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Oral Answers to Questions
(10 months, 2 weeks ago)
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Mr Barry Sheerman (Huddersfield) (Lab/Co-op)
The Lord Chancellor and Secretary of State for Justice (Alex Chalk)
I regularly meet the senior judiciary, including the Lord Chief Justice, to discuss priority issues across the justice system, including prisons. We are delivering 20,000 additional modern prison places, the largest prison build programme since the Victorian era, ensuring the right conditions are in place to rehabilitate prisoners, cut crime and protect the public. We have already delivered 5,200 of these places, including at the brand new HMP Fosse Way, which opened last month and which I look forward to visiting later this week.
Mr Sheerman
The Secretary of State, for whom I have great respect, surely knows that there is enormous unhappiness in the prison estate. Recent polls show how low morale is and how many people working in our prisons doing that difficult job are fearful for their safety. Will he meet me and perhaps even the Chair of the Justice Committee, the hon. Member for Bromley and Chislehurst (Sir Robert Neill), to talk about how we can find a way forward for the young people—there are perhaps 1,000 of them—in prison under joint enterprise? That would help him with prison overcrowding and bring justice to so many young lives.
Alex Chalk
I am grateful to the hon. Gentleman and will be happy to meet him to discuss that. I am glad that he paid tribute to prison officers, who do spectacularly important work. One thing I am proud of delivering is body-worn video cameras for all of them, because that is so important for de-escalating volatile situations and potentially gathering evidence so that they can see justice done.
Joint enterprise is a sensitive issue. I know that the hon. Gentleman takes a proper interest in it, but it is the legal doctrine that ensures that the getaway driver does not avoid culpability, that the lookout of the armed robbery is also culpable, and that the person who supplies the murder weapon, knowing that it will be used in that offence, also cannot escape liability. The Court of Appeal has considered this at some length in the case of Jogee, and we have to be very careful before seeking to recalibrate it. However, I am happy to discuss it with the hon. Gentleman at a time of his choosing.
Sir Robert Neill (Bromley and Chislehurst) (Con)
I am sure that the Lord Chancellor, as well as thanking the current Lord Chief Justice for his work, will welcome the appointment of Dame Sue Carr as the first woman Lord Chief Justice of England and Wales and look forward to working with her, too. Does the Lord Chancellor agree that one of the real areas of concern and pressure on prisons is the growth in the remand population? In January, before he was appointed to office, the Justice Committee produced a report on remand, from which some recommendations were accepted and some were not. Will he revisit some of those recommendations and see what more we can do to bear down in particular on the growth in remand for people who after all have not yet been convicted?
Alex Chalk
Those are excellent points. Let me begin by joining my hon. Friend in welcoming Dame Sue Carr, whose appointment has been hugely welcomed across the political spectrum, across the legal sector and beyond. I also pay tribute to Lord Burnett. I think I speak on behalf of everyone in the House in saying that there is nothing but regard and respect for the contribution that he has made.
On remand, my hon. Friend is absolutely correct. It is worth reflecting that, compared with the pre-pandemic period, there are between 4,500 and 5,000 more of those people in custody. As he rightly pointed out, they have not been convicted of any crime. Technology, such as electronically monitored tags, can be of assistance. It is for the bench or the Crown Court judge to decide whether there are reasonable grounds to believe that, if released on bail, that person would commit further offences or fail to surrender, but I know that the courts will want to bear the technological options in mind.
Ellie Reeves (Lewisham West and Penge) (Lab)
Over the past 10 years, more than 3,000 prison places have closed and community sentences have halved, and the three new prisons planned will not open before 2027 at the earliest. No wonder we have a prison capacity crisis, with the Government having to commandeer police cells and judges being told to jail fewer people. How can the public have faith that they will be protected and that crime will be punished when that is the Government’s record?
Alex Chalk
I am grateful to the hon. Lady. It is worth reflecting that the second biggest programme in Government after High Speed 2 is in prison building. I invite her to go and look at Five Wells or Fosse Way, or at the work taking place at Millsike. Those are modern, safe, rehabilitative, productive prisons. We make no apology for investing in our prison estate because, if we can bear down on the things that prevent individuals from getting back on the right side and putting crime behind them, that is good for society, good for the individual and good for the taxpayer.
Mr Speaker
Order. We are 10 minutes in and still on question 1. I want to make sure that we get everyone in.
Paul Holmes (Eastleigh) (Con)
The Lord Chancellor and Secretary of State for Justice (Alex Chalk)
We are determined to ensure that domestic abuse victims secure access to justice and the protection of the law. The changes we are making to the legal aid means test mean that more than 2 million more people in England and Wales will be eligible for civil legal aid each year. Domestic abuse victims in receipt of universal credit will not be means-tested when applying for protective orders, effectively fast-tracking access to legal support and the protection of the courts.
Paul Holmes
I welcome the new policy, which means that domestic abuse victims who cannot access joint assets controlled by their abuser will no longer have those disputed assets counted towards their eligibility for legal aid. Does the Lord Chancellor agree that this will help to secure access to justice for survivors when their abusers try to continue to control them after they have split?
Alex Chalk
I agree wholeheartedly. My hon. Friend puts it well. Disputed assets such as the family home are by their nature illiquid and inaccessible. Worse still, they may be controlled by the abuser. By ensuring that those assets are not taken into account when deciding whether to grant legal aid, we are helping to ensure that victims of DA can access that vital legal support and, with it, the essential protection of the courts.
Andrew Gwynne (Denton and Reddish) (Lab)
Extending legal aid eligibility to 2 million extra people is great, but eligibility is not the same as access to legal aid services, which have been collapsing in the last 18 months. We have seen a 20% reduction in housing legal aid providers, 21% less mental health support, 27% less welfare support and 30% less immigration and asylum support. There is a crisis in access to fair justice. What is the Secretary of State doing about that?
Alex Chalk
I am delighted to say that we are expanding access to legal aid to more than 6 million more people in total. Let me pay tribute to legal aid lawyers, who have an exceptionally important role in ensuring that individuals have access to justice. What we will not do on the Government Benches is demonise legal aid lawyers. I was in practice as a legal aid lawyer. Charlie Falconer has admitted that he regrets that the Labour Government demonised “fat cat” lawyers. It was not true then, and it is not true now. We will support legal aid lawyers.
Christian Wakeford (Bury South) (Lab)
Ruth Jones (Newport West) (Lab)
The Lord Chancellor and Secretary of State for Justice (Alex Chalk)
Through the rape review, we are making strong progress in our ambitions to increase the number of referrals to the Crown Prosecution Service, CPS charges and Crown court receipts for adult rape cases back to 2016 levels. Incidentally, 2016 levels are ambitious, given convictions in that year were 30% higher than in 2010. According to the latest quarter of data, we are on track not just to meet but to beat each ambition. Adult rape prosecutions continue to rise, up 44% in the last year, meaning that more people are being put on trial for this devastating crime than in 2010. There is further to go, but it is important and welcome progress.
Christian Wakeford
Is it any wonder that women do not come forward when they have been raped? Not only is there a 1% chance of the perpetrator being charged, but women have to wait nearly three years for a result. Recent figures from Rape Crisis show that victims and survivors of rape and other serious sexual offences wait the longest to have their experiences heard in court, with an average wait of 839 days from report to completion in court. The delays are having a devastating impact on victims and survivors, leading to deteriorating mental health and wellbeing and survivors attempting to end their life as a result. The Government have given up on protecting women and girls, have they not?
Alex Chalk
I regret that language. As a matter of fact, convictions are at or around the 2010 level. If the hon. Gentleman wants to suggest that rape was decriminalised in 2010, he is welcome to, but it is completely untrue. The number of prosecutions is higher this year than it was in 2010. Of course we must continue to invest in supporting victims—that is why we have 800 independent sexual violence advisers to accompany those victims on what can be a difficult and traumatic journey. How many were there in 2010? There were a handful.
Ruth Jones
There were 580 rapes recorded by Gwent police for the year ending March 2022. Given that, as we have heard, across England and Wales only 1.3% of rape cases result in a charge, will the Secretary of State tell me how many Gwent cases resulted in a successful prosecution and what is being done to increase prosecution rates?
Alex Chalk
The statistic that the hon. Lady just cited is completely wrong. Let me make a couple of points. The number of rape convictions is at or around the level it was in 2010. The number of cases passed by the police to the CPS for charge is up 130%. The number of cases charged is up more than 90%. The number of cases received in the Crown court is up more than 120%. Of course there is more to do. Of course work needs to take place, but the system is recovering very well. People are getting justice and those rapists are being convicted, punished and disgraced. Finally, the sentences they receive are around a third longer than the sentence they received in 2010. That is just deserts for wicked rapists.
Dame Maria Miller (Basingstoke) (Con)
My right hon. and learned Friend is absolutely right that support for victims has been essential in increasing the number of cases taken to court. As he said, the numbers have risen significantly in the last 12 months. Could he outline what more he is doing to speed up the time taken to get a case to court, because that time waiting can leave victims not only distressed but potentially walking away from a case that would otherwise come to court?
Alex Chalk
My right hon. Friend is absolutely right to make those balanced and fair observations. To try to assist victims, there are a few really important things. Rolling out section 28s ensures that individuals can get their account recorded on tape; that is done whatever then happens in the court process. The independent sexual violence advisers and the independent domestic violence advisers, whom I have talked about, make an enormous difference. Through the victims code, we want to ensure that individuals get the support they need from victims’ services, have the opportunity to go on court familiarisation visits, make victim personal statements and are kept updated by the officer on the case as it proceeds. All those things are critical to ensuring that victims are not spectators of the criminal justice system, but participants in it.
Edward Timpson (Eddisbury) (Con)
The section 28 achieving best evidence video interviews to which my right hon. and learned Friend refers are there to support vulnerable witnesses and to help to secure not only a charge but a conviction. However, yesterday, during a Justice Committee evidence session, we heard from senior King’s Counsel that there were incidents where such cases were being de-prioritised because of the backlog in the criminal courts, on the basis that in essence the evidence-in-chief had already been taken. Is my right hon. and learned Friend aware of that issue? If not, will he look into it further and report back to the Committee?
Alex Chalk
I am grateful to my hon. and learned Friend for raising that important point. As he knows, listing—prioritisation; which case gets called first—is a matter for the independent judiciary, but he raises important issues. I would be happy to look at them and to discuss them with him, if appropriate, in due course.
Giles Watling (Clacton) (Con)
Marco Longhi (Dudley North) (Con)
Rob Butler (Aylesbury) (Con)
The Lord Chancellor and Secretary of State for Justice (Alex Chalk)
Our prisoner transfer agreement with Albania came into force in May 2022. Between January 2021 and December 2022, 1,441 Albanian foreign national offenders were returned to their home country from custody and the community. To build on that, we announced a new arrangement with the Albanian Government in May 2023 to speed up prisoner transfers, with an additional 200 of the most serious offenders able to be sent back to serve their sentences in Albania—good news for the rule of law and good news for the British taxpayer.
Giles Watling
I am very grateful to my right hon. and learned Friend for his work on Albania, illegal migrants and returning offenders. We pay £40,000 a year to maintain a prisoner in their cell and we do that for foreign prisoners, too. Will my right hon. and learned Friend seek to make more arrangements with other countries to return their offenders, thus saving the taxpayer money?
Alex Chalk
My hon. Friend is absolutely right. It is an expensive business to incarcerate people. The UK has over 100 prisoner transfer agreements. We are working hard to ensure that existing PTAs work as effectively as possible and deliver value for money for the taxpayer by removing FNOs to their home countries. My Department also has ambitions to secure PTAs with new countries. We are engaging with our counterparts in target countries to advance that. I will update the House in due course.
Marco Longhi
May I, too, thank the Secretary of State and the Prime Minister for the difference the agreement with Albania is making in reducing arrivals? Germany, a member of the ECHR, refuses to even allow claims from Albanians. Will the Secretary of State therefore consider derogating from the ECHR, as German appears to have done and as we did over prisoner voting, to further build on that success?
Alex Chalk
My hon. Friend has raised an important point. In the five months to the end of May, Albanian small boat arrivals were down by 90% on last year, and we have returned 1,800 illegal migrants and foreign criminals to Albania. Thanks to changes in our asylum system, we have gone from accepting one in five Albanian asylum claims to accepting just one in 50, in line with other European countries such as Germany.
Rob Butler
I am grateful to my right hon. and learned Friend for the progress that he is making in the removal of Albanian prisoners from our jails. I know from my time in his Department that they make up a sizeable proportion of the foreign national offenders whom we have in custody here. Does he agree that, at a time when our prisons are so close to capacity, the return of foreign prisoners to their own countries is important to ensuring that our hard-working and skilled prison officers can focus their work on the rehabilitation of offenders who will eventually be released into their local communities here in the UK?
Alex Chalk
My hon. Friend is entirely right. I am glad that he has raised the issue of rehabilitation because, as he says, when prisons can run a full regime, the opportunities for rehabilitation are optimised. I recently visited HMP High Down to see prisoners being trained in a brand new, purpose-built warehouse. They are learning the skills that they need for life on the outside and that work is bearing fruit. The percentage of prisoners in work six months after release has doubled in the last year, and that means a better chance for them to go straight and a better chance for the community not to have to suffer from crime.
Andy Slaughter (Hammersmith) (Lab)
If the Secretary of State were doing a good job of returning foreign prisoners, we would expect to see overcrowding coming down, but on a recent visit to Wormwood Scrubs prison I found, increasingly, that two people were occupying a one-person cell without a shielded toilet, and that time out of cell was between one and two hours a day. If the Secretary of State is proud of his record, will he collect and publish those statistics? At the moment, his Department is refusing even to collect the time out of cell figures.
Alex Chalk
Those statistics are not published, but I thank the hon. Gentleman for going to HMP Wormwood Scrubs, because I think it is important for Members to visit prisons.
When it comes to the additional numbers in custody, the key element is the number of people on remand, which, as I have said, has risen by between 4,500 and 5,000 since the period before the pandemic. That is important, not only because those people have not necessarily been convicted of any crime and all Members should have some concerns about people being in custody for a long period, but because some have been recalled. Of course we will work to drive down the number of foreign national offenders, but, as I have said, the principal issue that we are facing at present is that of remand prisoners.
Jim Shannon (Strangford) (DUP)
As always, I thank the Secretary of State for his answers. I know that our Ministers and our Government always maintain the highest human rights standards, and the highest standards in respect of prison conditions. Can the Secretary of State assure me that, when it comes to the transfer of Albanian prisoners, those high standards will be maintained in respect of both prison conditions and human rights?
Alex Chalk
The hon. Gentleman is right to raise this matter. Yes, we will be robust, but we will also be fair, and being fair means ensuring that basic standards relating to human behaviour and the way we treat our fellow human beings are upheld. When, as part of our robust arrangements with Albania, 200 of the most serious offenders—each costing us about £40,000 a year—are transferred there, that will happen in a dignified and appropriate way, and they will be serving in conditions with which both the hon. Gentleman and I will feel comfortable.
Alison Thewliss (Glasgow Central) (SNP)
The UK Government are reportedly paying jailed Albanian offenders £1,500 to return to their country of origin as part of an early release scheme. Can the Secretary of State tell us how many of those whom he has sent back have been eligible for that money, and how—given that one of them has told the BBC that he plans to come back to the UK within days or weeks of his release—he can be sure that this scheme is an effective deterrent?
Alex Chalk
Let me begin by saying that I know the hon. Lady is standing in for the hon. Member for Cumbernauld, Kilsyth and Kirkintilloch East (Stuart C. McDonald), and we wish him an early recovery. I will write to her about specific numbers but, on the issue of early removal, it is absolutely right that, if individuals who have served a requisite period in our jails can be sent back to their home countries, we should send them there, because of the cost to the British taxpayer but also because the capacity is needed to run a full rehabilitative regime. This policy is not controversial across parties and we are committed to upholding it.
Chi Onwurah (Newcastle upon Tyne Central) (Lab)
The Minister of State, Ministry of Justice (Damian Hinds)
The number of IPP offenders in custody has fallen from 6,000 in 2012 to 2,916 at the end of March this year. That includes 1,561 who had been released but were then recalled. The Government are committed to helping IPP offenders to progress through their sentences, under the revised IPP action plan published in April, and towards safe release.
Chi Onwurah
At age 17, my constituent Danny Weatherson was convicted of shoplifting, with a recommended term of 15 months. Seventeen years later, he has only just been granted parole, in a justice system that seems too under-resourced to progress his case. Imprisonment for public protection is a complex area, and many who serve such sentences undoubtedly do present a threat to the public, but does the Minister agree that discussions on reform should take place on a cross-party basis, with the voices of victims and justice campaigners heard, and that a functioning probation system is a prerequisite?
Damian Hinds
I am grateful to the hon. Lady for the tone in which she asks about this issue. Obviously, the role of the Parole Board and the probation service is vital, and the Parole Board is regularly looking at cases. I welcome what she said about continuing to look at this matter, and the Government welcome the Justice Committee’s recent report, which was an important opportunity to take stock. The Lord Chancellor will speak further on this matter in due course.
Simon Baynes (Clwyd South) (Con)
Mark Pawsey (Rugby) (Con)
The Parliamentary Under-Secretary of State for Justice (Mike Freer)
The Government remain committed to reducing the outstanding case load in the Crown court and are working with partners across the criminal justice system to do so. For two years in a row we have removed the cap on the number of days the Crown court can sit, in order to increase capacity. We are recruiting up to 1,000 judges across all jurisdictions this year, on top of the 1,000 we recruited last year. We have also extended the use of 16 Nightingale courtrooms and opened two permanent super-courtrooms in Manchester and Loughborough so that there are more courtrooms available across the court estate.
Simon Baynes
Will the Minister give the figures for the backlog in north Wales, where my constituency of Clwyd South is located, and for Wales overall? Will he also comment on any particular factors that are affecting those figures in Wales?
Mike Freer
As of December 2022, the outstanding case load in north Wales was 337 and the outstanding case load in Wales was 2,106—a 34% increase from pre-pandemic levels. As with every region, the outstanding case load in Wales has been impacted by the pandemic and the disruptive action by the Criminal Bar Association. As I have said, the Government remain committed to reducing the outstanding case load in the Crown courts, working with partners across the system.
Mark Pawsey
The Government have introduced the use of pre-recorded evidence in rape trials and are trialling an extension for other cases to allow parties to provide information while memories are fresh. My attention has been drawn to a case that predates the roll-out, in which those involved had to wait three years to give evidence. What assessment does the Minister have of the effectiveness of pre-recorded evidence in speeding up the justice process?
Mike Freer
My hon. Friend raises a good point. On the roll-out of pre-recorded cross-examination—known as section 28—to victims of sexual and modern slavery offences in all Crown courts in England and Wales, this has been available to children and vulnerable adults since November 2020. It is particularly important with those vulnerable witnesses to ensure that their evidence is taken while it is fresh. The impact of that on speeding up cases is important. Rolling it out across the whole estate may mean that the impact of that evidence is diminished. That is why it is part of a programme—not just section 28 video recording, but the work we are doing on capacity and judicial recruitment. It is a package.
Alex Cunningham (Stockton North) (Lab)
I wonder whether the Minister has considered the Magistrates Association report “Inaccessible courts: a barrier to inclusive justice”, which shows that magistrates courts in England and Wales have serious accessibility failings. It says that impacts on the efficiency and fairness of the justice system and undermines efforts to recruit a more diverse magistracy. One in five magistrates courts do not have level access. In 30% of courts, magistrates with a disability cannot sit in some or all of the courts in the complex. A third of courts do not have accessible toilets for them, and half do not have hearing loop systems installed or operating. Just what has happened to all that cash the Government claim to be investing? It certainly is not addressing the basics.
Mike Freer
The Government are committed to improving the whole court estate, not just magistrates courts. On diversity, we are investing £1 million. On the accessibility of our physical estate, I have taken a particular interest in ensuring that those magistrates who have specific needs are supported. I can reassure the hon. Gentleman that investment in our court estate will continue to address all the issues that we face.
Andrew Selous (South West Bedfordshire) (Con)
The Minister of State, Ministry of Justice (Damian Hinds)
We are committed to recruiting 5,000 additional prison officers across the public and private estate by the mid-2020s. We have seen recent improvements in recruitment, with 655 additional full-time equivalent officers appointed between December 2022 and March 2023 alone.
Andrew Selous
At risk of being potted, kettled or attacked with toothbrushes that have razors fastened to the end, the work of a prison officer is not for the faint-hearted, yet their role is essential to keeping us free. We have just celebrated Armed Forces Week, and rightly so—I say that as a former veteran—but it troubles me that we do not have a similar week to celebrate the work of prison officers. We do not do enough to recognise their service to keep us all safe and free, across society. Can we change that, please, and urgently?
Damian Hinds
My hon. Friend is right about the paramountcy of safety for our brave staff, which is why we have been investing in security, body-worn cameras, PAVA spray and so on. He is also right that prison officers are often hidden heroes in our society, and they do not always get the recognition they deserve. As it happens, this evening is His Majesty’s Prison and Probation Service staff awards, which I am looking forward to attending, and I am keen to find more ways to publicly recognise these incredible people for what they do. His suggestion of a Prison Officers Week is interesting. More generally, I hope all colleagues will take the opportunity to visit their local prisons and to speak directly to prison officers.
John Cryer (Leyton and Wanstead) (Lab)
According to the Prison Officers Association, the turnover rate among officers is still very high. What discussions has the Minister had with the POA about not only recruitment but retention?
Damian Hinds
I have spoken to the POA about recruitment and retention, as the hon. Gentleman would expect. We have recently seen about a 1 percentage point improvement in the resignation rate, which is significant, but we have to make sure that all aspects of the job are right. Of course it is about pay and conditions, but it is also about things such as safety and making sure prison officers have the right support for what can be, mentally, a very difficult and straining job.
Selaine Saxby (North Devon) (Con)
The Minister of State, Ministry of Justice (Edward Argar)
In the rape review action plan, we committed to expanding our victim support provision throughout the court process for victims of these dreadful crimes. We are more than quadrupling funding for victim and witness support services from 2009-10 levels, increasing the number of independent sexual violence advisers and independent domestic violence advisers to 1,000. We completed the roll-out of section 28 measures in September 2022, and we continue to deliver our enhanced specialist sexual violence support programme in selected Crown courts.
Selaine Saxby
Can my right hon. Friend confirm what measures are taken for sexual assault and rape victims in remote, rural or coastal communities, where trials may take place a long way from their home?
Edward Argar
I am grateful to my hon. Friend, who is a champion for rural and coastal communities in all aspects. The Government take seriously the experience of victims across the country, no matter where they live. In addition to the measures I have just set out, the Crown Prosecution Service supports victims of crime from remote and rural areas, with victims being able to claim back travel expenses when they need to travel far to attend court. We recognise the challenges of rurality, which is why the MOJ’s sexual violence service design and delivery team has regular engagement with the National Rural Crime Network and is a member of the NRCN’s domestic violence working group.
Anna McMorrin (Cardiff North) (Lab)
This week, it has been three years since the harm panel’s report found a serious risk of harm to victims of domestic abuse and their children in the family courts, yet we have seen that nothing has changed. Heartbreakingly, the experiences of victims in the family courts all read the same: the mother criminalised, the children ignored, the father excused. One 10-year-old girl disclosed to the guardian assigned to her case that her father had sexually abused and assaulted her. The guardian dismissed this and, instead, read a book to her, saying that her mother had made it up and her father had done nothing wrong. With no definition of rape or consent in statute in the family courts, when will the Government put a stop to this national scandal?
Edward Argar
I am grateful to the shadow Minister for her question. She will be aware that Lord Bellamy, whose portfolio covers the family courts, is looking at this issue carefully. Although it is not in my portfolio, I understand that two of the three limbs of the report she mentioned have already been implemented, and we anticipate implementing the final element later this year.
Catherine West (Hornsey and Wood Green) (Lab)
Alex Davies-Jones (Pontypridd) (Lab)
Liz Twist (Blaydon) (Lab)
The Lord Chancellor and Secretary of State for Justice (Alex Chalk)
Tackling violence against women and girls is a driving mission of this Government, and we are delivering on it in three ways. First, we have created and are creating new offences, such as revenge porn, and coercive and controlling behaviour, so that abusers have no place to hide. Secondly, we are increasing penalties so that offenders are not just convicted and disgraced, but punished in a way that fits the crime and protects victims. Thirdly, we are supporting victims by quadrupling the funding for victim and witness support services.
Catherine West
Today, tragically, 300 women in Britain will be raped. Under this Government’s watch, in three of those cases there will be a charge. Under this Government’s watch, charging numbers have plummeted. What are the Government going to do about it?
Alex Chalk
What we are not going to do is come up with statistics that are completely untrue. This is incredibly important, because people listen to what the hon. Lady has to say and it is simply wrong to send a message out that people are not being prosecuted. Let me make one thing crystal clear: more people have been prosecuted for rape in the last year for which statistics are available than was the case in the last year of a Labour Government. That is an important point. If I may, I will read out something so that she understands this, because people are getting justice all the time. It relates to one of the new Nightingale courts that we have set up, in Cirencester. Let me tell her what happened when two victims spoke out as their rapist had been sent to prison for 25 years recently. Victim B said:
“I would just like to say how happy I am with the whole criminal justice system. I wasn’t sure whether to go”—
to the police—
“due to being scared and thinking nobody would believe me. If there is anyone out there with the same situation I encourage them go forward as soon as possible”.
Of course there is more to do, but people are being convicted, people are being put on trial and rapists are being punished.
Alex Davies-Jones
The Domestic Abuse Act 2021 is vital. It finally introduced a full statutory definition of domestic abuse and banned the horrendous cross-examination of victims by their abusers. However, the Act also rolled out controversial polygraph lie detector testing of high-risk domestic abuse perpetrators. Will the Secretary of State meet me and other members of the all-party parliamentary group on perpetrators of domestic abuse to discuss our concerns that polygraphs are pure pseudoscience and have no place in otherwise vital legislation?
Alex Chalk
The hon. Lady raises an important and sensitive issue. She is right to say that polygraph results have to be handled with care. That said, that testing has been shown to be one of a number of important risk management tools in monitoring the compliance of high-risk sexual offenders with their licence conditions. In the way it is used by the probation service, polygraph is 80% to 90% reliable when indicating deception. However, she raises this important point and of course I would be happy to meet her to discuss it further.
Liz Twist
It is two years since the Government’s rape review, which the Secretary of State referred to earlier, but too many rape victims are still being failed by the criminal justice system, at every stage of the process. Although it is good to hear those positive reviews, too many women are not experiencing this. So what more are the Government going to do to step up the work to ensure that dealing with rape is a priority?
Alex Chalk
The hon. Lady is absolutely right to talk about this issue, as indeed are all right hon. and hon. Members. All I respectfully plea for is some balance in the way we discuss this sensitive issue. Let me say something on the recovery that has taken place. The number of cases passed by the police, after having investigated the matter, to the Crown Prosecution Service for consideration of charge is up by more than 130%; the number of cases where the CPS decides to charge is up by more than 90%; and the number of cases that come to the Crown court is up by more than 120%. I am not suggesting that the job is done—of course it is not, and we need to support victims. That is why we invest in independent domestic violence advisers and independent sexual violence advisers; why we ensure that section 28 is rolled out; and why we have the specialist sexual violence support services in court. That is why we do all these things, and will do more: it is because we want to ensure justice for victims of this appalling crime.
Chris Elmore (Ogmore) (Lab)
The Parliamentary Under-Secretary of State for Justice (Mike Freer)
Following a merger of IT systems, there is no current data on average waiting times, but the outstanding caseload has reduced from 48,000 in February to 41,000 in March this year because of an increase in the number of sitting days. As well as the increased sitting day allocation, we continue to support and reform the employment tribunals process and to make progress in reducing the backlog.
Chris Elmore
Members of my trade union, the Union of Shop, Distributive and Allied Workers, who submitted claims for a protective award in 2020, after being made redundant without consultation, are still waiting for the employment tribunal to hear their claim. They are owed thousands of pounds in respect of failure to consult before redundancy and it cannot be just that, three years on, they are still no closer to receiving compensation. Will the Minister look into the case, to ensure that their collective claim can be dealt with by the Tribunals Service as soon as possible, because it is not acceptable that it has not been dealt with three years on?
Mike Freer
The tribunals are operationally independent, of course, but I would be more than happy to investigate the case that the hon. Gentleman mentions and see whether there are any issues causing the delay.
Mr Philip Hollobone (Kettering) (Con)
The Lord Chancellor and Secretary of State for Justice (Alex Chalk)
Our prisoner transfer agreement with Albania came into force in May 2022. To build on that, as I have mentioned before, we announced a new arrangement with the Albanian Government in May this year to speed up prisoner transfers to Albania of the most serious offenders. The Government will energetically pursue bilateral agreements with EU partners and wider-world partners wherever possible.
Mr Hollobone
Will the Secretary of State confirm that out of a prison population of 85,000, about 10,000 prisoners—12%—are foreign national offenders? He said earlier that we have over 100 prisoner transfer agreements, but only a handful of them are compulsory, where we send prisoners back whether they want to go back or not. Can we have more compulsory prisoner transfer agreements with countries that have a large number of nationals in our jails?
Alex Chalk
I thank my hon. Friend for raising this issue consistently—he was raising it when I first came to the House in 2015, and he is absolutely right to do so. Yes, we will continue to work on the issue. At the risk of stating the obvious, those agreements have to be agreed to by the other nation, but I can assure him that those matters are getting very close focus and attention.
Ian Byrne (Liverpool, West Derby) (Lab)
The Lord Chancellor and Secretary of State for Justice (Alex Chalk)
I am pleased to be able to say that we are committed to bringing forward legislation to enable offenders to be compelled to attend their sentencing hearing. Offenders who rob innocence, betray lives and shatter families should be required to face the consequences of their actions and hear society’s condemnation expressed through the sentencing remarks of the judge.
Ian Byrne
I have recently tabled an early-day motion to put it on record in the House formally the pain that the wilful absence of an offender at a sentencing hearing causes bereaved families. Will the Secretary of State explain why provisions cannot be included in the Victims and Prisoners Bill to change that? Will he meet me and Cheryl Korbel to discuss when legislation will be brought forward and how bereaved families can be at the heart of shaping a change in the law, to ensure that no bereaved family who has to suffer in the fight for justice will face that situation at sentencing ever again?
Alex Chalk
I thank the hon. Gentleman for raising this case and for rightly identifying the anguish, pain and insult that families feel when a cowardly defendant refuses to attend court. On his specific question, he will understand that there are issues of scope and all sorts of things as to whether legislative measures can be included within certain Bills, but of course I will be happy to discuss that with him. The central point, however, is that there is a cross-party belief that there needs to be some legislative progress—we are committed to that as well.
Ellie Reeves (Lewisham West and Penge) (Lab)
I have listened to what the Secretary of State has said, but the Government have had 13 years to compel criminals to attend courts to hear their sentences. The Government’s failure to do that has meant that in the last year alone the killers of Olivia Pratt-Korbel, Zara Aleena and Sabina Nessa have all avoided hearing their sentences, and avoided hearing the impact that their callous crimes have had on the families left behind. Will the Government urgently make this simple change, and stop cowardly offenders from evading their sentencing hearings?
Alex Chalk
The hon. Lady raises an important point by referring to those three cases. What concerns me is that one defendant’s actions could be copied by others, who take the view that that is somehow a way of getting away from the consequences of their actions. She makes it a political point—we are in the House of Commons, so I totally understand that—but I could equally make the point that the legislation was not changed pre-2010 either. We have seen the anguish caused by these actions, so let me make the point that I want to know that when an offender is sitting in a cell, trying to get to sleep when the rest of the world is getting to sleep, the judge’s words of condemnation are ringing in their ears. There are victims who find it hard to ever recover, so why should that defendant ever be able to sleep soundly in their bed?
Marion Fellows (Motherwell and Wishaw) (SNP)
The Lord Chancellor and Secretary of State for Justice (Alex Chalk)
The Illegal Migration Bill will break the business model of people-smuggling gangs, deter migrants from making dangerous channel crossings and restore fairness to our asylum system. The Bill will provide a robust but fair legal framework to remove illegal migrants swiftly while ensuring that proper opportunity to appeal remains. I am working closely and regularly with Cabinet colleagues on the implementation of the Bill.
Marion Fellows
I thank the Minister for his answer. The Illegal Migration Bill would prevent UK courts from granting an interim remedy to delay the removal of an individual while their judicial review claim is heard. Is that not a fundamental attack on the rights of an individual to access the courts? Does he really believe that an asylum seeker will be able to participate effectively in a judicial review if they are already in Rwanda?
Alex Chalk
This is a fair country and we will always take what proper steps we should to ensure that individuals’ rights are upheld. I respectfully say this: as well as considering those migrants who come across the channel, the hon. Lady needs to think about those migrants on the north coast of France who are thinking about whether to put their lives into the hands of people traffickers. We need to send a clear message that they should not do so. I also say respectfully that she should think about the rights of the British people who are having to fund a great deal of this. We will be fair, but we will also be firm and make no apology for either.
Anna Firth (Southend West) (Con)
The Lord Chancellor and Secretary of State for Justice (Alex Chalk)
Since the last oral questions, I have brought forward measures in the Economic Crime and Corporate Transparency Bill to tackle strategic lawsuits against public participation—so-called SLAPPs—to give courts the power to dismiss lawsuits aimed at gagging campaigners and journalists who oppose financial misconduct. In the past week I have met victims and their families, including Georgia Harrison, to discuss new measures to tackle intimate image abuse, and Farah Naz, the aunt of tragically murdered Zara Aleena, to discuss compelling offenders to attend their sentencing hearing. I visited Snaresbrook Crown court, and HMP High Down where I opened a brand new DHL logistics workshop, which is supporting prisoners to learn the skills they need to turn their lives around.
Anna Firth
According to the Government’s own statistics, 18% of knife possession offences involve juveniles, which is of great concern to my constituents in Southend West. What consideration is being given to increasing the sentence for those supplying a knife to an under-18, which is currently only six months? Should that not be the same as possession of a knife, which is currently four years?
Alex Chalk
We keep all these matters under review and my hon. Friend will know well that the role of a knife in the commission of criminal offences is already reflected in the criminal justice sentencing rules. For example, the starting point for a murder that is committed with a knife that is brought to a scene is considerably higher than it is in other circumstances. We also wish to ensure that knives do not get into prisons, which is why, as part of our £100 million security investment programme, we have funded enhanced gate security in 42 high-risk prison sites. On the issue of sentencing, we keep all matters under review, and I would be happy to discuss that with my hon. Friend.
Steve Reed (Croydon North) (Lab/Co-op)
May I add my congratulations to Dame Sue Carr on her historic appointment?
When he was Chancellor, the current Prime Minister let the murderous boss of Russia’s mercenary Wagner Group, Yevgeny Prigozhin, bypass sanctions so that he could abuse our courts to silence a British journalist who was exposing his crimes. Why did the British Government side with this Russian war criminal over the British press?
Alex Chalk
No, no, no—that is to completely misrepresent the situation. As the hon. Gentleman knows, we have one of the most robust systems of sanctions; whether in an individual case money can be released is at the discretion of an arm’s length body. Of course the Chancellor was not seeking to do that, and to suggest that, I am afraid, is discreditable.
Steve Reed
What is disappointing is that the Government’s proposed reforms in the economic crime Bill would still allow warlords to use these tactics to silence journalists in the British courts, but there is another area of concern as well. Will the Secretary of State confirm—because this is an area of doubt—whether the reforms he is proposing would prevent wealthy tax dodgers from silencing journalists in court, as the right hon. Member for Stratford-on-Avon (Nadhim Zahawi) threatened to do when he was Chancellor of the Exchequer?
Alex Chalk
I hope the hon. Gentleman will join me in welcoming the measures on SLAPPs, because it is very important to ensure that those people do not use their financial advantage to try to snuff out freedom of speech, legitimate investigative journalism and all the things we want to see in a free and fair society. By common consent, the measures we are introducing will make a very significant difference. We remain open to going further and to considering further matters, but we need to take it in stages. We are looking to manage the balance between freedom of speech and people’s right to access justice. These are important steps and have been widely welcomed, so it is right to see how they bed in.
