in Iran? If the regime falls, these people may go on to lead the country.
Gillian Keegan
I understand that there is a lot of activity on delegated legislation at the moment, so the hon. Lady will be delighted to hear that that is all going through. Of course we continue to build our relationships in Iran at many different levels. We are all very concerned by the human rights abuses, and at all appropriate opportunities we will increase and build those relationships to ensure that we can continue to take action, with the international community and with our partners in Iran.
Chris Stephens (Glasgow South West) (SNP)
Mahsa Amini was, of course, a Kurd. Many of those joining protests in Glasgow and Edinburgh are of the Kurdish community, and we should celebrate the contribution that that community makes to life on these islands. What discussions has the Minister had with her Home Office counterparts on cases such as family reunion and expediting asylum interviews, given the current situation in Iran?
Gillian Keegan
I have regular conversations with the Home Office and the consular team on many different cases, but it would not be right to discuss those here.
Hilary Benn (Leeds Central) (Lab)
The sheer bravery of all the women and girls who have taken to the streets of Iran to fight for their freedoms is inspirational to all of us in this House. Does the Minister agree that the oppression that they face has nothing to do with so-called religious observance, and everything to do with that age-old problem of men trying to tell women what they can and cannot do?
Gillian Keegan
I thank the right hon. Gentleman for raising that point. It is also fair to say that we should congratulate the men who have joined those protests. We have all observed that and very much welcome it. It is a very important part of the change.
Carol Monaghan (Glasgow North West) (SNP)
Of course, Mahsa Amini is her legal name, but her family name—her Kurdish name—is Jîna. We have to recognise that, because the Kurdish community in Iran are among the most persecuted groups. My hon. Friend the Member for Glasgow South West (Chris Stephens) has already asked about expediting asylum cases, but I will ask the Minister again. There are many people in our communities who are from a Kurdish background and, indeed, who are Iranian human rights activists. What are the Government going to do to expedite these asylum claims, given the barbarity of the regime that we are now witnessing?
Gillian Keegan
Of course, Iran must cease its indiscriminate bombardment of Kurdish towns, which has led to the loss of innocent lives and damaged civilian infrastructure. Those wholly unacceptable attacks are a violation of Iraq’s sovereignty and territorial integrity, and they demonstrate a repeated pattern of Iranian destabilising activity in the region. We are acutely aware of that and are working to improve the situation.
Dame Diana Johnson (Kingston upon Hull North) (Lab)
May I get the Minister to confirm that there are currently no legal or safe routes for any woman fleeing persecution in Iran to enter this country and claim asylum?
Gillian Keegan
I will reply to the right hon. Lady in writing on what legal and safe routes are available.
Karin Smyth (Bristol South) (Lab)
As has been said, it is the UN International Day of the Girl Child, so I think that highlighting the myriad challenges that girls face should have been at the front and centre of the Minister’s response. Those women in Iran are an inspiration to girls across the world. Beyond commenting on sanctions, the Minister has not said much about how the Government are supporting wider civil society. I would be grateful if she could consider what further efforts the UK Government could make to support those incredibly brave girls and women in Iran.
Gillian Keegan
I totally agree with the hon. Lady. There is, of course, much activity and we will continue to work to do all we can and to celebrate the UN International Day of the Girl Child, as I know many of us have done today.
Fleur Anderson (Putney) (Lab)
This is an important debate on the International Day of the Girl Child. Many women constituents have written to me, inspired by the protests in Iran and shocked at the murder of Mahsa Amini. I stand in solidarity with those women protesters. I have a 22-year-old daughter. She is able to wear what she chooses and to protest as she chooses. She would not be in fear of being beaten up and murdered in prison. Has the Minister considered expelling the Iranian diplomats—this cannot be business as usual—and what more would have to happen before she did so?
Gillian Keegan
Of course, as the hon. Lady will have heard in my statement, we have not continued with business as usual. As of yesterday, 10 October, we have announced new sanctions on senior security and political figures in Iran and the so-called morality police. We have sanctioned the morality police in their entirety, including their chiefs. We have taken some actions. We know that there will be other discussions with international partners, and obviously we keep things under review.
Sarah Owen (Luton North) (Lab)
I welcome the heartfelt contributions from both sides of the House, praising the bravery of the women and girls protesting in Iran, yet, sadly, on International Day of the Girl, we are seeing women’s rights being eroded in Iran and across the world. Will the Minister give a guarantee that any woman or girl fleeing Iran due to these human rights abuses will not be put on a plane to Rwanda if they seek refuge in this country?
Gillian Keegan
We are there to support the rights of women and girls all across the world, and we will continue to do so through our work with the UN and others.
Barry Gardiner (Brent North) (Lab)
The irony is that this is a regime, which, since 16 September, has killed at least three further young people in an attempt to prove to its population that it did not kill Mahsa Amini. The reduction of sanctions and the unfreezing of Iranian assets would serve only to strengthen the regime and turbocharge its repression of young people such as Mahsa Amini. What assessment have the Government made of the attempt by President Biden to revive the Iran nuclear deal, which would lead to such a reduction in sanctions?
Gillian Keegan
We have also always been clear that Iran’s nuclear escalation is unacceptable. It is threatening peace and security and undermining the global non-proliferation system. We have kept that matter very separate when we consider our actions in both of these cases. We have always been clear about that.
Nadia Whittome (Nottingham East) (Lab)
Zahra Sedigi Hamadani and Elham Choubdar are two LGBTQ rights activists who have been sentenced to death in Iran. Amnesty International says that they were targeted because of their real or perceived sexual orientation and/or gender identity and their social media activities in support of LGBTI communities. Will the Minister commit to raising those cases with the Iranian Government demanding a stay of execution and the immediate release of the activists from detention?
Gillian Keegan
I can confirm that I am aware of those cases and that they are under consideration.
Mr Toby Perkins (Chesterfield) (Lab)
The Iranian regime is guilty not just of routine brutality against its own people, but of exporting terror and supporting despotic regimes and terrorist organisations in a whole raft of countries. The people who are protesting in Iran have provided an inspirational example to all of us, but there will be many others who are considering joining those protests but are frightened to do so. It would send a very powerful message if the Minister could come to the Dispatch Box and tell us in response to the question from the right hon. Member for Chipping Barnet (Theresa Villiers) what she is doing to build those relationships with potential alternative leaders in Iran. Can she tell us more and offer hope to those potential protesters that the UK Government will support those who can show a better future for the people of Iran?
Gillian Keegan
The British Government have a policy of not officially making a decision on that. Their choice is for Iran’s Government to be a matter for the Iranian people. We make sure that we support opposition groups in Iran, but we do not support any one group in particular.
Jim Shannon (Strangford) (DUP)
I thank the Minister for her response. According to a report from the National Council of Resistance of Iran, 400 protesters from largely female groups have been killed and 20,000 arrested during the four weeks of nationwide protests. This House must send the strongest condemnation of those killings and mass arrests. Does the Minister recognise the Iranian people’s right to self-defence and resistance in the face of the deadly crackdown that particularly targets women and their right to establish a democratic republic?
Gillian Keegan
Yes, as I have said many times, we strongly condemn the Iranian authorities’ crackdown on protesters and journalists and on internet freedom as well. They must respect the rights of their people and release those who are unfairly detained, and there must be a free, fair and transparent investigation into the death of Mahsa Amini.
Alex Sobel (Leeds North West) (Lab/Co-op)
I do not know whether the Minister saw Beth Rigby’s interview this weekend with Nazanin Zaghari-Ratcliffe, but it was a gut-wrenching and emotional interview. In it, Nazanin said that what has happened to Mahsa Amini brings back memories of how helpless people are when they are in custody in Iran. She also said that,
“the world cannot turn a blind eye”,
to what is happening in Iran. The Government must act on human rights abuses. The uprising we see in Iran is supported by civil society organisations not just in Iran, but among the Iranian diaspora around the world. What support are the UK Government giving to the Iranian diaspora here and its civil society organisations, as well as those in Iran?
Gillian Keegan
Of course it would bring back memories, and that interview showed us the plight that Nazanin found herself in for many years. The Foreign Office will continue to work both on those individual cases and within societies to ensure that we keep those relationships alive, in order hopefully to defend the human rights of everybody around the world.
Mr Deputy Speaker (Mr Nigel Evans)
I thank the Minister for taking the urgent question and responding to a number of Members—particularly, as was mentioned, on the International Day of the Girl.
Sale of Property (Sealed Bids)
Tuesday 11th October 2022
(1 year, 7 months ago)
Commons ChamberRead Full debate Sale of Property (Sealed Bids) Bill 2022-23 View all Sale of Property (Sealed Bids) Bill 2022-23 Debates Read Hansard Text Watch Debate
A Ten Minute Rule Bill is a First Reading of a Private Members Bill, but with the sponsor permitted to make a ten minute speech outlining the reasons for the proposed legislation.
There is little chance of the Bill proceeding further unless there is unanimous consent for the Bill or the Government elects to support the Bill directly.
For more information see: Ten Minute Bills
This information is provided by Parallel Parliament and does not comprise part of the offical record
Sir Bill Wiggin (North Herefordshire) (Con)
I beg to move,
That leave be given to bring in a Bill to prohibit the sale of property by sealed bids; and for connected purposes.
The role of Government is to ensure that markets work and that deals are fair and as transparent as possible. We make rules to ensure that unfair exploitation does not occur. That is clearly more important in land and property transactions, as they are usually the largest deals that most of us will ever do with our own money.
The purpose of my Bill is therefore to enhance transparency, to reduce costs and opaque behaviour, and to ensure that both buyer and seller are treated fairly by the estate agent. Let me say that, despite the vast number of good agents, there are still some who think that using such opaque techniques to try to extort money is acceptable.
We know that when one buys a property, one does a search and survey before exchanging contracts. That is sensible and prudent. However, when one is asked to submit a best and final offer or a sealed bid, that is done to try to extract more money without any extra information being given. That is not in the interest of any party except the agent, who has made little or no effort to assist in the deal making, as a broker of any other transaction would expect to do.
A sealed bid or private treaty sale will be suggested to a seller when multiple potential buyers are interested in purchasing the same property. Prospective buyers are invited to submit bids for the property through a secret ballot or through an invitation to submit a best and final offer. All bids are then supposed to be considered at once. The owner of the property and the estate agent then decide behind closed doors, in an unclear and opaque process, who should be declared the winner.
Agents are not bound by any legislation setting out appropriate processes for how transparency following bids should be handled, nor is there any later declaration of the price or any other useful information that would help the market. In fact, there are no credible statistics available recording how many sales take place by sealed bid, which demonstrates the overly relaxed nature of the regulations surrounding property buying.
The system is therefore ripe for abuse and detrimental to the confidence of potential buyers. I hope that this Bill can generate real reform and encourage genuine transparency in the property market.
It is inefficient that with such a process of sealed bids the prospective buyer has no idea what their competitors have bid. To be eligible to submit a bid, one must go through the cost of searches and surveys—an expensive procedure. The average homebuyer pays between £1,000 and £1,500 for conveyancing before exchange of contract. There are also other tedious undertakings, such as letters from one’s bank or lengthy pieces on one’s suitability to own the property.
Bidders are required to do so much before even being considered for the property, but what do they get in return? Nothing but confusion, secrecy and unanswered questions. They often find themselves in frustrating and distressing circumstances: either they have not bid enough and are never told what the winner paid, or, if successful, they might be paying well over the asking price, and often far more than that which the agent thought the property was worth.
All that is great news for the seller and the estate agent —right up until the seller becomes a buyer, of course. It leaves an agent who did not know his market with a larger commission, having done less work. It is not surprising that they do not want more transparency and no wonder that this element to the market needs reform.
Once a bid is submitted, a buyer cannot really alter their offer. Estate agents will often tell buyers that their offer is legally binding before exchanging contracts. That may or may not be true, as a “subject to survey” clause is possible. Supporters of sealed bids claim that they speed up the buying process and discourage time wasters. However, in many cases, the seller or the buyer attempts to renegotiate after the sealed bid has been accepted, thereby prolonging the process. According to Quick Move Now, in quarter 4 of 2021, 39% of property sales fell through due to the buyer changing their mind or attempting to renegotiate the offer. When a property sale falls through, people lose not only the house or flat, but any money they have spent on applying for a mortgage, conveyancing or a property survey. Government figures suggest that consumers waste £270 million each year because transactions fall through. Failed transactions make moving house—already considered one of life’s most stressful experiences—more frustrating and less practical.
Research undertaken by the Department for Business, Energy and Industrial Strategy suggests that consumers are extremely concerned by the weakness of regulation for estate agents. Aggressive tactics that are employed to close a deal quickly include practices such as gazumping. A system of sealed bids only encourages such harmful practices, which waste time, wreck estate agents’ reputations and artificially inflate the housing market.
Often, estate agents use the sealed bids process to pressure inexperienced sellers into accepting the highest bid, with no regard to the circumstances of the buyer, while buyers are pressured into submitting their very highest offer. I must keep saying that estate agents are, by and large, good, honest people. However, the actions of a few can sully the industry. Processes such as sealed bids and best and final offers only add to that unfortunate perception. That is why reform is long overdue.
Sealed bids not only affect the housing market. In Herefordshire, the average price for prime arable land is £10,670 an acre. Agricultural land values in England have reached their highest level since 2016. During that time, the use of sealed bids for farmland has also increased. That is concerning, as the price per acre for farmland is being increased artificially, in turn putting pressure on the price of food.
Due to transport costs, the land next door is always more valuable to a local farmer than land further away, and it is more valuable to them than to someone who lives further away. That means that farmers are much more exploited and much more vulnerable than any other type of property buyer. This has to stop. How can we encourage new and aspiring young farmers to acquire land in such an opaque market environment?
This Parliament has the ability to do far more for prospective home and farm buyers. Now we must find the will. We were elected on a key manifesto commitment to rebalance the housing market towards more home ownership. Home ownership is a fundamental Conservative value. Sealed bids and best-and-final-offer messages do not rebalance the market; they seek to corrupt it. They are not the way to an open, transparent, competitive market; they seek to stifle competition and transparency. They artificially raise prices and hopes, meaning that thousands of pounds are wasted. Through this Bill, I wish to see better regulation of the housing and property market, fairness for all prospective buyers and sellers, and transparency for an industry that has for far too long operated in murky ways. That all starts with an end to the practice of sealed bids and best and final offers.
Question put and agreed to.
Ordered,
That Sir Bill Wiggin, Mr Ian Liddell-Grainger, James Grundy, Dr James Davies, Andrew Rosindell, Cherilyn Mackrory, Mr Mark Francois, Sally-Ann Hart and Sir Edward Leigh present the Bill.
Sir Bill Wiggin accordingly presented the Bill.
Bill read the First time; to be read a Second time on Friday 24 March 2023, and to be printed (Bill 157).
Bowel Conditions (Assessment)
Tuesday 11th October 2022
(1 year, 7 months ago)
Commons ChamberRead Full debate Bowel Conditions (Assessment) Bill 2022-23 View all Bowel Conditions (Assessment) Bill 2022-23 Debates Read Hansard Text
A Ten Minute Rule Bill is a First Reading of a Private Members Bill, but with the sponsor permitted to make a ten minute speech outlining the reasons for the proposed legislation.
There is little chance of the Bill proceeding further unless there is unanimous consent for the Bill or the Government elects to support the Bill directly.
For more information see: Ten Minute Bills
This information is provided by Parallel Parliament and does not comprise part of the offical record
Chi Onwurah (Newcastle upon Tyne Central) (Lab)
I beg to move,
That leave be given to bring in a Bill to require the Government to publish an assessment of incidences of bowel conditions and diseases, including an assessment of geographical and socioeconomic disparities.
We have a hidden epidemic—a hidden epidemic that this Government are making no attempt to understand, and a hidden epidemic that is devastating the lives of many in Newcastle Central: a hidden epidemic of bowel disease and bowel conditions in the north-east.
Bowel conditions are not a sexy subject; needing the loo rarely is, though it can be a source of humour. I know that children are always fascinated to learn that there was a curtain around your Chair, Mr Deputy Speaker, for over 600 years to enable Speakers to relieve themselves during long sessions. Fortunately, we have moved on since then, but there is still a curtain around bowel conditions. That is why we are all so grateful for the much missed and tireless “Bowel Babe”, Dame Deborah James, who did so much to tackle the stigma surrounding the diagnosis and care of people with bowel diseases.
Bowel ill health has a significant impact on my constituents, leading to lives lost and stoma surgery, which requires ongoing care and support. Like Members across the House, my primary concern is the wellbeing of my constituents. That is why I, like so many of us, attended the “Stomas in Parliament” event in July, to better understand the impact of stomas on constituents’ lives. It is also why in July, I visited Richard Brady, consultant colorectal surgeon at Newcastle Clinical Research Facility, to see how they are trialling innovative surgical products from the company Coloplast that reduce the burden of leakage on stoma wearers. It was fascinating to hear and see the reality of stoma wearing and changing, but I also learnt of the difficulties confronting so many patients in Newcastle and the north-east.
One person living with a colostomy told me that he felt invisible to Government. One who has had inflammatory bowel disease since she was 16 and, later, ulcerative colitis has “lost count” of the number of medications and surgeries she has had. Another living with stage 3 bowel cancer explained the frustration and embarrassment they felt in public spaces when a toilet was not available in shops. One patient said that, during the first few months following her ileostomy, her stoma nurse felt like her only friend. Another said that she felt as though the world was crashing down when she was diagnosed with colorectal cancer after experiencing no symptoms, and one person living with a stoma told me that his condition made him fear leaving the house, thus isolating him from the people he loved and the things he loved to do. The lived experiences of those with bowel disease can be very distressing.
Bowel disease comes in many forms. There is colon cancer, inflammatory bowel disease, Crohn’s disease, diverticulitis, gastroenteritis, diverticular disease, colitis, ileus and many more. All these conditions impact patients differently, and each presents its own challenges.
