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Oral Answers to Questions
(1 month, 3 weeks ago)
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Mr Tanmanjeet Singh Dhesi (Slough) (Lab)
Ben Lake (Ceredigion) (PC)
Richard Thomson (Gordon) (SNP)
The Secretary of State for Wales (David T. C. Davies)
The UK Government fully recognise the challenges posed by cost of living pressures as a result of the covid-19 pandemic and the war in Ukraine, which is why we have provided £96 billion since 2022 to support households and individuals across the United Kingdom —an average of about £3,400 per household.
Mr Dhesi
Diolch, Mr Speaker. Just as the cost of living crisis here demands urgent action for my constituents in Slough, the cost of living crisis in Wales demands it for the good people of Wales, especially as households face being £870 worse off under this Government’s tax plan. Shockingly, a Which? survey has found that one in five working-age parents in Wales is skipping meals owing to high food prices. What recent conversations has the Secretary of State had with supermarkets about keeping the cost of food down?
David T. C. Davies
I hope the hon. Gentleman will recognise and welcome the fact that, as a result of the policies being pursued by this Government, inflation has fallen from more than 11% to about 4%. I hope he will also agree that workers throughout Wales will be very pleased with the cut in national insurance contributions, which means that on average they will be £642 better off. If he is really concerned about the plight of working parents in Wales, I hope he will ask his colleagues in the Welsh Labour Government to roll out the childcare initiatives that are being rolled out in England, but not by them in Wales.
Ben Lake
A number of my constituents have been adversely affected by their transfer from working tax credit to universal credit, because they work in sectors such as agriculture and tourism and their incomes are therefore seasonal. The switch from an annual to a monthly assessment of their entitlement means that many are losing out, but the Government have said that there will be no impact assessment to determine the financial effect of the move. Will the Secretary of State intervene in support of such an assessment, so that workers with seasonal incomes can be treated fairly?
David T. C. Davies
The hon. Gentleman is a champion of constituents in rural areas such as his, and I am happy to look at any information that he wants to give, but I hope that he will recognise that the increase in the living wage will have helped his constituents, even those who work seasonally. That is alongside the extra payments that the Government have made to households in which people are living on benefits or have disabilities.
Richard Thomson
Is the Secretary of State aware of a report published this morning by the Trussell Trust? It states that 55% of the people receiving universal credit in Wales ran out of food last month and could not afford more, nearly 40,000 have needed to use a food bank in the last month, and four in 10 have fallen into debt because they could not keep up with their bills. Whatever the UK Government are doing about this, it is clearly nowhere near enough. What is the Secretary of State going to do about it?
David T. C. Davies
The focus of this UK Government is on ensuring that people can work and do not have to live on benefits, but we recognise that there are those in need. That is why pensions, benefits and the living wage have all risen in line with inflation, and why we have ensured that additional payments are made to pensioners, those living on benefits and households where there has been disability. The fact is that people on low wages will not be helped by the plans of the hon. Gentleman’s Government in Scotland—and, indeed, the Labour Opposition—to shut down the oil and gas industry, which would throw 100,000 people out of work.
Mr David Jones (Clwyd West) (Con)
Does my right hon. Friend agree that the Welsh Government’s sustainable farming scheme, if implemented, would have the most serious possible impact not only on Welsh farming businesses, but on the cost of living in the rural areas that depend on them? Does he further agree that for those communities, the scheme is the very opposite of sustainable?
David T. C. Davies
My right hon. Friend is entirely correct. The Welsh Labour Government’s sustainable farming scheme involves taking 20% of prime Welsh agricultural land out of commission in order to pursue a whole load of nebulous schemes. It will increase food miles, and will reduce our ability to feed ourselves.
Virginia Crosbie (Ynys Môn) (Con)
One of the best ways we can support people with the cost of living across Wales is by supporting businesses. Does the Minister agree that the Welsh Labour Government, propped up by Plaid Cymru, should do more to support hard-working farmers on Anglesey, such as Richard Jones and his family dairy, Maelog Jerseys, in Llanfaelog?
David T. C. Davies
I completely agree with my hon. Friend. The Welsh Government should abandon their so-called sustainable farming scheme, which will remove 20% of prime Welsh agricultural land and prevent farmers from growing food or grazing crops on it. They need to do something about tuberculosis, which is running rampant in Wales, unlike in England, and they need to look at the nitrate vulnerable zones across the whole of Wales, which will also impact farmers, such as her constituents.