Henry Smith (Crawley) (Con)
The Minister of State, Ministry of Justice (Edward Argar)
My hon. Friend is absolutely right to highlight this issue. We yesterday tabled an amendment to the Online Safety Bill that would create a new offence of encouraging or assisting serious self-harm, whether by verbal or electronic communications, publication or correspondence. That fills a gap in the law and, together with the broader regulatory measures in the Bill, it will help to protect people from such content. It remains our intention, however, when parliamentary time allows, to expand the offence to cover encouragement or assistance given by means other than such communications, which are currently out of scope of the Bill.
Alison Thewliss (Glasgow Central) (SNP)
Anyone’s Child has a mass lobby of Parliament today, calling for reform of the UK’s failed and outdated drugs laws. Will a Justice Minister be meeting anybody from Anyone’s Child to hear their case for supporting, not punishing, those who take drugs and their families?
Alex Chalk
I do not have plans to do so, I confess, but if the hon. Lady is to have those conversations, I invite her to consider writing to me afterwards; if there are matters we can take up, I would be happy to do so.
Sir Edward Leigh (Gainsborough) (Con)
Alex Chalk
No one is a more doughty defender of the people in his constituency who are concerned about matters relating to Scampton than my right hon. Friend. This is principally a Home Office matter, as he knows, but the points he has made will have reverberated not just in this Chamber but, I am sure, all the way down the road to Marsham Street.
David Linden (Glasgow East) (SNP)
Alex Chalk
We have already taken important steps to recalibrate disclosures so that they have to take place only when absolutely necessary, but the hon. Gentleman is right about employment. A prisoner who gets into employment is 10% less likely to commit an offence. I am delighted to see, through the huge efforts of employment advisory boards, employment advisers and employment hubs in custody, that the proportion of offenders in employment six months after release has doubled in the past year. A lot of work has been done, but of course there is further to go.
Karl MᶜCartney (Lincoln) (Con)
Earlier, the Minister was asked about the backlog of criminal court cases and answered at length regarding Crown courts. On behalf of magistrates and magistrates court staff, can we have an update on the situation with magistrates courts, please?
The Parliamentary Under-Secretary of State for Justice (Mike Freer)
The magistrates have continued to make good progress in reducing the backlog, and that is a testament to the work they do on our behalf.
Paula Barker (Liverpool, Wavertree) (Lab)
The Minister of State, Ministry of Justice (Damian Hinds)
The work that our probation service does is incredibly important and, like the work of prison officers, it often goes unseen. There have been recruitment challenges throughout society, as the hon. Lady will know, but we have been focusing particularly on recruiting into probation. I am pleased to report that, over the past couple of years, we have exceeded our target, which was already stretching to 4,000. In regions such as London, where recruitment has been particularly difficult, we have had encouraging signs, including, for example, 144 new trainee probation officers starting in London in 2022-23. Their ongoing training and professional development will be incredibly important over the next few years.
Sir Jacob Rees-Mogg (North East Somerset) (Con)
I wonder what conversations the Lord Chancellor can have with the Chief Coroner about the poor performance of the Somerset coroner’s office, where the waiting time went up from 23 weeks to 31 weeks in 2022 against a decrease in the rest of the country. That involves worse things for individual constituents. Mrs Deborah Cox has been waiting nearly four years for the coroner to get on with the job of providing an answer. That is deeply distressing for families, and I wonder what can be done.
Mike Freer
My right hon. Friend has shown great interest in the work of coroners. They have judicial independence, but I am more than happy to raise his concerns with the Chief Coroner to see if any specific issues in Somerset are causing concern to his constituents.
Jeff Smith (Manchester, Withington) (Lab)
Damian Hinds
What the hon. Gentleman said is just not the case. He is absolutely right that securing accommodation on release is incredibly important—we have just had a similar conversation about employment, but accommodation underpins so much else, including the ability to get into work—but the tier 3 accommodation that he mentions had, by February of this year, already supported more than 5,000 people who would otherwise have left prison without a home to go to.
Andy Carter (Warrington South) (Con)
Further to the Minister’s comments about the progress made in magistrates courts, may I thank him for recently meeting members of the Cheshire bench who came to Parliament? Will he update the House on the decision to pause the additional sentencing powers granted to magistrates in 2022? Does he agree with me and members of the Magistrates Association that restoring those powers could free up about 1,700 extra Crown court sitting days each year?
Mike Freer
The change in sentencing powers was no reflection on the magistrates, whose work is highly valued. The Department continues to keep the sentencing powers under review. I give my hon. Friend the commitment that the issues raised in that meeting with his local bench are being progressed through the Department
Helen Hayes (Dulwich and West Norwood) (Lab)
Alex Chalk
The hon. Lady is absolutely right that people should have the opportunity to see justice done, and justice is done not simply by getting an injunction—important though that may be—but by ensuring that an abuser hears the clang of the prison gate in appropriate circumstances and if that is what the court orders. I do not know specifically what happened in that case, but I can say that, under the victims code, individuals have the opportunity to raise issues with the CPS. Supposing that they were seeking to drop a case, there is now a victim’s right to review—to say to the CPS, “Look again at this.” Equally, there is the opportunity for court familiarisation visits or special measures applications. That is all about ensuring that, where they want to, victims have their day in court and see justice done.
Jonathan Gullis (Stoke-on-Trent North) (Con)
My understanding of the law presently is that if someone is driving a motor vehicle and they kill an individual, their blood can be taken without their consent, but the blood cannot be tested unless the defendant gives their consent, and if the defendant refuses to give consent, that is accepted as guilt in the eyes of the law. That meant that Claire, the mother of six-year-old Sharlotte-Sky, who tragically lost her life in Norton Green due to John Owen, who was on drink and drugs, waited over a year before she got her day in court and justice. Will the Lord Chancellor back my campaign for Sharlotte’s law to be introduced?
Alex Chalk
My hon. Friend has been a doughty champion on this issue and he continues to raise it. I suggest that he and I have a conversation in due course.
Cat Smith (Lancaster and Fleetwood) (Lab)
When my constituent reported her rape to the police 14 months ago, she also revealed that the rape had been videoed by the perpetrator. The police are now in possession of the mobile phone that this has been recorded on, but she is still waiting for her justice and her day in court. Could the Minister say how long my constituent might expect to wait to get justice?
Edward Argar
The hon. Lady will appreciate that I am unable to comment on the specifics of a case, and it would probably be inappropriate to do so in the Chamber, but if she would like to write to me with the details that she cannot share on the Floor of the House, I am happy to look at them.
James Sunderland (Bracknell) (Con)
Waitrose is based in my constituency, and in recent meetings with the partners and with other supermarkets, it has raised with me the scourge of shoplifting. Organised gangs operating with impunity across the UK are engaging in retail crime. They are often inflicting violence against workers using weapons, and they are costing supermarkets a fortune. Can we do more work on the deterrent effect of greater sentencing, and may I urge the Minister to look at whether the provisions of the Protection of Workers (Retail and Age-restricted Goods and Services) (Scotland) Act 2021 could be rolled out in England too?
Alex Chalk
Let me make a couple of points. First, increasing the number of police officers means that there is more resource to try to ensure that the people who commit this crime—and it is not a victimless crime, by the way—are brought to book. Secondly, I am proud of the fact that we have doubled the maximum sentence for assault on an emergency worker, so that defendants can be properly punished where they have assaulted police officers, ambulance staff or potentially people who work in supermarkets, though I would query whether they are in scope.
Sarah Green (Chesham and Amersham) (LD)
One of the concerns raised with me by several victims of domestic abuse has been their experience of victim blaming in the criminal justice system. Can the Secretary of State outline what steps his Department is taking to tackle victim blaming and provide better support to survivors of domestic abuse and sexual violence?
Edward Argar
Significant work is under way across the system to tackle victim blaming and disproportionate attention on victim credibility. As part of that, we developed Operation Soteria, which ensures that officers and prosecutors are focusing their investigations on the behaviour and offending pattern of suspects, rather than on subjective judgments of victims’ credibility. I am happy to meet the hon. Lady if she would like to discuss this further.
Sir Robert Neill (Bromley and Chislehurst) (Con)
Will the Lord Chancellor confirm that it remains the Government’s intention to update and modernise our human rights law as necessary, but to do so while firmly remaining in adherence to the convention on human rights?
Alex Chalk
Yes, that is correct. Having carefully considered the Government’s legislative programme in the round, I can inform the House that we have decided not to proceed with the Bill of Rights, but the Government remain committed to a human rights framework that is up to date, fit for purpose and works for the British people. We have taken and are taking action to address specific issues with the Human Rights Act 1998 and the European convention, including through the Illegal Migration Bill, the Victims and Prisoners Bill, the Overseas Operations (Service Personnel and Veterans) Act 2021 and the Northern Ireland Troubles (Legacy and Reconciliation) Bill, the last of which addressed vexatious claims against veterans and the armed forces. It is right that we recalibrate and rebalance our constitution over time, and that process continues.
Liz Saville Roberts (Dwyfor Meirionnydd) (PC)
Rhianon Bragg, who was held hostage by her ex-partner, has faced multiple errors and omissions in her treatment as a victim. Given the catastrophic failings she has experienced in the criminal justice system, and with a parole hearing on 12 July, will the Secretary of State now review this case in full and support Rhianon’s call for an entire audit of the process from the victim’s perspective?
Alex Chalk
I am afraid that I did not get the first part of the right hon. Lady’s question, but if she writes to me, I will come back to her.
Rob Butler (Aylesbury) (Con)
I recently visited Aylesbury Prison, where I was very impressed with the excellent work that is being done at the establishment as it has transformed from being a young offenders institution to a category C adult jail. One particular challenge, though, is the prevalence of psychoactive drugs such as spice. What progress is my right hon. Friend making on combating this appalling and deadly substance?
Damian Hinds
I am grateful to my hon. Friend, both for the particular interest he takes in his local prison and for using his much broader experience across the system. He is right to identify the issue with keeping drugs out of prisons. Different substances come and go to some extent, but particularly for spice, the investment we have made in drug trace machines for post—I think there are now over 100 of those—has been very important.
Matt Rodda (Reading East) (Lab)
The Ministry of Justice has been trying to sell Reading jail to a commercial developer for some time, but our community hopes that it can instead be turned into an arts hub. Can the Minister update me on that sale, and will he meet with me and constituents on this important matter?
Damian Hinds
I am grateful to the hon. Gentleman for his question. He and I have met, along with the other MP for Reading, my right hon. Friend the Member for Reading West (Sir Alok Sharma). As he is aware, a sale is progressing, and of course there is commercial sensitivity attached to that, but I can assure the hon. Gentleman that assurances for purchase will be required by solicitors and all required due diligence will be undertaken. I will be happy to talk with him further.
Mike Amesbury (Weaver Vale) (Lab)
Louise and her family are facing unnecessary and quite challenging delays in the local coroner’s service in Cheshire. This seems to be happening far too often at the moment. What more can Ministers do to speed up that process?
Mike Freer
As the coroners are independent judicial office holders, we can continue to raise particular cases to find out what specific issues are holding back those cases. If the hon. Gentleman writes to me with the details of that case, I will ask the Chief Coroner to investigate.
Andy Slaughter (Hammersmith) (Lab)
Today, Inquest and 40 other justice organisations launch a campaign for a national oversight mechanism to systematically learn the lessons of inquests, inquiries and investigations from Grenfell to deaths in custody. Do the Government support that initiative?
Mike Freer
I am more than happy to look at any specific proposals to see how we can improve the process of inquests and inquiries. Of course, my door is open if the hon. Gentleman wishes to have a more detailed discussion.
Jim Shannon (Strangford) (DUP)
I am never one to miss an opportunity—thank you very much.
Does the Minister believe that there is a greater role for youth justice agencies to be involved at early stages, eliminating the need for repeated court dates if arrangements can be made with victims of crime and the offender support network to agree a mechanism of reparation and rehabilitation to reduce small offence cases in court? Do it simply—that is really what I am asking.
Alex Chalk
As always, the hon. Gentleman raises a really important issue. There can be some cases where reparation is exactly the right way to proceed, but it is case-specific. For some victims, peace and closure comes from meeting the defendant and understanding more about what prompted the crime, but other victims simply do not want that at all. It has to be taken on a case-by-case basis, but I will just make this point: one of the unnoticed things that has happened over the past 10 years is that the number of children in custody has gone down. We are diverting people from custody wherever possible so that they can have a crack at a decent future.
Illegal Migration Bill: Economic Impact Assessment
(10 months, 2 weeks ago)
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Yvette Cooper (Normanton, Pontefract and Castleford) (Lab)
(Urgent Question): To ask the Secretary of State for the Home Department if she will make a statement on the publication of the impact assessment on the Illegal Migration Bill.
The Minister for Immigration (Robert Jenrick)
The Illegal Migration Bill is critical to stopping the boats. Its intent is clear: if someone comes to the UK illegally, they should be detained and swiftly returned to their home country if safe, or relocated to a safe third country such as Rwanda. The impact assessment published yesterday makes clear that inaction is simply not an option. The volumes and costs associated with illegal migration have risen exponentially, driven by small boat arrivals. Unless we act decisively to stop the boats, the cost to the taxpayer and the damage to society will continue to grow.
The asylum system currently costs £3.6 billion a year and £6 million a day in hotel accommodation, but that is not the true cost of doing nothing. As this impact assessment shows, the cost of accommodating illegal migrants has increased dramatically since 2020. If these trends continued, the Home Office would be spending over £11 billion a year, or £32 million a day, on asylum support by the end of 2026. In such a scenario, the Bill would only need to deliver a 2% deterrence in arrivals to enable cost savings.
The figure of £11 billion is an extraordinary amount of money—nearly 10 times the amount of money the taxpayer spent on the asylum system as recently as 2021—and anyone opposing this Bill needs to explain how they would pay those costs. Given the Labour party’s opposition to this Bill, it represents another £11 billion black hole in its fiscal plans.
The impact assessment suggests that passing this Bill could directly save the UK taxpayer over £100,000 for every illegal migrant deterred from making a small boat crossing. It also finds that the Bill could lead to a much wider set of benefits—including reducing pressures on local authorities, public services and the housing market—that could not be monetised, meaning that the savings will in fact be much greater.
The British public are clear that they want to stop the boats. That is why we must keep using every tool at our disposal to do just that and to secure our borders, and why this Bill must become law.
Yvette Cooper
I was going to ask if the Immigration Minister had seriously signed off this garbage of an impact assessment, which no self-respecting Minister could possibly think was serious, but actually the nonsense he has just said is even worse and even less coherent. This is not an impact assessment. According to the Government’s own guidance, it is supposed to include the
“costs, benefits and risks...and a consideration of a range of options.”
However, we have something that does not even include some of the most basic options to assess, such as speeding up the asylum system and making savings that way. Instead, it says that this impact assessment
“does not attempt to estimate any costs of implementing the Bill…or estimate the volumes of individuals that will be impacted by the Bill.”
Really, what is the point of it, given that the document itself admits that people “may not be deterred” by any of this, and it cannot answer the most basic questions? I have never seen anything more clueless and chaotic.
The impact assessment does provide evidence of the scale of Conservative failure. The cost for one person in the asylum system for just one night has gone up fivefold in four years. That is just the cost of Tory mismanagement. It has gone up faster than mortgages or energy bills, and it has even gone up faster than the price of cheese. It is all Tory Home Office mismanagement. It shows the shocking fact that people are now staying in the asylum system for four years, and there is no alternative to try to speed up the system or to look at that.
The Government do say that it will cost £169,000 per person to pay another country to take asylum decisions for us. So far, the Government have sent more Home Secretaries than asylum seekers to Rwanda, but how many people are they actually budgeting for? The Prime Minister says he wants to send everyone, so can the Minister tell us where the billions of pounds it would cost to send everyone to Rwanda this year will come from, and if not, can he tell us how many he is really budgeting for and what in fact is going to happen to everyone else instead?
The impact assessment says it costs £7,000 per person to keep someone in detention for 40 days. That is more than double the current average cost of keeping people elsewhere in the asylum system, so where are the hundreds of millions of pounds for the detention plan going to come from, and where are these detention facilities going to come from? The Minister has not attempted to cost speeding up the system and he has not attempted to cost what we really think will happen, which is that tens of thousands more people will be in indefinite detention or indefinite asylum accommodation. The Treasury bailed out the Home Office by £2.4 billion last year. How much is it going to be this year?
The Government have crashed the economy, and now they have crashed the asylum system too. We have an impact assessment that shows the Home Office does not have a clue and the Treasury does not have a grip, and the Prime Minister who claims to be Mr Fix-It is instead Mr Muck-It-Up. The country deserves better than this.
Robert Jenrick
The right hon. Lady misses the point entirely. The impact assessment bears out the cost of the current broken system and makes it clear that there is no option but to completely overhaul our asylum system and make it fit for the decades ahead. The reality, as those of us on the Government Benches see it, is straightforward: if people continue to cross in small boats, the cost to the taxpayer in one form or another will continue to increase and that is a completely unacceptable outcome—but it is the one that can be expected with Labour’s recklessly naive approach to border security.
When the right hon. Lady said that this document was “garbage” and “clueless”, I thought she was referring to her own five-point plan to tackle illegal migration, because we cannot grant our way out of the problem, we cannot simply arrest our way out of this and do nothing to dismember and dismantle the business model of the gangs. We cannot provide a safe and legal route to every single person eligible for refugee status or every economic migrant who views this country as a better place, and we certainly cannot reheat the tired old policies like the Dublin convention that she looks back on through her rose-tinted spectacles. Even members of the European Union have moved on from that, but not the Labour party. She cannot even bring herself to call these unnecessary and dangerous journeys what they are under British law: illegal.
The truth is that Labour’s do-nothing approach to stopping the boats is the fastest route to more crossings, greater taxpayer spending and more pressure on our communities. Left unchecked, the cost will spiral to £11 billion by 2026. That is the cost of a Labour Home Secretary; that is the cost of Cooper. Only the Conservative party will truly tackle the root cause of the problem, not just the symptoms. We are determined to secure our borders and stop the boats, and the British public can rely on us to do so.
Tim Loughton (East Worthing and Shoreham) (Con)
The Opposition seem to think that the Rwanda scheme is purely about displacing people who have entered illegally from Kent to Rwanda. In fact, it is about deterring them from coming in the first place and instead encouraging them to use the safe and legal routes that are now in the Illegal Migration Bill, because it will become a lottery whether someone ends up on a plane to Rwanda or in a hotel in Kent. Given that the French authorities admitted to the Select Committee on Home Affairs that when the Rwanda scheme was first announced there was a surge in migrants approaching the French authorities about regularising their position in France rather than hazarding the channel crossing, what discussions has my right hon. Friend had with the French and Germans, who have expressed interest in a Rwanda-type scheme, about having a joint multinational scheme to get this thing up and running?
Robert Jenrick
My hon. Friend is absolutely right. There is a view expressed by some, mainly on the left, that the UK is somehow an outlier in pursuing a policy like Rwanda. I can tell him, having spoken to our European counterparts and Home Affairs and Interior Ministers in north Africa and beyond, that leaders across the world are looking to the UK not as an outlier but as a leader in this field. They are looking to the Rwanda policy as one of the most innovative and comprehensive approaches to a problem that everyone is facing. In an age of mass migration, with millions of people on the move, it is right that the UK leads. We will invest in border security, and that is the difference between us and the Labour party. [Interruption.] The right hon. Member for Normanton, Pontefract and Castleford (Yvette Cooper) does not want to invest in border security; we do. We will pursue the Rwanda policy, we will secure our borders, and other countries will follow our lead.
Madam Deputy Speaker (Dame Rosie Winterton)
I call Scottish National party spokesperson.
Alison Thewliss (Glasgow Central) (SNP)
The Tory Illegal Migration Bill has almost completed its journey through Parliament and only yesterday did the Home Office deign to publish this ludicrous economic impact assessment, which is as revealing in what it omits as what it includes. There is nothing about the backlog they have created; it is all about the boats.
We know the cost of this cruel Tory ideology is £169,000 per soul deported, costing more than if people were allowed to stay. We know the figures for asylum processing claims, which are estimated to take four years, but we do not know the set-up costs for the wildly expanding detention estate or those left in immigration limbo or the staffing in the Home Office and the Ministry of Justice to deal with this.
The Government say that this will save money, because victims of modern slavery will no longer be entitled to support. How despicable. This is an egregious waste of public money in a cost of living crisis, and it fails to recognise the value of human potential. We have just celebrated the Refugee Festival in Scotland—an incredible experience that celebrates the contribution of those who come to our shores for sanctuary. It is increasingly evident that the only way that Scotland can uphold our humanitarian values is by regaining our independence. As Winnie Ewing would have it, stop the world, Scotland wants to get on.
Robert Jenrick
I am delighted that the hon. Lady celebrated Refugee Week. I do not know if any refugees came to it, because the SNP does not house refugees in Scotland. The point is that we are proud of our record as a country. Since 2015, under a Conservative Government we have welcomed into the United Kingdom more than half a million people seeking genuine sanctuary from war and persecution—individuals coming from Hong Kong, Ukraine, Syria and Afghanistan. SNP Members continuously pose as humanitarians, but we all know the truth is that at every single opportunity, they fail to live up to their fine words. If they cared about this issue, they would welcome asylum seekers into their own part of the UK, but they do not.
Sir Desmond Swayne (New Forest West) (Con)
When it works, it will be a bargain, won’t it?
Robert Jenrick
I agree with my right hon. Friend. Border security is the first priority of any Government. We understand that, and that is why we are investing in it and ensuring that we can stop the boats. I am only surprised that the Opposition care so little about our national security.
Madam Deputy Speaker (Dame Rosie Winterton)
I call the Chair of the Home Affairs Committee.
Dame Diana Johnson (Kingston upon Hull North) (Lab)
Two weeks ago, when the Home Secretary gave evidence at the Home Affairs Committee, I asked her when the impact assessment for the Illegal Migration Bill would be published. While I welcome the fact that it has been published today, or last night, it is after the Bill has completed all its stages in the House of Commons and is three quarters of the way through the House of Lords. That is wholly unsatisfactory for Parliament to undertake its role of scrutinising Government legislation. At that Select Committee sitting, the Home Secretary also said:
However, I would also say that to my mind it is pretty obvious what the economic impact of the Bill will be. We will stop spending £3 billion a year on our asylum cost. It is a Bill that will lead to the cessation of 45,000 people in hotels and £6 million a day. To my mind, those are savings that we cannot ignore.”
The Home Secretary told the Home Affairs Committee that those savings would happen. Can the Minister help me by pointing to where those savings are in the impact assessment? I am struggling to find those figures in the document that the Government have produced.
Robert Jenrick
The document makes it abundantly clear that, were costs to continue to rise on the current trajectory—we are in an age of mass migration and the numbers of individuals looking to cross, for example from north Africa to Europe, are extremely high so there is reason to believe that numbers will remain high for a sustained period—by 2026, which is just a few years away, the system would be costing an additional £11 billion. We cannot countenance such waste of taxpayers’ money. As we have seen in other parts of the world such as Australia, where systems of this kind have been implemented, by delivering this system and ensuring a genuine deterrent effect, we will ensure that we save the taxpayer that money. But, more important than merely saving money, we will save the British public the stress and the strain on public services, housing, integration and community cohesion that tens of thousands of illegal migrants bring to our country. That is a prize worth fighting for, and that is why we are delivering this Bill.
Jackie Doyle-Price (Thurrock) (Con)
May I just say to my right hon. Friend that in the past week we have seen arrests and convictions in Essex? One example was over the tragedy that befell the Vietnamese a few years ago, but another was a new gang that has been identified that is trafficking people to work in modern slavery locally, in Grays. Although the British public want us to stop the boats, the British public are also generous in spirit, and what they really want is to make sure that this country is not being taken advantage of. The responsibility to tackle that lies with the machinery of Departments, our criminal justice system and our law enforcement agencies. If they can all get a grip, will that not be a better solution than sending people to Rwanda?
Robert Jenrick
Our policy with respect to Rwanda is not the totality of our approach; we are also, as my hon. Friend has just noted, investing significantly in law enforcement at home and abroad. We have increased the number of illegal working raids by 50% just this year alone. We have signed two landmark deals with France and a memorandum of understanding with Italy. We have signed a returns agreement with Georgia. I have recently travelled to Belgium and met my counterparts there, where we spoke about that horrific incident with the Vietnamese individuals who died in the back of an HGV. We agreed to further deepen our collaboration and law enforcement co-operation. She has my assurance that we are working around the clock and tackling this issue from each and every dimension, and that is why I believe that the UK has the most comprehensive plan to tackle illegal migration of any country in the western world.
Sir Stephen Timms (East Ham) (Lab)
The Minister is proposing, according to the document, to spend eye-wateringly large sums—£169,000 per person—to process claims in Rwanda. He wants to spend that money to treat people with great cruelty. How can that possibly be justified?
Robert Jenrick
I usually have the utmost respect for the right hon. Gentleman, but he is wrong in each respect of that question. First, the figure that he quoted is a gross figure, not a net figure. Secondly, that figure does not relate to the Rwandan partnership, but is an indicative figure based on the Syrian resettlement scheme. We chose not to publish the commercially sensitive nature of our relationship with Rwanda for good reason, because countries and partners working together in good faith should not publish details that we said we would not. His last point, that individuals will be treated with great cruelty in Rwanda, is categorically untrue. I wonder whether he has been to Rwanda—I certainly have. It is a country that is safe and where we have a good working relationship. The High Court exhaustively analysed Rwanda’s safety and the treatment that it would propose to give to those coming from the United Kingdom, and the High Court concluded that the scheme was appropriate and in accordance with our legal obligations. We will shortly hear from the Court of Appeal, but I very much hope it will uphold the High Court’s judgment.
Sir Edward Leigh (Gainsborough) (Con)
What is nonsense is to deny that it makes economic sense to offshore. Nobody is going to spend thousands of pounds to a people smuggler just to be detained and sent back to Rwanda. In terms of deterrence, will the Minister accept that if someone is fleeing chaos in Syria or Iraq, they will not be deterred to come if they are going to be put up in a cosy, warm, former airman’s bedroom in RAF Scampton, rather than a hotel in bracing, cold Skegness? Is not the solution to get the Bill through and pass it into law and for the House of Lords to stop its silly games?
Robert Jenrick
I completely agree with my right hon. Friend, although not necessarily his comments about Skegness. The point is that we have to look at each and every one of the pull factors to the United Kingdom. The approach that we are now taking to accommodating asylum seekers is not an outlier within Europe. I have spoken to my counterparts in almost every European country in recent weeks, and they are all considering options such as barges and sites such as former military bases. Many are considering tents. Many are bailing people to no fixed abode with vouchers and essentially leaving them to sleep on the streets. We have to ensure that the UK is not perceived to be a soft touch, and I will never allow that to happen.
Tim Farron (Westmorland and Lonsdale) (LD)
Who would have thought that a policy designed for shallow political purposes would turn out to be an expensive embarrassment? It is not about what is in this assessment; it is about what is not. Where is the estimate of the savings if the Government chose competence over posturing and efficiently cleared the 160,000 backlog of asylum seekers? Where is the impact assessment for the effect of these proposals on the victims of modern slavery? Has the Minister made any assessment at all of the likelihood that people will still come to our shores by small boats but simply not claim asylum, slipping underneath the radar and ending up in slavery and criminality? Where is the comprehensive assessment of this ridiculous policy?
Robert Jenrick
On the hon. Member’s penultimate point, we have gone to great lengths to ensure that individuals do not arrive on our shores without our knowledge. That happens in only a tiny number of cases because of the good work of our small boats operational command. We meet individuals and ensure that they are properly security checked before they flow into the system. That is the right thing to do.
The costs to the UK taxpayer of the current levels of asylum seekers are extremely high. Then, as the impact assessment says, there are non-monetised costs such as the effect on the housing shortage and public services, and the challenge to community cohesion and integration. It is for all those reasons and others that we must get a grip on this challenge. I do believe that border security is worth investing in. The hon. Member may not, but I do, and I think that the British public do as well. They want us to secure our borders and they are willing to see us invest in that.
Mr William Wragg (Hazel Grove) (Con)
May I again caution my right hon. Friend against the Gerald Ratner approach to Government policy? Will he answer this direct question: how long did it take on average to process an asylum seeker’s claim five years ago, how long does it take today, and why?
Robert Jenrick
The last time my hon. Friend asked me a question, he said that we would not be able to produce a barge to house asylum seekers. Actually, days later we signed the agreement to do that, and that will be coming forward, so he knows that when we say things, we mean them and we will deliver.
With respect to the time it takes to process asylum claims, it is too long. However, that is the product not just of management within Government and the Home Office, but the sheer number of people crossing every year. I have spoken to my opposite numbers in France, Belgium, the Netherlands and Italy, and every one of those countries is struggling with backlogs of cases as much as we are—more so in some cases—because the asylum systems across Europe are being placed under intolerable pressure by the number of people making these dangerous and unnecessary journeys. That is why we have to instil deterrence, and the Rwanda policy gives us the ability to reduce the numbers and restore sustainability to the system.
Dame Nia Griffith (Llanelli) (Lab)
Instead of effective measures to tackle the people smugglers and speed up the processing of asylum claims to reduce the backlog, the Bill means that the Minister’s Department will need to requisition more and more accommodation, as it is doing with the Stradey Park Hotel in my constituency. In spite of promises of job opportunities from Clearsprings, his Home Office contractor, all 100 staff have had the devastating news today that they face redundancy. What will the Department do to help those staff and those who are in similar circumstances because of the Bill?
Robert Jenrick
The best thing that the hon. Member could do is support the Bill when it returns from the House of Lords to enable us to get the flights off to Rwanda so that we imbue the system with the deterrence that it requires. The impact assessment that we laid yesterday makes it clear that if we do nothing, the costs to the system will spiral by £11 billion a year. She, like other Labour Members of Parliament, writes to me day in, day out complaining that the way in which we accommodate asylum seekers is too rudimentary. They say it is not specialist enough, that we should be spending more money on asylum support, not less, and that a hotel is not good enough and needs to be more luxurious. We have the Labour leader of Westminster City Council saying that individuals being housed in a hotel in Pimlico were being poorly looked after and that they should have their own single ensuite bedrooms. How out of touch with the British public can they get?
Mr Philip Hollobone (Kettering) (Con)
Local residents in the Kettering constituency are appalled that two local hotels—the Rothwell House Hotel in Rothwell and the Royal Hotel in Kettering—are being used as asylum seeker accommodation. I am convinced that the answer is to get the Illegal Migration Bill through and to stop people crossing the channel in small boats. Is it not the case that we are spending £3.6 billion a year and that that will rise to £11 billion in just three years? Is it not the case that doing nothing is simply not an option?
Robert Jenrick
My hon. Friend is absolutely right. He and his constituents see every day the harm that doing nothing could cause, with the loss of more than one valued hotel in his constituency. We want to stop this once and for all, and the dividing line is between those who want to deal with the symptoms of the problem by tweaking the system and managing failure and those of us who want to transform the system, stop the boats, secure our borders and ensure that we have a sustainable system for an age of mass migration.
Andrew Gwynne (Denton and Reddish) (Lab)
We can tell that we are in the dying days of the Government ahead of a general election, because they always resort to dog-whistle rhetoric. Nobody on either side of the House wants open borders. We want a secure border around the United Kingdom, but what we do not want is more unworkable propositions from the Government. They have brought forward Bill after Bill after Bill, and none of it has worked. The impact assessment shows that this Bill will not work either. There is no attempt to estimate the total costs or benefits of the proposals. It uses the word “uncertain” 24 times in 40 pages and does not cover the costs that we need to know. Will the Minister tell us how much this will cost and where the money will come from?
Robert Jenrick
The difference here is that if we do nothing, we will see the British taxpayer spend billions of pounds. [Interruption.] That is not on us; that is on the Labour party. We are not doing nothing; we are taking forward the Rwanda partnership, which is one of the most innovative and novel approaches to tackling this issue of any country in the world.
Marco Longhi (Dudley North) (Con)
May I extend my most sincere thanks to the Minister for his words today in response to the urgent question? I have been very loud about exactly this matter in the Chamber since I was first elected, and this is without question what the British people voted for back in 2019. Does he agree that the Labour and the Lib Dem response of simply saying, “Oh, speed up the asylum system,” equates to saying, “Just let them all in”?
Robert Jenrick
I could not agree more strongly with my hon. Friend. There is a naivety to the Labour party’s position. If Labour Members think that they can solve the problem just by granting people asylum quicker, doing a few more arrests and trying to reinvent the Dublin convention, which even European leaders have moved on from, they do not know what we are dealing with. Just the other day, the shadow Immigration Minister, the hon. Member for Aberavon (Stephen Kinnock), supported a proposal to loan Ukraine the small boats that we have seized to help its citizens deal with the recent floods. Does he have any idea what these boats are like? They are the most unseaworthy craft that I have ever seen, produced by the most evil and ruthless people smugglers and human traffickers. That suggests that Labour Members do not understand the problem. If we are to beat the people smugglers, we need to take robust measures, and that is what we are doing.
Ruth Cadbury (Brentford and Isleworth) (Lab)
The Minister is claiming that, without the Bill, the cost of the current system will rise to £11 billion—by the way, that figure is not in the impact assessment. Will he confirm that his calculation is based on the idea that per-person accommodation costs will keep rising at the same pace as they have over the last few years as a result of his Department’s failure to get a grip both on the asylum system backlog and, as I have said before, on the rip-off merchants who are scamming the Home Office for billions of pounds of taxpayers’ money on dodgy contracts?
Robert Jenrick
I will always hold the providers to account for the quality of the service they provide for the taxpayer. I take that very seriously, as I have said to the hon. Lady in the past, but I am afraid that, like the shadow Home Secretary, she is missing the point. The more illegal migrants who come to the country, the greater the cost to the taxpayer. If we want to tackle the problem, we need to break the business model of the people smugglers. Tinkering around at the edges and trying to manage the system better, which seems to be the Labour party’s approach, will never work.
Jonathan Gullis (Stoke-on-Trent North) (Con)
Residents in Stoke-on-Trent North, Kidsgrove and Talke are rightly outraged to see hotels used, people losing their jobs, levelling-up projects undermined and the hospitality and retail sectors destroyed. This is the right scheme because, like the successful Australian scheme, it will act as a deterrent to people coming to this country, therefore bringing down the need for hotels and the burden on the Home Office.
Sadly, the only plan we hear from the shadow Home Secretary is to process people quicker. That is amnesty in another name. We are currently accepting 70% of them, and the right hon. Lady will not even commit to getting down to France’s level of 18%. Is the truth not that the shadow Home Secretary may belittle the scheme but she does not say whether she would scrap it if she were Home Secretary? Ultimately, Labour is getting ready for another embarrassing flip-flopping U-turn.
Robert Jenrick
I do not know whether the shadow Home Secretary would scrap the scheme—I have heard all sorts of conflicting reports in that regard—but my hon. Friend is absolutely right that this a world-leading partnership. Time and again, I speak to Interior Ministers throughout Europe who look to it as an innovative approach. I would not be surprised if other countries follow us once we have operationalised it.
Marion Fellows (Motherwell and Wishaw) (SNP)
For the Minister’s information, Motherwell and Wishaw has been welcoming refugees for more than 100 years—Lithuanians, Vietnamese, Congolese and Syrians. Please do not make that mistake again.
The economic assessment says:
“By setting an annual cap this should reduce the inflow of people entering the UK and therefore reduce the cost associated with processing asylum claims”,
with secondary benefits—[Interruption.] I am sorry, Madam Deputy Speaker, I do not feel well.
Madam Deputy Speaker (Dame Rosie Winterton)
If it is okay with the hon. Lady, I will move on and I will come back to her if she wishes me to.
Sir Christopher Chope (Christchurch) (Con)
Will my right hon. Friend apologise for the delay in producing this impact assessment? Will he also explain to the House why the four countries of Scandinavia have been able to reduce the number of asylum applications from 239,000 in 2015 to 28,000 last year? Why have they been able to do that when we cannot? Why is our asylum process still taking longer than it ought to? The rate at which asylum applications are being dealt with is currently at its slowest ever.
Robert Jenrick
First, I am sorry that the hon. Member for Motherwell and Wishaw (Marion Fellows) is feeling unwell, and I hope she recovers quickly.
With respect to my hon. Friend’s question, I can report good news: we are making good progress on the pledge we made at the end of last year to eliminate the legacy asylum backlog. The number of caseworkers is rising rapidly and we are on course to achieve our ambition to double them. Productivity is increasing. We will see those results flow through very rapidly. That is the right thing to do, although it is not the totality of the response to this challenge, because the reason we have a backlog in cases is the sheer number of people crossing. We published the impact assessment yesterday. I hope my hon. Friend will read it and it will inform any further discussions we have in this House following their lordships’ deliberations.