The north-east appears uniquely vulnerable to bowel ill health. Scientists believe that that is because we have the perfect storm of contributory factors. According to The BMJ, the north-east has the highest rate of ulcerative colitis in the country, and the UK as a whole has the highest rate in Europe. The north-east also has the highest rates of colorectal cancer in the UK, with 646 patients diagnosed per 100,000 people—14% higher than London. The UK also has one of the lowest survival rates of colorectal cancer in high-income countries.
Diverticulitis, in which tiny bulges in the colon wall become inflamed, leading to severe pain, is another condition linked with many social factors that are more prevalent in the north-east. One is smoking; 13% of people in the north-east smoke, which is the highest rate in England. Another is obesity. In the north-east, 34% of adults are obese, which is the joint highest rate in England, and 29% of year 6 children are obese—the second highest rate in England.
Another critical factor is economic deprivation, to which the north-east is particularly vulnerable following 12 years of Conservative economic mismanagement and neglect. Two in five children in the north-east live in poverty—the highest rate of any UK region. According to a recent Survation poll, a third of people in the north-east are worried that they might have to use a food bank—the highest proportion in the country. Access to primary care is also a factor, and can be linked to poverty: when a person works two jobs to make ends meet, it is harder to get to the doctor’s. Other factors include Celtic heritage, lack of exposure to sunlight, and a diet high in animal fat. The consequence of all these factors combined is that the north-east suffers from higher rates of bowel ill health. Despite that, it has lower rates of screening uptake. That means more advanced cases, and higher rates of stomas that result in ongoing care demands and have a significant impact on people’s quality of life.
As I have said, Newcastle Hospitals NHS Foundation Trust is a centre for innovative bowel disease treatment, and patients cross the Pennines for its support, but the Government need to do much more to highlight and address the unacceptable regional disparities in bowel illness. In answer to my parliamentary questions, the Department of Health and Social Care told me that it makes no assessment of regional disparities in the prevalence of bowel disease. The Bill would make patients living with these conditions visible in the NHS and in Government datasets, which would aid treatment and help to identify areas with a higher prevalence of a condition.
The Government also told me that there were just under 2,000 newly formed stomas in 2021, but analysis of NHS patient activity data suggests that the true number is around eight times higher, at between 160,000 and 200,000. The Government simply do not know what is happening. We need legislation to better understand, identify, prevent and address bowel conditions, so that we can better target investment, and focus resources on reducing inequity across the UK. My Bowel Conditions (Assessment) Bill would be the first step in addressing the issue, not only for my constituents, but for the country.
The Bill would provide for the statutory collection and reporting of statistics by region and by socioeconomic indices. This data would be invaluable to all those involved in the treatment of bowel conditions. More importantly, it would help in supporting existing patients, and contribute towards prevention and diagnosis of future patients. Better understanding will save lives.
The Bill would force the Government to assess, and ultimately address, the inequalities that have grown over 12 years of Tory neglect. Twelve years of Government mismanagement have resulted in record waiting lists for care, and chronic staff shortages. Cancer waiting times worsened in every one of those years prior to the pandemic, and according to Bowel Cancer UK, England is also poorer at diagnosing cancers at an early, more treatable stage than the best performing countries. That is why the next Labour Government will undertake one of the biggest expansions of the NHS workforce, and will produce a long-term workforce plan for the NHS.
People living with bowel conditions deserve to live in dignity. For this to happen, we need the stories and voices of patients to be heard by the Government. The Bill will make that patient living with a stoma who said that he felt invisible visible to the NHS, to integrated care boards, to the Department of Health and Social Care, and to the Government. I hope that the Bill progresses today, so that we can finally address this hidden epidemic, which affects and cuts short the life of so many in the north-east.
Question put and agreed to.
Ordered,
That Chi Onwurah, Liz Twist, Mary Kelly Foy, Catherine McKinnell, Kate Osborne, Mrs Sharon Hodgson, Mrs Emma Lewell-Buck, Ian Lavery, Ian Mearns and Grahame Morris present the Bill.
Chi Onwurah accordingly presented the Bill.
Bill read the First time; to be read a Second time on Friday 25 November, and to be printed (Bill 158).
Health and Social Care Levy (Repeal) Bill (Allocation of Time)
Ordered,
That the following provisions shall apply to the proceedings on the Health and Social Care Levy (Repeal) Bill:
Timetable
(1) (a) Proceedings on Second Reading and in Committee of the whole House, any proceedings on Consideration and proceedings on Third Reading shall be taken at today’s sitting in accordance with this Order.
(b) Proceedings on Second Reading shall (so far as not previously concluded) be brought to a conclusion four hours after the commencement of proceedings on the Motion for this Order.
(c) Proceedings in Committee of the whole House, any proceedings on Consideration and proceedings on Third Reading shall (so far as not previously concluded) be brought to a conclusion six hours after the commencement of proceedings on the Motion for this Order.
Timing of proceedings and Questions to be put
(2) When the Bill has been read a second time:
(a) it shall, despite Standing Order No. 63 (Committal of bills not subject to a programme order), stand committed to a Committee of the whole House without any Question being put;
(b) proceedings on the Bill shall stand postponed while the Question is put, in accordance with Standing Order No. 52(1) (Money resolutions and ways and means resolutions in connection with bills), on any financial resolution relating to the Bill;
(c) on the conclusion of proceedings on any financial resolution relating to the Bill, proceedings on the Bill shall be resumed and the Speaker shall leave the Chair whether or not notice of an Instruction has been given.
(3) (a) On the conclusion of proceedings in Committee of the whole House, the Chair shall report the Bill to the House without putting any Question.
(b) If the Bill is reported with amendments, the House shall proceed to consider the Bill as amended without any Question being put.
(4) For the purpose of bringing any proceedings to a conclusion in accordance with paragraph (1), the Chair or Speaker shall forthwith put the following Questions in the same order as they would fall to be put if this Order did not apply:
(a) any Question already proposed from the chair;
(b) any Question necessary to bring to a decision a Question so proposed;
(c) the Question on any amendment, new Clause or new Schedule selected by the Chair or Speaker for separate decision;
(d) the Question on any amendment moved or Motion made by a Minister of the Crown;
(e) any other Question necessary for the disposal of the business to be concluded; and shall not put any other questions, other than the question on any motion described in paragraph (11)(a) of this Order.
(5) On a Motion so made for a new Clause or a new Schedule, the Chair or Speaker shall put only the Question that the Clause or Schedule be added to the Bill.
(6) If two or more Questions would fall to be put under paragraph (4)(d) on successive amendments moved or Motions made by a Minister of the Crown, the Chair or Speaker shall instead put a single Question in relation to those amendments or Motions.
(7) If two or more Questions would fall to be put under paragraph (4)(e) in relation to successive provisions of the Bill, the Chair shall instead put a single Question in relation to those provisions, except that the Question shall be put separately on any Clause of or Schedule to the Bill which a Minister of the Crown has signified an intention to leave out.
Other proceedings
(8) Provision may be made for the taking and bringing to a conclusion of any other proceedings on the Bill.
Miscellaneous
(9) Standing Order No. 15(1) (Exempted business) shall apply to proceedings on the Bill.
(10) Standing Order No. 82 (Business Committee) shall not apply in relation to any proceedings to which this Order applies.
(11) (a) No Motion shall be made, except by a Minister of the Crown, to alter the order in which any proceedings on the Bill are taken, to recommit the Bill or to vary or supplement the provisions of this Order.
(b) No notice shall be required of such a Motion.
(c) Such a Motion may be considered forthwith without any Question being put; and any proceedings interrupted for that purpose shall be suspended accordingly.
(d) The Question on such a Motion shall be put forthwith; and any proceedings suspended under sub-paragraph (c) shall thereupon be resumed.
(e) Standing Order No. 15(1) (Exempted business) shall apply to proceedings on such a Motion.
(12) (a) No dilatory Motion shall be made in relation to proceedings to which this Order applies except by a Minister of the Crown.
(b) The Question on any such Motion shall be put forthwith.
(13) (a) The start of any debate under Standing Order No. 24 (Emergency debates) to be held on a day on which the Bill has been set down to be taken as an Order of the Day shall be postponed until the conclusion of any proceedings on that day to which this Order applies.
(b) Standing Order No. 15(1) (Exempted business) shall apply in respect of any such debate.
(14) Proceedings to which this Order applies shall not be interrupted under any Standing Order relating to the sittings of the House.
(15) (a) Any private business which has been set down for consideration at a time falling after the commencement of proceedings on this Order or on the Bill on a day on which the Bill has been set down to be taken as an Order of the Day shall, instead of being considered as provided by Standing Orders or by any Order of the House, be considered at the conclusion of the proceedings on the Bill on that day.
(b) Standing Order No. 15(1) (Exempted business) shall apply to the private business so far as necessary for the purpose of securing that the business may be considered for a period of three hours.—(Chris Philp.)
Health and Social Care Levy (Repeal) Bill
Tuesday 11th October 2022
(1 year, 7 months ago)
Commons ChamberRead Full debate Health and Social Care Levy (Repeal) Act 2022 View all Health and Social Care Levy (Repeal) Act 2022 Debates Read Hansard Text Watch Debate Read Debate Ministerial Extracts Amendment Paper: Committee of the whole House Amendments as at 11 October 2022 - (11 Oct 2022)
The Chief Secretary to the Treasury (Chris Philp)
I beg to move, That the Bill be now read a Second time.
Let me start by reiterating that the central and defining mission of this Government is growth. This Government are completely and unashamedly committed to achieving that objective—economic growth. However, we are not committed to it simply for its own sake or for some abstract reason; we are committed to growth because of the impact it will have in so many ways on people’s lives.
Growth brings higher wages, bringing prosperity to our constituents. Economic growth will create new and better-paid jobs and, critically, economic growth will create a sustainable tax base that will fund public services into the future. Without strong economic growth, we cannot have well-funded health services, education and police. It is quite clear that, with economic growth, everyone benefits—not in some trickle-down sense, but because it will elevate salaries for everybody, create jobs the length and breadth of the United Kingdom, and generate the tax income that will fund our public services.
Crucially, this growth agenda set out by the Chancellor two or three weeks ago will pursue growth in a way that is fiscally responsible, and on 31 October—in just under three weeks’ time—the Chancellor will set out in detail how that will take place, buttressed by a full scoring and forecast produced by the Office for Budget Responsibility.
The growth plan announced by the Chancellor just a fortnight ago is crafted to achieve 2.5% growth year on year. It aims to do so in a host of different ways. First, it will do so through lower taxation, because with lower taxation we incentivise companies to invest, we incentivise people to get into work, and we encourage companies and high-potential individuals to choose to locate in the United Kingdom as opposed to somewhere else. Many successful companies, and indeed successful people, have a choice about where they locate, where they do business and where they work, and by having internationally competitive rates of personal and corporate taxation we are encouraging them to make the choice to locate in the United Kingdom, all of which improves and increases economic growth.
There is of course more to the growth plan than just that. We are working on infrastructure—whether road, rail or energy infrastructure—and speeding up its development, as well as supporting skilled employment, removing barriers to investment, getting the housing market moving and removing obstacles, such as the recent IR35 changes that have caused difficulties for many self-employed people and contractors. Critically, the growth plan has moved at pace to help both households and businesses with the terrible crisis posed by Putin’s illegal invasion of Ukraine and its consequences for energy bills.
Just a few weeks ago, households and businesses in the United Kingdom were faced with the realistic prospect of domestic energy bills going up to £5,000, £6,000 or even £7,000 per year. The energy price guarantee takes that possibility off the table, not just for six months but for two years, ensuring that the average household will pay no more than £2,500.
Peter Grant (Glenrothes) (SNP)
Does the Minister accept that, regardless of what the Government have done, my constituents can expect to pay double for their energy bills this year compared with what they paid last year?
Chris Philp
The energy price guarantee ensures that the average household pays no more than £2,500 a year. The hon. Gentleman is correct that that is higher than average bills this time last year, and that is why the comprehensive package was put in place earlier this year. It amounts to a further £37 billion, and ensures that households on the lower one third of incomes receive £1,200 per year, which pretty much fills the gap that he described. The energy price guarantee, combined with that £37 billion intervention, is the kind of thing we can do as a Union and as a United Kingdom. It is the kind of thing we can do together that would be so much harder apart, and that is one of the benefits of our precious Union. There is a lot more in the growth plan, but I will not labour the point because we are here to talk about the health and social care levy.
Hywel Williams (Arfon) (PC)
Growth in Wales has for a long time—for many decades before and after devolution—been based partly on the idea of attracting high-worth individuals to invest in Wales. The mixed result of that gives me pause for thought as to that strategy. Does it do the same for the Minister?
Chris Philp
We will deliver growth if we encourage people across the whole income spectrum—people doing jobs on lower incomes, those on higher incomes, businesses big and small alike. We need to encourage the entire economy, which is why tax cuts in the growth plan are broadly based, like the tax cut we are debating now. We need to encourage them all, which includes companies and people who are internationally mobile. I used to be technology Minister, and most technology businesses have a choice about where they locate. They are very internationally mobile. They could go to New York, San Francisco, Singapore—they could go anywhere in the world. We need to ensure that every part of the United Kingdom is attractive to such businesses, and the growth plan intends to create those conditions that make us attractive as a nation.
Alex Cunningham (Stockton North) (Lab)
The Minister seems to have mentioned everything except the need for a healthy workforce. Local authorities spend £1.2 billion every year on social care needs caused by smoking, and that will get more expensive if the Government fail to address the issue of tobacco. This morning the Health and Social Care Secretary hinted that she will do less, not more, to tackle the dangers of smoking. Will the Minister join me and press her to bring forward the tobacco control plan, to help protect the health of the nation and save health and social care costs?
Chris Philp
I do not think I should trespass into the realm of my right hon. Friend the Secretary of State for Health and Social Care and Deputy Prime Minister. She will make her own views and policy on that issue without intervention from me. We are ensuring that the NHS is well funded so that it can provide the treatment our constituents need. Our commitment to NHS funding is undiminished.
Let me turn to the Bill, which repeals the health and social care levy. Members will recall that the health and social care levy was originally announced in September last year, and the Health and Social Care Levy Act 2021 received Royal Assent on 20 October last year. The levy had two phases: first, a temporary 1.25% increase for employers and employees in the current tax year; and then from April 2023 a formal surcharge of 1.25%, which would have affected not just those of working age but also those of state pension age. The Bill repeals that Act with elegant simplicity. Clause 1 states simply:
“The Health and Social Care Levy Act 2021 is repealed.”
James Cartlidge (South Suffolk) (Con)
This is my first opportunity to congratulate the Chief Secretary on his appointment. What he said on the energy support for my constituents and all our constituents is very important, and I very much welcome that. However, on repealing the levy, he is of course aware that one of the most important things that it was going to fund was the welcome cap on care costs introduced by the Government, which had been promised by successive Governments with many a White Paper and many a Green Paper. How will we now pay for that?
Chris Philp
I thank my hon. Friend for his kind words. We are long-standing colleagues, and I look forward to working with him for many years to come. To be clear, the funding that was to be provided via the levy for both health and social care, which in the case of social care amounted to £5.4 billion over the three-year spending review period, is completely unaltered. There is no change to that funding at all.
My hon. Friend asked about funding for social care. The funding envelope for all public services will be set out by my right hon. Friend the Chancellor on 31 October via his medium-term fiscal plan. We will ensure that we are responsible custodians of the public finances by sticking to the spending plan set out in spending review 2021. We will be disciplined about doing that. We will ensure that we generally exercise spending restraint, mindful of the fact that we cannot have public spending forever increasing at faster and faster rates. We will be disciplined about how we manage the public finances.
I also point to economic growth. If, or rather when, we are successful in delivering the growth plan’s mission to elevate trend growth from 1.5% to 2.5%, with an extra 1% per annum over a consistent period of time—for example, five years—by the fifth year that additional growth will deliver about £47 billion of extra tax revenue, as set out in the table on page 27 of the Blue Book that accompanied the growth plan. I hope that gives my hon. Friend a hint about our thinking, but really the medium-term financial plan on 31 October will provide the most complete answer.
Hywel Williams
The Chief Secretary is being generous with his time. I should say that the table on page 27 shows a target, rather than anything that will stand closer examination. However, in respect of the decision to increase national insurance to pay for social policy—in England, I might add—the Welsh Government had no say whatsoever, just as they had no say in the now paused policy of scrapping the additional rate of income tax. Does the Minister not think that the Welsh Government, who are, after all, responsible for social care in Wales, warrant consultation on a fundamental matter such as this?
Chris Philp
I do not think that the Government in Wales complained too loudly when they were provided with extra money to fund social care in Wales. On the hon. Member’s point about page 27 of the growth plan, he is right that it is a target, but it is a target accompanied by a plan to deliver it. There is a clear path to how we will achieve the increase in growth that I referred to.
Let me return to the repeal of the health and social care levy. To be clear, the Bill will repeal the legislation from last year, reversing the temporary increase in national insurance contributions from 6 November—in just a few weeks’ time. Additionally, it will ensure that no new levy comes into force in April 2023. Members will understand that it takes a little time for His Majesty’s Revenue and Customs and businesses to prepare their systems for such tax changes. That is why we chose 6 November as the date of implementation, but that will ensure that the extra money gets into people’s pockets as quickly as possible.
That brings me to the rationale for why we are repealing the levy. First, it is so that people can keep more of their own money, particularly at this time when that is so critical with the cost of living. In Treasury questions earlier today, many Members on both sides of the House referred to the cost of living challenges, most of which follow from Putin’s illegal invasion of Ukraine. By reducing this tax and urgently alleviating the tax burden on our constituents, that will immediately assist with cost of living pressures. I am not saying that it will solve them, but it will certainly assist with them.