Jo Stevens (Cardiff Central) (Lab)
The impact of the Conservatives’ cost of living crisis on people in north Wales has been exacerbated by their dither and delay on new nuclear at Wylfa. The previous project, which Ministers abandoned in 2019, could have been 50% completed by now, and would have created up to 8,500 jobs. Some 900 permanent jobs would also be well on the way, adding a total of almost £400 million a year to the local economy in wages. What does the Secretary of State say to people across north Wales who are still looking for good jobs because of his Government’s failures?
David T. C. Davies
The last Labour Government certainly did not build any nuclear power stations. The UK Conservative Government are getting on with Hinkley, and we are sorting out small modular reactors. There is a process going on, in which six companies with an SMR model will be reduced to two, and one will be selected by the end of the year. We have provided £160 million to buy the Wylfa site. That will ensure that there is a nuclear industry in Wales—a result of the policies of this Conservative Government.
Jo Stevens
It is a stark admission of the Government’s failure that the Secretary of State boasts, after 14 years in government and doing absolutely nothing for five years, of acquiring a site at Wylfa. His Government’s inaction has cost people money, and still does. In nine years, all but one of our current reactors will be offline, which will weaken our energy mix, risk higher prices, and again leave us vulnerable to energy tyrants such as Putin. Will the Secretary of State make an explicit commitment today to backing new nuclear in places such as Wylfa, as Labour has done, in order to unlock jobs, investment and cheaper bills—issues that his party has ignored for so long? Or is this another never-ending Tory fiasco, like High Speed 2?
David T. C. Davies
The last Labour Government were not in the least bit supportive of nuclear. What this Conservative Government have done for energy is increase to 50% the amount of electricity that comes from renewables. We are the first advanced economy to halve our carbon dioxide emissions, and we are pushing forward with floating offshore wind and SMRs. All we get for business from the Welsh Labour Government is a block on new roads being built, 20 mph speed limits, and legislation to charge people for driving to work.
Stephen Crabb (Preseli Pembrokeshire) (Con)
David T. C. Davies
The UK Government are backing our small businesses by raising the VAT threshold, delivering tax reliefs for the creative industries and investing in high-growth industries, such as advanced manufacturing. That is in stark contrast to the Welsh Labour Government’s anti-business agenda; Wales has some of the highest business rates in the whole United Kingdom. It is interesting that the hon. Member for Cardiff Central (Jo Stevens) thinks that having the highest business rates in the United Kingdom is funny.
Stephen Crabb
Sadly, pubs and restaurants are closing at a faster rate in Wales than in any other part of the UK. The measures in the Budget that the Secretary of State mentioned will bring some relief, but does he agree that what is pushing many of these businesses to the wall right now is Welsh Labour’s slashing of business rates support?
David T. C. Davies
My right hon. Friend is absolutely correct. The UK Government have made sure that pubs and other small hospitality businesses receive a 75% discount on their business rates. In Wales, that policy has been absolutely slashed, meaning that pubs and small businesses pay thousands of pounds more under the Welsh Labour Government. That is an absolute disgrace.
Sir Chris Bryant (Rhondda) (Lab)
May I return the Secretary of State to the issue of the Rhondda tunnel? The Chancellor of the Exchequer doled out bits and pieces of money to the constituencies of various Members of Parliament on the Tory at-risk register, but he did not allocate any money to the Rhondda tunnel, despite the Secretary of State having told me personally in the Chamber that we should apply for money from the levelling-up fund. That is all gone, hasn’t it? So where should we now apply for money for the Rhondda tunnel?
David T. C. Davies
There have been three rounds of levelling-up funding. The hon. Gentleman should know that there are growth deals across the length and breadth of Wales, covering every single constituency; that there are special projects being backed in areas such as Newport; and that there is an investment zone and a freeport in Port Talbot. Constituencies the length and breadth of Wales have benefited from the many projects that this Government have put forward. I appreciate his concern for that project in his constituency, and I suggest that he might look at shared prosperity fund money in future.
Alun Cairns (Vale of Glamorgan) (Con)
My right hon. Friend is well aware that the Chancellor has extended business rate relief at the rate of 75% here in England, but of course the Welsh Government are refusing to pass that money on to small businesses in Barry and Cowbridge in my constituency. Does he not think it completely unfair that a business in Bristol or Cornwall will pay a lot less in business rates than a business in Barry or Cowbridge?
David T. C. Davies
My right hon. Friend is absolutely correct. It is extraordinary that the Welsh Labour Government, who are receiving this funding in order to support small businesses in Wales, are failing to pass it on. As a result, the average pub in Wales will pay more than £2,000 more in business rates than a pub in England. The Welsh Labour Government must do more to support small businesses in Wales.