Clive Efford (Eltham) (Lab)
The impact assessment illustrates the cost of the Government’s decisions. Nobody else is to blame. The Government have had 13 and a half years, but we are in this mess. On 25 May, when I asked the Minister about dealing with asylum claims, he told me that increasing the pace of dealing with asylum claims would likely increase the number of people coming across on small boats. He also said in answer to my hon. Friend the Member for Westminster North (Ms Buck):
“the faster the process, the more pull factor”.—[Official Report, 25 May 2023; Vol. 733, c. 439.]
Where are those statements borne out in the impact assessment?
Robert Jenrick
The point I made then and have made again today is that the Labour Party’s policy is merely focused on the symptoms of the problem. It is saying that, if we can grant the decisions faster, everything will be fine. That will not resolve the problem; in fact, it is dangerously naive. We are dealing with the most evil people smugglers and human traffickers, and highly determined economic migrants. That is why we need a much broader approach. At the heart of it has to be deterrence. The Rwanda policy is part of that. That is why we have brought forward the Illegal Migration Bill. The sooner we get it on the statute book, the sooner we can implement it.
Bob Blackman (Harrow East) (Con)
My right hon. Friend is clearly right that this is a multifaceted approach. We need to break the business model of the evil people smugglers, but also speed up the process of dealing with those people who have genuine asylum cases, and then remove those who do not. Will he join me in sending this signal: if someone enters this country illegally, we will remove them to Rwanda where their case will be considered and, if they have a case, they can return.
Robert Jenrick
My hon. Friend is absolutely right. We want to build a system whereby the UK is a generous and welcoming country to those in genuine need of sanctuary. That is why we have pursued the resettlement schemes that we have in recent years, and we want to do more in future. The Illegal Migration Bill envisages that through its clause on safe and legal routes. For those who come here in breach of our laws, breaking into our country in an irregular manner, we will pursue the most robust approach. They will be returned home if it is safe to do so, or to a safe third country such as Rwanda. That is a sensible and robust approach that will help us to create a sustainable migration system.
Kim Johnson (Liverpool, Riverside) (Lab)
The Minister was correct when he said that the system was broken—broken by this Government, which is why we are paying £6 million a day to house people fleeing conflict and persecution. Liverpool, as a city of sanctuary, has extended its support to people fleeing persecution, not illegal migrants, to the sum of 2,800. Will the Minister agree that it is unacceptable for the Government to expect us to rehouse 237 people from Afghan hotels with five months’ notice? Will he agree to meet me and other Liverpool MPs to discuss this matter and solve it urgently?
Robert Jenrick
I am happy to discuss that with the hon. Lady, or she can speak to the Minister for Veterans’ Affairs, my right hon. Friend the Member for Plymouth, Moor View (Johnny Mercer), who is leading on the resettlement of Afghans. I respectfully disagree with her. Those individuals who came across in Operation Pitting under the Afghan relocations and assistance policy, to whom we owe a debt of gratitude, have in some cases been in hotels for approaching two years. That is not right for them or for the country. We need to help them now into sustainable forms of accommodation. That is why we have established a generous new scheme. We are working with local authorities, with dedicated triaging teams going into the hotels and helping those individuals into vacant service family accommodation, the private rental sector and social housing. I strongly encourage her to work with her local authority to do the same in Liverpool.
Henry Smith (Crawley) (Con)
The Immigration Minister is right that the current level of illegal migration is unsustainable, due to not only the billions of taxpayers’ money being spent but the pressure on public services and housing and, therefore, on our environment. Will he assure me that, in addition to the Illegal Migration Bill, we will always uphold the decisions of this Parliament and the British courts above those of the European Court of Human Rights?
Robert Jenrick
I am grateful for my hon. Friend’s support for the action that we are taking. This Conservative Government brought forward the Illegal Migration Bill, a robust measure that is probably the most significant change to our immigration legislative framework since the second world war. We believe that it is in accordance with our international law obligations. We are determined to tackle this challenge, and we will do whatever it takes to do that.
Patrick Grady (Glasgow North) (SNP)
I hope the Minister is prepared to correct some of his earlier claims, because Glasgow remains the local authority with the most dispersed asylum seekers per head of population; it has more than any other local authority in the country. If he does not believe me, he would be very welcome to come and meet some of the asylum seekers and refugees at the Maryhill Integration Network, people who trained as accountants, nurses and teachers. They do not want to cost the taxpayer money; they want to become taxpayers. But his failed immigration processing means they are not having their claims processed in time. Will he come and hear some of their genuine stories about why they had to flee their home countries in the first place, and the contribution that they could and want to make now?
Robert Jenrick
First, I agree that Glasgow is taking in a large number of asylum seekers. It is just a pity that nowhere else in Scotland is. That is the approach the SNP Government have established. Only last week, we approached the SNP Government to suggest that the vessel that has been housing Ukrainians in Leith be used to house asylum seekers. The SNP Government said that they did not think that that was a good idea—Ukrainians were welcome, but asylum seekers were not welcome. That is emblematic of an approach that is rhetorical and never backed up by reality. I would be happy to speak to the hon. Gentleman’s constituents, but the truth is that the SNP is letting them down.
Dr Caroline Johnson (Sleaford and North Hykeham) (Con)
Much of the media reporting this morning focused on the £169,000 cost of transporting an individual and processing them in Rwanda, but what are the alternative costs of ongoing open illegal migration, leading to problems with accommodation, access to public services, lack of infrastructure, increasing house prices and social integration? Could the Minister tell us more about the costs of those, please?
Robert Jenrick
My hon. Friend makes a very important point. Not only is maintaining a system without taking robust further steps like the Rwanda policy likely to be extremely expensive—that is detailed in the impact assessment—but there are non-monetised costs as well, which are hard to calculate with certainty, such as the impact on scant social housing and housing more broadly, the cost to public services and the fact that many of these individuals come to the UK speaking poor English. Many require great support by the British state to help them to integrate and build successful lives in this country. That is a very challenging situation. We have to be honest with ourselves about that. We need to take action to stop the boats, so we can ensure that the finite resources we have as a country are not directed at young men who are in a place of safety such as France, but can go to the people who really need it most in and around conflict zones: families and those people we would want to resettle in the United Kingdom.
Ms Marie Rimmer (St Helens South and Whiston) (Lab)
The Prime Minister claims he is ready to take tough financial decisions, such as not giving our NHS heroes a pay rise, leaving them struggling to pay ever-increasing mortgages and the cost of living caused by those on the Government Benches voting measures through and crashing our economy just a few months ago. The Rwanda scheme is set to cost even more billions than the already crashed asylum system, delivered by those on the Government Benches over there. So how can the Minister truly sit there and justify spending £169,000 to send one single asylum seeker to Rwanda? I accept that the Government are working with local authorities on housing in the private sector—deregulated housing in the private sector that cannot be given to any of our people. That is what he is doing. You cannot justify what is going on here. You’ve crashed it and you go on to—
Madam Deputy Speaker (Dame Rosie Winterton)
Order. The hon. Lady is experienced enough to know that she does not address the Minister directly like that, but through the Chair.
Robert Jenrick
The hon. Lady is wrong on a number of counts. First, the impact assessment does not say that it costs £169,000 to send somebody to Rwanda. The figure is an indicative one based on the Syrian resettlement scheme, as I said in answer to a previous question. The partnership with Rwanda is rightly commercially sensitive, so she is wrong to draw the inference that she does. With respect to accommodating asylum seekers, we want to ensure we bring those costs down and we want the best possible relationships with local government to do just that. But the truth is that the driver of those costs is the sheer number of people crossing the channel every year. Unless we take decisive action, I am afraid that will continue to rise. That is why she should support us when the Bill returns to the Commons.
Jack Brereton (Stoke-on-Trent South) (Con)
Clearly, the best way to reduce the costs of illegal migration is to increase deterrence, in particular with the Rwanda plan. Will my right hon. Friend confirm that he is doing everything possible to ensure that once the Court of Appeal has made its decision we can get on with the flights to Rwanda immediately?
Robert Jenrick
My hon. Friend is absolutely right. Deterrence has to be at the heart of our approach, whether domestically in terms of making it harder to live and work illegally in the United Kingdom, or internationally with the work we are doing upstream. The Rwanda policy is a critical part of that. The Home Secretary, the Prime Minister and I meet every week to ensure we are ready to operationalise the policy as soon as we have the ability to do so. We will await the judgment of the court. Of course, we hope it will uphold the very strong judgment we received from the High Court earlier in the year.
Alex Cunningham (Stockton North) (Lab)
The Government’s failing asylum seeker policy also impacts on local areas in the UK where large numbers of asylum seekers are accommodated. The Government promised not to increase the number of asylum seekers in the north-east, but the Minister told me in a letter this week that that would not stop a large barge being sited on the Tees. Is Teesside getting hundreds or thousands more asylum seekers, yes or no?
Robert Jenrick
I am surprised by the hon. Gentleman’s approach because he voted against every measure we brought forward to tackle this challenge. As a result, more people will come to the United Kingdom illegally on small boats. I suspect he cannot even bring himself to call these individuals illegal migrants. We are taking the tough steps we need to tackle this issue. We are also looking at new ways to accommodate people. Barges and vessels are options being pursued by the Irish, the Belgians, the Dutch and the SNP in Scotland.
Sam Tarry (Ilford South) (Lab)
The Minister spoke earlier about investing in border security, but it was only in April that Border Force were on strike over pay and conditions. He also spoke earlier about humanitarian approaches to migration, yet I still have constituents in Ilford South whose families are in Afghanistan fleeing the Taliban and facing every day being murdered by the Taliban. The Government have failed to bring those people safely to this country. We then turn to the impact assessment on the Bill, which exposes what it is: an absolute dog’s breakfast. It is designed for one thing only: to try to win an election. It is nothing to do with serious migration policy. It is not properly costed. It is total nonsense. Mark my words, Madam Deputy Speaker, I doubt a single flight will go to Rwanda. It will be an incoming Labour Government who will, yet again, have to clean up this Government’s incompetent mess.
Robert Jenrick
Let’s see about that, shall we? I think we have the right policy. It is one we are pursuing. As soon as we have the ability to do so through the courts, we will get those flights off to Rwanda. On the hon. Gentleman’s suggestion that the UK is cruel or inhumane, I could not disagree with him more strongly. The facts bear that out. The fact that we brought more than 500,000 people to this country, including from places such as Afghanistan, on humanitarian visas shows that we are one of the world’s leading countries in that regard. One of the challenges we have, to be frank with him, about helping some people we would like to help from Afghanistan, or those who fled to neighbouring countries such as Pakistan to come to the UK, is the fact that so many people have come across on small boats from a place of safety such as France that they are putting intolerable pressure on our system. The sooner we stop the small boats, the more we can do for people who really deserve our help.
Mick Whitley (Birkenhead) (Lab)
The impact assessment confirms that the Government’s Rwanda scheme, which I have criticised previously in this House for its senseless cruelty, will also come at huge expense to the British taxpayer. Does the Minister accept that there is both a more humane and financially prudent alternative to the Government’s plans, and that should begin by allowing asylum seekers to seek paid work, which the Lift the Ban coalition estimates would lead to the Government receiving more than £366 million in tax and national insurance alone?
Robert Jenrick
I do not support allowing asylum seekers to work in this country. The approach that we are taking under the Illegal Migration Bill means that individuals who come here will be processed swiftly—in days and weeks, not months and years—and then either returned home or sent to a safe third country such as Rwanda, so that issue will not be relevant. Let me also point out that the hon. Gentleman recently opposed the proposal for a number of asylum seekers to stay in his constituency, despite having said that it was a place of sanctuary.
Neil Coyle (Bermondsey and Old Southwark) (Lab)
Excessive cost for nil result—does not that assessment sum up not just the Minister’s flawed Home Office plans, but the incompetence at the heart of the whole sinking Government?
Robert Jenrick
No. As I have said on many occasions, the approach we are taking is to introduce one of the most creative and robust systems of any country in the western world.
Jim Shannon (Strangford) (DUP)
I recognise that the Minister and the Government have a big illegal migration issue to sort out, but the economic impact assessment does not paint an accurate picture. Without foreign staff our NHS would collapse, and without the support of grandparents to help with children our workforce would collapse. The assessment does not do justice to the fact that we as a nation are infinitely richer thanks to those who choose to come here to work and raise their families, and who make the choice to be the best of British alongside those of us who were born here.
Robert Jenrick
The difference is that the people to whom the hon. Gentleman has referred come here legally. We welcome people who come here legally—as visitors on tourist visas, as workers on work visas, as NHS workers on NHS and social care visas—but it is very different if people break into our country, flagrantly breaching our laws. No other country in the world would tolerate that, and neither should we.
Madam Deputy Speaker (Dame Rosie Winterton)
That brings us to the end of the urgent question.
Alison Thewliss
On a point of order, Madam Deputy Speaker. The Immigration Minister told me earlier:
“I do not know if any refugees came to it”
—Refugee Week—
“because the SNP does not house refugees in Scotland.”
That statement seems to me to be as insulting as it is inaccurate, and I would like some clarification of it.
Let me say first that it is up to the Home Office, not the Scottish Government, to decide where people are dispersed. Glasgow supports about 5,000 asylum seekers, Scotland took well over its population share of Ukrainians, and every single local authority in Scotland took people as part of the Syrian resettlement scheme. The Minister also mentioned the luxury cruise ship in Leith that was contracted by the Scottish Government to house Ukrainians. The Ukrainians on that ship were afforded comprehensive wraparound support. I would be interested to hear from the Minister whether he would offer refugees the same comprehensive wraparound support on that basis, because if he would not, I would understand why the Scottish Government would be nervous about it.
Robert Jenrick
Further to that point of order, Madam Deputy Speaker. Perhaps it would be helpful if I sent the hon. Lady a copy of the letter that I wrote to the Scottish Government recently, which debunks many of the points that they had raised with regard to the vessel in Leith. If there is still time, the hon. Lady could ask them to change their mind, because if they are willing to accommodate Ukrainians, surely, given how strongly they feel about asylum seekers, they would want to do the same in this instance.
Madam Deputy Speaker
Order. Let me speak.
I am not entirely sure that anyone is asking me to do anything. It seems to me that we are slightly prolonging the exchanges on the urgent question, and I have to say that it is not for the Chair to adjudicate on two different points of view. I hope that if the hon. Lady wants to come back to this, there will not simply be a further exchange of views on what has already been said. A point of order should be directed at me, to ask me to do something, but the hon. Lady clearly wanted to put some points on the record. She has done that, the Minister has responded, and I think the House will now want to move on. I urge the hon. Lady, if she has something further to add, to ensure that it is relevant to the Chair. Otherwise, she might consider that she has put her points on the record.
Alison Thewliss
Further to the point of order, Madam Deputy Speaker. Thank you for what you have said, and I will be brief. The Minister implied, at the Dispatch Box, that Scotland does not take refugees. This is clearly a point of accuracy, because that comment was inaccurate, and I ask, Madam Deputy Speaker, whether the Minister could withdraw it.
Madam Deputy Speaker
Again, that is not a matter for the Chair. The hon. Lady has made her point. If the Minister felt that he had said anything inaccurate, or had inadvertently misled the House, he would be expected to correct the record at the first opportunity. I think we will leave it at that, because this has been quite a long extension of the previous exchanges.
Schools (Gender and Parental Rights)
(10 months, 2 weeks ago)
Commons ChamberRead Full debate Read Hansard Text Watch Debate
13:48 - The House having divided: - Ayes: 34 / Noes: 40 - Question accordingly negatived.
Andrew Bridgen (North West Leicestershire) (Reclaim)
I beg to move,
That leave be given to bring in a Bill to prohibit the promotion of social transition practices in schools; to require schools to inform parents if their child has indicated an intention to pursue, or has commenced, social transition; to provide for a right for parents to access information about lessons in schools; to make provision about the teaching of the concept of gender identity in schools; and for connected purposes.
The issue that I bring to the House today needs a Bill, the very necessity of which is both grotesque and revealing of an absurdity: the turning of a blind eye to the real-world effects that seemingly good-faith legislation has had on our education system, on schools and on society as a whole.
So that we can all be clear about what the proposed Bill refers to, let me start by defining the terms that it mentions. “Gender identity” is the theory that, although we may be biologically male or female, the more important characteristic is what we actually feel like on the inside. “Social transitioning” is the conscious act of self-rejection of our biological reality.
Cases of that happening used to be one of the clearest examples we had ever seen of an exception that proves the rule, but I am sickened to say that, under all our noses, members of society who are either politically or educationally tasked with helping to bring up our children have turned raising the next generation into a science experiment, with consequences that break my heart.
In schools today, it is rapidly becoming taught that it is a normal and common experience not to feel at home in our own bodies, and that the reason we feel like that is likely to be because we, as a person, are simply trapped in the body of the opposite sex. In some schools, one in 15 children now identify as something different from their actual biological sex.
The exceptions that proved the rule are now becoming the rule. We have started to blur the lines of basic reality, and have turned what was already an extremely complex world for children to get to grips with into a more complex one. To paraphrase Douglas Murray, there is just about nothing more formative to our grip on reality than the realities of sex. The first, most basic, most instinctive thing we become aware of when we are growing up or even meeting someone new is simply that there are boys and there are girls. In dismantling that, we dismantle the world and pull out a foundational block of society. Who knows where the Jenga tower may fall? But one thing is certain: the tower will fall, and we should all be ashamed that we would doom our children to such a fate.
Social transition practices in schools have now become the norm in every classroom in the country. They are promoted as a normal and healthy response to natural feelings that children experience during the difficult period that we used just to call “growing up.” There is not a single child in our schools today who has not been exposed to these practices. They include the policing of language by mandating the use of a child’s preferred pronouns—referring to a boy as “she” or “her” instead of “he” or “him”, or vice versa—and the use of body alterations to reflect a transition to the opposite sex, which primarily take the form of surgical castration for boys, double mastectomies for girls, Frankenstein-esque genitalia being created from grafts of skin, and drugs to pause or halt puberty. Teachers, students or even parents who do not oblige are punished and ostracised. In Canada, calling a child by their “wrong pronoun” is already a crime.
The common consensus is that this gender-based ideology came from adolescents who are more inclined to adopt so-called progressive and liberal values, but that could not be further from the truth. The origins of gender ideology came from rogue academics in the 20th century who have since been discredited, laying the groundwork for future socialist thinkers to start making more and more wild claims about the nature of our societies.
George Bernard Shaw was one of those who opened Pandora’s box by coining anti-family rhetoric and promoting the rejection of societal gender norms. In 1928, Shaw wrote:
“The social creed must be imposed on us when we are children… It is quite easy to give people a second nature, however unnatural, if you catch them early enough.”
Those are chilling words, yet here we are, voluntarily following his playbook.
This did not come from our children spending more and more time in the echo chamber of social media; it has been clinically and systematically imposed on them from the top down. Gender ideology is a political ideology—one that is being, effectively, promoted in schools, and that therefore constitutes political indoctrination, which, under section 406 of the Education Act 1996, is strictly prohibited.
Any who would argue that gender identity is protected by the Equality Act 2010, and can therefore be discussed in schools, would have grossly misinterpreted the Equality Act, as gender identity is not a protected characteristic. There is a reason why we are careful what topics we broach with children and teach them at young ages. Why have we forgotten that?
If it were at all possible, it gets much worse. The public are rightly shocked when they learn just how graphic and extensive sex education lessons have become in our schools. Five-year-olds are being taught to identify different genitalia in class. Nowhere in the guidance on sex education lessons does the Department for Education discuss nine-year-old children being taught about masturbation or witnessing dolls simulate sex acts, or 11 to 12-year-olds being taught that they can feel pleasure from anal or oral sex. Does this depravity know no bounds?
Not only are these topics being broached, but pre-pubescent children are being encouraged to explore their own bodies in this manner. It borders on criminality when adults are suggesting that children as young as eight should engage in adult activities. We have a duty to safeguard our children, preserve their innocence and protect them from the complexities of adult life until they reach an appropriate age, when they are mature enough to engage with topics and fully understand them.
What is happening in our schools is unacceptable, and there is a need for immediate action. Classrooms should be a safe harbour. Inclusivity has become a double-edged sword, cutting through the very fabric of childhood. Every child has the right to innocence and immunity from the sexual perversions of adults.
When teaching sex education—a topic where a bridge should stand between parents and teachers—a barricade has formed. Parents have been left in the dark and even actively blocked from seeing the material taught to their own children. We must act now and hope that the damage already done will not be too long-lasting.
The Bill I propose today will prop up existing legislation aimed at protecting our children and put an end to this dark chapter. Social transition in children will be forbidden. The promotion of social transitioning and the discussion of social transitioning practices will be prohibited from appearing in any aspect of a school curriculum. Local authorities, governing bodies or headteachers shall immediately inform parents or carers of any child who indicates intent to socially transition or who has commenced the process of socially transitioning. Moreover, when the parents of a child who has considered socially transitioning have been informed, the relevant safeguarding policies shall be adhered to and the relevant safeguarding leads shall be notified.
Parents will be entitled to the right to consultation, the right to withdraw their children from sex education and the right to have access to the materials used as part of that sexual education. Schools will only be allowed to use published, citeable resources that are reliably available for public and regulatory scrutiny. The Bill will uphold and reinforce the provisions laid out in the Education Act 1996 and will forbid the promotion of gender identity. Where gender identity is taught, it will be taught alongside opposing views to allow for a fair presentation of political beliefs.
Relationships and sex education lessons and personal, social, health and economic education lessons were brought in to sensibly and safely inform our children about topics necessary to keep them safe from harm. Let us get a grip of the legislation and deliver on the original intended purpose. Our children are not guinea pigs; it is high time that this House took charge and stopped allowing ideologies passed down from mad scientists that treat them as such. My proposed Bill will protect children, reassure parents and offer certainty to teachers. I wish with all my heart that it was not necessary, but it is needed—and it is desperately needed.
Mr Ben Bradshaw (Exeter) (Lab)
I would like to make it clear to the House that I was not intending to speak in this debate when I came to work today, but I and a number of colleagues were so appalled by the Bill’s contents—as we were by that speech—that we felt it was important to send a clear message from this place, particularly to young LGBT people and their families, that this nasty Bill does not represent the views of Parliament.
Trans and non-binary people have always existed. Gender dysphoria has been an internationally recognised condition for decades. Coming out as trans or non-binary is never easy and often extremely difficult. That is why, historically, so many trans people have suppressed their gender dysphoria, leading to high levels of mental illness and, all too often, sadly, suicide. Better knowledge and a much wider acceptance of gender non-conformity in recent years, particularly among the younger generation, have thankfully made it easier for trans and non-binary young people to come out. Of course, that can pose challenges to schools, but schools have become very experienced at handling social transitioning with sensitivity and professionalism.
This Bill would turn the clock back to an age in which the very existence of trans and non-binary people—a tiny minority—was simply not acknowledged. It would force young people to continue living in the gender assigned at birth, even when, as in the vast majority of cases, they have the full support of their parents to transition and live in their chosen gender. Parents would face the impossible choice of forcing their child to continue living in the gender they no longer identify with—with all the negative, often devastating, impacts on that child’s mental health—or removing them from school and educating them at home. There is no evidence that the way schools currently deal with this very small number of cases is not working.
For young LGBT people whose families are not supportive of their sexuality or gender identity, the consequences of this Bill would be even worse: it would, in effect, force schools to out LGBT students. The National Society for the Prevention of Cruelty to Children says that young people should never, ever be outed against their will, except when serious safeguarding concerns require it. One third of homeless young people are LGBT people who have been rejected by their families. The Albert Kennedy Trust, a charity that does fantastic work with homeless young LGBT people, has seen a 70% increase in referrals in the last three years, and half of LGBT young people report that they would be worried about coming out to their families because of hostility from one or more family member.
This Bill is not about the welfare of young people, and it is not about the smooth running of our schools; it is about a cynical but completely transparent attempt, by a conspiracy theorist who is too right-wing even for today’s Conservative party, to stoke the culture wars on the backs of our most vulnerable minority and their families. It is despicable. I urge colleagues in this House to give it a resounding thumbs down.
Question put (Standing Order No. 23).
The House proceeded to a Division.
Madam Deputy Speaker (Dame Rosie Winterton)
Perhaps the Serjeant could make sure that everything is okay in the Division Lobbies.
Opposition Day
Mortgage and Rental Costs
(10 months, 2 weeks ago)
Commons ChamberRead Full debate Read Hansard Text Watch Debate Read Debate Ministerial Extracts
16:26 - The House divided: - Ayes: 213 / Noes: 288 - Question accordingly negatived.
16:42 - The House divided: - Ayes: 283 / Noes: 198 - Question accordingly agreed to.
Madam Deputy Speaker (Dame Rosie Winterton)
I inform the House that amendment (a), tabled in the name of the Prime Minister, has been selected.
I call the shadow Chancellor to move the motion.
Rachel Reeves (Leeds West) (Lab)
I beg to move,
That this House is extremely concerned that, under this Conservative Government, average mortgage costs will be increasing by £2,900 per year, with a typical household in the UK paying over £2,000 more per year than in France and over £1,000 more than in Ireland and Belgium, and that renters face huge increases in rent payments; condemns the Government for its slowness in acting to support millions of homeowners and renters and so alleviate the impact of its policies; calls on the Government to bring in mandatory measures, as the current voluntary measures could lead to around one million homeowners missing out on support, and to immediately adopt measures to ease the mortgage crisis and halt repossessions by guaranteeing support from lenders for struggling mortgage borrowers and strengthening the rights of renters; in particular calls on the Government to require lenders to allow borrowers to switch to interest-only mortgage payments for a temporary period, to lengthen the term of their mortgage period, to reverse any support measures when requested and to make mandatory repossession restrictions; and further calls on the Chancellor of the Exchequer to instruct the Financial Conduct Authority to urgently issue guidance that the credit score of borrowers should be unaffected by any temporary switches to interest-only mortgage payments or lengthening of their mortgage period and to introduce a renters’ charter that would end no-fault evictions immediately.
Throughout Britain, families are experiencing the harsh, rolling impacts of the Tory mortgage bombshell. Last autumn, the Tories’ mini-Budget crashed the pound; they trashed our economic institutions and left our country’s reputation in tatters, with higher mortgage rates as the consequence. The current Prime Minister and the latest Chancellor have not turned the situation around. For families across Britain, things are getting worse, not better. The Prime Minister is now lecturing the country to “hold our nerve”. It is easier to hold your nerve when you do not have to pay the price of the Tory mortgage bombshell.
What are the consequences? Millions of households will be hit by the bombshell, paying, collectively, a total of £15.8 billion more in mortgage payments by 2026. That will be an additional £240 per month, on average, for those re-mortgaging. In the constituency of the Chief Secretary to the Treasury, the right hon. Member for Salisbury (John Glen), the figure is higher still, with 9,700 households there facing payments, on average, of £280 per month more—or £3,400 per year. People can hold their nerve all they like, but how does the Minister think that is going to pay the mortgage or the rent?
Lloyd Russell-Moyle (Brighton, Kemptown) (Lab/Co-op)
My right hon. Friend is making a good introduction. Is it not the case that all this money that will be lost by households does not go to help anyone but the Tories’ friends in the banks, who, of course, have presided over those neo-liberal policies that trashed our economy?
Rachel Reeves
I thank my hon. Friend for that intervention. I will come on to the ways in which we can better protect people, but many banks are doing the right thing and trying to support their customers. It is important that all lenders take the action that is needed, which is why we need the Government to make that charter a requirement, not a voluntary agreement.
These devastating increases in mortgage rates will damage people’s plans for the future and deny many their dreams. In plenty of cases, they will mean more lives and hopes ruined. Citizens Advice said this week that many of its clients with mortgages have seen their finances “fall off a cliff”, with more and more people struggling to afford the essentials, such as food and heating. But it is not their fault: they have done nothing wrong.
For James, from Selby, the Tory mortgage bombshell is going to cost him and his family £400 more each month. That is nearly an extra £5,000 a year, but he cannot find that money and so he and his family have no choice but to sell their house and downsize. He has just told his children that they are going to have to start sharing bedrooms because they cannot afford to live in their home. Can the Minister explain why James and his family are having to pay the cost of this Tory Government’s failures?
Margaret Greenwood (Wirral West) (Lab)
My right hon. Friend is making excellent remarks. Does she agree that this situation is having a devastating impact not only on people with mortgages, but on renters, because landlords are passing on the costs to them? Does she agree that we need no-fault evictions to be scrapped immediately?
Rachel Reeves
I very much thank my hon. Friend for that intervention. She is absolutely right: the people being hit are those who are having to re-mortgage; those who are on floating rates and are just seeing their payments automatically go up; first-time buyers who want to be on the housing ladder but, because of this bombshell, are not able to get on it; and renters, who are paying the higher mortgage payments of their landlords. She is right to say that we need Labour’s renters charter, in order to do a number of things, including ending no-fault evictions.
Families facing the increasing squeeze from their rising mortgages are now having to confront that stress and anxiety day in, day out. For many, this will mean that their family holidays are cancelled this year; they will watch hard-earned savings drain away; and they will decide that they can no longer afford to spend money on days out with friends and family. For others, it could be much worse, with them not moving up the housing ladder, but slipping down it, through no fault of their own. The scale of the impact of all of this is devastating.
Jim Shannon (Strangford) (DUP)
I commend the right hon. Lady and the Labour party for bringing this debate forward. Every one of us, including my constituents, is dealing with the same problems. Some people contacted me last week to say that their mortgage rates are going up from £400 to £800, while others have said that theirs are going up from £600 to £1,200. It is just impossible to find that amount of money. Does she think that perhaps the Government—I look to them when I say this—should be looking at mortgage tax relief? That is one direct method of helping people to retain their houses and their dream of home ownership, and to survive this crisis.
Rachel Reeves
The hon. Gentleman speaks powerfully and I recognise those stories of people seeing their mortgages double because of what is happening. I will come on to the solutions proposed by the Labour party, but it is important that money is not injected into the economy at this time. If that happened, interest rates would go up even more, crippling the hopes and opportunities of exactly those we want to help. I will come on to the solutions that we propose shortly.
Over the next few years, 7.5 million families will be hit by the Tory mortgage bombshell, month after month after month. That is why it is essential that greater mortgage flexibility and support from lenders must be mandatory, not voluntary as the Government have put forward.
Consumer champion Martin Lewis warned the Government about mortgage market issues last year, and he now says “the timebomb has exploded”, yet under the Government’s scheme, 1 million households are missing out. What is the Government’s response to them? Tough? It is up to the discretion and the goodwill of their lender? That is not good enough.
Although it is welcome, as I said, that many lenders are stepping up and doing the right thing, the scheme cannot be voluntary. That is why, when Labour set out our mortgage package last week, we made sure that that would be compulsory, across the board, and required of lenders. That is right: required of lenders. Without that clarity and confidence, families are rightly anxious about what comes next and how it will affect them.
Imran Hussain (Bradford East) (Lab)
My hon. Friend is making an excellent speech, highlighting the real situation facing many of our constituents as we sit here today. In my constituency, 9,000 families will see a mortgage increase of up to £1,400, on top of struggling to put bread and butter on the table and keep up with energy costs. All we hear from the Prime Minister is that they should hold their nerve. Frankly, that is rich coming from somebody who is never going to be in that position. Does my hon. Friend agree with me that rather than finding solutions, what this Tory Government and the Prime Minister are demonstrating is that they are completely out of touch with people’s real problems today?
Rachel Reeves
My hon. Friend speaks powerfully on behalf of the people of Bradford East, a constituency that I know well and that I know will be badly affected, not just by the Tory mortgage bombshell but by the cost of living increases as well.
Catherine West (Hornsey and Wood Green) (Lab)
My constituent’s mortgage has gone up from £1,950 to £3,000. She spent an agonisingly stressful time waiting for that deal to come through, but if she had made the deal today, it would have been £3,500. Does my hon. Friend agree that that is too much stress for one family to take?
Rachel Reeves
My hon. Friend is absolutely right. People who live in Hornsey and Wood Green, where house prices are high, will see a big increase in their payments. When rates go up from below 2%, which is what many people were paying, to above 6%, there will be huge increases. It is through no fault of my hon. Friend’s constituents, or any of our constituents, that they are in that position, which is what is so frustrating.
I remember a time—you may as well, Madam Deputy Speaker—when the Tory party used to preach personal responsibility, yet this Government are taking no responsibility for the devastation that they have caused. Where is the apology for the Tory mini-Budget? Where is the apology to those paying hundreds of pounds more a month in mortgage payments, or to those at risk of losing their homes? There is nothing.
Let us just imagine for a moment that a group of people working in an office, a supermarket or a factory burn the place down. Everyone else who works there is told that they have to pay to clean up the mess and that that payment will carry on for years. The next day, the arsonists turn up to work again, expecting to be paid as normal and, not only that, they are furious if someone even brings up the incident of the fire with them. That would be preposterous and outrageous, and yet it is precisely what the Government are doing. “Inflation? Oh, that was nothing to do with us. It was all global events. It was those public sector workers asking for a pay rise. It was the Bank of England. It definitely was not anything to do with us.” That is what we hear from this Government. Well, we know what the Tories did last autumn was totally outrageous. The country will not forgive or forget the scale of the harm that the Tories have caused to the economy and to families up and down our country.
The Government say that this is happening everywhere, so let us look at what is happening in Europe. The latest data comparing interest rates among our European neighbours show that a household in Britain, with a £200,000 mortgage, is now paying over £2,000 per year more for its mortgage than in France, over £1,000 a year more than in Ireland or Belgium, and £800 more than in Germany. That impact on families in Britain reflects the choices made by this Tory Government.
To make matters worse, after 13 years of the Tory Government being in power, average real wages are still lower than they were in 2010. Many families have faced one financial pressure after another. Energy bills are twice as high as a year ago. The weekly food shop is astronomical. On top of all that, higher mortgages and higher rents are the last thing they needed. No one is reassured by the suggestion from the Prime Minister that he is “100% on it”. After 13 years in power, it is clearer by the day that the Tories are the problem, not the solution.
The truth of the matter is that we have the highest inflation in the G7, with core inflation rising and interest rates rising too. We are in a weaker position than many as a consequence of Tory choices that have left our economy lacking resilience and security in the face of shocks, including global ones. Banning onshore wind, closing our gas storage facilities and scrapping the home insulation programme have all contributed to higher bills, higher costs and less security.
A patchwork Brexit deal full of holes is making goods such as food more expensive, with the prospect that that could get worse at the end of this year, with new import checks and costs. What is the Government’s latest idea? One of the Chancellor’s economic advisers called last week for the Bank of England to “create a recession”, adding:
“They have to create uncertainty and frailty."
Will the Minister tell us whether the Chancellor agrees with that advice from his advisers? If not, why is taking advice from them?
A Labour Government would be built on the firm foundations of economic responsibility, with strong fiscal rules. We would negotiate a bespoke British food and farming agreement with our trading partners, while staying out of the single market and customs union. We would lift the ban on onshore wind and reform antiquated planning rules, working in partnership with businesses and trade unions to invest in the jobs and industries of the future, protect our energy security and reduce our energy bills. That is what is needed to get our economy on sustainable and stable path, so that families are not grappling with a cost of living crisis created by this Tory Government.
If ever there were proof that the Government do not have the answers that our country needs, it is what is happening on housing. The Conservatives once claimed to be the party of home ownership: not any more. Home ownership is falling. It is not because of just their failure to require lenders to provide mandatory support for mortgage holders, although that would certainly help today. Incredibly, the Prime Minister has scrapped house building targets in the face of pressure from some of his councillors and Back Benchers. The consequence of the Tory Government’s policy is now to push the prospect of home ownership for young people and families starting out in life even further away.
Kim Johnson (Liverpool, Riverside) (Lab)
My right hon. Friend is making excellent points, particularly about young people being priced out of the property market. Does she agree that we need to overhaul the housing system to include better rights for renters and more council housing?
Rachel Reeves
My hon. Friend makes a really important point, because the Tory mortgage bombshell is experienced whether people have a mortgage or not. Renters are seeing huge increases in their rents—on average 10% in the last year—in Liverpool and around the country. That is why Labour’s renters charter is so important right now.