John Glen (Salisbury) (Con)
I, too, congratulate my right hon. Friend on his new role.
I acknowledge the narrative of growth and the therapeutic effect of the combination of supply-side reforms and tax cuts to generate growth. My concern is the interval between his assertions today and the medium-term fiscal strategy that will be announced on 31 October, and the markets’ confidence in that interval. Today we see a welcome announcement by the International Monetary Fund on the enhancement to growth, but we also see reference to the enduring effect of inflation. We have also seen in recent weeks the effect of interest rate changes on the cost of living challenges for families up and down this country. Will my right hon. Friend please take account of the interaction of those two conflicting realities?
Chris Philp
I thank my hon. Friend for his question. I pay tribute to him for his extraordinary service as City Minister. I think I am right in saying that he is the longest-serving City Minister ever—I think it was four years—and, I should say, he is the best to date. I pay tribute to him for his long and distinguished service.
My hon. Friend raised a couple of points. One was the interaction between the announcements and the OBR’s scoring. There was a desire to get the growth plan done quickly and with a sense of urgency, and the energy price guarantee was something we wanted to do straight away. Families were genuinely worried. They had huge anxiety about the prospect of facing £6,000 or £7,000 bills this winter. We wanted to take that off the table immediately. We also wanted to alleviate the tax burden that we are discussing today as quickly as we could. By doing this so quickly, assuming the Bill passes, on 6 November—in just a few weeks’ time—our constituents will be alleviated of this burden at this time of cost of living challenges.
As companies make decisions about where to invest—in the UK or elsewhere—they can do so in the knowledge that corporation tax in the UK will remain low. That is why we acted so quickly. I do, however, recognise my hon. Friend’s point about the need for market confidence, and that is why my right hon. Friend the Chancellor announced just yesterday that the medium-term fiscal plan would be brought forward from 23 November to 31 October. He recognised exactly the point that my hon. Friend made and similar points made by my right hon. Friend the Member for Central Devon (Mel Stride), the Chair of the Treasury Committee.
The point about inflation came up repeatedly in Treasury questions earlier. We should be clear that we are in a global interest rate up cycle. In, for example, the United States of America, base rates set by the Federal Reserve have increased by three percentage points this year—from 0.25% in January to 3.25% now. The equivalent interest rate set by the Bank of England, the base rate, has also increased, but only by two percentage points from 0.25% to 2.25%. So we have seen higher base rate increases in the USA in the year to date than we have here. As a consequence, the base rate in the USA is a full percentage point higher than in the United Kingdom, and we should keep that international context firmly in mind.
As I explained, we are repealing the levy so that people can keep more of their own money and so that we can help with the cost of living challenges at this time as a matter of urgency on 6 November and not delay any longer. I and the Chancellor think it is also important to boost incentives to work. We want to make sure that working is as attractive as possible and, by lowering the taxes on work, I believe that we will do that.
Steve Brine (Winchester) (Con)
I add my voice to those who have welcomed my right hon. Friend to his role. I think he will do a good job.
Here is what is worrying me. Yes, we want work to pay, but we also want work to be available. There are lots of vacancies in the labour market, but there are also labour shortages. Lots of people, as we have heard today, are economically inactive, many of them because they are on the NHS waiting list. As my right hon. Friend the Chief Secretary will know, the first part of the levy was to fund the catch-up programme. I was in my local hospital on Friday to see how we are getting on with the catch-up programme. We are still waiting for news of our elective hub at the Royal Hampshire County Hospital in Winchester, which would help with the catch-up and get people back into the workforce. Is that affected by my voting for this repeal today?
Chris Philp
I can categorically assure my hon. Friend that that is not affected. The £8 billion that was allocated over the spending review period to catch up on the elective backlog is completely unchanged by this measure, and the funding for social care—£5.4 billion over three years—is also unaffected. The rest of the money, because that is not all of it, will continue to be available to the Department of Health and Social Care to spend on the NHS and social care precisely as was intended. As a result of repealing the Health and Social Care Levy Act 2021, not a single penny less will go to social care or the NHS, or in particular the elective programme that he refers to. I cannot answer on Winchester hospital, but I am sure that the Health Secretary would be delighted to discuss that with him.
My hon. Friend also made a good point about vacancies. We have a lot of vacancies in the economy. Earlier this year, I believe for the first time in history, there were more vacancies than there were people in unemployment. If we are keen to tackle poverty and help people into a more prosperous future, getting them off benefits and into work is clearly the answer.
Karin Smyth (Bristol South) (Lab)
To follow on from the former Health Minister, the hon. Member for Winchester (Steve Brine), if it is true that the levy was essentially not needed for the social care reforms and the catch-up, and that everything is still staying, will the Minister tell us what advice he has had from the DHSC about what it will not do now that, presumably, there is less money for the other things that it was going to do?
Chris Philp
The funding provided by the Treasury to the DHSC is completely unchanged as a result of the reversal of the NIC increase. That applies both to the money that was essentially hypothecated to the DHSC and its other budget. It is completely unaffected, so we are not moving money from one part of the health service budget to backfill something else. The complete health service budget is unchanged. There is not a penny less for the health service in any way as a result of the changes, but we are changing the way we fund the expenditure. Instead of funding it from the health and social care levy, it will be funded differently, partly by general taxation and other means, which will be set out in the medium-term fiscal plan. However, not a single penny less will go to the health service as a result of this change.
Several hon. Members rose—
Chris Philp
I am spoilt for choice; I will start with my hon. Friend the Member for South Suffolk (James Cartlidge).
James Cartlidge
I am lucky to have a second intervention already. I know that as a former businessman, the Minister cares passionately about growth, and I respect that. However, as a businessman, he must also know that the single most important factor for business is confidence and stability. When we speak to businesses at the moment, we hear that they are worried about the lack of stability. They want certainty and confidence. He needs to explain the basic question about the £17 billion of revenue from the levy to fund social care and the NHS. If the levy is going, surely that implies that borrowing fills the gap or some other change fiscally. Is it the case that that will be confirmed on the 31st?
Chris Philp
Yes, it is. My hon. Friend is asking entirely reasonable questions, but we have to look at this issue in the round across the entirety of public expenditure. The Chancellor will set that out in detail on 31 October to the House, accompanied by the OBR scoring.
Alex Cunningham
The hon. Member for South Suffolk (James Cartlidge) has made this point: if £17 billion is being removed from the Exchequer, how can we have all that extra spending on the NHS and on social care if there is no additional taxation?
Chris Philp
As I pointed out, we will set that out on the 31st. The Chancellor has a number of measures in mind to make sure, over the medium term, that this is fully funded, and critically, so that we can do this and the other things in the growth plan—this is obviously only one measure among many—to make sure that we get debt falling as a proportion of GDP. Hon. Members are asking entirely reasonable questions, but the point of the medium-term fiscal plan, and the details that will accompany it on 31 October, is to answer precisely those questions.
Let me set out the benefits that the move will confer on employees earning more than £12,570 and self-employed people earning more than £11,909. The average saving for people in work who are earning more than those thresholds will be approximately £330 next year. Combined with the increase in the threshold that took effect last July, the saving for the average worker earning above those thresholds will be £500 next year. That will clearly be welcome at a time of economic challenge. Moreover, almost a million businesses—920,000—will get an average tax cut of just a shade under £10,000 next year: £9,600, to be precise. That will be very welcome indeed.
It is worth being clear that the increase in the threshold that was put through a few months ago means that people on lower incomes pay very little in national insurance or income tax these days. I am sure that Members of this House who want to see the burden of taxation made as light as possible, particularly for those with lower incomes, will strongly welcome the increase in the threshold. It follows the very substantial increases in the income tax threshold over the past 12 years, from about £6,500 back in 2010 to £12,500 today, which have lifted people on the lowest incomes out of national insurance and out of income tax entirely.
I have already made the point that the reversal of the levy is part of a much wider plan. Over the coming days and weeks, my colleagues the Secretaries of State for various Departments will announce further supply-side measures to stimulate growth in our economy, including by making the planning system faster, making sure that business regulations are not unduly onerous, improving childcare, addressing questions concerned with immigration and agricultural productivity, and improving digital infrastructure. As I have said, we will do so in a way that makes sure that debt over GDP falls over the medium term.
Chris Philp
I was about to finish, but as the hon. Member is an old friend, I will give way one last time.
Alex Cunningham
I am grateful; I enjoyed my time dealing with justice issues opposite the right hon. Member. Twelve years ago, one of his predecessors—a Lib Dem, in fact—cancelled the new hospital for Stockton. The need for one is far greater than ever and the Chief Secretary seems very capable of splashing the cash, so will he finally approve funding for a new hospital in Stockton?
Chris Philp
The Government have a commitment, which we stand by, to build I think 40 new hospitals in the coming years. Of course, the details of that programme are in the hands of my right hon. Friend the Secretary of State for Health and Social Care. I am sure she would be happy to discuss a hospital for Stockton with the hon. Member, who is an eloquent advocate for his home town, as ever.
Making sure that we act in a fiscally responsible way is a responsibility that falls partly on me as Chief Secretary. I have already said that we intend to stick to the limits set out a year ago in the comprehensive spending review—a three-year spending review, of which we are in the first year. We will exercise restraint in public expenditure, because we simply cannot have a state that continues to consume ever larger proportions of national income. Of course we need to make sure that public services are properly funded, but we need to do so in a way that does not impose excessively onerous burdens on taxpayers—our constituents who work hard day in, day out to earn a living and pay their taxes.
Growing our economy is our central and defining mission. The United Kingdom needs a Government who are wholeheartedly and unequivocally committed to economic growth. We stand committed to growth in a way that the anti-growth coalition arrayed against us does not. This Government have a very clear growth plan. The reversal of the levy and of the temporary national insurance increase is an important part of that growth plan, which is at the heart of this Government’s mission. I commend the Bill to the House.
James Murray (Ealing North) (Lab/Co-op)
Just over a year ago, Opposition Members stood in this Chamber urging the Government to drop their plans to hike national insurance contributions and to introduce a new levy on working people and their jobs. It was not just my Opposition colleagues and me making the case against this tax rise; the Government were warned by so many others, from the Federation of Small Businesses to the British Chambers of Commerce, the CBI and the TUC. Ministers were warned from all sides of the harm that their approach would cause. The Government were warned by their own Back Benchers. Ministers at the time even warned themselves. The tax information impact note on the tax rise was signed off by the Minister who took the original legislation through Parliament, and that note said:
“There may be an impact on family formation, stability or breakdown as individuals, who are currently just about managing financially, will see their disposable income reduce.”
In relation to businesses, it said:
“Behavioural effects are likely to be large, and these will include...business decisions around wage bills and recruitment.”
Yet the Government pressed ahead with the tax rise, supported in the Lobby by the current Prime Minister and the Chancellor. The Government kept supporting it until the then Foreign Secretary became Prime Minister and decided to perform a U-turn.
We welcome this U-turn, as it puts an end to a tax rise that we said was wrong from the very start. It is, of course, not the only U-turn that we have seen under this Prime Minister. Just last week the Government U-turned on their damaging and misguided plan to cut the top rate of tax for the very highest paid, so our current message to the Prime Minister and the Chancellor is to keep on U-turning.
James Cartlidge (South Suffolk) (Con)
Will the hon. Gentleman clarify something? Would he keep the social care cap and the spending on the backlog, and if so, given that he supports repeal, how would he fund that?
James Murray
The truth is that we are having this debate as part of a wider Government economic strategy that has caused economic chaos, and contains no plan for growth and no plan to fund public services. Even when we were discussing the original Bill last year, there was no plan for social care: there was no guarantee that a penny of the money would go into social care. So I will not take lectures from the hon. Gentleman.
James Murray
I am going to make some progress. I may let the hon. Gentleman intervene again in a few moments.
As I was saying, right now our message to the Prime Minister and the Chancellor is to keep on U-turning. They need to U-turn on their whole disastrous approach to the economy, which the Chancellor set out just over two weeks ago. That Budget—in all but name—was the most destructive, unfair and irresponsible fiscal announcement in a generation.
The Prime Minister and the Chancellor should now U-turn on their decision to lift the cap on bankers’ bonuses. They should U-turn on their refusal to ask oil and gas giants to put some of their eye-watering excess profits towards helping keep to people’s energy bills down. They need to U-turn on their discredited, dangerous trickle-down approach to the economy. It is time for them to reverse their disastrous kamikaze Budget, which has unleashed an economic crisis that they made in Downing Street, and which working people are paying for through higher mortgages and prices.
Alex Cunningham
My hon. Friend says, rightly, that we support this particular U-turn, but is he not as perplexed as I am about where all this money will actually come from—or does he know that, rather than having a magic money tree, the Tories have a full orchard?
James Murray
My hon. Friend is right to point out that the Conservatives’ sums simply do not add up. However, you do not have to take our word for it, Mr Deputy Speaker. Just look at the markets: they have issued their own judgment on the Conservatives’ so-called economic plan, and they are not convinced.
As we consider the repeal of the Health and Social Care Levy Act, it is important to remember how the Government’s decision to bring in this national insurance hike came to pass in the first place. Over the last 12 years under the Conservatives, we have been stuck in what the Chancellor himself rightly described last month as a “vicious cycle of stagnation”. With tax revenues stagnating under low growth, the Government made it clear that they felt the only way to raise more funds was to raise taxes on working people.
On Second Reading of the legislation that is being repealed today, the then Chief Secretary to the Treasury tried to defend the Government’s approach, saying that this new charge would
“enable the Government to provide additional funding to the NHS so that it can recover from the pandemic.”—[Official Report, 14 September 2021; Vol. 700, c. 843.]
We argued at the time that if the Government felt that they had to raise taxes, those with the broadest shoulders should contribute more, but the Government refused. They pushed ahead with this tax rise on working people and their jobs, and they refused throughout the debate on the original legislation to ask those with the broadest shoulders to take more of the burden. Now, as they repeal the legislation for the national insurance increase, they have abandoned any attempt at fiscal responsibility altogether, with an economic approach that has borrowing at its heart.
In a letter sent to the shadow Chancellor and the shadow Secretary of State for Health and Social Care on 22 September, the Economic Secretary to the Treasury wrote:
“The additional funding used to replace the expected revenue from the Levy will come from general taxation and may require further borrowing in the short-term.”
Labour takes a different approach. Our pledges are fully and fairly funded. As the shadow Chancellor has set out, we would boost NHS investment by ending the outrageous non-dom tax loophole exploited by the super-rich. We will use money from what is saved by scrapping that arcane practice to double the number of district nurses qualifying every year, to train more than 5,000 health visitors, to create an additional 10,000 nursing and midwife placements every year and to double the number of medical students so that our NHS has the doctors it needs.
Chris Philp
I think I heard the shadow Chancellor on television a week or so ago saying that her proposals on non-doms would raise about £2 billion. The cost of this measure is about £15 billion, so where is the other £13 billion going to come from?
James Murray
The Minister must not have been listening carefully enough to the shadow Chancellor setting out Labour’s plans, because we have set out how we would scrap the non-dom status, which it is completely irresponsible to keep in the current context, and to use some of that money to set out our plans for investment in the NHS. The difference between the Government and the Opposition is that the Government make promises and use throwaway comments about how they might fund this with general taxation or through extra borrowing, whereas when we set out our pledges, we set out exactly what we will pay for. They are fully costed, fully funded and paid for through fairer taxation.
James Murray
No, I am going to make some progress.
We have set out that we will not borrow for day-to-day spending and that we will not ask working people who are already struggling to foot the bill. That is what we mean when we say we are the party of economic responsibility and the party of social justice. The Conservatives have shown themselves to be the party of a failed approach to the economy. After six so-called growth plans from the Government that have all failed, the drunken gamblers of Downing Street have rolled the dice one last time, putting their faith in the ideological mantra that if they just slash taxes and regulation, they will unleash business investment and growth. They believe that wealth is created only by a few at the top, when the truth is that it comes from the bottom up and from the middle out.
The trickle-down economics of the Prime Minister and her Chancellor are wrong. Their approach will not work and it is not fair. It will hit working people’s spending power, undermining prospects for growth, and it ignores the need for the Government to be a partner for business to grow—something that is more important than ever with the turbulent, changing, challenging outlook that we face. That is why the next Labour Government would do things differently. We would bring together businesses and trade unions through a national economic council. We would support businesses to grow, through our modern industrial strategy, and we would use a national wealth fund to invest in the new green industries of the future. That is our approach to the British economy: pro-business, pro-worker, pro-growth.
The Government are making the wrong calls again and again. They were wrong last year to introduce the national insurance rise on working people, just as they were wrong last month when they tried to cut tax for some of the highest paid in society and to hide the OBR report on their plans. We welcome the Government finally admitting that they were wrong to raise national insurance on working people and businesses in the middle of a cost of living crisis, but their wider economic approach is one that is characterised by ballooning borrowing and a discredited trickle-down approach to economic growth.
The Prime Minister and her Chancellor are gambling with the livelihoods and wellbeing of people across the UK. Their gamble is dramatically worsening the cost of living crisis, with higher costs and mortgage payments for households across the country. It is shredding any reputation for economic competence the Conservatives might once have claimed to have, and it will fail to deliver the growth we need after 12 years of stagnation.
Throughout the cost of living crisis, Labour has forced the Conservatives to U-turn time and again. By repealing the national insurance rise and levy and by halting their plans to cut the top rate of tax for the very highest paid, the Prime Minister and the Chancellor have shown that they have it within themselves to make a U-turn. Our message to them is clear: do not stop there. The Government must U-turn on their whole economic approach and reverse their disastrous kamikaze Budget. Our message to the British people is also clear: this is a Tory crisis that has been made in Downing Street and is being paid for by working people. Only Labour will fix the damage that the Tories are doing. Only Labour will deliver economic responsibility and social justice. Only Labour will be a Government that are on your side.