Chris Evans (Islwyn) (Lab/Co-op)
The Secretary of State will know that much of our monetary policy, which has an effect on interest rates for Welsh businesses and Welsh households, is decided in Threadneedle Street. Has he met the Governor of the Bank of England recently? If not, will he invite him to Wales to see the impact of his policies on the Welsh economy? Will he hold a meeting with other Welsh MPs, and may I humbly suggest that it be in Blackwood, Newbridge or Risca in my constituency?
David T. C. Davies
The hon. Gentleman will surely be aware that the Bank of England sets interest rates independently, as a result of a policy brought in by the former Labour Government. It has been widely accepted that it is right that the Bank should set interest rates with a view to not what politicians ask it to do, but what the economy demands. As a result of the policies being pursued by this UK Government in conjunction with the Bank of England, inflation has dropped drastically from over 11% to 4%, and I would like to think that interest rates will soon follow.
Jessica Morden (Newport East) (Lab)
Thank you, Mr Speaker. This
“Budget will do nothing to deliver a better future for retailers and their customers.”
Those are the words of the British Retail Consortium, whose members face 45,000 incidents of theft and 1,300 incidents of violence and abuse every day. To help keep our Welsh high streets safe, we Labour Members want to fund an extra 13,000 police officers and police community support officers, and extra measures to deal with offenders. Why are the Government failing to tackle the epidemic of shoplifting and its victims, and to take it seriously?
David T. C. Davies
The hon. Lady is right to raise this important issue for retailers, but I remind her that the UK Government have provided for an extra 20,000 police officers across the whole United Kingdom. We have repeatedly brought forward legislation to increase prison sentences and punishments for offenders, but that legislation has often been voted against by members of her political party.
Liz Saville Roberts (Dwyfor Meirionnydd) (PC)
This Government pledged £1 billion to electrify the north Wales main line. We all know that that £1 billion is an uncosted number pulled out of the air. We also now know that phase 1 goes no further than Llandudno. How can the Secretary of State explain that to the people living in Ynys Môn and Gwynedd? Talk of rail electrification just means more of the same for us: slow trains, cancelled services and empty election promises.
David T. C. Davies
The UK Government have already shown a commitment to transport in Wales, spending £390 million on improved rail infrastructure over the last control period. In addition to that, there has been the south Wales metro, which is part of a UK Government-Welsh Government joint-funded growth deal. The Prime Minister was very clear about our commitment to the electrification of the north Wales rail line, and that commitment stands.
Liz Saville Roberts
The Tory leader in the Senedd opposes moves to tackle the effects of excessive numbers of holiday homes in our communities. He goes on about
“anti-tourism, and anti-English policies being imposed on the Welsh tourism industry”.
Now that the Tory Westminster Government are abolishing tax breaks for holiday lets, would the Secretary of State claim that his Chancellor is anti-tourism?
David T. C. Davies
I would not. My friend in the Senedd has spoken out repeatedly about the Welsh Labour Government’s plans for an overnight tourism tax, which will have a detrimental impact on tourism businesses across Wales. The hon. Lady’s party is in partnership with the Welsh Labour Government, and if she really wants to support the Welsh tourism industry, I suggest she tells it that her Members will vote against Welsh Labour’s Budget, to prevent that tax from coming in.
Jonathan Edwards (Carmarthen East and Dinefwr) (Ind)
The Secretary of State for Wales (David T. C. Davies)
The Government are committed to transforming our electricity network to reach our energy security and net zero ambitions. We recently announced an ambitious electricity network package that will reduce consumer bills, bring forward £90 billion of investment over the next 10 years and allow us to harness Wales’s renewable resources, such as floating offshore wind in the Celtic sea.
Jonathan Edwards
Pylon developments for electricity transmission and distribution purposes are very controversial in the communities that are expected to host them. I have four such potential developments in my constituency, and the whole of Carmarthenshire is in uproar. Will the right hon. Gentleman ask the Secretary of State for Energy Security and Net Zero to commission a study on technologies such as cable ploughing, which allow undergrounding and have a comparable cost to pylons?
David T. C. Davies
I understand the concerns that have been raised in the hon. Gentleman’s constituency. He has discussed this with me previously, and is championing his constituents’ concerns. The information that I have been given is that laying cables underground would cost five to seven times more, but I hear what he is saying. If he has a presentation or something that he can forward to me, I would be delighted to make sure that officials in the Department for Energy Security and Net Zero see it.