Treasury Ministers remain ignorant or indifferent to the plight of the renters whom my hon. Friend spoke about. A Labour Government would bring in a renters charter, ending no-fault evictions, and introduce a four-month notice period. Renters right now are exposed to their landlords passing the higher costs of their mortgages on to their tenants. Yet it is not clear whether the voluntary package, which the Chancellor described yesterday, includes buy-to-let mortgages. Will the Government tell the House and the country what they think the consequences of that will be? Labour would rebalance the housing market towards first-time buyers and towards renters. We would bring in a comprehensive mortgage guarantee scheme, stopping overseas investors buying whole developments off plan, and introduce our tough private renters charter.
The Tory mortgage bombshell could not come at a worse time for family finances—right in the middle of a cost of living crisis. Our country is being made to pay the growing price of Tory economic failure. People cannot afford this Tory Government. We have seen mistake after mistake, wrong decisions taken for the wrong reasons, and the Government never standing up for working families and refusing to take responsibility for the problems that they have created. The only thing that the Tories have to offer is desperate excuses for the state of the country after 13 years of their Government.
At the next election, people will be asking this question: are me and my family better off after 13 years of Conservative Government? The answer to that is a resounding no. The last thing that our country needs is this Tory mortgage bombshell. The country needs security for working people. That is what Labour will deliver. We are on to the third Prime Minister of this Parliament. If this Government had any decency, they would call a general election and let the people decide who they want to stand up for them and lead our country.
The Chief Secretary to the Treasury (John Glen)
I beg to move an amendment, to leave out from “House” to the end of the Question and add:
“welcomes the Government’s drive to halve inflation, grow the economy and reduce debt; particularly welcomes the Government’s new Mortgage Charter which has been agreed by 85 per cent of the residential mortgage market and will provide support to mortgage holders through new commitments and flexibilities to help borrowers who are anxious about rising interest rates; notes the extensive package of cost of living support to help families with rising prices, worth an average of £3,300 per household including direct cash payments to the eight million most vulnerable households; and further believes that Labour’s policies to manage the economy would be inflationary, lead to higher interest rates and put more pressure on mortgage holders and renters.”
After two decades of low inflation, the world has been confronted with a bout of fast-growing prices, and we are not alone. As a result of rising prices, central banks around the world, including in the United States, Japan, New Zealand and the European Union, have been raising interest rates in order to force down the rate of price rises. As all Members will be aware, last week, the Bank of England’s independent Monetary Policy Committee raised rates to 5%. Let me say at the outset that the Bank of England and its Monetary Policy Committee has the full support and confidence of this Government, and will continue to do so as it takes whatever action is necessary to return inflation to the 2% target in the medium term. As the Chancellor was clear when addressing this place yesterday, he will not take action that undermines the Bank of England’s monetary objectives.
Gareth Thomas (Harrow West) (Lab/Co-op)
The Minister will be aware that the latest data on mortgage rates specifically shows that, since the mini-Budget, they have increased faster here in the UK than in the US. That gap in mortgage rates means that someone here with a mortgage of £200,000 will be paying £1,000 a year more than in the US. What is the Minister’s explanation for that?
John Glen
I am here to account for what has happened in the UK. Obviously, there are differences—[Interruption.] If I may answer. There are differences across the EU and the US. What I am telling the House, which is quite transparently clear, is that inflationary pressures are affecting all economies at the moment, and it is my responsibility to account for what we are doing as a Government.
John Glen
I wish to make more progress.
Where there are non-inflationary measures that we can take to relieve the anxiety faced by families, we will do so and we will do everything we can to address the situation. That is why, on Friday, the Chancellor met the UK’s principal mortgage lenders, alongside senior representatives from the Financial Conduct Authority and UK Finance, to agree new support for those struggling with their mortgage payments.
Debbie Abrahams (Oldham East and Saddleworth) (Lab)
I am grateful to the Minister for giving way. Can he give an answer to my right hon. Friend the Member for Leeds West (Rachel Reeves), who asked whether the mortgage charter, which the Chancellor announced yesterday, will cover buy-to-let mortgages? Why exactly has the Chancellor not made that mandatory?
John Glen
I will come on to set out in detail what arrangements we have made. As the Chancellor set out pretty clearly yesterday, we will hear in the next couple of weeks the details of that agreement, which includes a growing number of lenders—it currently covers 85% of lenders in the country.
John Glen
I wish to make some more progress and then I will take some interventions in a moment.
At that meeting on Friday, the Chancellor secured agreement from lenders to a new mortgage charter, which we published yesterday. It sets out what support customers will receive. We are proud to say that, over the weekend, more lenders signed up to the charter, and we encourage further lenders to join that 85% of mortgage market providers.
The charter provides support for two groups of people in particular. The first group is those who are worried about their mortgage repayments. If they want to switch to an interest-only mortgage or extend their mortgage term to reduce their monthly payments, they will be able to do so with the option of switching back to their original mortgage deal within six months without a new affordability check or affecting their credit score.
For most people, the right course of action will be to continue to make payments on their current mortgage. Keeping up full repayments means that they will pay less interest overall. But this new measure means that people will be able to opt for a lower-cost approach for six months with full reversibility, giving them the peace of mind of knowing that they can try out a new approach and still change their mind later on.
Paula Barker (Liverpool, Wavertree) (Lab)
I thank the Minister for giving way. He is being very generous with his time.
With not all the mortgage market covered by the charter, there is a worry that around 1 million households could miss out on the support. Can the Minister guarantee that the measures that were outlined will be available to everyone struggling with their mortgage payments, not just those who happen to have a mortgage with one of the banks that is on the list of those that have cosy chats with the Chancellor?
John Glen
I hope that more and more lenders will be added to those 85% of providers. The details will be known in the next few weeks. This comes on top of the FCA’s rules around lenders having to take an individual approach to the circumstances of their customers, especially those trying to find a way through when they fall into difficulty.
Emma Hardy (Kingston upon Hull West and Hessle) (Lab)
Will the Minister give way?
John Glen
No, I wish to make a bit more progress. I will come back to the hon. Lady in a moment.
This measure will take effect in the next few weeks and it means that a homeowner with £100,000 outstanding on their mortgage over 15 years can change their payments—with no impact on their credit rating—by extending the mortgage term by 10 years, which could save them over £200 a month, or by moving to interest-only payments, which could save them more than £350 a month. A further measure for this group of customers means that, if they are approaching the end of a fixed-rate deal, they will have the chance to lock in a new deal with the same lender up to six months ahead. However, they will still be able to apply for a better like-for-like deal with the same lender, with no penalty, if they find one when their current deal ends.
Emma Hardy
I understand why the Minister wants to have a voluntary charter, but does he agree that what we are actually seeing from the banks—this was raised on the Treasury Committee—is that they are very quick to raise interest rates on mortgages, but not so quick to raise them on savings? The difference between the interest rates being raised on mortgages and those being raised on savings is around 50%, which is completely unfair. When the Chancellor meets the banks, will he also add to the conversation the unfairness that exists when it comes to interest rates on savings? That is why I am reporting back to the Minister on the need to mandate this—because we cannot always assume that the banks will act in the interests of their customers.
John Glen
I thank the hon. Lady for her point. As the Chancellor said yesterday, he did raise that with lenders on Friday. We will continue to work closely with them on those disparities where they exist. My colleague the Economic Secretary to the Treasury, who is responsible for the relationship with financial services institutions, will also be attending to this issue. It is right that, with interest rates rising, banks should be looking to put as much of that rise as possible on to the savings rates that they offer to consumers.
Imran Hussain
Time and time again the Minister seems to be ducking the central issue in this debate, which is that the charter the Government have proposed will not cover millions of people and will not provide support. Why will he not instead subscribe to the Labour position today and require all lenders to do it, so that everybody can get support? Answer the question Minister.
John Glen
I appreciate the passion with which the hon. Gentleman presents his point, but we have made an agreement with the FCA and with lenders, and in the next couple of weeks the details will be available for consumers and mortgage holders up and down the country. As I say, we have already moved from three quarters to 85% of lenders and I expect others to join in due course. We will continue to have dialogue with the FCA and to look at further ways to help consumers.
The purpose of our intervention is to provide people with more flexibility and optionality to find the best deal for their circumstances. Mortgage arrears and defaults remain at historically low levels, with less than 1%—I think it is 0.86%—of residential mortgages in arrears in 2023, a lower level than just before the pandemic.
Paul Holmes (Eastleigh) (Con)
We heard the shadow Chancellor outline the utopian elements of her compulsory scheme. Can the Chief Secretary outline which scheme goes further—our scheme, which is not mandatory but delivers 12 months before repossessions happen, or the Labour Party’s mandatory scheme?
John Glen
My hon. Friend makes a wise point, and I will come on to talk about some of the other measures in a moment. For those families involved, it is extraordinarily distressing to lose their home, so we will do all that we can to support people who find themselves in such a challenging financial position.
Barbara Keeley (Worsley and Eccles South) (Lab)
Will the Minister give way?
John Glen
No, I am going to finish answering the previous point.
As part of our strong regulatory framework for mortgage holders, banks and lenders already provide tailored support for anyone struggling, and they deploy highly trained staff to help those customers. Support offered includes temporary payment deferrals and part interest, part repayment, as well as extending mortgage terms or switching to interest-only payments. To supplement that, we agreed as part of the mortgage charter on Friday that, in the extreme situation in which a lender is seeking to repossess a home, there will be a minimum 12-month period from the first missed payment before there is a repossession without consent. I believe that that goes rather further than what the Opposition were suggesting.
Barbara Keeley
This crisis is already having an impact on renters too, and the Chief Secretary is not touching on that in his speech. I have a constituent on a rolling private tenancy who is worried sick that her landlord is going to evict her. She is worried about ending up in a hostel with her teenage daughter. She works full time and pays her way. That situation is shared by so many. Does the Chief Secretary not agree that there should be support for renters, and that the way to achieve it is to back Labour’s renters charter, including the halt to no-fault evictions and a four-month notice period for landlords?
John Glen
I do not accept that, but I do accept that there are challenging situations for our constituents up and down the country. That is why this Government have intervened and are working in this way with lenders to find a constructive package of interventions to meet the situation those constituents are in.
Anyone who is worried that they could be in those difficult situations should know that they can call their lender for advice without any impact whatsoever on their credit score. Lenders will also provide support to customers who are up to date with payments to switch to a new mortgage deal at the end of their existing fixed-rate deal without another affordability test, and provide well-timed information when their current rate is coming to an end. Taken together, those measures should offer some comfort to those who are anxious about the impact of high interest rates on their mortgage and provide support to those who get into extreme financial difficulties.
Catherine West
May I return briefly to the point made by my hon. Friend the Member for Worsley and Eccles South (Barbara Keeley)? Last time I asked the Economic Secretary to the Treasury about the number of renters estimated to be impacted by this situation, he did not have an answer. Do Ministers on the Treasury Front Bench have an answer today on how many renters will be affected by this crisis?
John Glen
The interventions we have made provide significant scope for assistance. To find an accurate number would be very difficult, but we will continue to work with industry and with lenders to find maximum flexibility and interventions to support them at this difficult time. While we roll out those measures, tackling inflation remains the No. 1 priority of the Prime Minister and the Government. Inflation makes every person in this country poorer and it has to be tackled head-on.
Notwithstanding that, I am fully alive to the fact that some people remain in real distress. I assure hon. Members and their constituents that we will always stand ready to help where we can. That is why at the Budget we announced that the energy price guarantee would be extended for a further three months. That extension was funded in part by the energy profits levy that this Government introduced last year, recognising that profit levels in the sector had increased significantly due to those very high oil and gas prices, caused by global circumstances—including, of course, Russia’s invasion of Ukraine.
Alongside holding down energy bills, freezing fuel duty, increasing universal credit and raising the national living wage and pensions, we are giving up to £900 in cost of living payments to households on means-tested benefits. Taking those measures together, the Government are already supporting families with one of the largest support packages in Europe, worth £3,300 per household on average.
The Government’s approach makes targeted interventions to protect the most vulnerable, while maintaining a laser-like focus on tackling inflation. I believe that that stands in sharp contrast to some of the policies offered by opposition parties. The Liberal Democrats are calling for a £3 billion mortgage protection fund, which would simply pour fuel on the fire of inflation, making it harder to bring prices down. That would be such a damaging move that it is apparently even too extreme for those on the Labour Front Bench to contemplate.
However, I would say that the Labour party is not without its own flaws when it comes to offering unfunded inflationary policies. The media reports that the right hon. Member for Doncaster North (Edward Miliband) has had his wings clipped by the Leader of the Opposition for his excessive spending proposals, but in reality the shadow Chancellor is only slightly delaying Labour’s £28 billion spending spree to the second half of the next Parliament—an amended timetable, but the same reckless policy.
We said that we would halve inflation, not because it was an easy thing to do, but because it was the right thing to do. History and the best economic insights that we have today tell us that the best way to beat inflation is to stick to our plan, backing the Bank of England’s monetary policy decisions. We will stick to the plan, because it is the only way we can give relief to families and reprieve to businesses. As we have done before, we will face down these economic challenges while supporting the most vulnerable and setting us up for economic growth.
Since a Conservative Government came into power in 2010, the UK economy has grown more than those of major countries such as France, Italy, or Japan, and about the same as Europe’s largest economy, Germany, which is now in recession. We have halved unemployment, cut inequality and reduced the number of workless households by 1 million. We have protected pensioners, those on low incomes and those with disabilities. We will now overcome this inflationary period, and offer a helping hand to those who need it as we do so.
Madam Deputy Speaker (Dame Rosie Winterton)
Before I call the SNP spokesperson, I think I will have to give some firm guidance about time limits. My initial guidance would be six minutes, just so the first speaker on the Government side is aware.
Stewart Hosie (Dundee East) (SNP)
The right hon. Member for Leeds West (Rachel Reeves) raised the spectre of those commentators who are suggesting that we crash the economy into recession as a way of tackling inflation. Others have commented on that over the past week or so. The more that I think about it as a serious proposal, the more hideously grotesque it appears that, in the midst of all this, there are people out there, swarming around with daft ideas, suggesting that poverty and penury are actually an economic tool.
The Minister spoke in support of his Government’s amendment (a), which starts by welcoming
“the Government’s drive to halve inflation, grow the economy and reduce debt”.
Inflation is not halving; it has stayed at 8.7%. Core inflation has gone up to 7.1%, real gross inflation is at 18%, and the debt to GDP ratio has hit 100%. I know that politics is politics and that there are things Ministers will have to say, but if they bear little resemblance to reality, they are unlikely to believed.
I am thinking of some of the very early contributions to debate. The hon. Member for Eastleigh (Paul Holmes), who is no longer in his place, referred to other people’s plans. I think it is just extraordinary to listen to Tories being critical of anyone who simply thinks that people having a warm, dry and affordable house for themselves and their family is anything other than a rather sensible ambition.
According to Moneyfacts, the average two-year fixed-term mortgage is now sitting at 6.23%, not far off the post-mini-Budget peak of 6.6%. Although it is true that, on Friday, the UK’s biggest lenders signed a deal that included, as part of this new mortgage charter, a commitment to give homeowners a 12-month grace period before their home is repossessed—I welcome that and the other measures—the deal actually forms a rather limited relief package that certainly will not offer help to everyone who needs it. That came after the Bank of England raised interest rates to 5%—the 13th consecutive rise, and a larger-than-expected increase—meaning that we now have the highest interest rates in 15 years.
I support 100% the operational independence of the central bank, but I wonder whether that was the right approach. We all know that there is a lag between interest rates going up and the impact of driving inflation down being demonstrated. I wonder whether we are repeating a mistake that we have seen many times in this country: interest rates not rising quickly enough at the beginning, and continuing to rise too late at the end, turning a bad situation into a recession, or making a recessionary situation worse than it need be.
The pledge on forbearance is one of the main measures in the agreement struck with lenders. The lenders that have agreed the pledge include NatWest, Lloyds, Santander and Barclays, which, as the Chief Secretary to the Treasury said, control 75% of the market—that figure has increased to 85%. As we have heard today, as well as in yesterday’s statement, that agreement does not cover all the lenders, nor does it cover all mortgage-holders, some of whom are in very specific circumstances. We heard from a colleague yesterday about people who have residual Northern Rock mortgages and are tied into specific deals. It would be helpful to find out, for example, whether they will be able to take advantage of the opportunities that the charter allows for. The SNP welcomes what has been said so far, but it is clear that the mortgage charter will offer limited relief to the millions of households across the UK who are facing soaring mortgage costs.
Let us look at the detail. As I said, the average two-year fixed-term mortgage is now sitting at 6.23%, not far off the 6.65% peak. The average five-year fixed-term mortgage is at 5.86%. Those rises mean that, at the two-year rate, repayments on a £150,000 mortgage—not far off the £184,000 average price of a house in Scotland—are now £990 a month, compared with £660 a month on the average rate available in December 2021, before the hike in borrowing costs began. From £660 a month to £990 a month is a 50% rise in two years. That is a huge amount of money: it amounts to an increase of £3,900 a year compared with December 2021. We know that wages have not kept pace with inflationary costs, and that the people who are struggling with this have also been struggling with soaring energy bills over the past 18 months. People are really hurting.
I feel for people who have done the right things: those who are earning reasonable wages but are not rich, who managed to save a 5%, 10% or 15% deposit, and who capped their mortgage at maybe three times their earnings and did not borrow excessively. I do not know anyone in the real world who has a spare £3,000, £4,000 or £5,000 a year to sling at the increase in their mortgage costs after facing all the other inflationary pressures over the past year.
For many, the measures announced will be of limited relief. We know, for example, that lenders will be quite selective about who they allow to take the interest- only option. David Hollingworth, associate director at L&C Mortgages, noted:
“Going interest-only can work but only for the right kind of borrower, someone with a good financial history of repayments, someone with plenty of equity in their home who is just looking for some breathing space.”
That does not cover a lot of our constituents, who may not have a lot of equity at all and may, for one reason or another, have found themselves missing a payment here or there because of other pressures.
The president of the Resolution Foundation highlighted that the approach of consecutive UK Governments to managing the economy and the housing market has led to lower levels of home ownership, with those who own their homes feeling “intense pain” as a result of rising interest rates. He said:
“There is a group of several million people who could be seeing their mortgage costs rise by about £3,000 in a year and that is a lot for a middle-income household to bear. So it is going to be tough for them. Conservatives believe in the property-owning democracy”—
although they are doing rather a good impression of trying to destroy it. He went on:
“We’ve seen tragically a narrowing of homeownership over the last decades. That in turn means that if you’re trying to use interest rates, mortgage rates to drive disinflation, you’ve got a smaller group to operate on and they feel more intense pain.”
The Resolution Foundation also noted that more than four in 10 low-income households are spending more than 40% of their income on mortgage repayments. That is extraordinarily stark. When one considers that something in the order of 116,000 households are coming off fixed-term deals every month—perhaps the Chief Secretary to the Treasury can confirm that number—those people who are already spending more than 40% of their income on housing costs will find things extremely tough indeed if they are hit with a 10%, 15%, 20%, 30% or 40% rise in their mortgages this coming year.
The Resolution Foundation also warned that 31% of low-income mortgage holders say that their fixed-rate mortgage will come to an end between now and the end of the year, and that a large number of that group are already spending more than 40% of their income on their mortgage, as I said. It was critical of the fact that the Bank of England does not have a duty to consider the implications that its actions might have on the housing market or mortgage holders. I have asked the Government a number of times recently about reviewing whether an inflation target is the right primary target for the central bank, and whether the tools that the Bank has are appropriate. I wonder whether we should have a growth target, for example.
In New Zealand, considering the impact of rising rates on the housing market is part of the central bank’s remit. The housing market is such a big part of Britain’s economy that I am sure the Bank of England will have considered the impact of rate rises, but it is also clear that its job when setting interest rates is to focus entirely on getting inflation back to 2%, and it has no obligation to look at the impact on the housing market. I wonder whether we should review the targets that the central bank has and the tools it is given.
We know that soaring mortgage costs do not just impact on mortgage holders; the costs of increased mortgage payments are also passed on to renters. In Scotland, we have offered some protection through the rent cap, but such a measure has not been introduced down here. It is interesting that Matt Downie, the chief executive of the homelessness charity Crisis, has said that hundreds of thousands of people could be left unable to cover their rent and at risk of losing their homes:
“Low income renters face a catastrophe—they can’t rely on housing benefit as it’s been frozen since March 2020 and is completely inadequate. There isn’t nearly enough social housing to go round and over a million households are on waiting lists for the few genuinely affordable homes we do have.”
The mortgage crisis and the inflationary crisis have thrown into stark relief the absence of a proper housing policy, particularly from this Tory Government, the size of waiting lists and the costs associated, even now, with getting a rental. Official figures this week showed that private rental costs rose at an annual rate of 5% in April—the sharpest pace on records dating back to January 2016—while rents outside London surged at the fastest rate on records going back to 2006. The Institute for Fiscal Studies also warned that interest rates hitting landlords’ borrowing costs were part of the reason for the very large increases in rents.
The pain is being felt across the board—well, almost across the board—for renters and mortgage holders, on top of all the other inflationary pressures we have seen. The message should be clear to the Government: whether you are a mortgage holder or a renter, holding your nerve will not pay the bills; holding your nerve is not a policy to fix these problems.
Suzanne Webb (Stourbridge) (Con)
I rise to oppose the motion in the name of the official Opposition and to support the Government amendment. The Labour motion is narrowly worded. Yet again, it tries to invoke hysteria and crisis and to undermine those we serve, and it completely misses the facts. We cannot allow the electorate, especially young people, to be indoctrinated by the sort of nonsense contained in the Opposition’s motion, which claims that it is all the Government’s fault.
These are the facts. First, on mortgage rates, the impact of the global financial crisis under Labour back in 2007 meant that the base interest rate fell to its lowest level for 300 years. Starting at 5.7% in July 2007, rates had fallen to 0.5% by March 2009, with a further fall to 0.25% in August 2016. There was a very slight rise back to 0.5% in November 2017, and then in 2021, as covid-19 loosened its hold on us all, globally we were met with persistent inflation caused by a worldwide supply chain crunch and, of course, Putin’s war. Those are the simple truths.
Suzanne Webb
I am going to make progress, because the Minister was very generous in taking interventions, and I want to ensure that everybody gets to speak.
The Bank of England, not the Government, pushed the rate up to 0.25% in December 2021, to 0.5% in February 2022 and then to 0.75% in March 2022—the highest it had been since the summer of 2018. That has continued, and we are now at 5%. I must agree with the Chancellor that there were flaws in the Bank of England’s economic forecasting. As the Governor himself has said, the Bank’s forecasting has not been accurate. It was for the banks to assess the financial competence of those applying for mortgages in the first instance. Banks would have understood that interest rates were artificially low—the lowest in 300 years of history—and that at some point they would naturally go up again, and they did. It took the huge global fiscal shock of a pandemic and a war in Europe to push interest rates up to where they are now, but such interest rates were common under Labour before it crashed the economy in 2008. We should not forget that.
If we look at the rates before the economy crashed and before Labour bled our economy dry and left no money, it keeps the interest rates “crisis” that Labour likes to talk about in perspective—or, to put it more succinctly, as the right hon. Member for Birmingham, Hodge Hill (Liam Byrne) said in the note he left to his successor in 2010,
“Dear Chief Secretary, I’m afraid there is no money. Kind regards—and good luck!”
That about says it all, and I will never tire of repeating it to remind people what they could be voting for.
Now for more facts. The employment market is strong. I recently visited my local jobcentre in Stourbridge. Those who worked there told me that the local job market is buoyant and that young people in particular are finding jobs. According to the International Monetary Fund, the OECD and the Bank of England, the prospects for the UK economy are bright. Even on mortgages—the subject of this debate—defaults remain at pre-pandemic levels, and the proportion of disposable income spent is almost half what it was in the 1990s. Banks around the world are raising interest rates to fight rising inflation caused primarily by Putin and a global pandemic. This is a global problem. Interest rates are higher in the US, Canada and New Zealand.
I absolutely cannot allow the Labour party’s economic incompetence to go unchallenged. Black hole after black hole after supermassive black hole is unearthed by my colleagues and I, as Labour seeks to twist and turn into whatever position of opportunism it favours in any given week. My right hon. Friend the Chief Secretary to the Treasury has uncovered another casual £3 billion from the shadow Chancellor’s U-turn on the digital services tax. That is in addition to another black hole 10 times the size—£30 billion, simply gone—from Labour’s plans to scrap business rates without replacement. Naturally, I look forward to whatever reply my right hon. Friend receives, but I doubt it will be forthcoming.
Perhaps the Opposition could tell us how Labour’s £90 billion of unfunded spending commitments would lead to lower inflation and interest rates—I await that with interest—or how Labour’s plans for £28 billion of borrowing would lower inflation and interest rates. The Institute for Fiscal Studies certainly does not think it would, and neither do I. We should also be mindful of not dragging language to the extreme. In Labour’s language, everything is a “crisis” these days—cost of living crisis, energy crisis, mortgage crisis. It cheapens the term and undermines all we serve.
I support the Government amendment, although I do not think we needed to use the word “charter”. I think this is just banks doing the right thing for their customers, nudged by a fiscally responsible Government. I will finish as I started, by saying that we cannot allow the electorate, especially young people, to be indoctrinated by the sort of nonsense contained in the Opposition’s motion, which tries to claim that it is all the Government’s fault. It is not. I will be supporting the Government amendment.
Several hon. Members rose—
Madam Deputy Speaker (Dame Rosie Winterton)
The next speaker will have six minutes, but after that I will have to reduce the time limit to five minutes.
Derek Twigg (Halton) (Lab)
Every day I hear from constituents, as many of us do, who are facing hardship as the cost of living crisis spirals out of control. It is truly extraordinary that in Britain today, people across our communities are having to worry about whether they can afford to heat their homes or feed their families, which is a major worry that we will see again as the weather cools down and we come into autumn and winter this year.
We now face another crisis, courtesy of a Conservative Government who seem entirely clueless as to a solution: a mortgage bombshell that leaves homeowners wondering whether they can even keep a roof over their heads. Let us be clear about the scale of the mortgage bombshell. In Halton, there are currently 9,600 households with an average mortgage payment increase of £1,600 a year. I hear from constituents who have lost mortgage deals and simply do not know what to do. Young people trying to buy their first home have been cruelly disappointed; for many, the dream of their first home will not be realised any time soon. That is another way this Government are failing young people. Others tell me that their mortgage costs are rapidly becoming unaffordable.
Worse still are the heartrending stories I hear from constituents who are about to lose their homes altogether. In Halton, the waiting list for social housing is huge, with over 4,000 households on it. Halton Borough Council is doing everything it can to help those in desperate need of a home, but as in so many other parts of the country, its services are stretched to breaking point.
Mrs Paulette Hamilton (Birmingham, Erdington) (Lab)
Time and again I meet people in my surgery who can barely afford to feed their family, let alone afford rent hikes. Does my hon. Friend agree that people in communities across the country cannot afford to pay the price of a Tory Government?
Derek Twigg
My hon. Friend makes an important point, and she is absolutely right. Places such as my constituency, with some of the highest rates of poverty in the country—which I will come to shortly—are finding it particularly difficult.
There are homeless children from my constituency living in hotels out of the area, who are struggling even to continue to attend their local schools. Recent figures from the End Child Poverty coalition show that 30.9% of children in Halton are living in poverty, but at Widnes food bank donations are now falling below demand. That food bank is purchasing food using monetary reserves. Food inflation has adversely affected the ability of people who had previously donated food to do so—what a disgrace in this modern age. This is at a time when rising numbers of people in my community need to turn to food banks because they cannot afford the essentials that we all need to survive. The situation is becoming unsustainable.
I have been contacted by an increasing number of constituents whose landlords are being forced to sell up as they cannot afford their own mortgages. Nearly 200 households in my constituency are classed as priority homeless, and less than a handful of social housing properties become available each week. There is little point in telling those people to look into private renting, as local housing allowance falls even further behind the spiralling cost of rent. In Halton, local housing allowance for a three-bedroom home is £593 per month, but the current lowest private rents are £750 per month. Local housing allowance for a two-bedroom home is £498 per month, with the current lowest private rents at £650 per month. More and more of my constituents face the nightmare of homelessness, and more and more cannot afford the essentials needed to survive.
What is truly shocking is that this did not have to happen in this way. Last autumn’s mini-Budget, founded on unfunded tax cuts and pushed through without proper scrutiny, was an exercise in economic recklessness that has left hard-working people having to shoulder yet another burden. There is also the impact of inflation, of course, and the fact is that this Prime Minister, when he was Chancellor—I challenged him on this at the time—did not take inflation seriously enough. We know the impact that inflation is having on the cost of interest rates and, therefore, mortgages. The Government have created this catastrophe, and they need to take more urgent steps to address it.
Labour’s five-point plan could help to ease the crisis. I urge the Government to consider the measures that we are putting forward—requirements that would cover the whole mortgage market, unlike the Government’s charter with selected banks. Local housing allowance must be increased if we are to stem the tide of evictions that threatens to completely overwhelm housing services across the country.
This is Government incompetence, plain and simple. It is hurting hard-working people, and it is high time that the Tories stop thinking about how they can grab cheap headlines and instead focus on doing more to really help the many people who are about to lose their homes. The fact remains that this country is worse off under the Tories—people feel worse off themselves. We are seeing failings across public services of a sort I have never seen in my lifetime, and the fact is that this Government need to go now.
James Wild (North West Norfolk) (Con)
It was Margaret Thatcher who said that
“inflation is the biggest destroyer of all—of industry, of jobs, of savings”.
As ever, she was right. That is why the Prime Minister put halving inflation as his top priority at the beginning of this year, along with growing the economy, because if inflation is not squeezed out of the system, everyone will become poorer.
Like central banks across the world, the Bank of England is raising interest rates to combat high inflation, and it is worth noting that rates are actually higher in the United States, Canada and New Zealand. However, the combination of high inflation and interest rates means that people are facing higher mortgage payments, which is causing concern for my constituents. In North West Norfolk, 24% of homes are owned with a mortgage or loan, compared with a national average of 30%—I declare an interest as one of those homeowners—and those families facing higher monthly payments are having to make difficult choices about their household spending, as indeed are people who are renting. That is why the Government are right to have put in place £94 billion-worth of support, a package worth on average £3,500 per household—one of the most comprehensive in Europe.
However, it is equally the case that the Government should not take action that would add to inflationary pressure: for example, by borrowing an extra £28 billion each and every year, as the Opposition are committed to do. The Institute for Fiscal Studies has said that the effect of such action would be to increase inflation and drive interest rates even higher. That is the damaging reality that Labour’s plan would lead to. Instead, along with the cost of living support package—I welcome today’s news that 95% of the disability payments have already been made—we need to take action to ensure that banks and building societies treat people fairly and introduce new protections.
As such, I support the measures in the new mortgage charter. It will help people who are worried about making their monthly mortgage payments by adding an option to switch temporarily to an interest-only mortgage, or to extend the term in order to reduce their monthly payments. The Chancellor gave the example that on a £200,000 mortgage that could lead to a saving of £350 a month, which is material. Importantly, people will be able to switch back to their original term within six months.
People who are approaching the end of a fixed-rate deal will of course be concerned about the rates in the market. Those people will have the opportunity to lock into a rate earlier, and then to change that at any point up to the new deal coming into effect. We have heard about repossessions. Where constituents have fallen behind with mortgage payments, it is incredibly worrying for them to think that they might lose their home. There are already strong protections in place to ensure that that is an absolute last resort, but in the current circumstances it is right to strengthen those protections. Now there will be a minimum period of 12 months from the first missed payment before any such action can be taken—double the period that the Labour party has proposed.
We in this House should be responsible and offer practical support, and the best advice for anyone who is worried about meeting their payments is to talk to their lender. Two weeks ago, I was in my local branch of the Nationwide building society, talking to the team there about the cost of living advice that they are giving to help my constituents. I welcome the fact that Nationwide is one of the lenders that has signed up to the charter. I hope that the rest of the market will also do so and, importantly, will tell customers about the new flexibilities, in order to reduce any concerns they might have.
Curbing inflation is not easy, but it is vital to relieve pressure on family budgets. In his column in The Sunday Times this weekend, the respected commentator David Smith looked at the prospects for inflation and the need for monthly consumer prices index increases to be smaller than a year earlier. He pointed out that from May to December last year, CPI rose by 4.7%, driven by higher energy costs caused by the illegal war in Ukraine. In the year prior to the pandemic, the increase in the same period was just 0.6%. He noted that a rise of just under 2% in CPI from now until December would deliver an inflation rate of 5% by the end of the year. I hope he is right, because getting inflation down must be the priority, and the target remains to halve it by the end of the year. That is what businesses and families want.
Throughout covid, the Government supported people, and in the face of current higher costs, support for the most vulnerable continues. Now, with the additional measures in the charter, people will see their mortgages better protected in the face of higher interest rates. That is the practical action that this Government are taking. The alternative put forward by the Opposition parties—more borrowing and more spending—would simply make inflation higher and everyone poorer.
Peter Dowd (Bootle) (Lab)
In advance of today’s debate, I read the contents of yesterday’s statement by the Chancellor on the mortgage charter. The answers he gave went from bad to worse, and beyond. Besides not answering many of the questions put to him, those he did answer—I use the word “answer” loosely—were answered nonchalantly. Then, when he agreed with the right hon. Member for Wokingham (John Redwood) that it was all the fault of a lack of productivity, above all in the public sector—that nurses, doctors, teachers, social workers, border staff, local government staff and the other 5.8 million people who work in the public sector are causing misery and problems for themselves—I realised that the nonchalance was simply a cover for incompetence at best, or ineptitude at slightly better.
Peter Dowd
I will not, because I do not want to take up too much time at this stage.
Clearly, the Chancellor has lost the plot. What about the productivity of the Government—the most unproductive Government in my lifetime? There was no mention of that in his statement. In that exchange, the issue of supply-side responses was also referenced. If either the Chancellor or the right hon. Member for Wokingham had read page 12 of the Library’s briefing yesterday, that would have confirmed to them that supply-side pressures and bottlenecks are easing and the cost of shipping has come down to pre-pandemic levels, but of course, that is a fact that the Government do not want to listen to.
My initial assessment proved to be correct as the debate wore on. In response to a question from my hon. Friend the Member for Sefton Central (Bill Esterson) about the reasons why many people in Europe are paying significantly less in mortgage payments than in this country, the Chancellor defaulted to the answer he gave to the previous question from my hon. Friend the Member for Chesterfield (Mr Perkins). He went from turgid to orotund and then back to turgid, with a little bit of circumvention in the middle. I thought I was listening to the Radio 4 programme “Just a Minute”, but without the humour.
The fact is that having a roundtable with the banks is all very well and good—a bit of finger wagging, a wink and a nod here, knowing looks there—but while the Chancellor looks for a solution or tells the banks in no uncertain terms that it is an issue that needs to be resolved, he is doing little to ease the pressure on millions of our constituents who have a mortgage, and there are millions of them. He said it needs a solution, and of course it does—I think we can all agree, without any contradiction, with that pearl of wisdom from the Chancellor. My cat Gilly knows there needs to be a solution. The only problem is that the Chancellor did not present us with one—unless, of course, that part of his statement was left out of Hansard.
I will not go into too much detail about how the current mortgage crisis sits alongside the cost of living crisis, the mental health crisis, the health crisis, the housing crisis and the many other crises inflicted on the country by the Conservative party—they have been covered on other occasions, including yesterday and today—but there are many thousands in my constituency, and millions across the country, who will be paying thousands of pounds more in mortgage payments as those fixed-term deals come to an end. What about the thousands of mortgage prisoners, many in my constituency, who have been hit even harder without Government intervention?
I want to bring to the attention of the Minister, and vicariously to the attention of the Chancellor, an article in the Financial Times today by Helen Thomas—I hope she will forgive me if she feels I am cherry-picking from the article, which I am not. She makes excellent points, and these are issues that have to be addressed by the Chancellor sooner rather than later. She says:
“This crisis should prompt longer-term questions about the peculiarities of the UK market”—
meaning the mortgage market—and that
“with little lending at above five years fixed and essentially none above 10 years, the UK looks an outlier even in Europe”.
In her final paragraph, Ms Thomas says:
“This interest rate shock will prove uncomfortable for many. But it should also prompt fresh debate on what might create a less dysfunctional mortgage market in the future.”
The question for the Chancellor is whether he is up to the challenge in effect laid out in that analysis. Were any of those points raised in his roundtable with the banks on Friday, and what commitments did he get from the banks in relation to easing the pressures on my constituents? Crises are years in the making, and the longer this Government stay in power, the longer this crisis will continue, so it is time for the Tories to go.