Mr Deputy Speaker (Mr Nigel Evans)
Could people who intend to speak in the debate please stand, because I know that at least one is not on the list? Thank you.
James Cartlidge (South Suffolk) (Con)
It is fair to say that it is a bit of a novelty for me to be called so early, and without a time limit, in a debate. I am very grateful, not least because how we pay for healthcare is one of the single most important subjects in British politics. That is essentially what we are debating today, and I feel strongly on this subject. The core principle must be one that I have always held as a Conservative, which is that we are fiscally responsible. As with the environment, we must aim to leave things in a better condition for future generations and, with the public finances, have in mind at all times the impact on those yet to be born—on our grandchildren—so that we are fiscally responsible. That is the fundamental belief of my party, in my view.
With that in mind, there is a lot of excitement about what the OBR will say on Hallowe’en, but it has already pronounced on the matter of health expenditure. In July it published “Fiscal risks and sustainability”, a fascinating bedtime read. The crucial thing is what it says about the OBR’s estimate for the future cost of healthcare in this country. It predicts that the current spend on health and adult social care will go from around 10.3% of GDP to 17.5% of GDP in 50 years’ time. That is an extraordinary increase—almost double—and it would take up so much more of our wealth and public expenditure. The OBR’s track record is very accurate on estimating health spend. It is based on a lot of cautious variables that are obviously difficult to predict, but essentially this is, if you like, cutting the mustard in telling us the future cost we have to face up to.
To put this in context, the OBR estimates that the headline estimate for public debt that we will be passing to our grandchildren will be 100% of GDP in 30 years’ time and that in 50 years’ time it will be 267% of GDP. That is what it says in this document. If we carry on as we are, we will have a national debt of 267% of GDP because of the rising cost of what is called demographics. That is mainly healthcare but also the state pension and other aspects of the pensions system. Overwhelmingly, however, it is healthcare. Adult social care will double as a percentage of GDP as well.
I should declare an interest in the sense that I had an indirect role in the creation of the health and social care levy, and it is fair to say that I have many reservations about what we are doing today. As colleagues know, the former Prime Minister—who deserves great credit for this—was determined that we would not just have another Green Paper or White Paper on social care. He wanted to actually deliver something for the country and he introduced the cap that had been promised by successive Governments, so that although people who have saved hard and have assets have to contribute to their care, they know that there is a limit. It is incredibly important that we brought that forward, and I sincerely hope that in removing the funding mechanism for the cap, the Treasury will resist the temptation to water it down. Local authorities are not yet aware of exactly what the cap will cover, and with the funding stream gone, the Treasury must resist the temptation to water the cap down. That is absolutely paramount.
When the Prime Minister came forward with wanting to pursue the cap, it was the view of the then Chancellor —my right hon. Friend the Member for Richmond (Yorks) (Rishi Sunak), who I had the privilege of being Parliamentary Private Secretary to throughout the pandemic—that it must be funded, and that it could not just go on the national credit card. The social care cap on its own is massive rising liability. I have just set out what is going to happen to health costs more generally. So, how to fund social care? The most common suggestion was an increase in national insurance, for the simple reason that it applies to businesses and individuals and so raises the sorts of revenue we can get. It is not easily avoided, and it can give us the money in the bank to pay for these expensive costs that we face.
However, I submitted a paper to the Chancellor at the time and suggested that, rather than having just a narrow national insurance levy—a social care levy, as it were—we should have a full health and social care levy that should be hypothecated and appear as an explicit line on people’s payslips. It will be there on our payslips until November. I accept that we have not made the most of it, and there has been almost no enthusiasm from any quarter—possibly only from the social care sector—but with a transparent, hypothecated statement on payslips, if the NHS came back to us two years into a five-year funding settlement saying, “We need this additional big item,” we could say, “Fine, but it will come out of the levy.” That would be transparent, and it would have provided the discipline that we have terribly lacked in health spending for many years, under successive Governments. I thought it had great potential, but it is being vapourised today. The Prime Minister has a mandate for it and the whole House seems to support that view, as does the Labour party even though it does not have the foggiest idea how it would fill the gap.
Peter Grant
The former Prime Minister had a mandate to do what he did last year. The hon. Member for South Suffolk (James Cartlidge) says the new Prime Minister has a mandate to do this. Where did that mandate come from? I do not remember Parliament being dissolved for a general election in the last couple of months.
James Cartlidge
The new Prime Minister would rightly say that our manifesto said we would not increase national insurance, so she can draw on the mandate of the general election. We also seem to have vapourised our memory of the pandemic, but I would argue that it changed everything. The enormous borrowing accrued to this Government during the pandemic, which everyone supported—everyone wanted even more spending and even more support for businesses and individuals, as I remember because I was the then Chancellor’s PPS—made it exceptional, and we had to balance the books. I make it clear that this was not my preference, as I would not have wanted a levy to fund the NHS and social care. Given the politics of the time, it was the best way forward.
This is my personal view about how we should move forward. The key point is that the NHS is free at the point of delivery, which means we pay with time. When something is free, people wait and there are massive queues. Of course, those queues have been massively exacerbated by the pandemic, which is why the backlogs are so big, but it is blindingly obvious that the pressure on the NHS is overwhelming. There is almost infinite demand on finite capacity.
Labour Members will say in any election campaign, as we will. “We will do everything possible to increase capacity.” The Deputy Prime Minister and Health Secretary will, of course, do everything possible through her ABCD—ambulances, backlogs, care, doctors and dentists —strategy to improve outcomes in the NHS, but when we talk about funding the NHS, when we talk about the obligation to our grandchildren and the next generation, we have to be more radical, frankly.
In my view, we need a core NHS that is free at the point of delivery, but as a country we need to drive up the use of the independent sector and of private healthcare from all those brilliant companies that are seeing take-up shoot through the roof because of the backlogs. I know some of this territory is difficult to talk about, but I will give three key reasons why we should go down this route. First, every single person who pays to go private is freeing up space on the backlog. They are also boosting NHS capacity.
Secondly, this is standard in comparable countries. The Republic of Ireland, Australia and Germany have tax incentives for people to pay for their healthcare. There is an understanding that people who go to that trouble should have some kind of rebate, because they are doing everyone else a favour.
Thirdly, this is already happening. The post-Beveridge revolution is happening, and it is happening silently. There has been a massive surge in the number of people paying privately for healthcare. The Guardian recently published figures estimating that one in 10 adults in the UK has paid for private healthcare in the past 12 months, primarily because of the backlogs. Use has surged, according to the Independent Healthcare Providers Network. The number of people paying for hip replacements was up 193% in January to March 2022 compared with January to March 2019, and the number of people paying for knee replacements was up 173%. This is a huge surge in the number of people paying privately. It is true that many of them will not have wanted to do so, and I am not suggesting that they will have been delighted. Of course, we all want everyone to be able to use the NHS without long waits—that is clearly the ideal scenario—but it is not deliverable any more, not least with the demographic pressures we face.
We should look at the surging use of the independent sector and embrace it as a policy opportunity. Research from the Independent Healthcare Providers Network shows that 48% of people in this country will consider going private in the next 12 months because they know about the waits. This is about choice, and the most important thing is to have greater tax incentives for people to use the independent sector, so that people think about making a realistic choice. We should not settle for long waits for care any more. This is standard practice in comparable European and Australasian countries.
To be very specific, going back to the OBR document I mentioned, as a country we face a huge liability for health and social care. We should target increasing the percentage of our healthcare spend that goes to the independent sector so that we have a better balance, more like the balance in comparable European countries. If we did that, we would get much better outcomes, we would have more choice and we would finally have a 21st-century healthcare system with diversity of provision, which is the best way forward.
We should recognise that the revolution is happening, and it needs to happen with the Government’s backing and support.
Madam Deputy Speaker (Dame Rosie Winterton)
I call the SNP spokesperson, Richard Thomson.
Richard Thomson (Gordon) (SNP)
It was a little over a year ago that the then Chief Secretary to the Treasury told the House that this health and social care levy
“will enable the Government to tackle the backlog in the NHS. It will provide a new permanent way to pay for the Government’s reforms”.—[Official Report, 14 September 2021; Vol. 700, c. 845.]
That was quite a spectacular U-turn on the Conservative party’s 2019 manifesto. Page 2, signed by the then Prime Minister, made a solemn pledge:
“We will not raise the rate of income tax, VAT or National Insurance.”
To be back here, just over a year later, seeing a reversal is really quite something. Describing it as a U-turn does not do it justice. An antisocial driver doing donuts in the car park of the local supermarket is the best analogy for how out of control this approach seems to be.
The UK Government published a health and social care levy policy paper when the levy was introduced, and I distinctly remember this quote:
“This levy provides a UK-wide approach which enables us to pool and share risks and resources across the UK”.
It was therefore highly enjoyable to listen to the current Chief Secretary to the Treasury claiming that, now the levy is being repealed, the reverse also happens to be true, in terms of the UK-wide approach to pooling and sharing.
I spoke in the debate when the levy was introduced, and I recall that there was a sparsity of Back Benchers prepared to provide political cover for their Government’s change of heart. Quite clearly, an awful lot has changed since then. We have a new Prime Minister, who makes much of the fact that she is prepared to be unpopular, which is probably just as well in the light of recent events. She also tells us, and the Chief Secretary repeated it today, that there is apparently a sinister grouping at work outside this place—the anti-growth coalition. I will not go through all the groups that supposedly comprise this coalition, but it seems to be anyone who has the temerity or the audacity to disagree with the Prime Minister, so it probably includes about half the Cabinet and most Conservative Back Benchers.
Hywel Williams
I am grateful to the hon. Gentleman for raising the Government’s assault with such frivolity. Does he know how one joins this anti-growth coalition? When does it meet? Does it provide lunch? Does one have to apply through the currently absent Minister? Is there a form on the internet, as there is for everything else?
Richard Thomson
I am sorry to disappoint the hon. Gentleman, but I do not have any answers. From a Marxist perspective—a Groucho Marxist perspective—I would not want to be part of any club that would have me as a member. I am sure the T-shirts are being printed and will be available very soon.
The Government Benches were rather sparse in our previous debate on the levy. Judging by some of the contributions and the exceptionally well-targeted friendly fire, the Government clearly have some way to go to persuade their Members on not only the sincerity of their commitments on health and social care, but their broader approach to managing the economy.
Scottish National party Members had concerns about the levy at the time as a means of achieving the policy objectives outlined. In our view, it was unclear what the additional resource would be used for, other than in the broadest of terms. The near £13 billion levy seemed to us to be an arbitrary amount, unconnected to any clear plan for how the funds might be used to tackle the pressures in the NHS—far less for how that resource, and how much of it, would end up being passported through to meet the challenges in the care sector. We also remarked that there was no sign of the accompanying reforms that would be necessary to get better outcomes on integrating health and social care services in England, as has been done in Scotland and as will be built on through the establishment of a national care service by the end of the current Scottish parliamentary term. The levy was also introduced, and is now being withdrawn, without our having had any indication from the OBR—although we believe the work has been done—of the impact not just of this but all the other fiscal choices that now sit around it.
To say that the UK Government are in complete disarray in their approach not just to health and social care but to managing the economy, would be a kindness and an understatement. They are abandoning the national insurance rise in favour of increased borrowing, just as the Chancellor’s limited fiscal event has resulted in borrowing growing considerably more expensive. They are introducing tax cuts, which are intended to be funded in part by cuts to public expenditure, and those will inevitably feed through to pressures on the health and social care sectors that the levy was supposed to be bolstering. With the rampant inflation we now see in our economy, any resource that makes it through to the health and social care sectors will not travel as far as it would have done—those pounds will buy less. The huge post-pandemic health and social care problems that we face in common across these islands have also been made that much worse by the botched nature of the mini-Budget.
John Appleby, the director of research and chief economist at the health think tank the Nuffield Trust, is surely correct when he warns that the funding ball is now back in the Government’s court, saying:
“They will have to fund the commitment through some combination of borrowing and deprioritising other public spending”.
Let us be realistic about this: that is a far more likely set of outcomes than seeing the commitment being met through ambitions for growth, no matter how loudly and repeatedly they are stated.
To be clear, SNP Members never believed that a levy on national insurance was the way to achieve the objectives of meeting those challenges. It is tempting to go back to what was said on 24 March, when Paul Johnson, the director of the Institute for Fiscal Studies, called the Government to account in The Times newspaper, saying:
“Why promise to spend billions cutting the basic rate of income tax whilst going ahead with an increase in NI rates? That will make the tax system both less equitable and less efficient. It will increase the wedge between higher taxes on earnings and lower taxes on pensions and unearned incomes. And wouldn’t that money have been better spent sooner helping those most in need?”
That was an excellent question then and it remains so today.
Let us be clear that the funding challenge goes beyond the challenges of the economy, to meeting the parallel challenge presented by the growing and complex demands of an ageing population. In meeting that challenge, it is important that we are able to meet the demands and needs of patients, service users and staff with dignity and compassion, while making sure that the responsibility for contributing towards that financially is a burden shared fairly and equitably.
In financial terms, that is going to be met through a combination of revenue spend and capital spend. The way in which that cost is shared will come down to political choices over how much is to be borrowed and how the tax system is to be balanced over the longer term. We certainly wait with a mixture of bated breath and nervousness as to what the Chancellor will finally bring forward later this month. I make no apology for repeating this point: it must be fairer, as a general principle, to spread the burden by increasing income taxes across the board on both earned and unearned income, as well as to look again at areas such as inheritance taxes and capital gains, so that the totality of the wealth right across the nations of these islands can be taken into consideration when sharing that burden.
Instead, we seem to have a piecemeal and incoherent approach to reform from this Government, allied to an equally piecemeal and incoherent approach to taxation and the wider economy. It is often said of a person’s character that, when someone shows you who they are, you should believe them. My goodness, haven’t we in the past three weeks seen exactly what the essential character of this Government is when it comes to their priorities? We have seen that instinct revealed in the decision to unapologetically lift the cap on bankers’ bonuses. We see it in the attempts to cut taxes for the richest, to give least to those who need it most and to hack back on the public services that enable people to live the best lives they possibly can, irrespective of their personal circumstances. We see it in the resulting economic chaos and the fiction that out of that chaos growth will emerge, which somehow makes all of this additional borrowing affordable.
In some kind of conclusion, it is clear that the problems that led to this levy being identified as a solution in health and social care have not disappeared, even if the levy itself is about to. The Chief Secretary repeated the Prime Minister’s lamentable jibe about the “anti-growth coalition”. As the chaos that has emerged from the mini-Budget shows, the solutions to the myriad problems we face are not going to be found among the dangerous, disruptive ideologues who cause mayhem by supergluing themselves to the policy prescriptions of the Institute of Economic Affairs. They can be found only by building long-term value in the economy and making sure that the burden for doing so is shared equitably among all people and all businesses that can make the contribution that they need to.
David Rutley (Macclesfield) (Con)
I am grateful for the chance to speak on Second Reading and to follow considered speeches by right hon. and hon. Members. I am particularly pleased to see the Economic Secretary to the Treasury, my hon. Friend the Member for North East Bedfordshire (Richard Fuller), in his place. I knew him for many years before coming to this place and he brings real expertise to the Front Bench, notwithstanding the fact that he has very big shoes to fill—that’s for sure.
The repeal of the health and social care levy is part of the Government’s growth plan. The key elements of the plan to address cost of living challenges, caused largely by President Putin’s savage attacks on Ukraine, are most welcome. The energy price guarantee helps to limit the price of fuel bills for households across the country for two years, while the energy bill relief scheme provides similar support for businesses right across the country. Those steps are particularly welcome to the small and medium-sized businesses, both in Macclesfield and across the country, which have felt particularly exposed to the sharp increases in energy costs.
I understand the desire for greater growth and for reducing the tax burden. I recognise that many businesses and working people will be pleased to see the health and social care levy being reversed. They will be able to keep more of what they earn and decide how best to use the saving for their own business or household. I acknowledge that many business owners will welcome another element of the growth plan: the planned rise in corporation tax will not go ahead either. That said, I believe it is important to see the removal of the health and social care levy, and other proposed tax reductions, in the context of the wider economy and our public finances.
Financial markets have shown concerns about the cumulative effects of the policies set out in the growth plan, as was eloquently set out by my hon. Friend the Member for Salisbury (John Glen) earlier, and the lack of an associated OBR forecast to help set out an independent view has been unsettling. The forecast will help provide an independent view of the plan’s impact on our public finances and on the levels of the Government’s borrowing and debt. That is why I was pleased to learn that the Chancellor will bring forward to 31 October his statement on the medium-term fiscal strategy, and that Treasury Ministers and officials will, as is necessary, work closely with the OBR over the weeks ahead. It is vital that the Chancellor sets out his fiscal strategy soon, to help explain how the measures in the growth plan, including the impact of reversing the levy, will be funded and what they will mean for the Government’s spending plans, such as the funding for NHS backlogs and social care that the levy sought to address, as highlighted very well by my hon. Friends the Members for Winchester (Steve Brine) and for South Suffolk (James Cartlidge).
The latest timing also means that documents will be available before the next meeting of the Bank of England’s Monetary Policy Committee on 3 November. They will help provide additional, much-needed information for the markets, to colleagues here in Parliament and, of course, to our constituents. As the Prime Minister has said, in hindsight more could have been done to roll the pitch and communicate the growth plan before the Chancellor’s statement on 23 September.
In addition to the steps to lower taxes, such as the reversal of the levy, and to tackle energy cost challenges, the growth plan includes several innovative plans, such as the investment zones to help drive growth. In Cheshire East, our vibrant life science sector and industrial hubs would represent an exciting opportunity for such a zone to drive sustainable economic growth. That is just an idea, of course, for the Chief Secretary.
I wish that we could spend more time talking about such opportunities, but we have to accept that we cannot wish away market concerns. We have to recognise where we are, and the Treasury needs to take the time to communicate and explain its plans in more detail and in the context of the wider economy. With that in mind, I am pleased that the Chancellor earlier agreed with the Chair of the Treasury Committee on the need to further engage with and counsel colleagues in this House over the weeks ahead.
To conclude, this Bill will see the health and social care levy reversed. That policy and the implementation and phasing of other measures in the growth plan aim to help lift growth and will have wider economic consequences, so let us take the time to understand them more fully. Like many colleagues, I am a strong supporter of free enterprise. I recognise that lower taxes have a role to play in driving growth. As is often said, there is a time to every purpose, and at heart I am a fiscal conservative.
Sarah Olney (Richmond Park) (LD)
The Liberal Democrats were opposed to this tax to start with. We opposed the national insurance levy when it was introduced last year. Our argument at the time was that it would disproportionately impact lower earners and hit working families at precisely the time when they were struggling to pay their bills and prices were starting to increase in shops. We are really pleased that it is being reversed, and we support this Bill.
We must not ignore the fact, however, that a great deal of damage has been done in the past six months, during which employees, the self-employed and employers have been charged with this levy. During that time, employees and the self-employed will have paid about £2.5 billion, and businesses about £3.8 billion. One of the main disruptions is that it has been incredibly disruptive to businesses. I speak with some feeling as an accountant who in a previous life spent many hours working on payrolls and forecasting employee costs. I can only imagine what it must have been like for businesses over the past three years. In 2019, a Conservative Government came in promising not to increase any business taxes, but in 2021 they increased national insurance, and now here they are in 2022 reversing that increase. That is an awful lot of change for businesses to have to deal with, and that is quite apart from the increased costs that they will have borne over the past six months.
Let us think about the impact that that cost will have had on businesses. They will have been thinking, “Which employees can we have? If we want to grow our business, how many employees can we afford to take on?” They will have revised those assumptions in the light of the increased cost of national insurance, so we can only assume that the six-month increase will have stunted the very growth that the Conservatives say that they want to see, and that it will have contributed in part to the economic slowdown, not least because the impact on employees will have decreased their take-home pay, and that, of course, will have decreased their consumption.
What businesses need above all is certainty and stability, but that has been continually undermined by this Government and their constant chopping and changing of national insurance. This, of course, is happening at a time of a huge increase not just in inflation but, as has been mentioned several times, in energy costs, primarily as a result of Putin’s illegal invasion of Ukraine. That is also having a massive impact on businesses in this country, and the chopping and changing of the costs of employing staff will not have helped.
It has always been our argument that tax could have been more productively raised by an expanded windfall tax, which we have been calling for since last autumn. We are very pleased that the Government took on board some of our suggestions, but both Shell and BP have said that the Government could have gone further. Potentially up to an extra £60 billion of taxes could have been levied on oil and gas firms, which would have negated the need not just for the national insurance increase but for many of the other unfunded borrowing commitments that the Government made on 23 September.
Now that we are repealing the health and social care levy, it is important to remember—the hon. Member for South Suffolk (James Cartlidge) made this point very well—that we still have to deal with a crisis in health and social care. The Government must immediately set out their plans. We all anticipate the much-awaited fiscal event on 31 October with a huge amount of excitement but, more than anything, we need to hear from the Government their plans for health and social care, because there is no doubt that the backlog in NHS hospitals is in itself having an impact on growth. I saw figures today that suggested that the number of people suffering from a long-term sickness that prevents them from working is at a record high. We can all see how that has come about from the events of the past few years, but these are people who cannot be available for work and who cannot contribute to the Government’s “growth, growth, growth” agenda; they are not able to take up posts in what we know now is a record number of vacancies simply because they are waiting for treatment. We welcome this reversal, but the Government must state, and soon, what they plan to do to address the backlog.
Of course, this is not just about health; it is also about social care. There are 130,000 vacancies across our social care sector, and we know that that is caused by chronic underfunding. It cannot offer the kinds of salaries that care workers can find in other sectors. The shortage of care workers and of places in care homes is having a knock-on impact on our hospitals. I was at Kingston Hospital recently and was told that the reason it has problems, and one of the big contributors to its backlog, is that it cannot discharge patients because there is no care package for them to be looked after in their homes. The issue of social care, health and the backlog needs to be addressed urgently. It was not being addressed when the legislation to increase national insurance was first brought in, and it is not being addressed now. We urgently need to hear more from the Government on that.
I say to the Government that we would support an increase in the windfall tax and that we oppose their plans to reverse the planned increase in corporation tax, which I believe is what is creating the biggest need for the additional borrowing announced on 23 September. The Government urgently need to look at that again and at all the plans announced by the Chancellor on 23 September, and I for one am very keen to see what they come up with on 31 October.
Kim Johnson (Liverpool, Riverside) (Lab)
I welcome this decision to repeal the regressive hikes to national insurance, which would have seen those least able to pay with the heaviest proportional tax burden to tackle the crisis in social care. This is the right thing to do, but it should never have happened in the first place. Tax rises on the poorest, especially during a cost of living crisis, are cruel and unnecessary.
We now need urgent reassurances from the Minister that new funding for adult social care will come from progressive taxation and the pockets of those who can most afford it. We must be clear that a U-turn is not a plan; it is the absence of one. We still have no answers from the Government about how they plan to tackle the crisis in adult social care or where the funding will come from, other than to wait until 31 October for the medium-term fiscal plan.
Twelve years of Tory austerity have already seen £8 billion taken out of the social care system. Now we are facing a winter of hardship driven by the rampant cost of living crisis. Instead of bringing forward measures that will help the poorest and those most in need, the Government are prioritising tax cuts for the rich and public service cuts for the rest of us. They have removed the triple-lock protections on pensions and are refusing to commit to raising benefits in line with inflation. They have made disastrous economic decisions that have crashed the economy and made the cost of living crisis one of the worst among comparable countries.
Local governments are being forced to make further crippling cuts, as well as find extra money for energy costs and inflation to maintain their public services. We know that adult social care provision will suffer. Liverpool has lost £465 million of our budget since the start of austerity, which is more than two thirds of our overall budget since 2010. Liverpool, like other cities, has a growing elderly population with increasing complex needs, including dementia.
We urgently need a big injection of funding to councils’ care budgets alongside a social care workforce strategy to meet rising demands. We are facing unprecedented staff shortages in the health and social care sectors, with more than 165,000 vacancies and a massive staff turnover of 30% a year. In Liverpool, 15% of our social care workers are employed on zero-hours contracts and we have a vacancy rate of over 10%. Without action, the consequences will be devastating. We must be absolutely clear: a shortage of staff costs lives. It is as simple as that.
We are about to face a second round of Tory austerity, with £43 billion to be slashed from public services that have already been decimated during 12 years of Tory Government. Instead of more cuts, we need a serious injection of cash into adult social care and a plan to bring those services back in-house to end the rampant profiteering of companies backed by private equity funds, which sucks public money out of the system and out of services and straight into tax havens in the Cayman Islands to be hoarded by the super-rich. Decent pay, terms and conditions for undervalued employees must take centre stage of any serious plans to tackle the deep-rooted structural issues in the social care sector along with a long-term workforce strategy and improved quality and standards of care.
The Secretary of State for Health and Social Care has committed to maintaining the same levels of funding on health and social care despite today’s cancellation of the levy. However, the Prime Minister and the Chancellor are crowing about this reversal to national insurance contributions as a key victory in their tax-cutting agenda, which will see £43 billion slashed from public services. Will the Minister confirm whether the Government will commit to spending the same planned £12.4 billion a year over the next three years that would have been raised by this levy? A simple yes or no answer would be great, thank you.
Peter Grant (Glenrothes) (SNP)
I do not often say this, but I welcome the decision that the Government have taken, which is to U-turn on their increase in national insurance contributions, although I utterly reject any suggestion that it should be coupled with any watering down of the previous commitments on funding for health and social care services.
I do not think that national insurance is the right name for this tax. It is an income tax—a jobs tax—and we should be honest about what it is doing. It is a jobs tax because if a person has a job, they pay tax on the money that they get paid for doing their job— unless they are earning way below the minimum full-time wage. If they are an employer, they pay tax on the wages that they pay someone for doing the job for them. It is only if a person is lucky enough to be able to make most of their money from owning shares or property that they can earn significant amounts of money without paying national insurance on that income. I have to say that not many of my constituents who are struggling on a minimum wage and part-time jobs are that impressed by the fact that they can get national insurance-free income from their share portfolios, because they cannot afford to buy them in the first place.
This is a form of income tax—a jobs tax—specifically targeted at working people. It is not even an insurance as such. I pay insurance on my car. If I am involved in an accident, I have a guarantee that the insurance company will pay its share of the costs. People do not get that guarantee just because they have been paying national insurance contributions all their life. Just ask the WASPI women—of the Women Against State Pension Inequality Campaign—how much of an insurance scheme guarantee they actually get from national insurance.
The legislation that we are being asked to repeal today—and it looks like it will be repealed today without a Division—introduced a form of hypothecated tax, which is not something that I would generally support. Nobody has really mentioned that in this debate, and it did not get much coverage in the debate last year. Other than for very time-limited and precisely defined purposes, hypothecated taxes do not really work. Filling in a small part of the decades-long underfunding in some of our most important public services is neither time limited nor specific.
Whatever we are going to do to change the tax system to get adequate funding for these services, a single, specific hypothecated tax is never going to be it. I have been consistent on this. I find it interesting that nobody who has spoken in this debate in favour of repealing the levy has explained why they voted for it in the first place last year. I note that sometimes people are allowed to change their minds regularly, whereas at other times people are not allowed to change their minds from eight years ago.
Our health and social care services are among our most precious public services. Universal healthcare—including free prescriptions—free at the point of delivery, based only on clinical need rather than the ability to pay, is surely an essential part of any civilised society. I would say the same about social care. I am proud that in Scotland we have free personal care for those who need it, regardless of whether they can afford to pay for it. I welcome the steps that the Scottish Government have taken to reduce the financial burden on those who need other forms of social care as well. All of these services are available to everybody and they should be paid for by everybody according to our means through general taxation. I am not ashamed to say that if I had to pay a wee bit extra tax that I could easily afford in order to provide a civilised society for my people to live in, I would do so willingly.
Those principles are now under direct attack, even more so than they were under the previous Prime Minister, and even more so than they were in the dark days of Margaret Thatcher. We now have a Prime Minister who has chosen to surround herself with people whose links to the NHS privatisation lobby are not hard to find. It does not need to be direct privatisation; it is very easy to privatise the health service by stealth, simply by strangling it of funds so that the waiting list becomes so long that people choose to pay for a health service that they have already paid for through their taxes.
That is why it is essential that we get a commitment from this Government that not only will there not be a reduction in cash terms in health service funding or in social care funding, but that those budgets will increase by enough to cover the cost of inflation as it hits those services. Historically, inflation in the health service has usually been higher than the headline rate of inflation. The headline rate of inflation is savage enough just now. It is likely that the true cost of inflation to the health service is even higher. I asked the Chancellor about this directly a few weeks ago when he issued his mini-Budget. Scandalously, he refused to give a commitment that funding in the health service will even keep pace with inflation, never mind increasing to meet what we can all see is an unmet demand.
Part of the reason that the NHS is coming under unprecedented pressure is that the policies and deliberate choices of this Government and their predecessors have forced people into poverty and destitution, and that has an impact on people’s health, which creates additional demand on the NHS. As others have pointed out, having people on health service waiting lists unable to work damages the economy. If the economy is damaged in such a way that it affects the funding of the health service—if, for example, people are given lower wages, are put under financial stress and are unable to afford the cost of living—that in turn damages our health, and to an extent that we perhaps have not properly realised until recently.
A recent study by the University of Glasgow and the Glasgow Centre for Population Health found nearly 335,000 excess deaths in the UK in the past seven years that were caused by austerity. Deliberate policy choices by this and previous Tory Governments since 2012 have killed more people than the covid pandemic. That is a scandalous thing to happen in any country that claims to be civilised. That is why we cannot fully consider the provisions of this Bill, or the provisions of the Act of Parliament that it seeks to repeal, in isolation from the wider policies of a Government who seem hellbent on plunging even more people into poverty, while lining the pockets of their own billionaire supporters and donors.
To give just one example, the Chief Secretary to the Treasury was delighted to tell us earlier that the combination of not increasing the national insurance levy and the previously announced changes to income tax thresholds will amount to a whopping £500 per year back in the pockets of my lowest-earning constituents. They are paying between £1,200 and £1,500 a year more just for the heat in their homes compared with last year, so the generous £500 a year that the Government are putting back into their pockets is less than half of what my constituents need just to stand still for electricity and gas prices. That is before they start to pay their increased costs of food, rent and mortgages for those able to buy their own homes.
That should not be inevitable. My constituents live in a country in which 85% of energy does not come from gas, so why do they see their bills doubling when there is a gas shortage? My constituents live in a country that supplies more energy than it needs and has a commodity that is in short supply, so why are they so much worse off when the value of the commodity that we have in surplus increases on the global market? Those are not questions that Treasury Ministers or other Ministers in this place do not know the answers to; they are questions that they are scared to face up to the answers to.
Repealing this legislation when the ink is hardly dry on the paper serves to illustrate yet again the total chaos that this Government are in. That chaos has spread to the whole of these islands, and they seem quite happy to inflict it on the financial markets, despite the impact they know it will have on people’s standard of living now and the pensions they will be able to rely on in the future.
The Government’s persistent refusal to provide a costed plan to ensure sufficient and sustainable funding for those vital services, directly through funding in England and indirectly through Barnett consequentials on the devolved nations, and their persistent refusal to put health and social care services on a proper and sustainable funding basis demonstrate clearly that our national health service can never be safe in the hands of this or any other Westminster Government.
Alison McGovern (Wirral South) (Lab)
Before I get into the Bill, I want to note some of the remarks made by the Government on their energy package and the speed with which that was brought forward. Given that this is the first opportunity we have to discuss these financial matters, I want to record that it felt during recess as though almost every day in August people were begging the Government to act, and they did not. We waited and waited, while they had an internal debate when they could have acted. For 12 years, in fact, it has seemed that the British economy has had both deep-rooted problems and significant shocks. Given the situation before us and the chaos we face, would not any Government want to act?
That brings us to today’s Bill, which is essentially a U-turn. As colleagues have said, the Government are showing here that they can U-turn, but what we need now is much more significant action. We can say with certainty that the Chancellor has already made a considerable impression on the economy. He inherited a cost of living crisis and for good measure added a cost of borrowing crisis, an interest rate crisis, a mortgage crisis, a sterling crisis, a Government bond crisis and a pension funds crisis.
Inflation was already at its highest rate in 40 years, devouring household wages and savings; Shell, ExxonMobil and Chevron recorded their highest ever profits and household energy bills doubled within a year. Thanks to this Government, the pound has slumped to its lowest value against the dollar since Britain went decimal in 1971, and the Bank of England has been forced to launch an emergency £65 billion bond-buying scheme that, as we saw yesterday, has barely stopped the chaos.
Thanks to this Government, in the blink of an eye the average homeowner now faces a monthly mortgage payment that is £500 more expensive and food bank use has soared to such an extent—[Interruption.] Do not say it is global. The food bank increase is not global; it is a feature of the UK economy, and it has soared to such an extent that volunteers will need either to turn people away or to reduce the size of emergency rations. That is the situation we face, and that is why this Bill must not represent the last U-turn from this Government.
We have heard from various Conservative Members that they are the party of tradition, so let me commend the Government on respecting a long-standing Conservative tradition in their conduct relating to our economy. Just like on 16 September 1992, Conservative Governments always end up sacrificing family finances to pay for their chaos.
This Chancellor, in his airy disregard for experts, produced a Budget so complacent, so unfunded and so unconvincing to the markets that the cost of our long-term borrowing soared. His doubters are now not just the members of the Labour party; they include bond traders, the currency markets, the civil service, the OBR, the Bank of England, the IMF and the British public.
The Conservatives have pierced a hole in the British economy, and the effects are widespread and severe. Pension funds were brought to the edge of collapse and, before the Bank of England intervened, we risked falling into a self-perpetuating spiral,
“threatening severe disruption of core funding markets and consequent widespread financial instability.”
To be so ignorant, so high-handed and so willing to risk impoverishing people is unforgivable.
It is some small comfort that today the Tories are reversing their own rise in national insurance. U-turn follows U-turn and we return to square one. However, this zig-zagging incoherence is not just a waste of parliamentary time and energy, but damaging to our stability and our credibility. No matter whether they raise taxes or lower them, high-quality public services and economic growth will continue to elude the Conservatives. That is because, as has been said so often, economic strength does not come just from the top; it starts in the everyday lives of working people right across our great country. The hon. Member for South Suffolk (James Cartlidge) explained well what is happening right now for people trying to work. Thanks to the Conservatives, record waiting lists see acute conditions becoming chronic and more and more people having to leave the labour market. Do not crow about unemployment being at historically low levels when inactivity—people simply unable to work—is shooting up again, as we found today.
James Cartlidge
Just to clarify, what I said was that it was due to the pandemic—not entirely, but everything the Labour party says now is airbrushing out of history the greatest post-war trauma that the country faced, when there was an enormous surge in borrowing, which we all supported, to fund the support for businesses and people in our constituencies. At some point, will Labour recognise the impact that had and the action we had to take, which has led to decisions such as these tax increases?
Alison McGovern
The impact of the pandemic on our labour market and our health service has been profound. It should inspire us to see the capabilities of the people within our health service, and it should show us the undeniable truth that there will be no economic health in this country without securing the health of the people of this country. That is what the pandemic shows us. I simply ask that the party in government today, the Conservative party, learns that lesson.