Owen Thompson (Midlothian) (SNP)
During the French revolution, the Queen of France supposedly said, “Let them eat cake”, after being told that her subjects were starving with no bread. Today, as the country faces a mortgage meltdown, our multimillionaire PM tells people that
“we’ve got to hold our nerve, stick to the plan and we will get through this.”
I am not sure whether he is looking to model himself as a modern-day Marie-Antoinette, but whether or not that was his intention, his gall is quite beyond belief. I will leave it to others to say that the Prime Minister is guilty of projecting
“an extraordinary, Orwellian, meaningless, evasive word salad”
when he speaks. Nor will I say that the PM is
“as much of a mendacious, narcissistic sociopath as his previous boss”.
These things are much better delivered by Ben Elton himself.
However, I will say that we are past crisis point. The Bank of England has raised the base rate 10 times since December 2021, from 0.1% to 4% as of February. Meanwhile, figures from the Office for National Statistics show that average weekly earnings have fallen in real terms in the year to December 2022 by 3.1%, which is one of the largest falls in growth since comparable records began in 2001.
Scottish homeowners are suffering for Westminster’s failure. As a result, independence becomes ever more necessary for ordinary Scots, so that they can stop paying the price for UK Government self-inflicted messes. Stronger direct action is needed to protect vulnerable homeowners from soaring mortgage costs. Like my right hon. Friend the Member for Dundee East (Stewart Hosie), I welcome the limited action that has been taken so far, but a purely voluntary scheme that stops repossessions for 12 months and allows for lower payments for six months is not enough to protect many householders from this disaster.
My constituency of Midlothian is especially vulnerable to this Westminster-triggered chaos. Midlothian’s population is growing, placing increasing demands on services that aim to tackle poverty. Just under a quarter of Midlothian’s children—4,400—were living in poverty going into the pandemic and the cost of living crisis. Midlothian has higher rates of economic activity and lower rates of unemployment than the Scottish and UK averages, but we also have lower average wages across some groups, in common with many other former coalfield communities. The falling value of real wages will hit many residents hard, and the higher than average house prices in Midlothian suggest a vulnerability to economic downturn and other cost of living pressures, particularly mortgage hikes. The average price of a house in Midlothian in October 2022 was £243,500, compared with the Scottish average of £193,730. This combination of higher house prices and lower wages could spell disaster for many.
The Chancellor’s mortgage charter is really a sticking plaster on a broken arm, and my constituents deserve better. These residents have been forced to stretch their budgets to get on the housing ladder in the first place, and are now utterly vulnerable to rising costs and labour market turbulence. It is hard to believe that the Tory party was ever seen as a bastion of high finance and fiscal propriety. Del Boy and Rodney could do a better job. In Scotland, we are fortunate that we have an alternative way out of this mess, and now more than ever we need to make sure we cast this PM and his ultra-rich cronies into the dustbin of history by forging ahead with independence.
Naz Shah (Bradford West) (Lab)
The Tory mortgage bombshell is the latest Tory-created crisis to hit hard-working families, adding to the litany of errors over the last 13 years made by an economically arrogant, incompetent and ignorant Tory party. According to the financial data provider Moneyfacts, the average two-year fixed residential mortgage rate has risen to 6.23%, up from 6.19% just last Friday. This is the highest since last November, when the property market was thrown into utter chaos after the Tory mini-Budget, otherwise known as the Budget that broke Britain. Because of the mess they have created, banks are now withdrawing mortgage deals, and the average household is facing a hike of almost £240 a month more on their mortgages.
In my constituency, this latest hike in interest rates will impact nearly 7,500 households, with an average increase in payments of £1,300 a year. As Opposition Members have stated already, these increases come at a time when families are already living hand to mouth. The sad reality is that Conservative Members just simply do not get it. Mortgage payments are up—by £1,300, if not more—while energy prices are up by thousands of pounds per household, supermarket food prices are up by 15% this year, council tax is up by 5% and car insurance is up on average by 43%. Again, they just do not get it.
The Prime Minister probably does not understand much, but who can blame him when he is sitting in his private plane, wearing his £3,000 suit and sipping coffee out of his £180 mug, with his head stuck in the clouds. Meanwhile, back down here on earth, in places in the real world such as Bradford West, hard-working families are being forced to skimp on daily necessities such as three meals a day and are on the brink of collapse. The UK economy’s ever-worsening crisis is not a recent misfortune. It is the consequence of a total abdication of economic prudence by the Tories over the last 13 years. The poor state of the UK economy today cannot be solely pinned on a global crisis. We need to call it out loud and clear that our ailing economy has been orchestrated by a string of Tory self-inflicted policy errors.
Every country faced economic impacts due to the pandemic, but our economy bounced back at the slowest rate of any G7 nation, with our GDP at the beginning of 2023 0.5% lower than at the end of 2019. Every country faced the economic impact of the global financial crisis, but reckless Tory austerity since 2010 has resulted in more than £0.5 trillion of lost public spending and a weaker economy. All the G7 nations faced the effect of rising energy prices caused by the war in Ukraine, but the UK’s over-reliance on energy, coupled with the Tories depleting our ability to generate our own energy, has left us the most poorly equipped to deal with rising energy prices.
The Tories’ disastrous 13 years in charge will be remembered for crashing the economy, poor growth, sky-high inflation, worsening living standards and the disastrous management of Brexit. Each of those alone has battered hard-working families, who have been plunged into poverty, but the combined litany of self-inflicted, delinquent and scandalous errors has left the UK a whole lot worse than in 2010.
We must hold the Conservatives to account, and the worst thing is they were warned. Martin Lewis, the finance expert, has said he warned the Government about mortgage market issues last year. He said about the current mortgage shock:
“Yet now the time bomb has exploded and we're scrambling about what to do.”
That is what the Tories do: they sleep at the wheel, then try to deal with the wreckage after the crash, and then blame everyone else.
On action on mortgages, it was Labour’s announcement that forced the Government to take urgent steps. However, Labour has called for mandatory measures to be placed on banks so that no one is left without support; the Government measures are completely voluntary and do not cover all of the mortgage market, with some 15% of the market for main residences missing out and no buy-to-let coverage.
Recently, the former Prime Minister fell off his tightrope. Now the Tory party has got rid of the clown, it is time to get rid of the circus. Give us a general election.
Gareth Thomas (Harrow West) (Lab/Co-op)
The rise in interest rates last week to a 15-year high will be profoundly worrying for many of my constituents, particularly the many homeowners with a mortgage, but also those privately renting who are worried that their landlord might now put up their rents at a time when it is very difficult to find a genuinely affordable home to rent in my constituency. It is estimated that there are 8,900 households in my constituency facing an average increase in their annual mortgage payments of £5,400. In the neighbouring Conservative-held seats of Harrow East some 7,800 households face an estimated annual mortgage payment increase of £6,200 and in Ruislip, Northwood and Pinner 9,500 households face an average annual increase in mortgage payments of some £7,000.
Harrow has one of the highest rates of home ownership and owner occupation in London. Families move out to Harrow because family homes have traditionally been more affordable than in inner London, and we have excellent schools and very good transport links. The Tory party’s mortgage bombshell threatens the dreams of too many Harrow families—dreams of owning and investing in their own homes, of being able to always afford the rent for the home they live in, of being able to provide a stable and secure place to bring up their children and to look after older family members and still to be able to afford a good quality of life with good holidays and trips out. Those ambitions are much tougher now for even more families in my constituency because of the Conservative mortgage bombshell. In short, close to 18,000 households in the London Borough of Harrow face an average increase in mortgage payments of between £450 and £580 a month.
Those figures are devastating for family finances. Ever more mortgage deals have been withdrawn by the banks. Moneyfacts data suggests that the typical rate on a two-year fixed rate loan have increased to almost 6%, double the rate of a year ago, and the independent Resolution Foundation estimates that by 2026 some 6.5 million households across the country will have been affected by the post mini-Budget rise in mortgage rates. It is not just homeowners who are going to be hardest hit: charities and property experts are understandably warning that the rapid rise in borrowing costs is not just having an impact on owner-occupiers but is contributing to record rent increases.
I am fortunate in Harrow to have a community that is determined to do what it can to help those in real need. Harrow food bank, London’s community kitchen, My Yard Harrow and Soul Kitchen Harrow provide an impressive and dedicated offer to families in dire need. They should not have to do that, but energy bills and food prices are already high, and if mortgage costs continue to feed through into rent increases, the pressure on lower-income families will be even more profound and disturbing.
Conservative Members like to claim that what is happening here is part of a global crisis or is just down to the Bank of England’s incompetence. There are of course global factors in play and it is also true that the Bank of England has questions to answer, but the disastrous mini-Budget last year and 13 years of economic failure have left our economy far weaker than it should have been, and the mortgage crisis is clearly worse in the UK than in other European countries. As my right hon. Friend the shadow Chancellor of the Exchequer said, mortgage rates in Germany, France, Ireland and the Netherlands are typically lower than here.
I strongly support the plans set out by my right hon. Friend. She has forced the Chancellor to take some action, but it does not go far enough to help those renting and those facing fast-rising mortgage costs. Mandatory action is required to support mortgage holders. It should not be up to the banks and those offering mortgages to decide whether they want to do the right thing; they should be forced to comply and to help, and we must certainly end no-fault evictions straight away.
The British people deserve better than they are getting from the Conservative party. Homeowners in Harrow should not be suffering the ever-increasing burden of higher mortgage costs. Ministers could do more to help. They should not be leaving 1 million people unprotected; they should back Labour’s plan today and then they should call a general election.
Helen Hayes (Dulwich and West Norwood) (Lab)
Ever since I was first elected in 2015 I have seen the pressures of the cost of living increase in my constituency. I meet regularly with the manager of our local food bank, and every time she tells me that the number of parcels it is delivering has reached a new record, that the challenges that result in people needing emergency help are becoming more complex and intractable, and that some Government policy decisions have directly contributed to a step-change in the level of need.
We have long seen spiralling private rents, unacceptably low pay and punitive changes in the benefits system creating terrible pressure on household finances, but the past nine months have seen a further increase in cost of living pressures, which are causing even previously comfortable household finances to buckle and break. People have seen their energy bills rocketing, the cost of essential food creeping up week by week, and unfeasibly high childcare costs. Now, thanks to a Prime Minister and Chancellor who have delivered more damage per day in their short tenure than any of their predecessors ever did, many of those same people are now staring down the barrel of imminent unaffordable mortgage increases.
In my constituency, 9,400 households will face a mortgage cliff edge this year, and they are expected to face an average payment increase of £6,300 a year as they negotiate new mortgage deals. This is a cause of profound distress and anxiety. Some of my constituents are worried that they stand to lose all that they have worked for—the material security that underpins their family life.
What is the Prime Minister’s response to this calamity and the profound distress it is causing? “Hold your nerve”, he says. That might be appropriate advice for one of his investor pals looking at some spreadsheets that are having a rocky ride, but it is a totally tone-deaf response to my constituents who are looking at their bank accounts and finding that the amount of money coming in simply will not cover all the bills they are required to pay. A voluntary agreement that covers some, but not all mortgage providers and offers only short-term measures is also of little comfort to my constituents and mortgage holders across the country, who will be left anxiously waiting to find out whether their provider is one of those offering support and worrying about what they will do when the mitigation measures come to an end and the cliff edge is still there.
The Government’s measures, cobbled together under pressure, simply do not touch the sides of the problem. They are voluntary for the banks and do not cover all mortgage providers. While the focus of the Government’s piecemeal plans is homeowners, there is nothing at all to protect private renters. I am seeing a huge increase in the number of my constituents who are facing section 21 eviction notices—a practice that the Government promised to outlaw years ago—linked to increasing rents. Some of that is due to the increased mortgage costs faced by buy-to-let landlords, who are excluded from the Government’s measures and are passing their own increased costs directly on to their tenants, but some of it is simply unscrupulous landlords taking advantage of the current economic climate to hike up rents once again.
I speak with private renters in my constituency every week. They are beside themselves with worry due to the insecurity of their tenure and the risk they live with that at any moment they could face a devastatingly unaffordable increase in their rent. The legislation that private renters urgently need has been yet another casualty of the chaos and uninterest of this Government and their contempt for the public they are elected to serve. It is not for the want of time—this House has regularly been concluding its proceedings early in the day in recent weeks—but due to the lack of political will to drive forward urgently needed legislation, and that is shameful.
Labour has set out a comprehensive plan to ease the Tory mortgage penalty that would provide meaningful help to homeowners, whatever their mortgage provider, and protections for private renters. Without such a robust package of support, communities across the country face a catastrophic increase in housing insecurity and homelessness, destabilising families, affecting mental health and wellbeing, making it harder to hold down employment and causing deep hardship. My constituents urgently need more leadership, more urgency and more meaningful action from their Government. If this Conservative Government are too weak, out of touch and preoccupied to act—and they certainly are—it is time they stepped aside for a Labour Government who will be committed to delivering the change our country so desperately needs.
Tahir Ali (Birmingham, Hall Green) (Lab)
I will start by saying how serious this mortgage crisis is for many of our families. If we reflect on how the Government Benches are empty compared with the Opposition Benches, it demonstrates the seriousness with which the Government take this issue. No wonder the Prime Minister said, “Hold your nerve.” The contributions from Government Members on this issue, which affects millions of people, again demonstrate their lack of empathy and the lack of seriousness with which they take this important situation.
We are in this mortgage crisis because of the mini-Budget. Imagine for a moment if that had not been a mini-Budget, but a full Budget—what other crises would we now face after 13 years under Tory Government, when they have broken this country for millions of our residents and constituents? Overnight, damage was inflicted, with increased payments for millions of mortgage holders. Mortgages were withdrawn overnight and house sales were cancelled. Mortgage rates went up and payments went up for millions of our constituents. In my constituency, 7,700 households are affected by that decision, with an average increase of £2,700 a year. Many of those households are run by key workers—the very workers we were clapping. Today, we are slapping them in the face by saying, “We will not help you with a decent wage increase. We will not help you with mortgage increases. We will not help you with the cost of living crisis.” That is the reality we are facing.
People should not be fooled by the words of Government Members when they say this is a global crisis. Look at their 13 years in office. Where are we with mortgage rates now? Under the previous Tory Government, where were we with mortgage rates then? They were at 15%, and we had record repossessions. This is a repeating of history and of what the Tories are good at: making sure that the poor get poorer and the rich get richer. That is what they stand for. I challenge Government Members to tell me—I see one shaking their head—how many of their constituents and households are affected by this mortgage increase and what the average increase is. I will give way to the hon. Member for Totnes (Anthony Mangnall) if he knows the answer.
Tahir Ali
My heart bleeds for those people. The Government have denied millions of workers in this country a decent pay increase, which would have allowed them to deal with the cost of living crisis. But no, what does the Prime Minister of this country say? He asks the public to hold their nerve. This is not about nerve; it is about the basic fact that life has become unaffordable for millions of people as a direct result of the Government’s failed approach. Instead, the responsibility falls on ordinary hard-working people. Meanwhile, the Government continue to sit back and watch the chaos unfold.
What about the renters? Yesterday, the Chancellor failed to mention renters in his speech at all, showing the Government’s complete disregard for this mounting issue. Renters face an unsustainable increase in rents as landlords deal with mortgage costs. Renters cannot continue like this. The Government are not in a position to help ordinary hard-working families. They should give way and call a general election.
Marsha De Cordova (Battersea) (Lab)
It is an absolute pleasure to follow my hon. Friend the Member for Birmingham, Hall Green (Tahir Ali), who made an outstanding speech.
We are living in through a Tory economic crisis made in Downing Street and paid for by the British people—Members on the Treasury Bench would do well to listen. After 13 years of this Government, this country is left with the biggest fall in living standards since records began. We have weak growth, low pay and the highest inflation in the G7, and Brexit is continuing to cause harm to our economy through reduced productivity, trade and investment. If that was not enough, people are now being hit by the Tory mortgage bombshell, which is having a devastating impact on households across the country.
Many people have told me that they are at breaking point, especially as this bombshell comes after the pandemic and the cost of living and energy crises. The Prime Minister’s patronising advice at the weekend that people should just hold their nerve shows how out of touch he is with the mortgage struggles of people across the country, including my constituents. Battersea is one of the 25 worst-affected constituencies in the country, with 9,300 households facing an annual mortgage payment increase of £8,400. Average house prices in Battersea are already 15 times the average salary, and the increase in mortgage costs will put owning a home even further out of reach for many.
Under the Tories’ watch, housing affordability has got worse and worse, with the ratio of house prices to earnings reaching record levels in England. It is not just homeowners who are suffering; almost 2 million private renters will be hit by rent increases as landlords pass on those higher costs to them. That is even more worrying for low-income renters, who cannot rely on housing benefit to help meet that wage shortfall. As we already know, local housing allowance is not sufficient and currently does not cover much of the rent. We can wonder why the Government are not doing more to lift up LHA payments.
The Government are not offering any support for renters. The Chancellor failed to mention them once in his statement yesterday, and the Chief Secretary to the Treasury also failed to mention renters in his speech.
Marsha De Cordova
Well, he did not mention a renters charter and ending no-fault evictions—that is what he should have talked about.
The Government need to follow Labour’s lead by bringing in a renters charter to end no-fault evictions and introduce four-month notice periods for landlords. Why would they not? They will try to blame global factors for their mortgage crisis, but the cost of borrowing is higher here than in any other developed economy. Homeowners are paying thousands of pounds more than Europeans for new mortgages, as interest rates soar. Research shows that even before the latest hike, a new mortgage cost a typical household over £2,000 more a year than in France.
There is no question about who is to blame: the Tories. Why? Their disastrous kamikaze Budget last autumn crashed the economy, the pound and our global reputation, and continues to haunt millions of homeowners, who are shelling out extra on their mortgage payments. The Government have failed to act quickly and decisively against the mortgage cost rises. The Prime Minister was warned that they should take action, but they were missing in action and failing to do anything. Labour has a five-point plan, but the Government have only managed to come up with sticking-plaster solutions in the form of a voluntary agreement, when Labour suggested a mandatory one. The Chancellor’s plans do not go far enough. The Government could have applied much more pressure on the banks. Why will the Prime Minister and the Chancellor not apologise for their Government’s failure to control inflation, which led to the Tory mortgage penalty?
This country is buckling after 13 years of this Tory Government. Labour will bring back credibility and financial security to our economy and to households, to ensure that the people of this country can have better. We are done with 13 years of this Tory Government. We need a general election now.
Gerald Jones (Merthyr Tydfil and Rhymney) (Lab)
The Tory mortgage bombshell can trace its roots back to the disastrous mini-Budget and the so-called growth plan last September. Coupled with 13 long years of Tory failures, it left our country in a mess and thousands of families in an extremely vulnerable and precarious position. Last September, a mortgage adviser in Merthyr Tydfil contacted me and told me the effect of the mini-Budget and how devastated he and many of his customers were to see hundreds of pounds added to mortgage payments every month. The shadow Chancellor was right that we can never allow the Tories to forget that.
After 13 disastrous years and an even more disastrous few months, the UK has the highest inflation in the G7 and a mortgage crisis that is worse than in other countries—typically, mortgages are £100 higher than in other European countries. In Merthyr Tydfil and Rhymney, approximately 6,400 households are affected by the Tory mortgage bombshell, paying on average an additional £1,300 per annum, on top of the cost of living crisis, all caused by the economic failures of the Conservative party.
Recently, I raised in the Chamber the plight of our local food banks, which are struggling to cope under so much pressure from demand and reduced donations, as people across our communities are feeling the pinch and are less able to donate. The Tory mortgage bombshell will only make matters much worse. Indeed, the added stress placed on families with their homes under threat is just unforgiveable.
Citizens Advice is an agency that works hard to support the most vulnerable. I work closely with our local citizens advice bureaux on promoting events to maximise income. They have been telling me for some time how their workload has increased massively, particularly on debt advice. We learned from Citizens Advice this week that its clients with mortgages have seen their finances fall off a cliff, as the shadow Chancellor said. Every month, the amount they need to spend on things such as housing, bills and food is over £100 more than their income. The situation is not sustainable and causes anxiety, stress and deep worry for so many of my constituents and many thousands more across the country.
The previous Prime Minister has apologised for her mistakes, which led to a spike in interest rates following the disastrous mini-Budget last Autumn. However, the Minister should do the same. This whole rotten Government should hang their head in collective shame for the misery they are causing so many.
The Tory mortgage charter falls short in a number of key areas. Not all the mortgage market is covered by the charter. There remains a huge worry that more than l million households could miss out on support. The Government must outline the measures they intend to take to ensure that help will be available to everyone struggling to pay their mortgage. Perhaps the Minister can address that in his wind-up, and confirm that support will be available to all, not just to those who happen to have a mortgage with one of the banks on the Chancellor’s invite list for his cosy chats.
All too often, this Tory Government have been too slow to act. Renters are not even mentioned in the latest charter. In his statement on Friday, why did the Chancellor make no mention of the impact of this crisis on people who are renting? It is time for the Minister to outline whether he agrees that one way to provide support for renters is to back Labour’s proposal to halt no-fault evictions.
The Conservative party likes to think of itself as the party of home ownership, but with housing affordability lower than ever in recent years, that claim lies in tatters. There is very little or no assurance given to those looking to take their first step on to the housing ladder that they will not be held back by issues in the mortgage market caused by the Tory mortgage bombshell. The Government simply cannot brush things away and put the cost of living crisis down to global factors. The latest data on mortgage rates specifically shows that they have increased faster here in the UK than in the USA since the mini-Budget and, as we have heard, the gap in mortgage interest rates with our nearest neighbours means someone with a £200,000 mortgage will pay over £1,000 a year more in the UK. The reality is that the Government have no explanation for that, apart from that they have been grossly incompetent.
It is time for the Government to step aside, put an end to the misery faced by millions of families, call a general election, let Labour get on with governing and get this great country back on its feet.
Kate Hollern (Blackburn) (Lab)
Many households who are already contending with the cost of living crisis are now set to face a further squeeze on their budgets thanks to the Conservatives’ mismanagement of the economy.
It is shameful to see so few Members on the Conservative Benches. The hon. Member for Stourbridge (Suzanne Webb), who is no longer in her place, said the Labour party was scaremongering. I wonder if that is what she will tell the 9,000 families in her constituency who are facing a £2,400 a year increase in their mortgages. Perhaps she just does not understand the impact of the financial disasters created by those on the Conservative Benches. Some 7,500 families in Blackburn are set to see their mortgages rise by £1,300 this year. The Resolution Foundation estimates that 6.5 million households will be affected by the post-mini-Budget rises in mortgage rates by 2026 and does not expect two-year fixed-rate mortgages to fall below 4.5% until 2027. That is a long time to hold your nerve.
The UK currently has the highest inflation in the G7. As with the energy crisis, the mortgage crisis is worse in the UK than in neighbouring advanced economies. And there is another crisis looming. Economists warn that there is a real risk of job losses and a sharp recession, as the latest economic forecasts project just 0.2% growth this year. We must not forget how we got here. The Conservative’s disastrous mini-Budget and 13 years of failure have left us dangerously exposed on inflation. During Prime Minister’s questions last Wednesday, the Prime Minister insisted that the best way to cut costs for homeowners would be to reduce inflation. On assuming office last year, his core commitment was to cut inflation to 5% by the end of this year. Of course, we all remember the Ready for Rishi campaign last July. He promised to reduce inflation. Conservatives did not believe him then and we do not believe him now. With inflation falling by only about 1.3% to 8.7% over the last six months, it looks increasingly unlikely that the Prime Minister will achieve that and fulfil his promise. The Government’s measures do not go far enough and leave too many people exposed.
In his statement to the House yesterday, the Chancellor stated that the charter has been signed by lenders covering 85% of the mortgage market—let us just forget the other 15%. Given that the charter does not cover the whole mortgage market, more than 1 million households could miss out on support. The Minister must guarantee that the measures he outlined will be available to everyone struggling to pay their mortgage, not just those who happen to have a mortgage with certain lenders and not just those who are up to date on their payments, because for months people have been falling behind, jumping from crisis to crisis under this Government. The Government are offering insufficient support to millions of renters. The Chancellor did not even mention them in his statement to the House yesterday. Has he made an assessment of the impact on local housing allowances? Has he made an assessment of the impact on the DWP? Or do the Government just accept that landlords will pass increased costs to tenants? An already broken rental market will suffer more without intervention.
Families are finding themselves on a cliff edge after months of increased bills and a cost of living crisis. It saddens me to see such a situation after more than a decade of austerity. Given what we have in our pockets and how we are able to pay our bills, it seems to us that, across the board, we are far worse off than we were back in 2010. No matter how many times the Prime Minister says, “Hold your nerve”, that will not pay the bills. How do you hold your nerve when you are struggling to feed your kids? How do you hold your nerve when you risk losing your home? I think the people of this country have held their nerve for long enough, and I think it is time for a general election.
Several hon. Members rose—
Mr Deputy Speaker (Mr Nigel Evans)
Order. There are three more speakers before the winding-up speeches, which I expect to start at about five past four, and I expect two Divisions after that. I ask any Members who have taken part in the debate and are not present to make their way to the Chamber now.
Ruth Jones (Newport West) (Lab)
I thank the shadow Chancellor, my right hon. Friend the Member for Leeds West (Rachel Reeves), for bringing this important debate to the House.
In my constituency, 9,500 people will now be forced to pay £2,400 more a year, and that sits firmly at the Government’s door. Across Britain, people are being hit hard by the Tory mortgage bombshell, and the banks are now withdrawing mortgage deals. After 13 years of Conservative Government, does it not just say it all that millions of people face that Tory mortgage bombshell and the threat of losing their homes? Unlike this Conservative Government, however, Labour will not stand by as millions face a mortgage catastrophe made in Downing Street. I commend our five-point plan, which will ease the effect of the Tory mortgage bombshell, and urge Ministers to get behind it.
We will allow borrowers to switch to interest-only mortgage payments for a temporary period. We will allow borrowers to lengthen the term of their mortgage period. We will require lenders to reverse any support measures when the borrower requests that. We will require lenders to wait for a minimum of six months before initiating repossession proceedings. We will instruct the Financial Conduct Authority to issue, as a matter of urgency, consumer guidance stating that the credit score of borrowers making temporary switches to interest-only mortgage payments and lengthening the term of their mortgage period should not be affected. I am particularly pleased to note that Labour would introduce a renters charter ending “no-fault” evictions with four-month notice periods for landlords. That is how we will give working people the certainty and support that they desperately need.
After the 2010 election and the global financial crash of 2008, we heard many times that the financial situation was down to the Government of the day. Conservative Members crowed from the treetops. Today, they say that everything is due to the macroeconomic climate and global economic challenges. I say to them, “You cannot have it both ways”, because as things stand, they are in office but not in power. I was elected to this place in April 2019, and the last four years have not been the easiest for our country. We need calm and sober leadership, we need decency and respect in our politics, and we need a real plan to protect jobs, homes and livelihoods for people in Newport West and across the country.
Last week, my constituent Jolene came to my surgery to talk to me about her fears for the future: fears about how she will pay her bills, how she will pay her mortgage, and how she will save her home. Jolene is now a full-time carer for her children, who have additional needs, but her husband is a full-time HGV driver who is working as hard as he can. The cost of living has hit them hard, and in the last few months their mortgage payments have risen from £520 to £750 a month; Jolene believes that they will go up again. Like thousands of other people across the country, she is sliding further and further into arrears, and is desperately concerned about how she will be able to look after her children, both now and in the future, and hold on to her home. What is the Minister’s message to Jolene? This morning I met another constituent whose monthly mortgage payment has rocketed from £400 to £1,100. Who can possibly budget enough to cope with such shocking increases?
I am sorry to say to the Minister that nothing we have heard from the Government in recent days gives me any confidence that they have a plan to do right by our people. Some 9,500 people in Newport West will now be forced to find money to protect their homes in the middle of a cost of living crisis. That sits at the door of the Conservative party and its ill-fated autumn mini-Budget, which did nothing but spook the markets and let down those most in need of a Government who were on their side.
Only Labour has a plan to build a stronger economy that will see us less exposed to inflation over the long term, to give our people the support they need and to finally restore economic credibility after 13 years of failed Conservative Government. The people of Newport West deserve that—and so do people in all corners of our United Kingdom.
Matt Rodda (Reading East) (Lab)
I would like to speak in favour of the motion. Time is pressing, so I will touch briefly on the scale of the problem facing the UK.
It is fair to say that many families—indeed, up to 7.5 million—face a very difficult challenge at present because of the increase in interest rates and the effect on mortgages. As we have heard, it has been calculated that that increase means around £2,400 extra on household mortgages every year, which is £1,000 more than the increase in mortgages in the United States.
The situation affects both buyers and renters, because landlords put up rents as well, but the Government are proposing only a voluntary scheme, which obviously falls well short, and about 1 million families are likely to be missed by this inadequate measure. Earlier, the Shadow Chancellor set out a much more effective scheme, which I obviously commend to the House.
Given the lack of time, I will move on swiftly and speak about how the Government’s mortgage bombshell is affecting local residents in Reading and Woodley. This crisis is making what is already a difficult housing situation far worse for local people in our part of Berkshire. We have had high house prices and rents for some years, given the shortage of supply and many other related housing matters.
To give colleagues a taste of the situation locally, terraced houses in Reading town centre can sell for as much as £300,000, so these are quite expensive properties. There is also a real shortage of property and a large waiting list for local authority properties. For a family house, the price may be as much as £600,000 or £800,000, so we are already talking very large amounts of money. As I said, renters face additional problems. We have an issue with dangerous cladding not being removed in some cases, as well as issues with leaseholders and landlords. There are, therefore, serious problems in our area, and that is on top of the national problems facing families, which I mentioned earlier. Colleagues from across the House have also mentioned the 20% rate of food inflation and the UK inflation rate being the worst in the G7.
I would like to point out some of the problems facing individual constituents. Without giving away too many personal details, perhaps I could just give a flavour of the problems involved, and I hope the Chief Secretary will reflect on them. One constituent—a gentleman called Peter—is in a good job. He has a young family, with two children, and they live in a three-bedroom house. They face an increase of £800 a month in their mortgage, and they simply do not know how they will cope.
Another constituent, Donna, who lives in a flat in Reading town centre, faces a £400-a-month increase. Again, that is an absolutely incredible increase in what she has to pay for her home. Sadly, she is one of many residents locally who have been affected by the cladding scandal and by delays in removing various types of dangerous cladding. She is already under enormous pressure because of the emotional stresses and strains of having a flat with cladding problems. In addition, she now faces this enormous extra increase in her payments. She is self-employed and has a small business. Imagine how this feels to her. This truly is a dreadful crisis.
I realise that time is limited, and I hope my hon. Friend the Member for Stockton North (Alex Cunningham) can get in shortly, but I ask the Chief Secretary to report back to the Chancellor just how dire the situation is and how it is affecting people up and down the country—both my residents and those of colleagues from across the House. I also urge him to think about the five-point plan outlined by the shadow Chancellor, which has been well researched and well received across the industry.
Alex Cunningham (Stockton North) (Lab)
I well remember 1979, when mortgage interest rates soared under Thatcher’s Tory Government as the Bank of England base rate hit 17%. Those who were buying homes at the time knew all about it. My wife Evaline and I, both in relatively well-paid professional jobs, had moved home a couple of years before and, like many others, had maximised our mortgage to secure the house we wanted for our growing family. Little did we know that the cost of our mortgage would almost double in a couple of years.
My elder son John says he remembers Evaline and I regularly sitting at the table to go through our finances, often robbing Peter to pay Paul, while realising that Peter would still have to be paid with plenty of interest on top. Yes, the anxiety goes well beyond mortgage holders; it affects the whole family. Like many homeowners today, we contemplated selling up and moving to a smaller home, but the reality was that we would not only have lost our new home; we would not have been any better off.
I have huge sympathy for people today who are seeing their mortgage costs go through the roof, largely because the Tories crashed our economy by making some extremely daft decisions when our economy was still trying to cope with the double whammy of Russia’s illegal war against Ukraine and our exit from the European Union. We had it tough when our costs doubled, but today’s Tory mortgage bombshell is so much worse.
Moneyfacts data suggests that the typical rate of a two-year fixed-rate mortgage has increased to almost 6%, almost double the rate of a year ago, and the Resolution Foundation estimates that 6.5 million households will be affected by the post-mini-Budget rise in mortgage rates by 2026. Other huge consequences emanate from the Government’s decisions. This week, economists warned that there is a real risk of job losses and potential recession. The latest forecast for economic growth suggests that the UK is struggling to get out of the slow lane, with growth of just 0.2% forecast for the year.
On Sunday, I watched the Prime Minister ducking and diving under quite simple questioning from the BBC’s Laura Kuenssberg, and it sickened me that he had the nerve and the gall to tell mortgage holders to hold their nerve. He lives just down the road from me, and I wonder if he would like to sit down with a few of my constituents whose fixed-rate deals are coming to an end within the next few weeks. One of them faces an increase from just short of £800 a month to £2,600 a month. I would like the Prime Minister to outline how that constituent should hold their nerve and retain their home.
That same constituent, like everyone else, is not only seeing their mortgage go through the roof. They must also cope with a near 20% increase in food prices, which according to the Office for National Statistics is the greatest hike in 45 years. That can be added to the extra burden of council tax increases across the country, as local authorities collect the Government’s social care levy because the Tories have so drastically underfunded social care in recent years.
What are the numbers on Teesside? In Stockton North, 8,900 families face an increase of £1,400 this year. The pain is the same across the Tees valley, with 11,900 families in Stockton South paying £1,800 more, 9,000 families in Darlington paying £1,400 more, 7,200 families in Middlesbrough paying £1,200 more, 9,300 families in Middlesbrough South and East Cleveland paying £1,700 more, and 8,000 families in Redcar paying £1,500 more.
The Tory mortgage crisis has other wide-ranging impacts. The Government’s failure to build sufficient homes over the last decade has led to limited supply and forced prices up, making it more difficult for people to get on the housing ladder. We also see developers putting some projects on hold and scaling others back. The Government’s housing figures, published today, show that affordable housing providers have stalled or stopped schemes, as they are experiencing what they say is a “perfect storm” of build cost inflation, rising labour costs, material unavailability, building remediation issues and a duty to support tenants through the cost of living crisis. Developers cutting the number of homes they are building will have an inevitable impact on jobs not only in the building sector but across the supply chains that support it.
We could go on forever about the excess profits being made by the banks, as they cash in on higher interest rates, but that appears to be fine by the Government. Now that times are good again for the banks, they need to do so much more. They should concentrate on helping their customers instead of their share price and their bottom line. I wish I could be confident that they will all act, but I am not. It is down to the Government to take action to compel them to do so.
Mr Pat McFadden (Wolverhampton South East) (Lab)
I thank everyone who has contributed to this afternoon’s debate. I cannot help noticing that the vast majority of them are Opposition Members, so I thank my hon. Friends the Members for Halton (Derek Twigg), for Bootle (Peter Dowd), for Bradford West (Naz Shah), for Harrow West (Gareth Thomas), for Dulwich and West Norwood (Helen Hayes), for Birmingham, Hall Green (Tahir Ali), for Battersea (Marsha De Cordova), for Merthyr Tydfil and Rhymney (Gerald Jones), for Blackburn (Kate Hollern), for Newport West (Ruth Jones), for Reading East (Matt Rodda) and for Stockton North (Alex Cunningham).
We did hear a couple of speeches from Conservative Members. I thank the hon. Member for Stourbridge (Suzanne Webb) for her speech, but she forgot something. She forgot to tell us that 9,000 households in Stourbridge are going to be facing an increase of £2,400 a year in their mortgage payments. She was followed by the hon. Member for North West Norfolk (James Wild), and he forgot something too. He forgot to tell us that 8,000 households in his constituency are facing an increase in mortgage payments of £2,800 a year because of the Tory mortgage bombshell. Just in case it slips the Minister’s mind when he stands up to make his own speech, he should tell us that 10,500 households in Arundel and South Downs will be facing increases of £5,200 a year. Those figures show the level of pain among mortgage holders and that will only grow in the coming months.
We should remember that those who have bought their own homes have done nothing wrong. They have done what generations did before them: they have worked hard, saved for a deposit and taken pride in having a home of their own. The security that comes with that has for many turned to dread, as month after month they receive a letter from their lender telling them that their bills are going up by hundreds of pounds a month. In my constituency, 6,800 households face paying an extra £1,800 a year for their mortgage, and that comes on top of the extra that people are already paying for energy, food and everything else.
The Resolution Foundation says that the average figure across the country is £2,900 a year more, but we must remember that that is an average. Depending on where someone lives—we have heard this through the debate—the real figure could be higher. In Uxbridge, for example, it is £5,200 a year. In Selby, it is £2,700 a year. And it is not just mortgage holders who are affected, but renters too, because the people they rent from are seeing their mortgages rise as well. Last year, private sector rents rose by more than 10%, and the proportion of people’s income being used to pay rent is rising too.
The inflation and interest rate figures we saw last week showed an economy and a plan that has been blown off course, because this was not the plan that the Prime Minister and the Chancellor had—this is not how it was supposed to be. Their plan was to bury last year’s disastrous Tory mini-Budget under 10 feet of concrete. If it was to be remembered at all, it was supposed to be thought of as a bad dream, from which we had all mercifully woken up, but their preference was for it never to be spoken of again. Their hope was that they would steady the ship, possibly get some small amount of economic growth and then offer tax cuts either this autumn or next spring, after which a general election would be called.
After 13 years of policy failure, that was all they had left. They certainly could not run on their record, because nothing is working better now than it was when they inherited it in 2010. They certainly could not run on hope for the future, precisely because their record is so poor and no one would believe them. But even the plan they had has turned to dust, because reality has intervened—their own economic mismanagement has intervened. Their plan turned to dust because the Tory mini-Budget was not the end of something; it was the start of something. The instability that it created has carried on and on, and the price is still being paid. The Prime Minister set out a target to halve inflation, but last week core inflation went up, not down. Once again, it was higher than expected and, once again, it was the highest in the G7.
Richard Fuller (North East Bedfordshire) (Con)
I am grateful to the right hon. Gentleman for giving way. What is the Labour party’s view on forecasting and the Bank of England? It would be interesting to hear that, because it has been commented that forecasting by the Bank of England is not as accurate as forecasting in other countries, meaning that it is not as easy for outside investors to predict future interest rates. What is the Labour party’s view on that and, in particular, what is its view on requiring the Monetary Policy Committee in the UK to do a dot plot on future interest rates, as Federal Reserve governors do, to help with any confusion about forecasts?
Mr McFadden
We are not going to join the chorus of Government Members attacking the Bank of England. I thought the hon. Gentleman was rising to raise the issue of the 15,000 households in his constituency that are facing an increase in mortgage payments of more than £3,000 a year.
We all wanted to see a recovery, but we do not have a recovery. We have deepening financial difficulties for millions of households. The Government were desperate to say that the worst was over, but for anyone remortgaging over the next couple of years, the worst is not over—it is still to come. Most people on fixed rates have not refinanced yet, and the rolling financial thunder of mortgage renewals will continue month by month, as households receive those letters from their banks and building societies. That is the reality of the Tory mortgage bombshell.
The Chancellor and the Prime Minister were supposed to be the fix-it crew, but things have not been fixed at all. Borrowing costs are even higher now than in the wake of the disastrous Tory mini-Budget last year. Let me be clear with Treasury Ministers: if they are doing worse than the last Prime Minister and the last Chancellor, they are not fixing anything. That begs the question, what is the point of them? They have nothing left to offer. They are caught between telling the country not to risk it with Labour, with their little dossiers full of made-up pledges, and then adopting pale imitations of our policies, whether on the windfall tax, the NHS staffing plan or the voluntary mortgage proposals that they announced on Friday. Time after time, they have no ideas of their own; all they have left is a pale imitation of what we have already proposed.
We wanted a mandatory plan, and that is what is at the heart of our motion today. The truth is that the Tory party has shredded its own economic credentials—the Tory party of sound money, which saw debt top 100% of GDP last week; the Tory party of low taxes, which has lifted the tax burden to the highest level in living memory. There is literally no point to this Government. They are running out of options and they are running out of road.
We are not speculating about what might happen in the future. We are talking about a real crisis, with a real cost of living squeeze on real people, right now, and it has all happened on their watch. After 13 years, they have run out of excuses and run out of people to blame. From Brussels to the blob and now the Bank of England, there are no scapegoats left. Their sense of entitlement to rule is matched only by their total unwillingness to accept any responsibility for anything that happens while they do rule. The Prime Minister says he is “on it”. What a reassurance to working people! I do not know what he is on—usually, a helicopter—but I know it is not working.
The Government cannot fix the problem, because they are the problem. The answer for the country is not another iteration of a Tory project that has already failed over and over again. It has failed on the cost of living crisis. It has failed on public services. And it is failing on mortgages, too. It is time for change, but the Tories cannot offer it. It is time for recovery, but they have failed to deliver it. It is time for an election and a new start, and the sooner they come, the better.
The Economic Secretary to the Treasury (Andrew Griffith)
I am afraid that, with the exception of my colleagues, that was an unedifying parade of clone speeches that would wear out an average plagiarism detector. When I look at Opposition Members and hear their contributions today, I find it personally dispiriting. As the Minister responsible for financial literacy, I clearly have a great deal more to do.
As my hon. Friends have rightly observed, we are not alone in our fight against inflation. Countries across western Europe and, indeed, the rest of the world are seeing the same trends, driven largely by Putin’s illegal war in Ukraine and the aftermath of the covid pandemic.
Several hon. Members rose—
Andrew Griffith
I will give way in a moment. Let me say this in all seriousness: the only bombshells that we should be talking about are those that are falling on the Ukrainian people, and it cheapens the Opposition that we hear again and again the slogan of the week, and what we do not hear about is the broader geopolitical and macro environment in which this country finds itself. The British people have a much greater awareness of these matters than those on the Opposition Benches.
Alex Cunningham
The Minister mentions global factors, but last week the Bank of England noted that since its last decision, the swap rate—the key rate that influences mortgage interest rates—had increased almost twice as much in the UK than in the US and more than three times as much in the UK as in the euro area. Does the Minister agree with the Bank of England?
Andrew Griffith
I am grateful that we have belatedly found some international comparisons. The hon. Gentleman will therefore understand that we are seeing exactly the same rises—sometimes a little more, sometimes a little less—across most of the developed western economies. That is why this Conservative Government are taking action. We have helped people through these difficult times by giving the average household—[Interruption.] Do Members know how much? We are giving the average household £3,300 at a cost of £94 billion to the Exchequer. That is one of the largest support packages anywhere else in Europe. I will happily give way if any Labour Member wishes to challenge that.
When it comes to our generosity, this Government have increased the national living wage and pensions by record amounts, because this is a Government who will always put the vulnerable first. In addition to the explanations given by the Chancellor in this place yesterday, the Chief Secretary to the Treasury, in his fantastic remarks earlier today, set out in some detail our support for those struggling with their mortgage payments in these difficult times. The Chancellor’s new mortgage charter provides peace of mind about extending an existing mortgage or moving on to interest-only payments for six months, giving those who are worried about mortgage repayments some valuable respite. Vitally, it also gives genuine security to those who are at risk of losing their homes because they fall behind on mortgage payments.
Mike Amesbury (Weaver Vale) (Lab)
But the charter is not mandatory, is it? How will that help the 10,100 constituents of Weaver Vale faced with that mortgage Tory tax bombshell? How will it help them if it is not mandatory?
Andrew Griffith
I will happily respond to the hon. Member. Not only did Opposition Members oppose the very powers in the Financial Services and Markets Bill that we passed last night that would give the Treasury the ability to direct the regulators—an ability they now somehow seem to want to reinvent—but the exercise of those powers would inevitably take time. What we are hearing from the Opposition is not just a package that in many respects is deficient compared with what the Chancellor and this Government have brought forward, but a path to implementing that package that—rather than taking days, hours and weeks as our mortgage charter will—would take a much more significant period of time. They offer more delay, less help for people and fewer paths to deliver.
Catherine West
The topic of the debate is mortgage and rental costs, but the Minister has not covered the rental side. The last time he came to the Chamber he was asked how many renters are going to be in distress due to this situation. He was unable to answer, because he had not done the assessment. Will he promise to go back to the office and do an assessment on how many renters are affected?
Andrew Griffith
All households are impacted by the higher cost of money that we face. That is why we are focused on supporting all households, supporting those who are the most vulnerable and bringing forward at pace our measures to support the mortgage market. That is also why, since taking power, this Government have restored the overall health of our financial system. It is important that the House understands that mortgage arrears and defaults are today at historically low levels. Less than 1% of residential mortgages are in arrears, a level below that which we saw during the pandemic and significantly lower than under the last Labour Government.
Stewart Hosie
In the last hour it has been reported that two-year UK gilts are at 5.24%, a 15-year high, above the post-mini Budget peak, and markets now see a 70% chance of those rates going over 6% by the end of the year. If it is all going so well, why do the markets not believe the Tories?
Andrew Griffith
I always make a point of not commenting on the markets, in whichever direction they move. The responsibility of Government is to act and the responsibility of this Government is to deliver. We will control what we can control and the markets will do what they do.
The mortgage charter lays out that there will be a minimum 12-month period—I believe that is double the Opposition proposal, but I am happy to take an intervention on that—from any first missed payments before any repossession action is taken. It is important that our constituents understand that these measures offer comfort to those who are understandably anxious about the impact of higher rates on their mortgages and provide support for those who would get into financial difficulties. More broadly, the mortgage market itself remains robust and, because of the actions the Government have taken over the past 13 years, the average homeowner remortgaging in the past year had close to 50% loan to value, indicating that most have considerable equity in their homes.
Help for mortgage holders, but help for savers too: this Government are committed to ensuring that people are supported to save and can access a wide range of competitive savings products. The current range of options available to savers includes some of the highest rates that we have seen in recent years on both instant access accounts and the more relevant fixed-term products, which represent a better apples-to-apples comparison with fixed-term mortgage rates. The top instant access savings rates currently on the market offer around 4.2% and the top one-year fixed rate is much closer to the mortgage rate at about 5.8% annual equivalent rate.
Tackling inflation remains the Prime Minister’s and this Government’s No. 1 priority, and it will remain so until it is tamed. Allowing inflation to go on at the current rate or to grow higher would be the biggest threat to our collective economic security. While we continue on our fight to fight inflation, we will also do what British public expect; we will look at how we can grow the economy over the long term, improve productivity and ensure that no communities are left behind. We continue to take forward supply-side policies to increase the productive capacity of this economy and encourage workers back into work, including rolling out the largest ever expansion of free childcare. All that will set us up for greater productivity.
Let us contrast that with the Lib Dem plan to pile on to inflationary pressures an unfunded £3 billion a year. That is eclipsed only by Labour’s £28 billion a year—Interruption.] Labour Members do not want to hear it; they are talking among themselves. The IFS said that Labour’s £28 billion plan would cause interest rates and inflation to rise. Paul Johnson said that
“additional borrowing both pumps more money into the economy, potentially increasing inflation, and also drives up interest rates.”
That really would be a Labour mortgage bombshell.
In this barmy weather, those thinking of taking a summer holiday should remember that Labour’s economic policy has more flip-flops than the average surf shop: national insurance, corporation tax, the pensions cap, North sea gas, and, yesterday, shelving reform of high street business rates. The fact is that no Labour Government have ever left office with unemployment lower than when they came to power. As my hon. Friend the Member for Stourbridge (Suzanne Webb) reminded us, the note left by Labour’s Chief Secretary to the Treasury in 2010 said, correctly: “I’m afraid to tell you there is no money left.”
This Government are taking action on the economy. We are taking the tough decisions to bear down on inflation, we are supporting the vulnerable, we are helping the economy to grow, and, as the amendment states, we are helping mortgage holders with our new mortgage charter.
Mr Deputy Speaker (Mr Nigel Evans)
To inform the House, I shall put the main Question first. Should it be negatived, I will then put the Question on the amendment.
Question put (Standing Order No. 31(2)), That the original words stand part of the Question.
Caroline Nokes (Romsey and Southampton North) (Con)
On a point of order, Mr Deputy Speaker. I rise to seek your advice. Following the ten-minute rule Bill of the Member for North West Leicestershire (Andrew Bridgen) this afternoon, a number of right hon. and hon. Members of this House have been accused of being in support of grooming children. I have looked at the Metropolitan police’s website, which specifically says:
“Grooming is when a person builds a relationship with a child, young person or an adult who’s at risk so they can abuse them and manipulate them into doing things. The abuse is usually sexual”.
That accusation has been retweeted by the Member for North West Leicestershire. I seek the House’s and indeed your advice, Mr Deputy Speaker, as to what action Members can take to ensure that there is some sort of sanction on that—I believe—unparliamentary behaviour.
Sir Chris Bryant (Rhondda) (Lab)
Further to that point of order, Mr Deputy Speaker. I do not want to comment on whether there is an appropriate sanction, because I am the Chair of the Committee on Standards, but the tweet that the right hon. Member for Romsey and Southampton North (Caroline Nokes) referred to says that several Conservative Members
“voted against the motion and in support of the grooming and mutilation of children”.
I suggest that that is incitement of violence against those Conservative Members and Opposition Members who voted against the motion. It is probably also actionable, and if any Conservative Members want to pursue that course of action, I will stand with them.
I wonder how we ensure that we protect the privileges of this House, namely freedom of speech. I would protect the freedom of speech for the Member for North West Leicestershire (Andrew Bridgen) to be able to say what he did in debate, though I thought it was absolutely abhorrent and despicable. It also chills my bones, as I suspect it does yours, Mr Deputy Speaker, because it feels as if a new section 28 is being introduced by the back door for trans people, just as we used to have for lesbian and gay people. How do we ensure that freedom of speech is guaranteed for the whole House and that we are not abused for doing our job properly?
Mr Deputy Speaker (Mr Nigel Evans)
I thank the right hon. Member for Romsey and Southampton North (Caroline Nokes) for her point of order and the forward notice of it and Sir Chris Bryant for the further point of order. While we do have privilege to speak as we wish in this House and rules to ensure that that freedom is used responsibly, what a Member says or retweets outside the House is not a matter for the Chair. Nevertheless, Members should remember that moderation is desirable outside the Chamber as well as within it, especially when criticising Members for their conduct in parliamentary proceedings. I am sure that this is not the last we will hear of this particular matter.
Repurposing Russian Assets to Rebuild Ukraine
(10 months, 2 weeks ago)
Commons ChamberRead Full debate Read Hansard Text Watch Debate Read Debate Ministerial Extracts
Mr David Lammy (Tottenham) (Lab)
I beg to move,
That this House condemns Russia’s illegal invasion of Ukraine; stands in solidarity with Ukrainians in their resistance to Russia’s invasion of their sovereign state; recognises the enormous damage that Russia’s invasion has caused to Ukraine’s infrastructure, economy and institutions; commends the recent commitments made by the Government to support Ukraine’s recovery during the Ukraine Recovery Conference 2023; and calls on the Government to present a Bill before this House within 90 days to allow frozen Russian state assets held in the UK to be repurposed for Ukraine’s recovery.
Some of the most horrifying images from the start of the Ukraine war came out of Bucha, a city just outside Kyiv. Bodies of innocent Ukrainians were strewn across the street, some with their hands tied behind their backs, and dozens were buried in mass graves beside burned-out tanks representing Russian aggression. Today, much of the damage wreaked on Bucha has been repaired. Walking down its streets, it is almost impossible to imagine the atrocities committed just one year ago.
Rebuilding has become a motif of Ukrainian resistance. By April, Ukraine had cleared debris from 2,100 km of road, rebuilt 41 of the 330 destroyed bridges and renewed 900 railway points. But as Putin’s barbaric war continues, there remains so much more to do.
Putin’s illegal invasion of Ukraine began not last year but in 2014. However, for the past 16 months since the start of the full-scale invasion, Ukrainians have been continually bombarded from the land, the sea and the air by a dictator determined to destroy everything that their country represents: its freedom, its vibrancy—which I have seen on two occasions—and its spirit. Yet in the face of Putin’s barbarism, Ukrainians have defended their country with courage and a fierce determination to defend the values that they cherish. Ukrainians have shown themselves to be free and proud people who refuse to be controlled or subdued.
Since the invasion began we have seen that Putin will seek to destroy that which he cannot control. We should be under no illusion about the sheer scale of the destruction that Putin’s war has brought to Ukraine, nor about the high price paid by ordinary Ukrainians. The statistics speak for themselves. The United Nations estimates that almost 10,000 civilians have been killed. Millions more have been displaced from their homes. Over 150,000 buildings have been destroyed or damaged, including homes, schools, hospitals and many businesses. Tens of thousands of kilometres of road have been rendered useless.
Landmines and munitions are strewn across the country. Vast swathes of farmland have been ruined, forests have been burned down and national parks have been destroyed. Millions of Ukrainians have been forced into poverty, and parts of the country are facing a humanitarian crisis. In total, the World Bank estimates that up to $600 billion will be needed to fund Ukraine’s recovery and construction. That is around three times the size of Ukraine’s GDP, and the figure is rising by the day.
Beyond the physical damage, we must remember the profound psychological impact of the invasion on the Ukrainian people. A people who were full of optimism for the future are now having to come to terms with the loss of loved ones and the destruction of their homes and livelihoods. Where once there was hope there is now uncertainty and fear, with the war making it impossible to plan for the future. Although Putin has succeeded in bringing about destruction, Ukrainians have resisted through a sense of strength, defiance, innovation and ingenuity. What they have achieved, frankly, is astounding.
In the early part of the invasion, Putin tried everything he could to destroy Ukraine’s energy sector. In raid after raid, energy resources were the targets of bombs. At one point, almost half the power generation was destroyed. Yet only months later, Ukraine’s electricity grid is once again fully operational, and even exporting power to Europe. Streets that were reduced the craters have been rebuilt. Bridges that only months ago were destroyed are standing once more. Homes that were reduced to rubble are now rising again. Across Ukraine, people are doing whatever they can to get on with their lives and rebuild their broken livelihoods.
However, with all the ingenuity and strength in the world, Ukraine cannot take on the job of national reconstruction on its own, nor should it be expected to do so. Our greatest strength in support of Ukraine against Russia is our unity, as I said yesterday. Labour will continue to stand united with the Government, our allies and our partners until Ukraine wins. Likewise, we will stand with Ukraine as it begins the long and difficult process of rebuilding its proud country and forging the bright and ambitious future that Ukrainians deserve.
The Ukrainian people deserve justice for the suffering they have endured and they deserve to see Russia held accountable for its actions. Ukrainians have already paid the ultimate price for Putin’s imperialism and they deserve to rebuild their country without having to bear the burden of the cost. That is why the Labour party believes Russia must pay for Ukraine’s recovery. It is not just a matter of justice; it is also a matter of deterrence. If Russia is not held accountable for its actions it will only embolden it against others, and other aggressors will be emboldened. The message will be sent that the international community is not serious about preventing future wars. That is why it is vital we show Russia that there are consequences for aggression. We must make it clear that the world will not tolerate its actions.
Alexander Stafford (Rother Valley) (Con)
The right hon. Gentleman is making a very powerful point. I sympathise with what he is saying, but I am also if not concerned then questioning about some of his calls. The way I hear it is that he is calling for reparations. After the first world war, huge reparations were put on Germany and we know where that ended up. The German populace felt that they could not cope with the reparations, and that lead to the second world war. The right hon. Gentleman is calling for Russia to pay. Can we make sure that that does not affect the people of Russia, so they do not create another conflict?
Mr Lammy
This is a debate about repurposing. The hon. Gentleman might remember that after the first Gulf war, oil revenues were used to rebuild much of Kuwait. That is the central point that this debate is about. There is a consensus globally on the issue, with the Canadians, the United Nations and US Senators making progress in this regard. The debate is about repurposing. We have to be very careful to get the balance right. It is clear that we cannot leave Ukraine to do this on its own, so the question is: do we have the will to make this happen?
Sir Iain Duncan Smith (Chingford and Woodford Green) (Con)
I am grateful to the Opposition for selecting this subject for debate. I cannot be here to make a full contribution, but I just want to ask the right hon. Gentleman a simple question. During a recent debate in this place, we pretty much came to a consensus that the first stage is to look to repurpose the frozen assets: $300 billion-plus of national assets and maybe $50 billion of individual assets. They are sitting in our hands. They are not the same as reparations; they are funds that are in very clear existence. A lot of international lawyers think it can be done. I just wondered what the right hon. Gentleman thought.
Mr Lammy
The right hon. Gentleman is right. He is right about the football team we both support—it is not the only thing he is right about, but he is right about that—and he is right that more than $300 billion of Russian state assets have been frozen by our global partners, with £25 billion here in the UK. The central point is that those assets are frozen, so the question is, what are we going to do now?
Dame Margaret Hodge (Barking) (Lab)
My right hon. Friend is making a very powerful contribution. I think there is large consensus in the House on this issue. I just want to draw attention to the facts. We actually do not know how much money has been frozen, either Russian state money or money relating to sanctioned individuals. There is a figure I have seen from the Bank of Russia which suggests £26 billion and figures from the Government that suggest £18 billion. Does he not agree that it is imperative the Government should openly tell us how much money has been frozen, who it comes from and where it sits, so that we can follow the money and ensure that justice is done for the Ukrainians in their country?
Mr Lammy
My right hon. Friend has been so assiduous on these issues over many, many years. She is absolutely right that we cannot have the necessary quality of debate without transparency. That is what we need. I do not think that that ought to be a matter of dispute between us and the Government; I should have thought that it was something on which we could agree. I hope the Minister will be able to tell us whether those figures can, in a transparent fashion, be put in the Library and made available to the Foreign Affairs Committee, so that we can all work on a common basis.
Liam Byrne (Birmingham, Hodge Hill) (Lab)
My right hon. Friend the Member for Barking (Dame Margaret Hodge) has provoked me into intervening. Would we not be better served in the House if the Office of Financial Sanctions Implementation not only disclosed the full measure of the assets that we have frozen, but came to the House once a month to tell us what sanction waivers it had written that have allowed oligarchs with fortunes in this country to live high on the hog in their well-tended mansions, paid for with money that has been stolen from the Russian people? The Minister himself came close to agreeing with us in the Foreign Affairs Committee that our sanctions regime is in danger of being undermined by the Treasury writing sanctions waivers left, right and centre.
Mr Lammy
I agree with my right hon. Friend, who has raised these issues time and again. The concern is, of course, that there is not the appropriate ministerial oversight, that this place is being kept in the dark about fundamental, key issues, and that in the end the money of taxpayers in all our constituencies will fund these waivers. That is why the House should have both transparency and the opportunity to challenge and question those who make these decisions on our behalf. I hope that that is what Ministers are doing, but it does appear that this is happening without ministerial oversight.
Sir Geoffrey Clifton-Brown (The Cotswolds) (Con)
I agree entirely with the thrust of the right hon. Gentleman’s speech. Does he agree that the possible lacuna in the tracing of Russian assets is in Companies House and shell companies? Does he agree that we need to amend the regulations surrounding Companies House to provide proper verification of the people in charge of those companies, and allow Companies House to liaise more closely with the fraud authorities and report suspected fraud?
Mr Lammy
The hon. Gentleman is absolutely right. That has been a standing issue that the official Opposition have taken up. We do think further reform is necessary at Companies House, and we were slightly concerned that that was not supported by the Government in the Economic Crime and Corporate Transparency Bill.
Dame Margaret Hodge
I too have been provoked, by the intervention from the hon. Member for The Cotswolds (Sir Geoffrey Clifton-Brown). He was right to say that the reform of Companies House and greater transparency about beneficial ownership are vital, but that will give us information only about companies, as opposed to trusts. Last week Lord Agnew of Oulton, a Conservative peer, successfully moved an amendment that would have provided some visibility in who controls trusts. We know that Abramovich, for instance, has transferred a large amount of his money into trusts controlled by his children, including a daughter aged about nine. If we do not have transparency, we cannot follow the money, and we cannot ensure that the assets of sanctioned individuals are really being held so that they can be repurposed to help the people of Ukraine.
Mr Lammy
I am, again, grateful to my right hon. Friend—first for raising the issue of transparency, and secondly for raising the issue of Lord Agnew’s amendment and endorsing the point that has already been made. I hope the Minister will tell us whether the Government might give that amendment some support, so that we can benefit from the satisfaction we should gain from this debate. I recognise that it is an Opposition day debate, and we are using our time as an Opposition to bring these issues to the forefront because it has been many months since the Government said that they wanted to act, but the debate is being held in a spirit of the national interest, and I hope everyone can recognise that.
The question, then, is “Who should pay for Ukraine’s recovery?” The Labour party’s view is that the answer is Russia, and one way of ensuring that this happens is repurposing Russian state assets that have been frozen in the United Kingdom. The Government have said at least since October 2022 that they are supportive of seizing Russian state assets to fund Ukraine’s reconstruction, but in the eight months since, no specific proposals have been forthcoming. From the very beginning of Putin’s invasion, Labour has worked with the Government to ensure that our sanctions framework is as effective as it can be, notwithstanding the issues that have been raised from both Back Benches today.
Sir Chris Bryant (Rhondda) (Lab)
If I am honest, Ministers have been a bit flip-floppy about this issue. The Foreign Secretary was remarkably snooty about it in the House only yesterday, when he said that I am apparently an idiot because I do not understand international law. Some of us have been arguing cross-party in favour of trying to seize Russian state assets and repurpose them for the rebuilding of Ukraine. I thought that that was the accepted, long-term destination of the Government, even if they had not quite managed to get there. I think that the objection the Foreign Secretary has is around the State Immunity Act 1978. We would need to amend it to be able to proceed, but that is perfectly available to us.
Mr Lammy
That is, of course, central to the work my hon. Friend has been doing in his Seizure of Russian State Assets and Support for Ukraine Bill. I think the House could come together to amend the State Immunity Act. I do not want to comment on the Foreign Secretary, except to say that, in my experience, if he has had an overnight flight, he can be a little prickly, but we will not hold it against him.
Since the beginning of the invasion, more than £25 billion of Russian state assets have been frozen in the United Kingdom, and more than $350 billion of Russian state assets have been frozen by our global allies, and those vital assets could be used to help fund Ukraine’s recovery. Since February last year, my hon. Friend the Member for Cardiff South and Penarth (Stephen Doughty) and I have been pushing the Government on this issue relentlessly, and I pay tribute to the great work of my hon. Friend the Member for Rhondda (Sir Chris Bryant), who tabled his ten-minute rule Bill specifically to speed up the Government’s efforts in this area.
Each time, the Government’s response to Members of this House has been that the Government support repurposing Russian state assets but that it is complex. We fully accept that, but we do not accept—and I do not think, given its mood, that the House accepts—that this issue is insurmountably complex or that we should not try to meet this challenge.
We accept the concern that, on the whole, it is not good for any Government to seize another state’s assets and that the right to property is fundamental to the rule of law, but there are exceptions to that rule. For example, the law reserves the right to fine people and deprive them of ill-gotten gains. In the same vein, we recognise concerns that repurposing Russia’s central bank reserves could violate Russia’s sovereign immunity but, again, there are exceptions to that rule. We believe that Russia’s continued refusal to comply with international human rights law or to follow the orders of the International Court of Justice are good grounds for such an exception.
Simply put, we believe that Putin’s full-scale invasion of Ukraine represents a wholly exceptional act, from which exceptional countermeasures can flow, and we are not alone in that belief. As the Minister will know, the Canadians have had legislation in place since December last year to repurpose frozen Russian assets, and it is a similar common law jurisdiction to ours. The European Union is working at pace to ensure that Russian central bank reserves can be repurposed by the summer. Last month, United States politicians laid a Bill that would allow for state assets to be repurposed. Finally, we must remember that the UN General Assembly has voted on this very issue, adopting a resolution that calls for Russia to pay war reparations to Ukraine and for states to transfer Russian state assets into a central bank account to be repurposed. This begs the question: why, then, are the Government lagging behind our international allies in this area? We believe we must rise to this challenge, and we must rise to it now.
Sir Iain Duncan Smith
I apologise for interrupting the right hon. Gentleman again.
Sovereign immunity applies in international law to foreign judicial processes. It is clear in international law that sovereign immunity does not apply to administrative or legislative processes, such as Bills. It is quite possible for us to pursue this by tabling legislation, as America has, to secure that process in the courts. Sovereign immunity applies only to judicial processes, so it would be wholly feasible in legislative terms.
Mr Lammy
The right hon. Gentleman is absolutely right. Very few countries now consider sovereign immunity to be an absolute immunity, and there have been many exceptions. Meeting damages, particularly those awarded by international courts and tribunals, is one such example. The State Immunity Act also expressly restricts sovereign immunity.
I agree with the right hon. Gentleman that Russia’s continued refusal to abide by international law provides us with exceptions, and we should now table legislation to make it clear that there are exceptions.
Richard Graham (Gloucester) (Con)
The right hon. Gentleman is making a powerful point about the importance of rebuilding Ukraine. All of us who were at the Ukraine recovery conference will have noted the key point that about $400 billion-worth of rebuilding is needed, coming from both the public sector and the private sector with huge support from the World Bank, and so on. Does he agree that part of this is not just getting Russian assets to play their part, very important though that is, but thinking about some of the softer aspects of rebuilding, including the work of organisations such as the Westminster Foundation for Democracy, to make sure that Ukraine emerges from this horrible invasion into a much better world, in all senses—a stronger democracy, less corruption and more for us all to be incredibly happy about?
Mr Lammy
The hon. Gentleman is right. President Zelensky committed to that at last week’s Ukraine recovery conference, and we need to support him. Democracy is forged in people-to-people contact. That was the case before the war—I remember meeting civil society in Ukraine and, frankly, they were very clear that there was work to be done—and it will most definitely be the case after the war.
Sir Chris Bryant
That prompts another thought in my little head. Quite a lot of people on social media have criticised the idea of doing any reconstruction of Ukraine now, saying that we should wait until the end of the war. I hope the shadow Foreign Secretary will agree that that is a preposterous suggestion. People need homes, schools, playgrounds and hospitals now and, actually, quite a lot of rebuilding is already ongoing. We need to give that a rocket booster to make sure it can happen at pace.
Mr Lammy
My hon. Friend is right, and it is why I wanted to mention in my speech that work is happening in Ukraine now, which is extraordinary. We should be behind that work, in defiance of Putin’s imperialism.
We will continue to work with the Government to ensure that Ukraine gets the support it needs to win this war. From the start of this invasion, we have been united on providing Ukraine with the military, economic, diplomatic and humanitarian support it needs. We commend the Government for the commitments they made to support Ukraine at the Ukraine recovery conference last week. We welcome the International Monetary Fund’s announcement of $15 billion to support Ukraine over four years, and we welcome the announcement of £250 million of extra funding from British International Investment. However, just as we pressed the Government to move further and faster on sanctions, in a constructive spirit, at the start of the full-scale invasion, today we are urging the Government to come forward with a legislative plan to repurpose Russian state assets for Ukraine’s recovery.
Sir Geoffrey Clifton-Brown
The right hon. Gentleman is a lawyer. Is he aware that one of the biggest arbitration cases ever is before the United Kingdom commercial court? It concerns the seizure by Russia, a month before it went to war in Ukraine, of several hundred civil commercial aircraft. That case is going to cover many billions of pounds, both here and in the US. When we consider what measures we take against Russia, should we not consider that act of expropriation by the Russian authorities?
Mr Lammy
The hon. Gentleman puts before the House an important case, which we should look at very closely, as it will be of concern to all of us in relation to how we move forward in these areas. It has been some time since I practised law, although I was pleased to be made an honorary doctor of laws by the University of Glasgow last week.
The UK has a part to play in supporting Ukraine not only today, but for tomorrow and in the decades to come. We believe that we can go further. The frozen Russian state assets held in the UK could have a transformative impact on the future of Ukraine. Let us imagine the good that £26 billion could do if we reappropriated it with the sole purpose of securing a positive future for the people of Ukraine. Russia forfeited its rights to these assets when Putin embarked on his barbaric and illegal invasion, and the least we can do is join our international allies in repurposing these assets for the benefit of Ukrainians. The Government have had more than a year to come up with this legislation, but there has been no plan, no action and no progress. We call on them to treat this matter with the urgency we believe it deserves and to come up with the required legislation within the next 90 days. That gets us to a place where in the autumn we could come together as a House to make this happen—if need be, this could be in the next Session of Parliament. Labour will support the Government in any way we can to make sure that this succeeds, and of course we will hold them to account if they should fail.
The Parliamentary Under-Secretary of State for Foreign, Commonwealth and Development Affairs (Leo Docherty)
Let me start by thanking the right hon. Member for Tottenham (Mr Lammy) for the tone and substance of the debate, and indeed other colleagues who have participated. We are united in our outright condemnation of Putin’s brutal invasion of Ukraine, which is a fundamental violation of Ukraine’s territorial sovereignty. He drew a moving counterpoint between the terror and destruction of Bucha, and the remarkable appetite and spirit of rebuilding and reconstruction that is a motif of the Ukrainian people. That spirit of courage and determination was on magnificent display last week at our very successful Ukraine recovery conference.
The right hon. Gentleman also mentioned the capacity of Ukrainians’ innovation and their ability to make running repairs on all of their national infrastructure, including, most importantly, their electrical grid. That spirit of innovation and ingenuity will surely see them have a bright future, as and when Ukraine begins the rebuilding effort. That should not wait for the end of any conflict, but should be concurrent with the conflict. That was one of the main messages last week.
The right hon. Gentleman referred to the fact that unity is our greatest strength. The Government agree with that, and thank him and his colleagues very much for the consistent support they have outlined for our common efforts. We are right behind the efforts of the Ukrainians to rebuild their country now. The World Bank has estimated that rebuilding will cost £400 billion. Last week, there was a galvanising effort, where more than $60 billion towards Ukraine’s effort was outlined. It was a remarkable conference in terms of its convening power and the contributions from President Zelensky. As the Prime Minister said:
“Russia must pay for the destruction that they’ve inflicted. So we’re working with allies to explore lawful routes to use Russian assets.”
Those assets will pay for the damage Russia’s invasion has so recklessly caused.
That is also why, on Monday 19 June, we published new legislation to allow us to keep sanctions in place until Russia pays up. We are keeping up the pressure through our sanctions regime, with an unprecedented package targeting over 1,600 individuals, 130 of whom have more than £18 billion frozen. We believe in transparency and in keeping colleagues informed, so I will place an update in the House of Commons Library, showing the total value of assets frozen, to ensure that colleagues have the latest figure.
Dame Margaret Hodge
I do not think anybody can quarrel with the words the Minister has expressed, but I would like to urge him into action. Today, Lord Alton of Liverpool is moving an amendment in the House of Lords that would ensure that when somebody is sanctioned, there is a duty on them to disclose all their assets. If they fail to fulfil that duty, the agency could pursue them, as a criminal offence would have been committed, and seize the assets. That is a tiny window that we are opening, which would start to create the reality of seizing rather than freezing assets. Will the Government support that amendment? There will probably be a vote on it within the hour.
Leo Docherty
I am grateful to the right hon. Lady for drawing my attention to that amendment. I cannot make a pronouncement on the Government position on it, as I have not read the amendment, but we will observe it and take note.
Liam Byrne
Will the Minister clarify the press release issued by the Foreign, Commonwealth and Development Office on 19 May? It said that
“consistent with our laws, Russia’s sovereign assets in our jurisdictions will remain immobilised until Russia agrees to pay for the damage it has caused to Ukraine.”
Will the Minister confirm whether it is now, in effect, the Government’s strategy to use frozen Russian assets to rebuild Ukraine?
Leo Docherty
That legislation, which is a statutory instrument made using the affirmative procedure, gives us options in the future to extend sanctions, up until the point where Russia has paid. It gives us tremendous leverage into the future and has great utility.
We have maximised the impact of our sanctions by co-ordinating with our key international partners, at huge economic cost to Putin’s war machine. Russia’s economy posted a deficit of nearly $50 billion in 2022, the second highest in the post-Soviet era, and with our partners we are choking off Putin’s access to the key technologies he needs on the battlefield.
As I have mentioned, we are the first member of the sanctions coalition to lay legislation, which we did on 19 June, explicitly enabling us to keep sanctions in place until Russia pays for the damage it has caused. That builds on the commitment made by the Prime Minister and G7 leaders that sovereign assets will remain immobilised until Russia pays up. It also goes further, giving us maximum flexibility to act as the situation requires.
Our commitment does not stop there. As criticism of the war grows within Russia, we are introducing a new route for those under sanction to request that their frozen funds be used for Ukrainian reconstruction. Let me clear: there is no negotiation, no quid pro quo and no access for those individuals to their assets while they remain under sanction. However, if they wish to do the right thing and use those funds to help right the wrongs caused by Putin’s invasion, there will be an approved route for them to do so.