If we look at what is going on with our labour market, we see that part of the growth plan must be to secure our health service, get waiting lists down and get people back to good health. We have heard that funding for health and social care services will be untouched, so let me assure the Government—already so elastic with their commitments—that their promise on the health service will be under heightened surveillance in months to come.
The Government say that they have a growth plan to end their cycle of stagnation and to radically overhaul what has been dragging us down, but that plan simply has no credibility. It is delayed and delayed. Until we see what they truly believe can help this country grow, all we see is the cost of borrowing growing, inflation growing, mortgage payments growing, food bank use growing and child poverty growing, while the true opportunities that this country has—its people and their talents—are left wasted.
Who asked for this? Who nodded happily at higher mortgage repayments? Who wanted public services to be slashed or spiralling inequality? There is no consent for this, as we have seen—not even consent on the Tory Back Benches. The resulting damage to our economy is immediate and sharp, but there is another danger that emerges slower but is just as great: the risk to our relationship with the British people.
I worry that we have short memories in this place. Only three months ago, more than 60 Ministers fled the Government of the right hon. Member for Uxbridge and South Ruislip (Boris Johnson). For some time, that Government were viewed with real anger by the public, who overcame the pandemic through shared sacrifice, only to feel cheated, insulted and taken for fools by their Government. Well, the British people are not fools, Madam Deputy Speaker. They understand that this winter, whether it is due to soaring energy bills, surging inflation or the war in Ukraine, shared sacrifice is needed again. In return, they are owed compassionate, responsible leadership and a Government who can look them in the eye.
This is not a time for economic hobbyism—for testing pet theories like schoolboys in the common room—and ignoring the country. Not even two people in every 1,000 voted for the Prime Minister or her Chancellor. Britain did not choose to be experimented on in this way. When the Chancellor delivered his crazy Budget on 23 September, everyone in this country was united in experiencing that act of economic vandalism. When children are hungry, pensioners colder and families fearful, the Chancellor avoided the profits of energy giants and signed off unfunded tax giveaways for millionaires. In waving through bigger bonuses for bankers, he took a torch to our social contract. Instead of shared sacrifice, this gang of fanatics on the Treasury Bench turned to casino economics and gambled away public trust.
It is an old, old saying that you can judge a person by what they choose to do with power. After 12 years of the Tories in power, the veneer has worn off, revealing the same old ideas that have been tested to destruction in this country: run the country on the cheap, leave public services crumbling and make working people pay the price. The big society—remember that?—has been and gone, one nation conservatism is a painted shell, and the façade of levelling up has been abandoned, as they cut taxes for millionaires and look set to cut benefits for the poor. It does not matter whether it is this Prime Minister or whoever soon replaces her—this is the Conservative project and it has been there all along.
It is the single greatest privilege in this country to sit on the Treasury Bench. Instead of living up to that honour, the Conservative party is hopeless, reckless, callous and weak. There is no consent for this Government’s ideas, and they should be driven out of office. If they really are such a confident group of free thinkers, surely they have nothing to fear from taking their pitch to the country.
The Economic Secretary to the Treasury (Richard Fuller)
It is a pleasure to close this debate on behalf of the Government. I thank all hon. Members for their contributions to this relatively short debate. I think it is fair to say that none of us came here expecting to find a perfect consensus, but it was rather pleasing to hear the measure welcomed by the Opposition spokesperson, the hon. Member for Ealing North (James Murray), the SNP spokesperson, the hon. Member for Gordon (Richard Thomson), the Liberal Democrat spokesperson, the hon. Member for Richmond Park (Sarah Olney), and the hon. Member for Glenrothes (Peter Grant). I thank all those Opposition Members for their support.
I thank my hon. Friend the Member for South Suffolk (James Cartlidge) and my long-standing hon. Friend the Member for Macclesfield (David Rutley) for their speeches and my hon. Friends the Members for Winchester (Steve Brine) and for Salisbury (John Glen) for their interventions. If there was one message from the four of them, it was on the importance of fiscal responsibility. That was heard loud and clear, and it has been resonated by the Chancellor again and again, including today. Truly, it is the essence of conservatism, as my hon. Friend the Member for South Suffolk said. I noted what my hon. Friend the Member for Macclesfield said about the Treasury working more closely with the OBR and about the engagement requested by the Chair of the Treasury Committee. I assure him that the Treasury team will engage as he has suggested.
This has been a serious debate for the most part. It looked like it was getting into levity at one point, when the hon. Member for Arfon (Hywel Williams), who unfortunately is no longer in his place, volunteered to be a member of the anti-growth coalition. He said it was important that there was a free lunch. The hon. Member for Gordon spoke about not joining a club and invoked Marx, although not the Marx who was the favourite of the former Opposition spokesperson on finance.
At times, there were clear points of ideology in respect of the plan. It is clear that the purpose of the Chancellor’s growth plan is to improve lives across the country over the long term. Growing the economy must be our guiding mission, and with this Government it is. We will do so through lower taxes, through improved infrastructure, by supporting skilled employment, by removing barriers to investment, by getting the housing market moving, by making Britain an even better place to do business and by ensuring that people who earn money keep more of it so that they can make their own decisions—that includes our businesses.
I heard from the Opposition spokesperson that their plan comprises two aspects. First, it is the Government—a Labour Government—who should decide the right way to achieve growth in this country, rather than the wealth creators and businesses. Labour wishes to make those decisions on behalf of all of us. Many of us on this side of the House know where that sort of central planning ends up.
Secondly, those with the broadest shoulders should bear the burden. I just warn hon. Members to measure how broad their shoulders are. My fear is that it is not those with broad shoulders but anyone with shoulders who bears the burden. My point is this: the starting position for Labour’s plan is that this year, 2022-23, those in the top 1% of the income distribution are estimated to receive 13% of all income, but already pay 30% of all income tax liabilities. Those in the bottom 50% of the income distribution are estimated to pay only 8.3% of all income tax. When Labour says that it wants to fund its plans through general taxation, it is not looking for the 1% to pay; it is looking for people on average and low incomes to pay. The Conservative party does not think that is the right way to achieve growth.
Richard Fuller
I will come to the hon. Gentleman if I have time.
The Liberal Democrat spokesperson gave a very good speech and raised important broader issues. She welcomed the measure and spoke about the costs that have been paid by people and businesses—she gave the figures £2.5 billion and £3.8 billion. That underlines the important contribution this measure will make by putting money back into the pockets of households as they face the winter crisis and into the hands of businesses as they make their investment decisions.
The hon. Lady kindly spoke about her past as an accountant—not everyone would necessarily volunteer their past as an accountant. She spoke about some of the disruption there has been. I assure her that I have spoken, as has HMRC, to payroll software companies to assess what the level of disruption has been and whether this additional change will cause further disruption. In my conversations with them, they have said that there have been minimal costs to date and that the reversal will have minimal costs for them. That is just a selection of payroll software companies—there are others—but I can give her some assurance that there has perhaps been less disruption than she feared.
Sarah Olney
I thank the Minister for that assurance, but the point I was making was not so much about the technical implementation; I totally take his point that it is a software change. The point I was making was more about headcount forecasts and how many staff businesses can afford to take on. Changing the national insurance contribution that businesses make has a material impact on those forecasts and will have had an impact on how many new jobs have been created.
Richard Fuller
That is an interesting point, and it probably is worthy of further investigation. On the day when we have announced that the country has more vacancies than unemployment, and unemployment is at a long-term low, one would think that that impact has not been significant, but it is an issue that is worthy of further investigation. The other point that the hon. Lady made about the impact that hospital discharges may be having on social care—she talked about the hospital in her constituency—is a relevant one, and I am sure that it will be taken up by my right hon. Friend the Secretary of State for Health and Social Care.
The hon. Member for Liverpool, Riverside (Kim Johnson) asked, as others did, whether the changes to the levy will change the funding previously announced. I can assure her that the levy change makes no difference to the funding outlined.
Other points were made, and we will have further discussions in Committee. My right hon. Friend the Chief Secretary to the Treasury made the point that the reversal of the levy is part of a much greater sum. Above all, it is about achieving the sustainable growth that this country needs and deserves. That is our mission as a Government, and it is the purpose of the Bill. I commend it to the House.
Question put and agreed to.
Bill accordingly read a Second time; to stand committed to a Committee of the whole House (Order, this day).
Further proceedings on the Bill stood postponed (Order, this day).
Health and Social Care Levy (Repeal) Bill (Money)
King’s Recommendation signified.
Motion made, and Question put forthwith (Standing Order No. 52(1)(a)),
That, for the purposes of any Act resulting from the Health and Social Care Levy (Repeal) Bill, it is expedient to authorise:
(a) the payment of sums by the Secretary of State out of money provided by Parliament to His Majesty’s Revenue and Customs for payment into the National Insurance Fund, and
(b) the payment of sums out of the National Insurance Fund into the Consolidated Fund.—(Amanda Solloway.)
Question agreed to.
Health and Social Care Levy (Repeal) Bill
Tuesday 11th October 2022
(1 year, 7 months ago)
Commons ChamberRead Full debate Health and Social Care Levy (Repeal) Act 2022 View all Health and Social Care Levy (Repeal) Act 2022 Debates Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: Committee of the whole House Amendments as at 11 October 2022 - (11 Oct 2022)
19:41 - The House divided: - Ayes: 190 / Noes: 257 - Question accordingly negatived.
The First Deputy Chairman of Ways and Means (Dame Rosie Winterton)
With this it will be convenient to consider new clause 2—Assessment of revenue effects on health and social care of increases in the rates of taxes on dividend and capital gains income—
‘The Treasury must lay before the House of Commons within 30 days of the date on which this Act is passed an assessment of the merits of raising at least the same amount of revenue for health and social care as would have been raised by the health and social care levy by instead bringing the rates of taxation on dividends and capital gains income in line with existing rates of taxation of earnings.’
This new clause would require the Treasury to report on an alternative to using the health and social care levy to fund health and social care, by raising more tax revenue from dividends and capital gains.
Schedule stand part.
James Murray
We know that the Bill is straightforward in what it seeks to achieve: as clause 1 sets out, it simply repeals the Health and Social Care Levy Act 2021. Ministers are asking us today to overturn a piece of legislation that they and their colleagues strained to defend and voted in favour of a little over a year ago.
As I set out on Second Reading, we welcome Ministers scrapping the tax rise on working people introduced by last year’s Act, but while the levy was not due to come in until April 2023, and the Bill means that the levy will never be charged, the Act also raised national insurance contributions for the current financial year 2022-23 as a transitional measure. As clause 2 confirms, the Bill keeps national insurance contributions at that higher level for the first seven months of this year, before letting them return to their previous levels from November. The decision by Ministers to scrap the national insurance rise is, of course, better to have come late than never, but this in-year change means that yet another cost will be paid for through working people’s taxes, as public money pays to undo the mess created by the Tories having made the wrong call last year. The explanatory notes to the Bill confirm that there will be a cost of an in-year change. Under “Financial implications of the Bill”, they state:
“HMRC anticipates increased call volumes and customer contact as a result of the in-year reduction of NICs rates. There will be delivery costs in implementing this policy. IT changes will be required to be delivered at additional cost to HMRC, to support safe delivery of this policy.”
All this could have been avoided if Ministers had simply listened to people across the country, to the Opposition, to Members on their own side, to the Federation of Small Businesses, the British Chambers of Commerce, the CBI, the TUC and so many others. If Ministers had listened, they would have realised that it was wrong to go ahead with this tax rise on working people in the first place. While we know that the U-turn before us will cost more than if Ministers had made the right call last year, we do not have a figure from the explanatory notes for exactly how much this will cost. On that point, the Bill’s notes simply say that
“Costings will be set out in due course.”
In other times, I might have read that statement and concluded that Ministers genuinely do not know the costings, but if their behaviour over the OBR report is anything to go by, it could be that they are simply refusing to publish those costings for political reasons.
It is because of this Government’s lack of willingness to subject themselves to transparent scrutiny that we have tabled new clause 1. New clause 1 would require the Chancellor to publish a report on the financial implications of the Act on the day that it comes into force. That report must make an assessment of the Treasury’s plans to raise an amount of revenue equivalent to the proceeds of the levy in the context of its approach to general taxation and borrowing.
As I mentioned on Second Reading, the Economic Secretary to the Treasury confirmed in a letter sent to the shadow Chancellor and the shadow Secretary of State for Health and Social Care on 22 September that:
“The additional funding used to replace the expected revenue from the Levy will come from general taxation and may require further borrowing in the short-term.”
We already know that borrowing is set to soar thanks to the Government’s disastrous and discredited approach to the economy. We know that their approach has inflicted huge harm on our economy, damaged our international standing and pushed up mortgage payments for households across the country. We know in particular that the Government’s failure to publish the OBR report showing the detail behind their approach has aggravated the spooking effect on markets. Through our new clause, we would require the Government to explain how they will maintain the funding equivalent to the levy, given their wider reckless decisions on borrowing and the economy.
New clause 1 refers to general taxation. As Members may recall, when they announced the health and social care levy last year, the former Prime Minister and Chancellor explained that, alongside the national insurance increase, the Government would also increase taxes on income from dividends at the same time. On 7 September last year, the previous Prime Minister, the right hon. Member for Uxbridge and South Ruislip (Boris Johnson), said:
“because we are also increasing dividends tax rates, we will be asking better-off business owners and investors to make a fair contribution too.”—[Official Report, 7 September 2021; Vol. 700, c. 154.]
The question arises of why the current Prime Minister and Chancellor have decided to cut this tax rate from April 2023. They do not need to scrap the dividends tax rise as part of the repeal of the Health and Social Care Levy Act—the dividend rate does not appear in that Act—but they have none the less committed to doing so. I would be grateful if the Minister could set out whether he agrees with the former Prime Minister’s argument that having a higher tax rate on dividends means asking better-off people to make a fair contribution. If so, can he confirm why the Government have decided that it is the right time to cut taxes for those who are better off, even if that means greater borrowing funded by all taxpayers?
As I have made clear throughout, we are glad that the Government are using the Bill to finally scrap this tax rise on working people, but it is clear that taxpayers will pay yet again to fix the mess the Tories have created, that Ministers are planning to again cut taxes for those they have described as the better-off and that this Government are desperate to avoid scrutiny of their plans. It is with that final point in mind that we ask Conservative Members who are uncomfortable with their Government’s approach to join us in supporting new clause 1.
Our new clause would simply require the Treasury to be transparent about how it will replace the money for health and social care that will no longer accrue from the health and social care levy, in the context of its wider approach to taxation, borrowing and the economy. As we have heard throughout the day in Parliament, there is widespread concern that the Government’s plans do not add up and that their lack of transparency is making matters worse. Our new clause makes clear to Ministers that this must change.
Steve Brine
I was not planning on speaking, but there are a couple of points that I would like to put on record, as a former Health Minister. I will not revisit the debate on the leadership campaign in the summer, or support new clause 1. I listened carefully to the hon. Member for Ealing North (James Murray) setting out his argument, and I have some sympathy with some of it, as he probably gathered from some of my interventions earlier.
I was happy to support the Second Reading of this repeal Bill—not that we had a Division on it. The Bill was well trailed throughout the ridiculously long leadership campaign in the summer; I do not think that that was the issue that spooked the markets at the time of the fiscal event a couple of weeks ago.
As my hon. Friend the Member for South Suffolk (James Cartlidge) said so eloquently on Second Reading, this is probably the most important debate that we could be having; I am miffed that the House of Commons is so quiet. It is about funding the British public’s No. 1 priority: the national health service. It was about that when we passed legislation on the levy, and it is about it now that we are repealing it. The issues have not gone away. I will listen carefully when the case for new clause 2 is outlined, but new clause 1 looks down the wrong end of the telescope. My hon. Friend cited the Office for Budget Responsibility’s projection that NHS funding will, in coming years, go from about 10.3% to 17.5% of GDP. Those are eye-watering figures. I have to say, as a former Minister for public health, primary care and prevention, that we cannot simply carry on that curve.
I want to put on record my points on three or four of the big challenges that the health service faces. If the Government let ideology get in the way of facing down those challenges, future generations—and Governments, whether Conservative or Labour—will pay the price. Take obesity. UK-wide, the NHS costs attributed to being overweight and obesity are projected to reach £9.7 billion by 2050. When I was in the Department of Health, we wrote the child obesity strategy. It is fair to say that the former Prime Minister, my right hon. Friend the Member for Uxbridge and South Ruislip (Boris Johnson), did not like a lot of it when he was running for the leadership of our party. In fact, I think he referred to the sugar tax as a sin tax, but—let the sinner repent—he came round to it. Now I hear rumours that it is for the bin.
I hear rumours that many other measures, including those around price promotion—"buy one, get one free”, as it is colloquially known—are also potentially for the bin, because we do not want to be seen as a nanny state. This from the state that recently passed a law making it illegal to leave the house without good reason. Sometimes, the state does things in the interests of the population that it serves, and there is no shame in that. If we do not tackle the obesity challenge, it will have not only a big financial impact on the NHS, which we are talking about how to fund, but a big social impact.
That takes me to my second point, which is on cancer. Around four in 10 cancers today are preventable. Smoking causes at least 15 different types of cancer. It is the biggest cause of cancer in the world today. Earlier, the hon. Member for Stockton North (Alex Cunningham) mentioned the smoking cessation plan, which I published when I was in office, and subsequently updated. We are still waiting for its revision. Press reports say that it is to be dropped as well. I gently suggest that that would be a massive own goal for our Government, and for the NHS, which we argue about how to fund.
Alex Cunningham
I thank the hon. Gentleman for his kind comments. I think that he will agree that the savings that could be made in the longer term by implementing an effective tobacco control plan are absolutely massive; both the Department of Health and Social Care and the Treasury could derive tremendous benefits from it very quickly, if they act properly.