Sir Chris Bryant
One sanctioned individuals who said, before he was sanctioned, that his assets could be given to the reconstruction of Ukraine was Roman Abramovich. The sale of Chelsea football club happened last May and I understand there is £2.3 billion sitting in a bank account. I am mystified as to why that money has not yet been handed over to the foundation. I have exchanged texts with the person who set it up. He said he is ready and he does not understand why he is not getting the money—he has not even been told why he is not getting the money.
Leo Docherty
That is a non-governmental body. There are ongoing discussions with regard to the focus and the use of those funds—whether it be in Ukraine or outside Ukraine to benefit Ukrainians—which has drawn out the process, but we are seeking to expedite the matter at pace.
Sir Chris Bryant
I am grateful to the Minister for giving way again, but discussions between whom? If Government Ministers are party to those discussions, what is the concern that people still have?
Leo Docherty
It is not a Government discussion; it is a discussion within the new organisation that will disburse and utilise those funds. We will keep colleagues updated as and when that situation is resolved.
Sir Chris Bryant
As I understand it, the Minister is saying that the members of the foundation itself are rowing with each other about to how to proceed, but surely that would not prevent the money being handed over by the Government.
Leo Docherty
The hon. Member should not put words in my mouth. Details remain outstanding. A discussion is under way within the institution with regard to the focus and the utility of these funds. As and when that is clarified, I am sure that we will be able to keep colleagues updated. I remain grateful to him for his interest.
Dame Margaret Hodge
I am extremely grateful to the Minister for giving way again. Before that exchange, he was speaking about the ability of sanctioned individuals to voluntarily give some of their money to the Ukrainians. Can he reassure me, first, that this will not become a mechanism whereby sanctioned individuals can get themselves out of sanctions and continue to launder their money into the UK, and, secondly, that this is not a mechanism that will, in effect, buy them immunity from prosecution should they have committed an offence here in the UK?
Leo Docherty
I am very happy to give the right hon. Lady an absolute assurance that it is not a mechanism for circumvention or for granting immunity. It is to ensure that those funds, if volunteered, can benefit Ukrainians.
We are tightening the net on those who are hiding assets in the UK. Under powers to be introduced by the Treasury, individuals and entities designated under our sanctions regime will be legally required to disclose assets they hold in this country. Failure to do so could result in financial penalties or the confiscation of assets.
We will legislate to require those holding assets in the UK on behalf of the Central Bank of the Russian Federation, the Russian Ministry of Finance or the Russian national wealth fund to disclose them to the Treasury. Our action will increase transparency on where those assets are held and limit opportunities for sanctions evasion. Taken together, these new measures mark a further strengthening in the UK sanctions approach against Russia, as Putin and his cronies continue their illegal war and as Ukraine embarks on its counter-offensive. This marks important progress, but I assure Members that our efforts will not stop there.
Many hon. Members will be aware of the active debate with our international partners on the use of sanctioned assets. As the Foreign Secretary and other Ministers have made clear to this House repeatedly, no country has yet found a legally tested solution to turn this commitment into reality at scale, despite various pieces of legislation having been laid or passed by our international partners.
We are at the forefront of a united effort, with our international partners, to see frozen assets repurposed for Ukrainian reconstruction. Nothing is off the table, and a cross-Government taskforce is considering all proposals carefully, including those that our partners may bring forward.
Liam Byrne
I thank the Minister for giving way; he is being characteristically generous. We might as well cut to the nub of the debate. Is it his ambition to bring forward to this House a Bill that fulfils the ambition of the Opposition’s motion?
Leo Docherty
It is our ambition to find a legally workable route to repurpose Russian assets. As yet, no country has found one. We are working with partners to do so. As the House will appreciate, we must assure ourselves of the safety, robustness and legality of any proposal in this regard. If there is no legality, there can be no utility. That is why we continue to engage with every available option. The process will require creativity and innovation. I assure hon. Members across the House that we will continue to consider every lawful option to use sanctioned Russian assets to rebuild Ukraine.
Dame Margaret Hodge
I am extremely grateful to the Minister for his generosity. Can he perhaps explain what the Canadians are doing? It is my understanding that the Canadians have seized the assets. Would he consider being a kleptocratic state or perhaps being an aggressor state, as has been suggested, as concepts that could bring seizing state assets within the rule of law? There are two issues there.
Leo Docherty
Our Canadian friends have legislated, but they have not yet found a legally watertight route to seizing those assets. The right hon. Lady speaks about other concepts that are of interest, and we will certainly consider them as we move forward.
Sir Chris Bryant
I am very grateful to the Minister. I am sorry, but what is the legal impediment, to his mind?
Leo Docherty
The hon. Gentleman knows a great deal about international law, so he will know that ideas such as these will be tested internationally and that if they are not watertight, they have no utility. It is not legally straightforward; this is entirely new ground and therefore it requires a robust legal framework. I think he would probably admit that it is unclear that one exists as yet. However, as ideas come forward, we are interested in testing them.
We are steadfast in our commitment to ensuring Ukrainian economic stability. We have committed to providing approximately £4.2 billion of fiscal support to Ukraine and, along with our G7 partners, we are committed to helping it to emerge from the war with a modernised economy that should be entirely resilient to Russian threats.
Let me conclude by saying that the recovery conference last week, which I referred to at the start, marked a further milestone in support for Ukraine and in ensuring that Russia pays for its actions. With our partners, we will keep up the pressure, while standing by Ukraine’s side until it wins and rebuilds.
Dave Doogan (Angus) (SNP)
Where will we find half a billion dollars to rebuild Ukraine? The international community, certainly; the World Bank, almost certainly; the EU and/or the US, definitely—but we should certainly shine a very bright searchlight on the ill-gotten gains of the Russian elites who stood by and watched Putin, who relies on the co-dependency they create, systematically destroy the natural and built capital of Ukraine for reasons so spurious that they would be comic if they were not so egregious and deadly for the innocent people of Ukraine.
Let us not forget where the playgrounds of those Russian elites were. They were in Paris, in Manhattan and in Mayfair, and elsewhere in London, where their inexplicable wealth sloshed around the property markets, casinos and car dealerships of this city. The Londongrad laundromat was a clear and present threat to national security, but in the tension between national security and the Tories’ access to wealthy Russians, national security came off second best.
London is the most notorious safe haven for looted funds in the world, with much of the money hidden via London in offshore trusts in British overseas territories. Even after years of campaigning by SNP Members and other stakeholders, it took Putin’s barbarism against the people of Ukraine for the Conservatives finally to stop accepting Kremlin-linked donations and to impose sanctions on Putin and his cronies. It is clear now what lies behind this Government’s pedestrian approach to pivoting from freezing assets to seizing them: the sheer value of Russian assets held within the UK. In this instance, as in many others, when I say the UK, I of course mean London.
Contrast that with Estonia, whose Government have declared they will present a blueprint for how Russian frozen assets can be legally seized. Their goal is to use the funds to pay for Ukraine’s reconstruction. The Estonian Prime Minister, Kaja Kallas, said last month that her country plans to offer a legal rationale for the expropriation of the €20 million in Russian assets that it has frozen. What it is to be a small EU nation that can act nimbly and remain in touch with its populace.
However, a country does not have to be a small EU nation to do the right thing. In Canada, the Frozen Assets Repurposing Act aims to allow Canadian courts to take the frozen assets of foreign officials whose misrule creates forced displacement and humanitarian needs. It essentially foresees new powers to seize and sell assets of sanctioned Russian oligarchs while repurposing the proceeds to help with the rebuilding of Ukraine. In Switzerland, should an oligarch fail to demonstrate the lawfulness of their wealth, the law on asset recovery would allow for the confiscation of frozen assets without the need to commence a separate civil proceeding. The European Commission has also followed suit, presenting in May a new directive on asset recovery and confiscation. The proposal seeks to modernise EU rules on asset recovery through a series of measures, including an asset recovery and management office with the power to trace and identify criminal assets, ensure that frozen property does not lose value, and enable its sale for the purposes of rebuilding Ukraine.
Sir Iain Duncan Smith
To clarify, there is a difference between the seizure of private assets and the seizure of state assets. Sovereign immunity simply does not stand in the way of the seizure of private assets, which requires only that legislation be passed, therefore negating the sovereign immunity. I accept that the Government could do that quite quickly—they have been talking about it—but state assets are a bigger issue because of state immunity. Again, legislative action could be taken, but it should be done in co-operation with other states so that there is no flight of capital.
Dave Doogan
I thank the right hon. Gentleman for his intervention, particularly because he highlights, as he did in his earlier intervention, the issues to do with state immunity. At the heart of this debate is an appeal for urgency on legislation that tests the very boundaries to which he refers. I take no issue with that intervention.
In contrast with what is happening in other jurisdictions, the UK has yet to transform its words about hoping that the proceeds of sanctions pay for reconstruction into a more informed policy and legislation-focused debate with action to follow. The UK cannot afford to be the weakest link in the western alliance’s struggle against Russian illicit finance. We recommend, as a minimum, that the UK Government review the designation criteria underpinning the global anti-corruption sanctions regime to consider whether an abuse of function would provide greater flexibility for FCDO officials to impose designations. Any new legislation must be properly funded, of course. New laws are useful only if they are properly implemented with the correct resource. Economic crime has been the poor relation in UK policing for too long. Economic crime enforcement in the UK is woefully under-resourced, particularly given the scale of the challenge posed by dirty money in the UK economy.
The UK has taken some steps—if belatedly—to freeze assets, but it must now legislate at the earliest opportunity to seize Russian assets, in accordance with international ambition and international law, with adequate funding and in co-ordination with allies who have done the same. While other countries are taking strides to legislate for how frozen Russian assets can be lawfully seized, the UK Government are, thus far, yet to make the transition from warm words to legislative effect. We need a step change on that immediately.
Several hon. Members rose—
Mr Deputy Speaker (Sir Roger Gale)
Order. Eight Members are seeking to participate in the debate. We need to start the wind-ups at about 20 minutes to 7. It is a self-denying ordinance; I will not put a time limit on at this stage, but I may have to do so. If hon. Members could stick to six minutes, we will probably get everybody in comfortably.
Mr Jonathan Djanogly (Huntingdon) (Con)
The sanctions regimes, and measures taken under them against named individuals and Russian state assets, have played a vital role in the Ukrainian resistance, albeit one of a more slow-burning nature than military help. They are a slow-paced, grinding remedy against what has turned into a slow, grinding war in which bravery, defiance and the spirit and determination of enlisted men will ultimately allow Ukraine to prevail. We must play our part. As of May, records show that 1,604 individuals and 228 entities under the Russian regime are subject to the UK’s freezing sanctions to a value of approximately £18 billion. In addition, an estimated £26 billion of Russian state assets are frozen here in the UK. Russia is the most sanctioned country in the world, and while innocent Ukrainians continue to be killed for Russian imperialist ambitions, that must remain the case. More broadly, it is estimated that some £275 billion-worth of Russian assets have been frozen worldwide.
The Government are actively freezing assets. Freezing is good, but reallocating frozen assets to Ukraine’s benefit will be better, not least because of the monumental sums that are estimated to be needed to fund reconstruction—that is, reconstruction of homes, businesses, infrastructure and lives. I was therefore interested and pleased to read the detail of the statutory instrument—the Russia (Sanctions) (EU Exit) (Amendment) (No. 2) Regulations 2023—laid by the Minister of State, Foreign, Commonwealth and Development Office, my right hon. Friend the Member for Sutton Coldfield (Mr Mitchell), last Monday. Its introduction enables freezing order sanctions to be maintained until Moscow pays compensation to Ukraine for the destruction that Russians have caused and will continue to cause until the war ends. It is a positive step towards the calls that I and many other Members of this House have been making for assets forfeiture, although we are certainly not there yet.
As part of the joint Foreign, Commonwealth and Development Office, Treasury and Home Office press release last week detailing these new legislative measures, I read with interest that the Government’s
“proposal to force sanctioned individuals to disclose UK assets will bring in greater transparency and leaves less room to hide.”
This proposal is long overdue, and I encourage the Government to make it a legal reality as soon as possible. Could the Minister explain the planned legislative process to enable that?
Questions over the specifics of the proposal remain. When brought forward, it is crucial that if sanctioned individuals are found to be in breach of the legislation, the proposal should open all their frozen assets to seizure and reallocation. I ask the Minister: would a breach of this provision cover an individual’s entire sanctioned asset base—at least that in the UK, and not just that which may have been found to have been hidden? That would have the dual effect of equipping the Government with a large motivational stick when it comes to greater transparency and allowing the effective forfeiture of a potentially significant amount of assets if breaches are identified. Both effects are desirable, and I would be interested to hear whether the Minister agrees.
Ultimately, the strength of the UK’s response to Russia’s attack on the post-1945 world order rests on being in lockstep with our international allies. The US, the EU and Canada are all proactively working on or have already implemented means of asset seizure and reallocation, even if only in a limited way. The move to allow frozen assets in the UK to be allocated towards Ukraine’s reconstruction complements similar moves in the US and Canada last year and EU proposals made earlier this month. All of this is very welcome.
Sir Julian Lewis (New Forest East) (Con)
I am grateful to my hon. Friend for giving way, and I apologise for missing the opening of the debate. Has any consideration been given to what should happen to the interest or other income generated by those assets during the period that they are frozen? Surely, even if the assets are not seized in the end, their owners should not benefit from anything that the assets earn during that frozen period.
Mr Djanogly
My right hon. Friend makes a different but important point. That aspect has been pursued by the European Union; in fact, I believe that it set up a committee a month or two ago to look at that very point. I think it is a very good idea, and we should certainly be pursuing it. Obviously, all these sanctioned assets cost money to keep—flats have to be maintained; boats have to be maintained—and we should be using income from these assets at least to pay for the maintenance of them, if not to get income that we can then give to Ukraine. He makes a very good point.
The Minister said earlier that the use of frozen assets towards reconstruction would not be allowed as a means of circumvention. It would, however, seem rather unlikely that a Russian sanctioned person would permit their frozen assets to be donated to Ukraine unless there was some benefit to them, such as sanctions cancellation. Perhaps the Minister could explain why else the sanctioned individual would want to do so. Why would they want to give their assets to Ukraine if there was not a deal to be had? The Ukrainians, it has to be said, have expressed concern at the prospect of deals being done with oligarchs in individual countries—they think that might breach the wall, so to speak. As such, could the Minister confirm that if deals are done at all, they would only be done on a multilateral basis?
To make one final point if I may, the original purpose of our adopting the Magnitsky sanctions was to protect those whose human rights are ignored by foreign regimes. As the Russian Federation staggers on, we must remain vigilant towards those of its citizens who support democracy. At this very moment, Open Russia’s vice-chairman Vladimir Kara-Murza—twice poisoned, and now sentenced to 25 years—languishes in a Russian prison, even though his lawyers and family are unsure of his exact whereabouts. Mr Kara-Murza, whose brave wife I had the honour of meeting in Parliament last week, is a valiant spokesman for democracy and human rights. The Government have sanctioned only five of his dozens of tormentors; even Lithuania has sanctioned 15 of them. As a British citizen, should Mr Kara-Murza not expect us to be leading the way on this issue? I hope that Ministers will now respond with appropriate resolution.
Dame Nia Griffith (Llanelli) (Lab)
I rise to speak in this very important debate on repurposing Russian assets to rebuild Ukraine. I congratulate my right hon. Friend the Member for Tottenham (Mr Lammy) on setting out so clearly the case for doing so, and my hon. Friend the Member for Cardiff South and Penarth (Stephen Doughty) on his work on the issue.
In February of this year, I had the privilege of going to Ukraine with the all-party parliamentary group on Ukraine on the anniversary of last year’s invasion, and to see Irpin and Chernihiv. There, we saw the destruction of bridges, homes and schools—a reminder of the fact that Russians have targeted civilian areas so often—and the need for generators, because time after time those areas have been hit by power cuts. However, all of that pales into insignificance against the destruction in the east, where whole cities—homes, hospitals and schools—have been left with no power supply and no water, their populations dispersed abroad, to other parts of Ukraine or to the frontline. We have also seen the flooding from the Kakhovka dam, and of course, vast areas of agricultural land are unusable now because of landmines. The task is absolutely immense.
This month saw the Ukraine recovery conference, held in London. A number of events and meetings ran alongside it, including Inter-Parliamentary Union events, which I was able to attend. It was very moving to hear Ukrainian MPs speak of the huge challenges facing their country, but impressive to see their absolute determination to build back better, strengthen democracy and tackle issues such as corruption. Time after time, Ukrainian MPs made clear that they want Russian assets seized to rebuild Ukraine.
We have to admire the immense resilience and determination of the Ukrainian people to rebuild. I have found that whether meeting bosses from the biggest telecoms company in Ukraine, whose workforce have repeatedly been the first out there to restore communication after yet another Russian hit; meeting the CEO of Naftogaz, who stated plainly that tackling corruption has to come before reconstruction; and meeting the deputy Minister for digital technology, who described some of the remarkable progress made in the digital sphere. However, he also pointed out that his departmental budget has been cut by 86%, with the money redirected to the Defence department. That reminds us of the huge economic challenges that Ukraine faces.
The task is enormous; the World Bank estimates that some $400 billion is needed to reconstruct Ukraine. Using frozen Russian state assets must be part of that, but the UK appears to be lagging behind. In the US, the Rebuilding Economic Prosperity and Opportunity for Ukrainians Act, which would give the US President the power to confiscate Russian assets frozen in the US, has been introduced in the Senate and the House of Representatives; and in Canada, the Government are looking to seize $26 million from Granite Capital Holdings Ltd. But here in the UK we are still lagging behind.
This issue has been raised time after time in this House. We had a whole Backbench Business debate on the issue not very long ago, in which suggestions and mechanisms were set out very clearly by my right hon. Friend the Member for Birmingham, Hodge Hill (Liam Byrne) and others. Today, we have heard suggestions on what could be done from my right hon. Friend the Member for Barking (Dame Margaret Hodge) and my hon. Friend the Member for Rhondda (Sir Chris Bryant). Time after time, we have made it very clear to the Government that they need to move faster on seizing frozen Russian state assets so that they can be used for rebuilding Ukraine.
Recently, like the hon. Member for Huntingdon (Mr Djanogly), I had the immense privilege and the very sobering experience of meeting the Evgenia Kara-Murza, the wife of Vladimir Kara-Murza, a prominent Russian dissident who has spoken out against the war in Ukraine. She told us of the terrible treatment of anyone speaking out and opposing or seeming to oppose the war, with detentions and arrests all the time, the routine torture of prisoners and the removal of children from so-called dissident parents. We heard how, back in November 2022, Canada first sanctioned Vladimir Kara-Murza’s persecutors, and how in March the US also sanctioned all 38 of his persecutors. However, to this day the UK has only sanctioned five. I have to tell the House that Vladimir was actually brought up in the UK and has UK citizenship, so I implore the Minister to make it a priority to sanction the remaining 33 persecutors, and to do everything possible to secure the release of Vladimir. Rather than lagging behind in this case, the UK should be taking the lead.
Many businesses in the UK have had to make alternative arrangements and different business decisions because of the sanctions regime. Although this may have been inconvenient or costly, they understand and accept the importance of using the strongest possible sanctions against Russia to try to exert maximum pressure on Putin’s regime to stop his illegal invasion of Ukraine. I would hope that Departments want to set an example by making sure they too stick rigorously to all sanctions, and do everything possible to ensure that no taxpayers’ money is inadvertently finding its way into supporting Putin’s regime.
In this context, I raise the question of the Home Office planning to use the Stradey Park hotel in my constituency for housing asylum seekers. The Stradey Park hotel was taken over a couple of years ago by an investment firm, which then sold investments in parts of the hotel, rather like timeshares, to a whole range of investors. There are now some 77 of those investors registered at the Land Registry as part owners of the hotel, and they can of course receive dividends from their investments in the hotel. One of them is a Russian domiciled in Russia, so the question is: what due diligence has the Home Office carried out to ascertain what connections this individual has with any individual, entity or sector against which we have sanctions? Departments should be taking extra care to ensure that no taxpayers’ money is being used in any way that inadvertently breaks sanctions.
In conclusion, I would like to stress to the Minister the need to be meticulous about the implementation of sanctions, and I urge him to speed up taking the necessary steps to enable Russian state assets to be seized and repurposed to rebuild Ukraine.
Several hon. Members rose—
Mr Deputy Speaker (Sir Roger Gale)
Order. Before we proceed, I think as a courtesy I should explain to the House that I have given consent to certain hon. Members to leave in order to attend a meeting with a very senior Ukrainian military officer. It is no discourtesy to the House; they have my consent.
Robbie Moore (Keighley) (Con)
Following the comments that all Members have made, I am sure we all agree that Russia’s appalling assault on Ukraine is an unprovoked, premeditated attack against a sovereign democratic state. Our Government, through their actions, have illustrated that they are completely committed to supporting Ukraine in its fight to liberate the country.
We are all supporting Ukraine, as we are the world’s second-largest military donor, with this Government having given £2.3 billion in military aid. This year we have given a total of £9.3 billion of humanitarian, economic and military support. We are also training many Ukrainian pilots and troops in the UK and offering sanctuary to well over 230,000 Ukrainians. I am proud to say that many of them have made Keighley, Ilkley and other parts of my constituency their home, and I have been pleased to meet many of them.
We are also punishing Putin’s regime with the most severe set of sanctions that Russia has ever seen. We are sanctioning over 1,500 individuals and entities, and freezing £275 billion of their personal assets. Those sanctions are specifically designed to deal a severe blow to the Russian economy, hobble Russia’s military-industrial complex and punish Putin and his allies, including 120 oligarchs worth over £140 billion combined.
In addition to those sanctions, we have ended imports of Russian coal and oil, cutting off a key source of funding for Putin’s regime, while limiting the impact on our consumers. We have also stopped the export of high-end luxury goods to Russia and sanctioned Putin and his political allies, including Sergei Lavrov, hitting the Kremlin regime at its heart. We are working, too, in lockstep with allies to exclude Russian banks from the SWIFT financial system. Our sanctions hit not only Russia but it allies in Belarus. We are sanctioning Belarus for aiding and abetting Russia’s illegal invasion, making sure not only Russia but its allies feel the economic consequences of support for Putin.
Of course, our sanctions are only one part of what we are doing as a country. We have also provided much military support for Ukraine, including by donating Storm Shadow missiles, giving it the long-range strike capabilities it needs to defeat Russia and liberate its country. We will deliver £2.3 billion of military support this year in addition to the Challenger 2 tanks and self-propelled guns we have already provided, and the hundreds of armoured vehicles and advanced missiles that we provided last year and at the beginning of this year. We have also committed to train 20,000 Ukrainian troops this year, building on the success of the training programmes we have put in place which saw 11,000 Ukrainian troops trained last year, and we have provided £4.7 billion in economic and humanitarian aid to the Ukrainian people.
The Prime Minister took part last week in the Ukraine recovery conference, at which he secured well over £60 billion of combined support from other countries, galvanising international backing for Ukraine in the face of Putin’s ongoing attacks. The conference raised that money to go towards Ukraine’s recovery and reconstruction from nearly 500 countries as well as the G7 and EU member states. That is on top of our announcing last week a multi-year financial support package worth over £2.5 billion for Ukraine, helping Ukrainians win the war.
One year on, this Government are absolutely illustrating that we remain committed more than ever to making sure Putin’s barbaric venture will fail, and we will continue Ukraine’s fight as long as it takes until the war criminal Putin is brought to justice.
Andrew Western (Stretford and Urmston) (Lab)
It is not possible to calculate the true cost of Putin’s barbaric attack on Ukraine—the misery caused by the death, destruction, and despair he has inflicted cannot be quantified—but there are some costs that we are able to calculate, enormous though they are. We know that the illegal invasion has caused approximately $137.8 billion of damage to Ukraine’s infrastructure, and we know that approximately $50 billion-worth of damage has been inflicted on Ukraine’s housing stock and that its agricultural sector, which is vital to countries beyond Ukraine, has seen a hit of $9 billion.
Behind each of these statistics are of course people—people who must pick up the pieces of this carnage. It is essential that we provide them with every possible means of support to do that. So I am pleased that the Opposition have secured a debate today to push forward a vital way in which we can fund this support. For it is not enough to fully stand behind Ukraine’s resistance to Putin; we must also be fully behind Ukraine’s recovery after, as I hope, this awful war has ended and Putin has been defeated. I fully back today’s motion, which is consistent with the unwavering support we have shown for Ukraine in the last year.
As we have heard today, the cost of rebuilding Ukraine is estimated to be around $400 billion, equivalent in scale to the Marshall plan that helped rebuild Europe after the horrors of world war two. We must pull every lever at our disposal to help meet that cost. One such lever is the repurposing of seized Russian assets. From the very beginning of Putin’s invasion, Labour has called on the Government to do that. In that time, conservative estimates state that the UK has seized more than £18 billion and possibly, as we have heard today, up to £26 billion in Russian-owned assets, and I commend that effort. I also commend the Government announcement last week that Russian sanctions will remain until compensation is paid to Ukraine. However, we must go further and faster. There are vast numbers of Russian assets in this country, often acquired through the corruption of the Russian state. It is morally and politically right to re-purpose them.
Matt Western (Warwick and Leamington) (Lab)
I commend my hon. Friend on making an excellent speech. Does he agree that Canada is showing exceptional leadership in how it is dealing with the seizing of ill-gotten Russian assets gained from Ukraine?
Andrew Western
My hon. Friend makes an important point, and I will give some other examples later on of other institutions and nations that are also leading the way in that regard. For all that there is unity across the House in our support for Ukraine, the Government have not made enough progress on overcoming the obstacles that stand in the way of repurposing Russian state assets. Indeed, we had a debate in this place on these issues back in March, when my hon. Friend the Member for Cardiff South and Penarth (Stephen Doughty) set out a timeline of Government commitments: Ministers had said on five occasions between July of last year and February this year that they were considering all options on using seized Russian assets to help rebuild Ukraine. We are a year on now from those first commitments on repurposing assets, and it is not clear that we are any further forward.
I urge the Government to take inspiration from what is happening not just in Canada but in the US, where legislation has been introduced in the Senate and the House of Representatives that would give the US President the authority to confiscate Russian assets frozen in the United States and transfer them to help Ukraine. The European Commission President has said that the EU bloc will put forward a proposal before the summer break on how the proceeds from the more than €200 billion belonging to the Central Bank of Russia frozen in the EU will be used to be pay for Ukrainian reconstruction. That is the level of urgency we need. I hope that when the Minister rises to wind up, they can let the House know what conversations the Government have had on the feasibility of replicating measures taken by our allies in the US and the EU.
We are all agreed on the importance of maintaining western unity in support for Ukraine, and part of that must not be falling behind our allies in the efforts to make Putin take financial responsibility for the damage he has done. The unity that exists in this House to support Ukraine is vital, but as part of that united effort, we must be able to press Ministers to go further and faster when it is needed. That is what today’s motion is about. I know that it is difficult, but Ukraine has no time to wait. We must see a concrete plan soon. The Government will have support from across the House in drawing it up and implementing it.
Catherine McKinnell (Newcastle upon Tyne North) (Lab)
The illegal and unjust war that President Putin has waged in Ukraine has now lasted for 16 months, and it is likely to be some time before it comes to an end. As the shadow Foreign Secretary, my right hon. Friend the Member for Tottenham (Mr Lammy) outlined, Ukraine, a country of more than 40 million people, has been subject to devastation on an unimaginable level. The country’s critical infrastructure has been deliberately targeted by Russian attacks, with hospitals, roads, energy infrastructure and hundreds of thousands of homes callously destroyed. But Russia’s illegal invasion has broken neither the Ukrainian people’s spirit nor the resolve of NATO and allies to stand alongside them both now and once victory has been achieved, as Ukraine rebuilds from this inflicted disaster.
As hon. Members have outlined, the World Bank estimates a recovery cost of more than $400 billion; it may cost up to $1 trillion. It is hard to wrap our minds around those figures, but, whatever the cost, the Ukrainian people deserve to emerge stronger from the conflict, and Russia needs to see that Ukraine emerges stronger from it. It is therefore absolutely right that we are thinking about how we best support Ukraine now and into the future. We should plan for victory and what that means. While Ukraine’s future must be determined by the Ukrainian Government, we must be doing all we can to support and contribute to the international effort that is clearly required.
That brings us to Russian assets here in the UK and whether and how they should be used for that reconstruction. The UK’s commitment to Ukraine has been steadfast, and proudly so, yet on this question we seem to be lagging behind. Our allies in the US and the EU are already taking steps towards developing the legislation needed to repossess Russian state assets to contribute to mending the impact of this illegal war. We must clearly act within the law, but we cannot hide behind the law. It is for us as legislators to find the legal means necessary to maximise financial support for Ukraine.
For far too long, the UK—London in particular—has been a repository for Russian wealth. The London laundromat served as a haven to billions of pounds of Russian money. We have a moral duty to put things right. We also have a significant opportunity to do that, and the need to do that speaks for itself. It is a matter of justice. The Treasury’s commitment to producing a plan that will criminalise the non-disclosure of Russian assets is welcome, but we need to see it and know when it will be introduced. There is no time for delay.
We need to start planning now for investing in reconstruction projects and ensure that every dollar and pound possible reaches Ukraine. To that end, I absolutely welcome the clarification sought by my right hon. Friend the Member for Barking (Dame Margaret Hodge) for the Government to publish transparently where Russian assets are held, how much they are and who they have come from. We must also take steps to ensure that whatever money is transferred in whatever form and however it is spent—I appreciate that there was a debate about that, which could explain some of the delays—we minimise the risk of any corruption.
The Government must start turning their rhetoric into action. We have heard for months about the intention to ensure that Putin pays and that these assets will be used, but warm words will not help Ukraine. Ukraine needs to rebuild itself, and we need to create the legal mechanisms to give it support to do so.
Once Ukraine succeeds, it needs not only to recover but to thrive. Whether that costs $400 billion or $1 trillion, it is clear that Russia and Putin must contribute towards repairing the immense damage they have caused. We can support making that happen. We have the means to do so by ensuring that the proceeds of Russian state assets held here in the UK go towards building Ukraine’s future. We need to give Ukrainians back their future—a future that they deserve—in a stable, secure and democratic state, where they can rebuild their lives. Let us as a country continue leading on support for Ukraine, and let us lead on financial support, too. Let us see the Government put their money where their mouth is, support our motion and show how they will ensure that these frozen Russian state assets are repurposed to rebuild Ukraine.
Layla Moran (Oxford West and Abingdon) (LD)
None of us will forget waking up nearly 18 months ago to the most dreadful scenes—images of war—happening on our doorstep in Europe. The people of Ukraine have endured the most unimaginable hardships in the last year and a half. I add my voice and that of the Liberal Democrats to today’s messages of solidarity with the Ukrainian people. We have not forgotten them, and we will continue to stand with them.
I also extend my thanks to the people of the UK. We must all be proud of the support that we have seen in this country. The British public have shown their deep generosity over the last year, opening their doors to Ukrainians. Over 2,000 Ukrainian guests have arrived in my home county of Oxfordshire—the fourth highest of any local authority in England. I opened my door to them, and it was a wonderful experience that I would highly recommend to anyone.
That war is not over, and it is vital that we do not rest on our laurels while Putin and his cronies continue to wage unimaginable destruction. We have known since the beginning that the best way to hit Putin where it hurts is through the wealth and assets of his cronies. We know that he funnels money through his oligarchs, which they squirrel away in property, superyachts and shell companies. They also hide it in far less glamourous places.
It was recently reported in Private Eye that the developers behind Botley West Solar Farm in Oxfordshire are potentially backed by dubious Russian money. Botley West would be the largest solar farm in Europe, sited on Blenheim Palace and Merton College land. The company behind it, Photovolt Development Partners, is registered in Germany but owned by Cyprus company Cranssetta Investments Ltd. The sole shareholder is a Yulia Lezhen.
A New York court case last year revealed that Yulia Lezhen’s husband, Dmitry Glukhov, was the primary beneficial owner of a goldfield development company that borrowed $58 million from Uralsib bank. The litigating company said that there was never any goldfield to be found. It looked for infrastructure, but did not find it. It alleged that the company was, in fact, a front to syphon off assets. It further said that it was not the only one, and that there were dozens of such companies, of which Photovolt—about to build to Botley West—was one. I ask the Minister: how can we know that Russian money is not still being greenwashed through our economy here in the UK? I would welcome a meeting with him or Treasury Ministers to get to the bottom of where the money is coming from.
Further historical questions remain for the Government about the money, most notably golden visas. A review of them was promised five years ago. The Government finally delivered a, frankly, pathetic statement a few months ago. I continue to challenge them to release the full report. If they have nothing to hide, they have nothing to fear. The cross-party work that we did in this place on the Economic Crime (Transparency and Enforcement) Act 2022 has been some of the most valuable work I have done in Parliament. It was a real opportunity to ensure that we are able to better fight kleptocracy and economic crime, not just in this case but in others in future.
It is not enough that we have seized Russian assets; it is time that we send those assets to where they will make the most difference. As we have heard, the estimated bill for post-war construction is in the order of $400 billion. The Ukraine recovery conference last week made an important start to those discussions. I welcome the UK’s part and our pledges. But the real prize is that $400 billion: all the assets we know exist that we could send. We are still unclear on what is stopping the Government from doing it. All I would say to the Minister is this: we have done it before and we can do it again. Where there is a will in this House, we can pass legislation quickly to help the Government. I urge them to come up not just with warm words, but a plan for how they will repurpose the assets and get them to where they are needed before it is too late. If we do not start rebuilding Ukraine now, morale will dip and that itself will affect the war effort.
The leader of the Liberal Democrats’ sister party Holos, Kira Rudik, said:
“This is the way we will ensure justice for all and will give a clear signal to other tyrannies about what consequences await them in case of encroachment on other people’s property.”
The Liberal Democrats continue to be proud to stand shoulder to shoulder against tyranny and will stand with Ukraine until it is victorious. When the Ukrainians are victorious, we will not walk away and leave them to pick up the pieces, or indeed the bill, alone.
Liam Byrne (Birmingham, Hodge Hill) (Lab)
I would like to start with a word of praise for what was a brilliant opening speech by my right hon. Friend the Member for Tottenham (Mr Lammy), the shadow Foreign Secretary. He gave the House not just a cry of anger or a plea for solidarity, but a demand for justice. Justice is exactly what the people of Ukraine need and they need it now.
There are three questions at the core of this debate, which were eloquently set out by the shadow Foreign Secretary: a practical question about who pays for violence; a moral question of who is punished; and a political question of how we in this country stay on track and keep pace with our allies. We should start with the question of who pays, because that was where we ended last week at the Ukraine reconstruction conference. As we heard, the bill for reconstruction is now enormous: $400 billion and counting, a one-third hit to Ukraine GDP, a fiscal deficit that is through the floor and interest rates that are through the roof. Where on earth will that money come from? We give thanks to the Bretton Woods institutions, which, best case, have mobilised something like $55 billion between them. Notwithstanding the money that was raised, promised, committed and vowed at the reconstruction conference last week, the gap is still enormous. That gap takes us to the question of justice and the requirement on Russia to make good the gap.
Ultimately, we on this continent of Europe are not simply a rules-based order; we are a rights-based order. In the ashes of world war two, we stood together with 10 of our great allies and, on 5 May 1949, founded the Council of Europe, which Churchill declared would hold up
“moral concepts…able to win the respect and recognition of mankind”,
a council united behind what Churchill called the charter of human rights
“guarded by freedom and sustained by law.”
That is the charter Russia signed in May 1998 and that is the charter it has breached ever since. If we believe in rules, we believe in punishment for those who break the rules. If we believe the aggressor must pay, then we must punish the aggressor. If there is no sanction, sentence, penalty or punishment for those who break the rules, we can expect those rules to be broken time and time and time again. Is that not the lesson that we should learn from even a casual glance at Russia’s history: the throttling of Berlin in 1948, the invasion of Hungary, the invasion of Czechoslovakia, the invasion of Afghanistan, of Georgia, of Moldova, of Ukraine? When are we ever going to learn the necessity of re-containing Russia? We cannot change the geography of Russia, but we can and we must end Russia’s ceaseless choreography of war.