Steve Brine
Without question. We had some success with our tobacco control plan, but progress has stalled. We cannot ignore the pandemic, as the Opposition Front Benchers sometimes try to, and I understand that it disrupted the smoke-free England plans, but we need to get back to it, for social reasons, and for economic reasons relating to the health service that we seek to fund.
I am sure that right hon. and hon. Members from across the House have heard of the “Be Clear on Cancer” campaign, and of the “Touch, Look, Check” message encouraging women to check their breasts. I lost my mother to breast cancer; it destroyed much of my family. I brought a ten-minute rule Bill on the subject to the House earlier this year. Breast Cancer Now tells me that it thinks that there are 12,000 undiagnosed breast cancers in this country today. One does not need to be a genius, a former Health Minister or a breast surgeon to understand what that could mean: undiagnosed breast cancers move beyond stage 1, into 2 and 3, when they are untreatable. That is what happened to my mother, and I do not want it to happen to others. If the nanny state means implementing “Be Clear on Cancer” campaigns to help people avoid cancer, I am a nanny state-ist.
David Rutley
My hon. Friend makes an important point about raising awareness, particularly on public health, and I support the points that he makes, but does he agree that, at this time of real challenge, it is also important to drive public awareness of how to use energy more efficiently, in order to help people with their fuel bills?
Steve Brine
I know why Dame Rosie is smiling: she thinks that I have possibly attempted to fit my Second Reading speech into this response to new clause 1. If I go down the road of energy policy, I may test her patience. All I would say to my hon. Friend is that, if the energy price guarantee was a price cap, and people could not pay more than the amount at which the cap was set, there would be some argument for not having a public campaign advising people on their energy use. It is not a cap; it is an energy price guarantee. If people use more energy, they will pay for more energy. It therefore seems logical to me, on lots of levels, to help people save energy—but what do I know?
I was just coming to diabetes. The NHS spends about £10 billion a year—that was about 10% of its budget, when I was in the Department—on diabetes care. That is a phenomenal amount of money, yet type 2 diabetes is preventable and, as we have heard from Members, people can turn it around. Why would we not want to encourage people to manage their weight better, when weight is one of the big drivers of diabetes?
Finally, stoke is a big killer in this country. It costs the NHS billions. During conference recess, I visited a group in my constituency called Say Aphasia—I figured it was a better use of my time. I met a group of 15 men who had had strokes. One was two years younger than me. They had severe communication difficulties. I see my hon. Friend the Member for Bury St Edmunds (Jo Churchill), a former public health Minister, by the Front Bench. She knows what I am going to say. Why would we not want to help the NHS prevent stroke through a proper salt reduction strategy? Given my surname, when I tried to suggest one to the Department, it caused some amusement among officials, but I think it is the right thing to do. If we cannot prevent stroke, I will meet a lot more people like those I met in the Say Aphasia group last week. Their ongoing cost to the NHS is significant.
In conclusion, the point I am trying to make, and maybe I am not making it very well, is that, if we do not believe in prevention—and in my heart I believe that those on the Front Bench do believe in prevention—the costs of the NHS predicted in the OBR book are going to look quite conservative. I think I am right in saying that those projections include this levy being in place, not repealed—
Steve Brine
And corporation tax, as my hon. Friend says from a sedentary position. If we believe in prevention—and, as I say, I believe that those on the Front Bench do—we need to have the courage to act on that. That will mean doing unpopular things, but sometimes we have to do unpopular things to do the right things, and that means preventing some of the major killers and some of the major causes of ill health that I have mentioned. If we do not do that, the NHS will continue to cost unsustainable amounts of money and it will become unsustainable. There endeth the lesson of Dr Brine.
Richard Burgon (Leeds East) (Lab)
I want to focus my remarks on my new clause 2. I thank the 25 right hon. and hon. Members who added their signature to mine on the amendment paper, and I am pleased that it has support from Plaid Cymru, Alba, Labour, Green, and Social Democratic and Labour party MPs.
The Conservative party was wrong to introduce the health and social care levy, so it is right that it is being scrapped, but it is wrong that the Government are imposing a package of unfunded tax cuts, which have created financial panic and led to interest rates shooting up and millions of people fearing how they will keep their home. The package has created a Tory crisis made in Downing Street, but being paid for by working people.
As I say, I welcome the scrapping of the levy, but of course health and social care still need the extra funding that it would have raised. We only have to look at today’s news about how the number of social care workers has fallen for the first time in a decade to see just how broken our care system is, and rising waiting lists and soaring ambulance waiting times show that the NHS is in dire need of a funding boost. So my new clause 2 would require the Chancellor, in addition to scrapping the levy, to look at different taxes to raise the income that would have been raised by the levy. Specifically, it calls on the Chancellor to look into the iniquity of tax rates on wealth being lower than the taxes paid on income from work.
We are, I am afraid, one of the most unequal countries in Europe when it comes to income distribution, but it is even worse when we look at wealth. The richest 1% hold almost a quarter of UK wealth, so we need a full and wide debate in our country about wealth taxes. I have been calling for a wealth tax—for example, a one-off wealth tax of 10% on wealth over £5 million, which could raise £100 billion and provide an emergency wealth fund to help get us through this crisis—but today, with new clause 2, I want to concentrate not on the taxing of wealth itself, but on taxes on income deriving from wealth.
We have a scandalous situation in our society in which income derived from wealth is taxed below income derived from work. If someone is lucky enough to be able to live off share dividend payouts, they will pay less in tax than someone who earns exactly the same amount by getting up each and every day and going out to work. Likewise, capital gains tax, which is paid on profits when selling assets such as a second home, is paid at rates below income tax rates. How on earth can that ever be justified, and how can it be justified when the Government are plotting—without any democratic mandate, I would add—to cut benefits and public services across society?
In fact, there is huge potential for increasing tax revenues by simply ending the significant tax discounts that go to income from wealth over income from work. How much would be raised by doing this? Ending the lower rates paid on capital gains and share dividends, and removing the related exemptions on those taxes, would raise around £24 billion per year. That is a lot more—nearly double—than the amount from the national insurance tax hike on working people, which would have raised around £12 billion to £13 billion. The funds that my proposal would raise could be a big down payment on the investment that we need to ensure our social care system delivers for everyone, and it could make a big difference in addressing the crisis in our health service.
For those on the Conservative Benches who may be appalled by this idea or this moderate proposal, I want to point out that the former Chancellor—not the last one, but the one before, the right hon. Member for Richmond (Yorks) (Rishi Sunak)—commissioned a review of capital gains tax, and that review recommended slashing the annual allowance and aligning capital gains tax rates more closely with income tax, in a move that could raise billions of pounds for the Exchequer. On this, Margaret Thatcher, even, had an interesting view. Under Thatcher’s premiership, the same basic unfairness of lower taxes on capital gains was ended. It was back in 1988 that the then Chancellor, Nigel Lawson, said that
“there is little…difference between income and capital gains, and many people effectively have the option of choosing…which to receive. And…it is by no means clear why one should be taxed more heavily than the other.”—[Official Report, 15 March 1988; Vol. 129, c. 1005.]
Since then, wealthy people living a low-tax lifestyle have been benefiting from even lower capital gains rates than over 30 years ago, so something has gone wrong and it is now time to put that right. We need solutions to deal with this economic crisis in a socially just way, not through austerity, not through benefits cuts and not through public service cuts. Social justice means putting tax justice at the heart of our economy. We should start by ensuring that those who live off their wealth pay at least the same level of tax as those who live off their own work.
John Redwood (Wokingham) (Con)
I disagree with new clause 2 and new clause 1. I welcome very much the legislation. One of the objectionable features of the original proposal was hypothecation, because I do not think it is possible to identify a single tax that just happens to meet the costs of a particular service, let alone a tax that would then have revenue growth at the right pace to take care of the needs of that service. This one was particularly misleading. There was no way that the amount of tax to be levied got anywhere near paying the full costs of social care. It was misleading to make people feel that social care might be as cheap as this particular tax, although the tax itself was burdensome on all those who go to work.
There are still strong elements of hypothecation in new clause 2, which I would equally object to. Again, we should not mislead people into believing there is a simple, relatively low tax that takes care of a huge problem—social care. Indeed, when the Government compounded the difficulty by saying that in the first instance the tax would be mainly used for the health service, and by some magic that would drop away and it would go to social care, it all became incredible to me. That is why I did not like the idea in the first place. It is very good news that we are sorting it out.
The challenge of new clauses 1 and 2 is a perfectly fair one, and I think the answer is straightforward. Social care does need more money to go into it, and it will need progressively more. If we fund our social care better and expand it, it will release some of the pressures on the NHS. There are some people who could vacate a bed quite safely and get better social care if that were available, so this is worthwhile expenditure from that point of view as well. Above all, it is worthwhile expenditure because people deserve better care and better treatment and that should be funded out of general taxation.
The Government are right now to abolish the hypothecated specialist tax, to give up the idea that there is a single, relatively low tax that solves all the problems, and to accept that social care and NHS provision together is a major claim on the general taxation of the country. If the general taxation of the country does not reach total spending—it does not seem to at the moment—it is also a claim on borrowing.
On that last point, we should remember that for the previous two years the Office for Budget Responsibility grossly underestimated the revenues that came into our economy, and we borrowed considerably less than it was forecasting. It may not be so wildly wrong this year, when it looks perhaps as if its borrowing forecast is a bit on the low side, but we must remember that the way to pay for these services is to grow the revenue. That was what we were doing last year and the year before, and that is what we must do next year, to take care of the need to spend more on the NHS and social care.
Lloyd Russell-Moyle (Brighton, Kemptown) (Lab/Co-op)
I rise to support new clauses 1 and 2, and I suspect we will soon vote on new clause 1. Let us be clear: the economic issues we are now facing—rising interest rates for homeowners, and a crashing of confidence in the British economy—are partly because the Government will not produce proper, transparent plans about how they are managing tax and spend.
New clause 1 would force the Government to publish proper documentation on how they will manage that expenditure. We cannot scrimp and save any more on social care, and while it is right to reverse this tax, which was pernicious and hurt the poorest the most, the Government’s failure to outline how they will raise the revenue and properly spend it will cause more chaos and more lack of confidence in the Government. It will contribute to the ongoing crisis in interest rates, and it will end up hurting hard-working people in this country again. Although the reversal of this tax is welcome, without proper analysis the danger is that people in this country will still pay, but they will be paying not through tax to the Government, but through pernicious interest rate rises to lenders and banks. That would be worse than the current situation.
Social care needs to be funded. Brighton and Hove City Council spends £154 million a year on adult social care. That is care for older and disabled people—social care in all its forms. It only raises £160 million through council tax and the precept, so it has only £10 million discretionary funding, although of course it gets grants for schools and other non-discretionary funds. That is the same up and down the country. It is no good just finding Treasury money to support an expanding need for social care; it is a scandal that any penny of council tax is going on adult social care at all. No voter I ever speak to thinks it is appropriate for council tax to be spent on adult social care. Council tax should be for council services, universal services, and ensuring that our local areas are better, more prosperous and thriving. Every person I speak to thinks that social care should be centrally financed. Yes, councils should deliver it, just as they do with education and other services, but the grant must be fully funded by the Government. That the Government have not outlined how they will do that, or have even a long-term plan to do that, continues the pressure and burden on councils and is wrong.
Not only is it wrong, but there is another way of doing it. That is why new clause 2 is so important. It starts to set out the alternatives, and my hon. Friend the Member for Leeds East (Richard Burgon) stated that we should be looking at taxing income from wealth. It is a scandal that generations after generations have squirreled away wealth, hiding it away like Monopoly money on a Monopoly board, and they are then able to generate money from doing almost diddly squat. That is wrong when hard-working people are toiling and paying a higher rate.
There are other ways that the tax could be raised, such as abolishing the upper earnings limit and the scandal of people who earn more than £50,000 paying only 3.25%—less once the levy is abolished—on national insurance. That rich people pay less national insurance as a percentage of income than poorer people is a national scandal. Rather than a progressive tax, it is an innately regressive tax. The poorer someone is, the more they pay; the richer they are, the less they pay as a percentage. If that was abolished and we had a flat tax for everyone, that would have raised £10 billion more than this failed tax U-turn. The Government would have been able to fund all they wanted. It would have been fair, and it would not have hit poorer people. There were many alternatives and the Government did not pursue any of them.
Last week I visited my local A&E at Royal Sussex County Hospital. Fantastic nurses and doctors were working their socks off, and the management were trying to cope with reducing resources. What did I see? Tens of people in beds in corridors, and more than 30 people in waiting chairs, waiting not to be treated in A&E but to be moved on to adult social care or other wards in the hospital. One person had waited for 23 hours, and another who had been discharged the day before had been waiting in A&E for four days. Why is that? It is because our social care system is failing. People are leaving in droves because there are no national terms and conditions and no decent pay. It is a disgrace that care workers earn less than £10 an hour in Brighton and across the UK. They are on poverty wages yet they do such important work.
We need a proper plan for how social care will be paid for. It is no good for the Government to remove this pernicious tax and then come forward with no plans, no ideas, no nothing. This Government have run out of ideas, and Conservative Members have run out of a future for this country. All they are in now is a quick “grab as much as they can” in the next two years, before they lose the election. It is not right for this country. We need them to move aside because Labour has the ideas. Labour has the plan for adult social care, and for everything.
Richard Fuller
New clause 1 was tabled by the hon. Member for Ealing North (James Murray), and he raised two specific points. One was on the direct cost that HMRC will incur as a result of this Bill, and he is right; there will be some additional costs. It costs to make these changes, and there will also be costs in future months from additional calls that may come into HMRC. Those numbers have not yet been fully quantified, but I will write to the hon. Gentleman with those costs when we have them. I do not think this was the intent of his question, but on the changes to dividend tax rates, the 1.25% cut will be implemented from April 2023 and is not taking place this year.
Overall funding for health and social care services will be maintained at the same level as if the levy was in place, and we will do that without the tax increase. The Chancellor and the Government are committed to fiscal sustainability, ensuring that debt to GDP falls over the medium term, and the Chancellor will set out further details in his medium-term fiscal plan on 31 October. Strong growth and sustainable public finances go hand in hand, and maintaining fiscal discipline over the medium term will provide the confidence and stability to underpin long-run growth. In turn, faster growth can promote confidence in the UK economy and lead to higher tax revenues without the need to raise levels of taxation. That broader context of the medium-term fiscal plan in the round is the right way to assess these changes, not via the specific measures in new clause 1. I therefore urge the House to reject the new clause.
I will make a point to my hon. Friend the Member for Winchester (Steve Brine), who rightly spoke about the importance of prevention. To reassure him, the Department’s spending review settlement provided £2.3 billion over the spending period to transform diagnostic services and funding to enable local authorities to invest further in prevention through the public health grant.
I turn to new clause 2, tabled by the hon. Member for Leeds East (Richard Burgon) and supported by the hon. Member for Brighton, Kemptown (Lloyd Russell-Moyle), who I was interested to hear advocating flat taxes—I look forward to further discussions with him about the merits of flat tax rates. There are key differences between the tax bases of earned income, capital gains and unearned income such as dividends. For example, employers also pay national insurance contributions on employment earnings, which broadens the base of revenue from national insurance contributions across employers, employees and the self-employed. In practice, if the taxation of dividends and capital gains were aligned with the taxation of earnings, we could expect to raise less than the levy was forecast to do due to the size of the tax bases and the significant behavioural responses by both tax bases. One of the key points that the hon. Member for Leeds East misses is such behavioural changes when we seek to change certain taxes in a significant way.
Unlike the Opposition, the Government are committed to lowering taxes, not raising them. We have already committed to reversing the 1.25 percentage point increase in dividend tax from April 2023, as I said, to drive growth and investment, and the Chancellor of the Exchequer will publish the medium-term fiscal plan on 31 October. I therefore urge the House to reject new clause 2. With thanks to those hon. Members for tabling their new clauses, I hope that they are satisfied with my explanations and that the hon. Member for Ealing North will not press his new clause to a Division.
Question put, That the clause be read a Second time.
Jim Shannon (Strangford) (DUP)
I will not detain the House any longer than I need to; I just want to put on record my concerns for those who are on £9 an hour and those who are also what I refer to as the working poor. While I welcome where we are, I will steal the phrase of a well-known supermarket: “Every Little Helps”. Tonight’s bit will help and it will go a long way. However, we need to do much more than this little measure. When it comes to moving forward, for the working poor—those across this United Kingdom of Great Britain and Northern Ireland—this repeal Bill is necessary at this time, and I am glad it is here. Investment in families is also necessary, especially the working poor, who were doing fine two years ago and are not doing as fine now. I just wanted to make those pithy comments, Madam Deputy Speaker.
Question put and agreed to.
Bill accordingly read the Third time and passed.
Business without Debate
Madam Deputy Speaker (Dame Rosie Winterton)
With the leave of the House, we will take motions 7 and 8 together.
Ordered,
Standards
That Laura Farris be discharged from the Committee on Standards and Sir Charles Walker be added.
Privileges
That Laura Farris be discharged from the Committee of Privileges and Sir Charles Walker be added.—(Craig Whittaker.)
Dental Training College: East Anglia
(1 year, 7 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Jerome Mayhew (Broadland) (Con)
It would be all too easy to focus any speech on dentistry on a call for the renegotiation of the NHS—[Interruption.]
Madam Deputy Speaker (Dame Rosie Winterton)
Order. Could colleagues leave quietly? Otherwise we will not be able to hear what the hon. Gentleman is saying.
Jerome Mayhew
As I was saying, it would be all too easy to focus any speech on dentistry on a call for the renegotiation of the NHS dental contract. Every Member of Parliament will know from their postbag the suffering that ordinary people are experiencing every day because they are simply unable to see a dentist.
The pandemic has caused the loss of 40 million dental appointments—more than an entire year’s worth of standard pre-covid treatment—but covid is not the cause of our problems. Ever since Labour imposed its NHS dental contract on the profession back in 2006, trouble has been brewing. Dentists have been voting with their feet, moving in their thousands away from NHS treatment into private work.
That trend has only accelerated through covid. Between the start of the pandemic and May 2022, 3,000 dentists have stopped doing any NHS work. Three quarters of those who are left say that they are likely to reduce their coverage further over the next year, so we simply cannot ignore the problem any longer. The pain and suffering are too great. Labour may have created this bad system, which fails to pay for the cost of complex work, but our job is to fix it, and the sooner the better.
The purpose of this debate, however, is not to moan about the state of NHS dental provision, but to put forward a positive case for solving the long-term problems in Norfolk and the east. Put simply, we have a desperate shortage of dentists of any description. Too few dentists and too few dental technicians—whether NHS or private—are choosing to work in East Anglia.
Nationally, the General Dental Council says that we have more dentists than ever before, with a national average of 43 for every 100,000 of the population, but in Norfolk and Waveney, that figure is just 38. That is the fifth lowest ratio of the 106 clinical commissioning groups around the country. Dental practices are crying out for new staff, but they simply cannot get them.
In the town of Fakenham in my constituency, I lobbied successfully for the NHS to award a brand-new NHS dental contract to increase local NHS provision. That was the Government being prepared to pour new money into increasing NHS provision. However, when that contract was advertised, not a single company bid for the work. There simply was not the staff to supply the need.
That is not just an NHS issue. In the same town, a private dental practice has been advertising for a private dentist for two years, but without success. In the constituency of my hon. Friend the Member for North Norfolk (Duncan Baker), there is a dentist in Sheringham who operates practices both in London and Norfolk. He has not had a newly qualified dentist come to work in his Sheringham practice for 10 years. Job vacancies in London are snapped up, but he simply cannot get them to take the jobs in Norfolk.
Why can we not produce dentists in East Anglia? The answer is that there is nowhere for them to train. If someone who lives in East Anglia wants to become a dentist, the nearest place they can train is Birmingham or London. None of the 10 training facilities around England is in the east of England.
That has to change. We know from our experience with the University of East Anglia that graduates tend to stay and build their lives close to where they have studied. Each year, the UEA does a survey of its graduates to see where they go to accept their first employment. If we look at that survey for doctors coming through the medical school of the University of East Anglia, we see that more than 40% end up taking jobs locally every year. That is great for us in relation to doctors and particularly for the Norfolk and Norwich University Hospital, which is based in Norwich. Unfortunately, however, the same problem is true in dentistry.
Let us look at the number of dentists working near existing dental training schools. As I said, Norfolk has 38 dentists per 100,000 of the population. Devon is a broadly similar county—it is largely rural, with coastal communities and one major conurbation, Plymouth—but there is a big difference: Plymouth has a dental school, which was installed in 2005, and Devon’s ratio of dentists per 100,000 of the population is not 38, but 49.6. If we look at the north-east, where there is a school in Newcastle, we see that its ratio of dentists to the general public is 56 per 100,000 of the population. In Cheshire and Merseyside, there is a school in Liverpool, so the whole area benefits from 58 dentists per 100,000 of the population. We can see from the hard data that people tend to settle down where they have trained.
So if that is the data, surely the solution to East Anglia’s problems is obvious: first, we need to open a dental school in East Anglia. I raised that need directly with the University of East Anglia some months ago and I have been enormously encouraged and impressed by their response, strongly supported by the NNUH, the region’s training hospital. The University of East Anglia has developed an innovative solution to our dental training problems that would minimise cost and get students out into the workplace from the start of their training, helping with capacity in the short term and dealing with the training deficit in the long run.
Tom Hunt (Ipswich) (Con)
As a Suffolk MP, I welcome the idea of an East Anglian training centre. I also want the University of Suffolk to play a role. It recently outlined its plans for a Suffolk centre for dental development. Does my hon. Friend agree that, actually, a dental training college in Norwich could work hand in glove with the new centre in Ipswich to make sure that people are trained locally but, when needed, they are pooled to provide services on the NHS for our constituents?
Jerome Mayhew
I am grateful to my hon. Friend for that intervention, and I agree entirely. There can be collaboration between the university in Norwich and the University of Suffolk, which is based in Ipswich. People can start training in Norwich and, once they are qualified, have career and professional development taken care of by the proposed unit in Ipswich. I will come on to that in further detail.
To return to the plans of the University of East Anglia, its idea is that students would work in the community for at least one day a week throughout their five-year training course. In that way, dental students will increase the capacity of associated NHS practices right from the get-go. Too often, it is suggested that a dental training school is too long term to solve the problems now. In a sense, it is, of course, but under this plan, we would have increased capacity right from the first year of the students’ five-year course.
There are more benefits, too: students would not only increase the capacity, but develop employment relationships locally, increasing their stickiness, and provide training income to stretched NHS practices. For that reason, MPs from North Norfolk, North West Norfolk, Mid Norfolk, South Norfolk and Norwich North all support the proposal. If there were an East Norfolk constituency, I am sure that that Member would support it as well.
Peter Aldous (Waveney) (Con)
I speak as an MP with a foot in both camps: I am a Suffolk MP but I also represent the Norfolk and Waveney integrated care system area. Does my hon. Friend agree, as my hon. Friend the Member for Ipswich (Tom Hunt) said, that it is very important that the two proposals being put together by the University of Suffolk and the University of East Anglia are collaborative and worked on together, so that they come through with a solution for the whole of East Anglia?
Jerome Mayhew
I am grateful to my hon. Friend. The only phrase that I would pick him up on is that he has “a foot in both camps”. I do not think there should be two camps. This is an East Anglian solution, whereby the proposals are complementary and, in time, they should both be implemented.
George Freeman (Mid Norfolk) (Con)
I commend my hon. Friend and constituency neighbour for raising this issue and highlighting the huge pressures that the dental service in his area and mine is experiencing on the ground. Many of our constituents are struggling and this proposal would not only make our region a leader in the science and technology of dentistry, but help to meet that demand and need on the ground. With new housing, the pressure will only get more acute in the next few years.
Jerome Mayhew
My hon. Friend is entirely right. There is a further point to be made about the collaboration between the University of East Anglia and the Norfolk and Norwich University Hospital, because they also have the Norwich research park co-located. I am thinking particularly of the Quadram Institute, the sole focus of which is world-leading research on the gut microbiota. I cannot pretend to know exactly what the gut microbiota are, but I know that they start with the mouth. There is huge capacity for proper, hard research in the area, and it could be assisted by a dental training school in Norwich. That is the first solution.
The second solution, which is also needed, is for the dental school in Norwich to complement the University of Suffolk’s plans to build a centre for dental development in Ipswich to support further career development in the region, attracting and retaining newly qualified dentists. My hon. Friends the Members for Bury St Edmunds (Jo Churchill), for Waveney (Peter Aldous) and for Ipswich (Tom Hunt) and others have all pushed for that.
The truth is that we need both to attract qualified dentists in the short term and to find a long-term solution to the wider training problem. It may be that an assessment is made nationally that there is no need for additional dental training seats, but people are human. We have to look beyond the empirical analysis and recognise that training needs to be offered in a location of real shortage. That location is East Anglia, and Norfolk in particular.
As a Conservative, I believe that people should have power over their own lives and that communities should not be dictated to by national Government. Rather, they should be empowered to come up with their own solutions to their local needs. We know what the problem is, and we have a solution to fix it locally; we just need the Government to trust the people to let us get on and do it.
We simply need more dentists and dental technicians in East Anglia. We recognise that budgets are tight and that timings may have to be stretched. We accept that short-term fixes are sometimes more powerful arguments in politics than long-term solutions. We simply ask the Minister to agree to meet the University of East Anglia team to learn at first hand how we can make East Anglian dentistry better, and to be inspired by their practical vision.
Madam Deputy Speaker (Dame Eleanor Laing)
I cannot quite tell whether the hon. Gentleman wishes to contribute.
Peter Aldous (Waveney) (Con)
I will contribute very quickly, Madam Deputy Speaker, if you will give me the opportunity.
My hon. Friend the Member for Broadland (Jerome Mayhew) has set out a great vision of a future in which East Anglia, Norfolk and Suffolk have high-quality dentistry schools. That is great, but we need a bridge to get to that future, because two dentistry schools will take some time to set up. Does he agree that we need to look at other strands to address the crisis in NHS dentistry in East Anglia, including recruitment and retention in the short term, making it easier for people from overseas to come and work in local dentistry; contract reform, which I think my hon. Friend referred to; a fair, long-term funding settlement; a focus on prevention; and improved local accountability through the fledgling integrated care systems?
Madam Deputy Speaker
Order. Perhaps I am confused, but I thought that the hon. Member for Broadland (Jerome Mayhew) had finished. [Interruption.] Ah, so now he is intervening on the hon. Member for Waveney (Peter Aldous). That is absolutely fine.
Jerome Mayhew
Thank you for that clarification, Madam Deputy Speaker.
Does my hon. Friend agree that all those aspects are very important, but that perhaps there is another proposed solution that he has not mentioned? As we have learned today, there are inducement payments for teachers in special areas that are struggling to recruit. Perhaps we could apply the same approach to dentists in special areas that are struggling to recruit.
Peter Aldous
I thank my hon. Friend for that intervention and apologise for hijacking his debate. Yes, I agree wholeheartedly. This is a multifaceted challenge; there is no one solution and no one golden bullet. We need to address all the points, and he is right to raise that one.
George Freeman (Mid Norfolk) (Con)
As a former Minister for life science and for science and research, I rise very briefly to highlight the point that my hon. Friend the Member for Broadland (Jerome Mayhew) made about the microbiome and the mouth—the buccal cavity—as a primary diagnostic for our understanding of the role of the biome and of gut flora and fauna, not only in good health but in diseases such as cancer. As a diagnostic tool, it could make our region a leader in the diagnostics of the digestive system and the gut biome, which would have a whole bunch of other important secondary health benefits. For that reason, I commend my hon. Friend’s case to Ministers on the Front Bench.
The Minister of State, Department of Health and Social Care (Will Quince)
I congratulate my hon. Friend the Member for Broadland (Jerome Mayhew) on securing this debate on the potential merits of establishing a dental training college in East Anglia. It is clear that he has support from his neighbouring MPs—I know that one of them cannot be here this evening, but very much supports this endeavour—and from colleagues further afield and across East Anglia. I also thank him for raising the issue of access to dentistry in rural and coastal areas, particularly the challenges of seeing a dentist in Norfolk.
As the new Minister for dentistry, I understand that areas across our country, as my hon. Friend has highlighted, have faced difficulties with recruitment and retention, including in his constituency of Broadland and in the east of England more widely. Those challenges have a significant impact on the provision of NHS dentistry and on patients’ ability to receive NHS care. My hon. Friend is right that we cannot ignore the problem, which I can assure him is a priority for me and for the Secretary of State. I hope that it will not have escaped my hon. Friend’s notice that dentists are a key element of the Secretary of State’s ABCD approach and of “Our plan for patients”.
I am aware that my hon. Friend, alongside my hon. Friend the Member for North Norfolk (Duncan Baker), attended meetings with my predecessor, and I think even with my predecessor’s predecessor, to discuss the construction of a dental school in Norfolk. It is a testament to the character of my hon. Friend the Member for Broadland that he brought the issue to my attention just days after my appointment as a Minister in the Department of Health and Social Care. If I may say so, his constituents are fortunate to have such a passionate and persistent advocate in their corner.
My hon. Friend set out in his speech to make a positive case for doing something about a long-term problem, and I think everyone in the Chamber this evening will agree that he has done so. He makes the case for a new dental school in Norfolk—a case that I know has the backing of my hon. Friend the Member for North Norfolk, who cannot be here this evening. On the face of it, it is a compelling case and is worth further exploration.
I think that my hon. Friend the Member for Broadland knows me well enough to know that I am not someone who likes saying no to parliamentary colleagues, although sadly that is a responsibility that all too often comes with the job. On this occasion, it is a no, but it is “No for now, and let’s very much keep talking.” Let me explain why.
Establishing a new dental school takes several years and would not influence service provision in the short term, as my hon. Friend rightly identified. Notwithstanding the strong case that he makes, it also would not guarantee the ongoing sustained retention of dentists or support staff in the area. Our focus is not just on training more dentists, important as that is, but on the better use of the full dental team and the progression and retention of all dental care professionals in the NHS. There is, of course, an argument about the medium to long term, which is why I suggest that we keep talking, and of course I would be delighted to meet my hon. Friend, as he requests, to further discuss his ideas and plans.
My hon. Friends the Members for Broadland, for Waveney (Peter Aldous) and for Ipswich (Tom Hunt) all mentioned centres for dental development, the alternative training model identified by Health Education England in its 2021 “Advancing Dental Care” review report—that is a mouthful! The centres for dental development model would specifically benefit localities in which there is a shortage in provision and there are no nearby dental schools—as is the case in East Anglia, as my hon. Friend the Member for Broadland rightly pointed out.
The premise is that the centres would build on any existing dental infrastructure in the area, bringing together training and the resultant provision of NHS treatment to patients in a co-ordinated way. Things like postgraduate training opportunities are more likely to be compatible than early undergraduate placements, as they would increase access to the more complex and specialist care that we know is often most lacking in certain areas of the country, otherwise known as dental deserts. This would work towards the aim, specified in the “Advancing Dental Care” report, to produce the skilled “multi-professional oral healthcare workforce” that could best support patient and population needs within the NHS. A further advantage of the centres for dental development model is that they would be tailored to suit the local workforce requirements, in addition to the education and training needs of the area, contributing to stronger, multi-disciplinary dental teams and local area workforce retention.
Given that the centres would focus on postgraduate training or the later stages of undergraduate training, they could provide support in transitions from undergraduate to dental foundation training and more specialised training beyond those, all of which involve—as my hon. Friend mentioned—important decision-making moments in terms of career development and where dentists are likely to base their careers and practices. We believe that a broader range of placements across the country and in different clinical environments would enhance the student experience. The centres could offer a constructive alternative to dental schools, while acknowledging and addressing recruitment, retention and training gaps. I am sure my hon. Friend will be pleased to learn that Health Education England has now moved into its four-year implementation stage through its dental education reform programme—another mouthful!—following the “Advancing Dental Care” report and its recommendations.
My hon. Friend rightly raised the subject of collaboration. With regard to establishing a centre for dental development in East Anglia—this has been mentioned by my hon. Friend and others—the University of Suffolk and the NHS Suffolk and North East Essex integrated care board have announced plans for a centre in Ipswich. I am informed—this also covers my area, so I have an interest in it as well—that the initial plans include proposals to offer postgraduate educational opportunities as well as wider training opportunities for newly qualified dentists, alongside the training of the dental therapists, hygienists and dental technicians who form a vital part of the dental workforce. I pay tribute to my hon. Friends the Members for Waveney and for Ipswich for the work that they have done in pushing so strongly for that development, along with the integrated care board, which is a trail-blazer in this regard. It would be wrong, at this juncture, for me not also to pay tribute to my hon. Friend the Member for Bury St Edmunds (Jo Churchill). She has pushed strongly for this as well, and, moreover, is—dare I say—a much-missed Minister at the Department of Health and Social Care. She has a passion for dentistry, and, within the Department, she really put it on the map. That is a legacy that I intend to continue.
I strongly encourage my hon. Friend to meet the NHS and HEE regional teams for his areas, as centres for dental development are very much a local solution, tailored to the existing infrastructure and needs of an area. I, and those in my office, would be delighted to help facilitate such a meeting.
I have mentioned integrated care systems and integrated care boards. As we make the transition to integrated care systems—this point was made by my hon. Friend the Member for Waveney—commissioning roles for dentistry will be delegated. This will ensure that dentistry decisions are considered at a local level, and that, for example, local workforce as well as local population health requirements are taken into account. I therefore encourage my hon. Friend to meet the integrated care board—I am sure he has already done so, but I think an ongoing dialogue would make sense—to discuss its plans further, and to talk about how they will affect Broadland and the rest of East Anglia.
My hon. Friend touched on recruitment and retention, which I know is a particular issue in his constituency and more broadly. I have referred to the changes that we have made nationally through system reform, but NHS England in the East of England region has been working closely with the organisations that train dentists to improve the recruitment and retention of NHS dentists in East Anglia, and will continue to help those training organisations to develop the dental workforce. I am pleased to say that, in 2021-22, there was an increase of 539 dentists performing NHS dentistry compared with the previous year. In the East of England, there was a 3.5% increase, with an additional 105 dentists. However, as my hon. Friend pointed out, that is not enough: we need more dentists, and we need more dentists on NHS contracts.
More broadly, I know that my hon. Friend will want to know what improvements are being made now which will improve access to dentistry for his constituents. He rightly focused on the medium to long term, but I know from my postbag that the pressing concern is often the here and now. We plan for the dental system improvements announced on 19 July as part of “Our plan for patients” to begin to take effect by the end of this year, and some of the improvements in the package have already taken effect and are beginning to bear fruit. The Secretary of State and I are looking at a number of further measures that we can take to aid recruitment and retention—I know that that is one of the key concerns of my hon. Friend and others, and I think my hon. Friend touched on one of the ideas that we are considering—and, in turn, improve access for constituents. As I have said, this is a priority for me, and I hope to share more details with my hon. Friend and the House in due course.
I am committed to playing my part to improve access to NHS dentistry, particularly for those most in need of dental care, and I know that recruitment and the dental workforce will play a pivotal role in that. I hope my hon. Friend has been reassured that action is being taken to address the challenges in recruitment and retention across the country, and particularly in his constituency. I look forward to working with him as we develop our ambitious plans, and I know he will continue to be a champion for his constituents and hold the Government’s metaphorical feet to the fire as we deliver the improvements in dentistry access that we all want to see.
Question put and agreed to.