This is no time for the sentence to be deferred. Why should the people of Ukraine wait? Why should they suffer in the sight of their enemies luxuriating in riches while their soldiers die and their children shelter in basements? Why should they watch oligarchs who stole from the people of Russia live high on the hog in their well-tended mansions here in London and elsewhere. Why should the gold of the Russian central bank, all £170 billion of it, sit gathering dust in a vault while the Ukrainian people suffer? That is not justice. Justice deferred is justice denied. Every day that we fail to take action is a day that we fail Ukraine, a day that we fail justice, a day when we neglect our duties to stand up against the brutal code of tyrants who think that might makes right and the strong do what they can while the weak suffer what they must. That is why we have to ensure that Russia picks up the bill for Ukraine’s reconstruction today.
That is the case for justice. As for the political case, it is pretty straightforward. Our allies are moving forward in not just freezing but seizing assets; is it not time we moved with them? The United States Senate is moving forward; is it not time we moved with it? The Canadian Government are moving forward; is it not time we moved with them? The President of the European Commission says that the frozen assets of the Russian central bank will be used to pay for reconstruction; is it not time we moved with the EU? Why should we fall behind? Our allies are sending a message to us here in the House—pick up the pace!—and that is the message that we send to the Minister.
It is time for us to crack on. First, as the shadow Foreign Secretary says, we need a Bill to be brought to the Dispatch Box within 90 days. Let us make sure that it amends the State Immunity Act 1978, which gives central banks immunity from jurisdiction and from enforcement. Let us empower Ministers with the authority to make seizure and forfeiture orders. Let us change the relevant terms of international law to safeguard that Bill. Let us move a motion for debate at the UN General Assembly to make it very clear that the majority of states now see the phrase “entitled to immunity” in a different light in different circumstances, now that war has been committed on this scale. To protect ourselves from any attempts to misuse the European convention on human rights, let us immediately begin prosecuting Russia for the crime of aggression, so that it cannot pretend that it is in any way some kind of victim in this illegal invasion.
Let me end by saying this. No one in the House forgets their first visit to Kyiv, that glorious city of Europe’s eastern border. No one forgets the message that they see emblazoned everywhere, on the posters in the squares, on the trains and in the cafés: “Be brave like Ukraine.” That is the message that the House sends to the Ministers on the Treasury Bench today: “Be brave like Ukraine. Strike a blow for freedom, and send the message from this mother of Parliaments that democracy on this continent will never be defeated.”
Ms Marie Rimmer (St Helens South and Whiston) (Lab)
Ukrainians are fighting for their country. They are fighting for their freedom and democracy, they are fighting for our shared values, and they are winning. Yet we must not be complacent: support for Ukraine needs to increase, and to keep increasing. Ukraine is strengthened with our international support.
The question now rightly turns to what will happen when Ukraine wins. Many of the invaded towns and cities have been left in ruins. Mariupol, once a bastion of tourism and the arts, has been turned into a ruin. A centuries-old theatre was completely destroyed. The Russian forces acted barbarically, and it is estimated that nearly 300 civilians were killed. That is only one example among many horrific war crimes that have been committed by Putin’s henchmen.
In March, the House rightly debated the seizure of Russian assets. The Government can and must do more to ensure that dirty money and Russian assets do not remain hidden here. London must no longer be the laundromat for oligarch and kleptocrat dirty money. However, that money must be put to good use. The money generated or hidden here for decades has helped to finance the brutal invasion of Ukraine, and for too long a blind eye was turned to it. The Government have a duty to ensure that it is now used to rectify that mistake. Now is the time to start planning how to use the money.
Russian assets should be used to undo the damage and destruction that Putin’s army has caused. Nothing will bring back the brave Ukrainian fighters who lost their lives defending their homeland, but we have a duty and a responsibility to honour their sacrifice. We must honour their sacrifice by rebuilding their country; we must honour their sacrifice by ensuring that dirty Russian money is finally put to a good use. Many of the foreign policy mistakes over decades have been caused by Governments failing to plan ahead. This must not be another example. We must not wait until the war is over to start taking action.
Last October, the Government indicated support for repurposing Russian assets, yet there have been no specific proposals. Other countries—our own allies—are taking the first steps to achieve that goal. Time and time again, we hear the Prime Minister say how we are standing shoulder to shoulder with our allies to support Ukraine. Our biggest ally, the United States, has introduced the Rebuilding Economic Prosperity and Opportunity for Ukrainians Act to repurpose frozen Russians assets towards Ukraine, and Canada and the EU are doing something similar. Our country should be doing the same. We are not standing shoulder to shoulder; we are following when we should be leading—especially as London has long been known as the Russian money laundromat. We need to correct this error.
Since the unjustified and brutal Russian invasion of Ukraine began, I have been delighted by the unity across the House in support of Ukraine, and I hope the same will be true of the efforts to rebuild Ukraine. This motion is the start of that process—a process that will likely go on for years after Ukraine wins—but it is the very least we can do. Putin invaded Ukraine because it dared to be a modern and free-thinking European nation. With our continuing multinational support, Ukraine will win. Russian assets and dirty money hidden here should and must be spent on rebuilding Ukraine for our brave Ukrainian friends, who are fighting for freedom and democracy. It is a war for our shared values, and that makes it our war as well. We must act now.
Stephen Doughty (Cardiff South and Penarth) (Lab/Co-op)
It is a pleasure to speak in this debate, and I thank all my right hon. and hon. Friends, and indeed all Members, who have contributed to it. It has come at a pivotal moment, just a week after the Ukraine reconstruction conference, and at a critical time in Russia’s brutal war against the people of Ukraine. I draw attention to my declaration in the Register of Members’ Financial Interests as a shadow Minister.
Today’s debate has underscored not only the degree of unity and consensus in the House on the need to stand with Ukraine for as long as it takes, but the strong appetite for the UK to go even further. I commend the speeches we have heard from Members on both sides of the House, which had common themes. My hon. Friend the Member for Llanelli (Dame Nia Griffith) spoke powerfully about her experience of visiting Ukraine and seeing the destruction. My hon. Friend the Member for Stretford and Urmston (Andrew Western) set out the record of loss and damage. My hon. Friend the Member for Warwick and Leamington (Matt Western) explored how other allies, including Canada, are taking action. My hon. Friend the Member for Newcastle upon Tyne North (Catherine McKinnell) emphasised the need for urgency—that was a common message in all the speeches today. We heard a powerful speech from my right hon. Friend the Member for Birmingham, Hodge Hill (Liam Byrne), with whom I travelled to Ukraine in September last year, about the wider consequences of not acting, the importance of deterrence and the fundamental importance of justice. My hon. Friend the Member for St Helens South and Whiston (Ms Rimmer) gave a powerful illustration of the loss and destruction in the beautiful country of Ukraine.
We also heard many excellent speeches from the Government side. We had helpful legal clarity from the right hon. Member for Chingford and Woodford Green (Sir Iain Duncan Smith). We had a useful question from the right hon. Member for New Forest East (Sir Julian Lewis) about the accrual of interest on the assets that are being held. We heard many other powerful contributions, which all had one common message.
It is beyond doubt that there is only one perpetrator responsible for the unjustified and unprovoked invasion of Ukraine, and that is Russia and Putin. We all remain committed to a just and lasting peace based on respect for the UN charter and Ukraine’s sovereignty and territorial integrity, but also its future prosperity and the flourishing of its democracy. We all want to see that.
However, intention alone will not bring Ukraine to that destination. We all need to be clear that it will take decades of commitment, determination, consistency and investment to ensure that that happens. Labour has been consistent in calling on the Government to repurpose Russian state assets to help rebuild critical Ukrainian infrastructure, provide much-needed humanitarian aid to the country and invest in its future, and I commend the work of my hon. Friend the Member for Rhondda (Sir Chris Bryant) in that regard in his ten-minute rule Bill. We have called for those things because we believe in justice, but we also believe in deterrence—
Mr Deputy Speaker (Sir Roger Gale)
Order. I am terribly sorry, but I think I am right in saying that the hon. Gentleman has just walked into the Chamber.
Stephen Doughty
We believe in deterrence not only in relation to Putin, but in relation to others who have egregiously breached the rules-based international order.
I have a great deal of respect for Ministers on these matters. Indeed, we have wholeheartedly welcomed the Government’s position on Ukraine, and we continue to show that unity, but we need to be clear that Ministers have not provided the answers. I ask them very directly and very pointedly: what consideration is being given to the seizure, sequestration and repurposing of Russian state-owned assets? I am afraid that our calls have been repeatedly met with haze. We continually hear the phrase “exploring all lawful routes”, which has been said to me five, six or seven times in the Chamber and in answer to written questions. We need greater clarity, as Ukraine does not have time to wait. There has been a clear call for urgency today.
The Government need to get on with this. They need to come up with the legislation and the necessary measures to allow frozen Russian state assets to be used to rebuild Ukraine. As our motion says, we hope and believe they can reasonably do this within the next 90 days. I hope the Minister can give us a clear timeline for when we can expect proposals. The President of the European Commission attended the Ukraine recovery conference, and she made it very clear that the EU will come forward with proposals before the summer. I hope we will see the same level of urgency from the Government.
I saw the scale of the damage for myself on my visit to Ukraine last year, and it was utterly shocking to see residential buildings with rocket holes through them and the wanton damage to civilian infrastructure, including railways and roads. We have all seen the terrible scenes at the Kakhovka dam and elsewhere in recent weeks.
As my right hon. Friend the Member for Tottenham (Mr Lammy), the shadow Foreign Secretary, said, we cannot forget that tens of thousands of civilians have lost their lives and millions more are now refugees. This war will leave lasting psychological scars on every Ukrainian.
As I have previously relayed to the House, the Kyiv School of Economics, working in conjunction with the National Bank of Ukraine, estimates that, as of December 2022, the damage to residential and non-residential infrastructure amounted to $137 billion. The vice-president of the World Bank has estimated that the figure could be up to $630 billion, which is treble Ukraine’s GDP. This year alone, Ukraine’s national budget has a $38 billion gap.
Of course, before any reconstruction can begin, it will be necessary to clear the huge number of mines and unexploded ordnance that have been scattered across the country, including on the prime agricultural land that feeds not only Ukraine but the world. I commend the HALO Trust and others that do incredible work to deal with mines and unexploded ordnance. The HALO Trust has made it clear to me that it will take more than a month for every day of fighting to clear the ground of unexploded ordnance and munitions. This means that, if the war stopped today, it would take more than 30 years and billions of dollars to make areas safe for habitation and economic activity to begin again. There is also incomprehensible environmental damage. The destruction of the Kakhovka dam will have huge consequences not only for people but for the future ecological welfare of Ukraine, its wildlife and its economy.
We have heard many different arguments today about the legal possibilities, and my right hon. Friend the shadow Foreign Secretary set out very clearly what is needed. The UN General Assembly has already voted on this issue. A resolution was adopted by last November’s special session on Ukraine, setting out a very clear framework for how to proceed. Resolution ES-11/5 recognised that Russia
“must bear the legal consequences of all of its internationally wrongful acts, including making reparation for the injury, including any damage, caused by such acts”.
The resolution also called for member states to recognise the need for
“the establishment, in cooperation with Ukraine, of an international mechanism for reparation for damage, loss or injury”.
Under international law, this would not be viable in ordinary circumstances but, by explicitly invoking a claim for compensation, the UN resolution clearly satisfies the specific prerequisites of notice and opportunity for Russia to comply.
It is worth noting that, as was referenced earlier, there is clear precedent for such action. A UN compensation commission was established in the case of the first Gulf war, and it paid out $52.4 billion-worth of Iraqi oil revenues to pay for reconstruction and reparations to Kuwait. Incidentally, Russia supported that resolution.
I hope the Minister can set out his thoughts on the many eminent legal proposals that are out there. There are clear examples of how we could proceed. There are proposals for temporary countermeasures and the temporary suspension of sovereign immunity—there are very clear grounds for that to be done. There are clear precedents in the law of countermeasures and clear grounds in the UN resolution, as well as other historical examples and precedents.
We are under no illusions that this is a complex area, and we recognise that drafting and implementing such legislation is challenging. However, given that extensive evidence out there, will the Minister tell us what review the Attorney General and his Department have made of it? When will he come forward with clear proposals? We heard repeatedly about the work of allies. Canada, the US and the EU have all taken or are taking practical, tangible steps to move in this area, in turning Russia’s state-owned assets into the means for Ukraine to forge a brighter future and to meet reconstruction needs now. They are taking the lead and we should be alongside them, as we have been on many other issues, be it on direct military support to Ukraine, humanitarian support or working together on sanctions.
In conclusion, the Prime Minister rightly stated at last week’s conference that Russia “must pay” for the damage it has inflicted. He said:
“we’re working with allies to explore lawful routes to use Russian assets.”
But we need to get on with this now. We must complement warm words with decisive and urgent action, beginning today. Labour is committed to working alongside the Government in their support for Ukraine, in ensuring that it wins this war and defeats Russia. We welcome the commitments made last week, but if we are to be a constructive and objective Opposition, we must make it clear that the UK can and must go further. Therefore, the motion is simple and clear, and if Members support it, it will begin a process that should have started many months ago. Russia forfeited its absolute rights to these assets when it embarked on this egregious, unlawful and unprovoked war of aggression, when it destabilised our continent and when it sought to dismantle the global rules-based order. The consequences not only in this situation, but for many others in the future if we do not act and ensure that there are consequences for Russia for what it has done are very serious and even more wide-ranging. I commend the motion to the House. Let us get on with it.
Mr Deputy Speaker (Sir Roger Gale)
With the leave of the House, I call the Minister.
Leo Docherty
Thank you, Mr Deputy Speaker. The Minister of State, Foreign, Commonwealth and Development Office, my right hon. Friend the Member for Berwick-upon-Tweed (Anne-Marie Trevelyan) has had to go away to deal with an urgent welfare issue. So, with the leave of the House, let me begin by thanking all right hon. and hon. Members from across the House for the constructive tone of this debate and for their continued support for Ukraine in the face of Putin’s deplorable and illegal invasion. We have heard many thoughtful and considered speeches and interventions. First and foremost, I would like to reiterate our absolute determination to ensure that, fundamentally, Russia pays for the damage it has caused in Ukraine.
I was grateful for the contribution of the hon. Member for Cardiff South and Penarth (Stephen Doughty), and I will try to cover some of the points he raised. It was welcome that he reiterated the fact that Putin is to blame. We work on the basis that the perpetrator must pay, which is exactly what the Prime Minister outlined last week during the very successful Ukrainian recovery conference.
Sir Geoffrey Clifton-Brown
The Russian economy is worth about $1.8 trillion, ranking it 11th in the world. Does my hon. Friend agree that the UK has a strong legal base and that we need to work with our international partners so that we can send out a strong message to the Ukrainians today that there is a hope that one day their country will be rebuilt?
Leo Docherty
I am grateful for that intervention, as I entirely agree with it. If we look at the work that has been carried out by G7 allies, European nations and other states around the world in constraining the export of Russian hydrocarbons and finding alternative supplies, we see that the European energy picture has changed radically overnight. That was a consequence of allied will and effort. If we bring that same determination to the issues we have discussed today, we can have a very significant impact.
The perpetrator must pay and we are very clear about that. I will come on to what consideration we have given to the various options that have been laid out today, but I should say—
Mr Deputy Speaker
Order. I am nothing if not even-handed. I said to the hon. Member for Leeds North West (Alex Sobel) that it is not appropriate to come into the Chamber at the end of a debate and then intervene, and that applies to the right hon. Lady as well.
Leo Docherty
I am grateful to the hon. Member for Cardiff South and Penarth for laying out the various options. He asked what consideration we have given, give and will continue to give to them. First and foremost, we are working at pace. Our officials were in Brussels earlier this week, liaising with EU officials and looking at various models, so the work is continuing at pace. Clearly, if that were easy we would have done it already, but that does not mean that significant institutional effort and energy is not being put into the matter.
Mr Djanogly
The Minister is speaking about the EU. Is the issue not that at the start of the conflict the UK was leading the pace, particularly in financial services and other areas, but as the war has progressed, we seem to have been waiting for the EU, as he mentioned, and the US to lead the way? Is it not now time for the UK to regain the initiative once again?
Leo Docherty
I respectfully disagree with my hon. Friend’s characterisation. We are all looking at these issues. Clearly, the EU has some ideas about the potential use of interest payments on seized assets. That is an idea, not a legally tested, viable route. As the EU is considering that, so are we, which is why our officials were in Brussels earlier this week.
Mr Djanogly
To follow that theme, let us take the question of interest as an issue. That idea has not come out of the EU in the past two months; it has been spoken about for at least six months, but the EU has decided to look at it in the past two months. Has my right hon. Friend not considered that that is something we should have done by now?
Leo Docherty
It is certainly under consideration, but it will depend upon legality. If there is no legality, there is no utility.
Stephen Doughty
I thank the Minister for giving way; he is being generous. It is welcome that he is having those discussions with our allies in the EU, and I hope he is speaking to the United States and Canada about it as well. Will he give us an idea of the timetable? The motion is very reasonable and specifies 90 days, as we recognise these are complex issues. The EU has committed to coming forward with proposals before the summer break. Will he do the same?
Leo Docherty
I will not commit right now, but I can give an assurance to the hon. Gentleman and the House that we are working at pace, as we recognise that this is an urgent issue. Urgent is what we will be and do, in terms of pushing the business forward.
On a similar theme, the hon. Member for Cardiff South and Penarth made some interesting comments about the United Nations General Assembly resolution ES-11/1. We note that resolution and recognise that there are interesting parallels that might be considered with regards to the situation post-war, vis-à-vis Iraq and Kuwait. Of course we will consider that, as we do all other options.
The hon. Gentleman mentioned the Canadian model. For the clarification of the House, the Canadians use the term “seizure” for freezing. Like the UK, Canada is not yet able to test the lawfulness of any potential seizing fully, as we understand it, through their court system. They have the legislative start, but it has not yet been legally tested. We will keep in touch with our Canadian colleagues as they move forward. He asked what role the Attorney General, my right hon. and learned Friend the Member for Banbury (Victoria Prentis), might have. He will know that she is much vested in this matter. She has visited Kyiv to look at accountability issues and she will keep colleagues updated as she reviews those issues.
Robbie Moore
In my speech, I mentioned that the Prime Minister had attended the Ukraine recovery conference last week. Does the Minister agree that that demonstrates that the Prime Minister and the Government are taking world leadership on the issue, by bringing together countries from across the world, including EU member states and G7 states, to commit at least £2.5 billion as part of the recovery package for Ukraine, once the war has finished?
Leo Docherty
I entirely agree with my hon. Friend. Last week was a remarkable show of the convening power of the UK, the tremendous resolve of our Ukrainian friends and the remarkable scale of global support, not just in military hard power but in global capital. When that global capital is mobilised to help Ukraine resurrect itself, that will, in tandem with the military effort, lead to a Ukraine that is sovereign and able to resist all potential future threats. Last week was a great success, but there is more work to do.
Finally, let me say to the hon. Member for Cardiff South and Penarth that I am grateful for his reflections on his visit to Ukraine. His insights into the scale of the destruction are very welcome. I am grateful also that he mentioned the HALO Trust, which does heroic work to expedite de-mining. It is 30 years of work, and we are proud to be putting some of our investment into that. It is money extremely well spent. It also speaks to the horrendous scale of environmental damage that has been wreaked right across the country. I am very grateful overall for the hon. Member’s constructive tones.
I should reassure the House that our sanctions have inflicted a severe cost up until this point on Putin for his outrageous imperialist ambitions. In collaboration with key partners, we have now sanctioned more than 1,600 individuals, including 130 oligarchs. We have frozen more than £18 billion-worth of assets in the UK and sanctioned more than £20 billion-worth of UK-Russia goods trade. We will stand with Ukraine for as long as it takes in that regard.
Catherine McKinnell
The Minister has set out the significant recovery of assets through sanctions, which rather brings us back to the point that the Government have not really been clear about: what is the delay on deciding how and whether those assets can be repurposed for reconstruction in Ukraine? Am I right in thinking that the Government responded to a parliamentary question back in July 2022—so almost a year ago—saying that they were considering all options on assets that have been seized, including whether they can contribute towards the reconstruction of Ukraine? Why is it taking so long? It does create the fear that the Government have considered it, but have not yet come up with the answer.
Leo Docherty
It is taking a long time because it is very complex. There is no straightforward legal route. No other nation has yet come up with a tested legal proposition despite legislative activity. We are therefore moving in tandem with our allies to expedite and find a route, but if it were very simple, we would have done it already.
Through the G7 leaders’ statements, we have been very clear that the perpetrator should pay. We have underlined our continued commitment to that objective by introducing new legislation to enable us to keep sanctions in place until Russia compensates Ukraine. Nothing is off the table, as I have already said today, and we continue to work with our international partners on the options for using sanctions for reconstruction purposes. However, of course, if it is not legal, it is not viable and therefore not useful.
Robbie Moore
I thank my hon. Friend for giving way. Of course, the whole purpose of imposing sanctions is to stifle the economic drive that Russia is undoubtedly using to fund its aggression against Ukraine. Can my hon. Friend confirm that he and the Government are using their ability to encourage other allies to keep their sanctions in place and to take their lead from us?
Leo Docherty
That is a very relevant and good point. We have made the point to colleagues around the world that all allies must stand together to prevent circumvention, because economies more connected and more proximate to Russia face severe economic impact. We do work with allies to ensure compliance and also to prevent circumvention.
As we saw last week, the new measures that were announced during the Ukraine recovery conference marked a significant step forward to driving Ukraine’s reconstruction through a number of different ways. Both the Prime Minister and the Foreign Secretary emphasised the UK’s continued commitment to ensuring that Russia pays for the reconstruction of Ukraine. The Foreign Secretary announced fresh action to increase the pressure on Putin and his supporters through a series of key measures: first, the new legislation, which I have referred to, enabling us to maintain the sanctions on Russia until Moscow pays compensation to Ukraine; secondly, the development of a route to allow sanctioned individuals to volunteer their money to go to Ukraine to help reconstruction; and, thirdly, under the sanctions regime, delivering a new requirement for sanctioned individuals and entities to disclose assets they hold in the UK.
That, in the round, will ensure that we drive forward, that the perpetrator pays and that we can help our Ukrainian friends to rebuild their magnificent country.
Question put and agreed to.
Resolved,
That this House condemns Russia’s illegal invasion of Ukraine; stands in solidarity with Ukrainians in their resistance to Russia’s invasion of their sovereign state; recognises the enormous damage that Russia’s invasion has caused to Ukraine’s infrastructure, economy and institutions; commends the recent commitments made by the Government to support Ukraine’s recovery during the Ukraine Recovery Conference 2023; and calls on the Government to present a Bill before this House within 90 days to allow frozen Russian state assets held in the UK to be repurposed for Ukraine’s recovery.
Business without Debate
Air Quality: Luton Road, Dunstable
(10 months, 2 weeks ago)
Commons ChamberRead Full debate Read Hansard Text Watch Debate Read Debate Ministerial Extracts
Andrew Selous (South West Bedfordshire) (Con)
It is vital for our health that the air we breathe is as clean as possible. When I was on the Select Committee on Health and Social Care, I had the honour to chair the health component of a five-Select Committee report into improving air quality. We should be honest that, unless we are all happy to be a lot poorer, there will always be some difficult compromises involved, but none the less it is right that the Government are committed to improving air quality.
The Government recognise that local action in areas such as transport and planning is key to making the improvements required around the country. Reducing diesel-powered heavy goods vehicle traffic in residential areas and reducing the frequency with which HGVs have to start and stop, which leads to additional concentrations of fine particulate matter caused by brakes and tyres, is a critical part of that action.
On 17 January 2005 an air quality management area was declared in Dunstable by the former South Bedfordshire District Council. The Woodside Link road was first proposed in 2012. At the funding and permissions stages, it was made abundantly clear that reducing traffic, especially HGVs, within the Dunstable AQMA was a key objective of the scheme.
That objective was spelled out in the 2006 air quality action plan, the 2012 Woodside Link consultation document, the 2012 environmental assessment report for the Woodside Link road, the 2012 Central Bedfordshire Council environmental scoping report, the 2013 Woodside connection and Houghton Regis development modelling report, the 2013 local pinch point funding evidence document, the 2013 letter to the chief executive from the South East Midlands local enterprise partnership and the 2015 Woodside Link contract award. I think the Minister will agree that that is irrefutable evidence of what the Woodside Link was intended to do—namely, to provide a direct route for HGVs between the M1 and the Woodside industrial estate. It was not intended to increase traffic in half of Dunstable’s AQMA by redistributing HGVs from the high street in Dunstable to Luton Road, yet unfortunately that is what has happened.
The air quality action plan was produced in 2006 and cited the proposed Woodside Link scheme as a means to divert traffic, especially HGVs, away from the AQMA to improve air quality. However—and it is a very significant however—the Woodside Link economic case was published in February 2014, although it does not appear to have been publicly available, and stated:
“The traffic flow forecasts indicate that there is an increase in flows along Luton Road as HGVs re-route in order to access the Woodside industrial area.”
That is highly significant, because the Luton Road is around half of the AQMA. That statement from February 2014 is completely at odds with the document that was put in the public domain on 3 November 2016—namely, the area-wide weight limits report. That report states, at paragraph 15b on page 7:
“An earlier proposal for weight limits in the area was met with opposition from residents of Luton Road. However, it is felt that the completion of the A5-M1 and Woodside Link roads will mean that heavy traffic in Luton Road will be reduced. It is unlikely that side roads will be used in preference to Luton Road, particularly since the proposal is not expected to increase lorry traffic in Luton Road.”
What the public were told was very clear and stated in multiple documents—fewer HGVs on Luton Road as a result of the Woodside Link—and there it was in black and white. So it appears that Luton Road residents were not given the full facts in the run-up to the decision to build the Woodside Link, which received £5 million of central Government funding.
If we then fast-forward to the 2022 post-opening report for the Woodside Link road, we see that there are no traffic studies available for Luton Road—which, I repeat, is roughly half the AQMA. However, I am grateful to one of my highly assiduous constituents, who has looked at the existing traffic studies on three neighbouring roads—Boscombe Road, Church Street and Poynters Road—and has calculated that there has been an 18% increase in HGVs travelling along Luton Road, following the redistribution of traffic that arose in 2018 from the imposition of weight limits on other roads. Central Bedfordshire Council does not want to use the 18% figure, but has confirmed that it is likely that there has been an increase in HGV traffic along Luton Road. That is highly significant given that a major argument for building the Woodside Link road was to improve air quality across the whole of the AQMA, and certainly not just half of it.
A large number of the people who were identified as the key beneficiaries of the Woodside Link road at the funding stage—residents of Luton Road and nearby—are now worse off as a result of the scheme because increased HGV traffic outside their front doors is not a benefit for air quality purposes. Despite that, Central Bedfordshire Council is reporting to the Department for Transport, in the five-year post-opening report, that all the objectives of the scheme identified at the funding stage have been achieved. My assiduous constituent did not agree with some of the figures in that report. It took him six months of complaining to get the figures changed.
There had been claims that the original figures had been reviewed by the Department for Transport, but it turned out that that was not the case either. My constituent had to request copies of the report under the Environmental Information Regulations 2004, and had to wait nine and a half weeks to be provided with a copy. It also needs to be pointed out that the air quality action plan for Dunstable has not been reviewed since its adoption by the former South Bedfordshire District Council in 2006—seventeen years ago. Those plans are supposed to be reviewed every five years.
As MPs, sometimes people come to us about something and there are no easy solutions, but in this case, there is one. Significantly greater use of the Woodside Link road by HGV traffic coming to the Woodside industrial estate and neighbouring industrial developments would provide huge relief. On page 181 in section 13.5, the environmental assessment report for the Woodside Link road, published in October 2012, says of the Woodside Link:
“The route alignments have been designed to maintain substantial distances between existing properties and the new road, where possible.”
The road also includes noise, fencing and bunds. There are significantly fewer residential properties alongside it, and the homes that are alongside it are further away, with some of the protection I have just mentioned.
Coming to the Woodside industrial estate and the neighbouring business developments up the M1 from the south, the additional journey time to go to junction 11A and use the Woodside Link road only takes a few minutes longer than using the Luton Road. The Luton Road is more congested and has many traffic lights on it, causing HGVs to stop and start, producing more diesel fumes and more particulate matter from brakes and tyres.
There is one very significant local business based close to Luton Road which is doing the right thing, and that is Amazon. Amazon sometimes gets criticised as a business, possibly unfairly, but from the very beginning, it has instructed all its delivery drivers to avoid using junction 11, which would necessitate travel along Luton Road, and to use junction 11A instead. That specifically applies to drivers coming up from the south as well. Amazon continues to make that instruction very clear, and is an example of a business behaving responsibly, acting as a good neighbour and caring about local residents’ health. We need other businesses to follow suit.
I salute the patient and studious detective work that my constituent has undertaken to reveal all this information. It is with a desire to seek full transparency, accountability and the remedies necessary to put these issues right that I have brought these matters into the public domain this evening. It should not have taken this long to get this far. Central Government must have a role in overseeing the proper conduct of local government in the noble pursuit of helping people to breathe air that is as clean and pure as possible. It also has a duty to ensure that its money is spent according to the objectives originally stated, with accurate and transparent evaluation of the actual outcomes.
I look to the Minister, who I know is new to this case, to take a serious interest in it and to get into the detail with her officials and Central Bedfordshire Council. As I said, I think there is a solution, and I think we could make life better, as we all originally intended to do.
The Parliamentary Under-Secretary of State for Environment, Food and Rural Affairs (Trudy Harrison)
My hon. Friend the Member for South West Bedfordshire (Andrew Selous) is correct: I am new to this case and, indeed, to this portfolio. However, this debate has led me to understand some of the monitoring that has been carried out in South West Bedfordshire and the wider area. I thank him for bringing this case to my attention and for giving me the opportunity to set out what the Government are doing to improve air quality, which is a fundamental part of our environmental improvement plan across the Department for Environment, Food and Rural Affairs.
Poor air quality is the greatest environmental threat to health, leading to reduced life expectancy and costing the NHS and society billions of pounds each year, so action from Government is vital. Since 2010, we have achieved significant reductions in major pollutants. I hope my hon. Friend will allow me to talk about some of the positive things that have been achieved, and then I will move on to the specifics of this case, where further interrogation of the monitoring results is clearly needed.
We know that emissions of fine particulate matter, known as PM2.5, are down 10%, emissions of nitrogen oxides are down 45%, and emissions of sulphur dioxide are down 73%. Of course, that is good news and is heading in the right direction, but we must go further. Reducing concentrations of PM2.5 in England by just 1 microgram per cubic metre in a single year can prevent around 50,000 cases of coronary heart disease, 15,000 strokes, 9,000 cases of asthma and 4,000 lung cancers over the following 18 years. That is why earlier this year, we set a new maximum annual mean concentration target for PM2.5 of 10 micrograms per cubic metre, down from the previous limit of 20 micrograms, to be met by 2040. Alongside that, we set a population exposure reduction target, which will mean that on average, everyone’s exposure to that harmful pollutant will fall by over a third by 2040. The measures through which we will meet those stretching targets are set out in the environmental improvement plan, which was published on 31 January this year. That action includes continuing to tackle emissions from domestic burning; challenging councils to improve air quality more quickly; reducing ammonia emissions from farming; and improving our regulatory framework for industrial emissions.
As the environmental improvement plan recognises, councils play a vital role in improving air quality and have the tools and levers to tackle air pollution at a local level. Throughout my hon. Friend’s speech, he referenced a particular road, Luton Road, and the good work that a business in his constituency—namely, Amazon—has done by directing its drivers down a different road. Traffic regulation orders are one tool that the local council could potentially look into, and while that is closer to the remit of the Department for Transport, I would be very happy to meet Transport Ministers—probably the roads Minister, my hon. Friend the Member for North West Durham (Mr Holden)—to talk that proposal through.
We are committed to working with local authorities, providing them with clear guidance, funding and tools. On air quality specifically, that includes the air quality grant, which this year provided over £11 million to 44 local projects. Since 2010, we have funded over 500 projects, ranging from anti-idling campaigns around schools to training GPs to become air quality champions. It also includes the £883 million we have made available to help local authorities develop and implement local nitrogen oxide reduction plans and support those impacted by those plans.
I pay tribute to my hon. Friend’s constituent, who seems to be a real champion for improving the air quality in his community. We need those champions—can-do people in the local community who know their area best. It should not be so difficult for people in our communities to get the information and data that they need: even I have struggled to get the data I need to influence policy. That is something that we absolutely need to improve on. The guidance we have provided also includes the revision of our air quality strategy, which we published in April this year. That strategy sets out how we expect local authorities to use their powers to improve air quality and support delivery of our stretching national targets.
Turning to the Woodside Link, that scheme was completed in 2017 to improve access to housing and other developments in the Dunstable area, with £5 million of Government funding; a further £33 million came from the council and third-party organisations. From the embryonic stages of the link road, as my hon. Friend the Member for South West Bedfordshire explained—he will know, because he has been the Member for the area since 2001, all the way through the scheme—local residents were hoping to see a reduction in heavy goods vehicles on that road. The council has shared its “five years on” report with the Department for Transport, and I know that my hon. Friend has raised concerns with that Department, too. The findings and the impacts of the scheme are matters for Central Bedfordshire Council, but I am very happy to take this issue up with it, and I of course recommend that my hon. Friend continues to engage most assiduously with the council on it.
Luton Road is part of Central Bedfordshire Council’s declared air quality management area. The air quality management area was declared in 2005, due to exceedances of the nitrogen dioxide air quality objectives from roadside emissions. I am pleased that Central Bedfordshire Council has stated in its latest annual progress reports to us that the levels of nitrogen dioxide on Luton Road have been compliant with objectives since 2018. My understanding, however, is that there is not a monitor for PM2.5 on Luton Road.
Andrew Selous
I am very grateful for the Minister’s interest and I would like to take up the offer of a meeting with the roads Minister and her to try to work with the local authority, because I think we can move forward to make things better. I think at the heart of this is the public statement
“that heavy traffic in Luton Road will be reduced.”
That has not happened, and that is where the anger comes from. More HGVs belching out diesel fumes when stopping and starting at lights means worse air quality. We will need to measure where I looked before and after, but it must have got worse: more HGVs means the air quality gets worse if someone’s front door is next to a busy road such as that. That is where I think the disappointment and the anger is. The Government do need to be transparent, honest and straightforward, and if we have not achieved what we said we were going to, we need to go back and do a proper post-evaluation report and see what we can do to put it right. Would she not agree with me about that as an approach?
Trudy Harrison
I would certainly agree with the local MP, who has served the area since 2001. He has seen this project through to fruition and absolutely understands the concerns—first, the promises made to his constituents, and now the concerns—about increased traffic and therefore increased emissions. While the Department for Transport does have a comprehensive plan to decarbonise the transport sector, including heavy goods vehicles, we are not there yet. As I have set out, air quality is a fundamental and vital part of our ability to survive and thrive, and it is critically impacting on the health of our nation.
I look forward to meeting to speak in more detail with my hon. Friend, the roads Minister and perhaps members or officials from Central Bedfordshire Council to see how we can assist. I will also remind the council that the action plan for the Luton Road air quality management area dates from 2006. That has not been updated by Luton Council. I am pleased to say that, last year, we strengthened the Environment Act 2021 by introducing a new escalation process.
Andrew Selous
I appreciate that this is a long way from the Minister’s constituency, but the council that has not updated the action plan is Central Bedfordshire Council. This is about Luton Road, but that is within Central Bedfordshire Council, which is the local authority.
Trudy Harrison
I thank my hon. Friend for that correction. There has been a new escalation process for local authorities behind on their reporting duties, including where air quality action plans have not recently been updated, and that will come into force on 30 June.
I can assure my hon. Friend that, even after compliance with the legal air quality objectives has been secured, we do expect local authorities to continue to act to improve air quality. As we set out recently in the air quality strategy, we fully expect councils to take action to reduce emissions of PM2.5 from sources within their control. If we consider that the action from councils is insufficient, we will consult on introducing a stand-alone legal duty on local authorities to take action to reduce PM2.5 emissions.
I thank my hon. Friend again for raising this important issue and for giving me reason to look into our monitoring across the country, particularly the monitoring undertaken in his constituency and specifically on Luton Road. I hope that I have reassured him that we are taking comprehensive and necessary action to drive down harmful emissions, but there is always more to do. We are doing this at both national and local level, protecting our people’s health and our environment, and I look forward to following up with my hon. Friend to discuss this in much more detail.
Question put and agreed to.