Michael Fabricant (Lichfield) (Con)
On the subject of transmission and distribution policy, is my right hon. Friend aware that the Senedd has decided to ban GB News? What is his policy on that?
David T. C. Davies
There may be a small electricity saving, but it is very disappointing that the Welsh Labour Government are preventing a perfectly legitimate viewpoint from being heard by Members of the Senedd, who would do well to listen to people who do not always agree with everything they say.
Jerome Mayhew (Broadland) (Con)
The Secretary of State for Wales (David T. C. Davies)
As my hon. Friend knows, healthcare is devolved to the Welsh Government, who have received record funding to deliver on their devolved responsibilities. They receive 20% more funding per person than is received for comparable services in England. Despite that extra money, more than 24,000 patients in Wales have been waiting more than two years for treatment. The number of people waiting more than two years for treatment in England, which has roughly 20 times the population, is around 200.
Jerome Mayhew
Last month, fewer than half of red calls were answered by the ambulance service in Labour’s Wales within the necessary eight minutes. That is the Leader of the Opposition’s blueprint for government. Does my right hon. Friend agree that, instead of campaigning for more politicians in Wales, Labour should focus on delivering the health services that the people of Wales thoroughly deserve?
David T. C. Davies
I completely agree with my hon. Friend. I had to make a 999 call for an ambulance for my father-in-law at 11 o’clock one morning, and it arrived at 4 o’clock the following morning. My father-in-law then had to wait for another six hours in the back of an ambulance outside an accident and emergency unit. The Welsh Labour Government had built industrial fans in the ambulance bays to waft away the diesel fumes. That is totally unacceptable. They are cutting the NHS budget in Wales by around £65 million, yet they can find £120 million extra for more politicians in Cardiff Bay.
Hywel Williams (Arfon) (PC)
The Under-Secretary of State for Health and Social Care, the right hon. Member for South Northamptonshire (Dame Andrea Leadsom), has announced an extra £200 million of spending for dentistry. I have repeatedly asked her whether that is in the English budget or additional, in which case it would produce a Barnett consequential, but all she could say, repeatedly, is that it was additional. Can the Secretary of State for Wales tell me whether the extra £200 million for dentistry in England will produce about £10 million extra for Wales, or will it produce nothing at all? Perhaps he does not know, either.
David T. C. Davies
As a result of the Budget, around £170 million extra will go to Wales. The hon. Gentleman knows that Wales receives around 20% extra to deliver healthcare, and it is therefore absolutely appalling that the Welsh Labour Government are unable to deliver the same services that are supplied in England. It is interesting; Labour claims to be the party of the national health service, but where are Labour Members? They are not standing to ask a supplementary to this question, because they are ashamed of the healthcare that they have delivered in Wales. Let this not become a blueprint for the rest of the United Kingdom.
Sarah Atherton (Wrexham) (Con)
A 90-year-old constituent of mine spent 31 hours in the back of an ambulance outside the Wrexham Maelor Hospital waiting to be seen. Betsi Cadwaladr University Health Board, which serves north Wales, is responsible for 80% of the preventable deaths in Wales. Does the Minister agree that the Welsh Labour Government, who run the NHS there, are putting lives at risk?
David T. C. Davies
My hon. Friend is absolutely right to raise concerns about the level of healthcare being provided to her constituents. Shockingly, when the independent commissioners at the Betsi Cadwaladr University Health Board raised serious concerns about more than £100 million being misspent, the Welsh Labour Health Minister called them in and sacked them. No wonder we are not getting the right level of healthcare in Wales.
Angus Brendan MacNeil (Na h-Eileanan an Iar) (Ind)
The Secretary of State and other Tory MPs bring up a litany of health issues in Wales, but Barnett consequentials are a result of health spending and need in England. Have the UK Government ever made any spending decisions on need in Wales, such as in health, and then funded England, Scotland and Northern Ireland as a consequence of Welsh need? He might find that a strange question, because UK decisions are always made on the basis of England’s need and other people get money as a consequence, which is why Wales is never going to catch Ireland for as long as Wales is in the UK and not independent. Is that not so?
David T. C. Davies
The Holtham review looked at what Welsh needs were and calculated that Wales needed an extra 15%. The UK Conservative Government then provided Wales with an extra 20%. The question still stands: why have thousands of people in Wales been waiting for more than two years for treatment, given that the Welsh Labour Government have been given more money than they need to properly fund the health service in Wales?
Marco Longhi (Dudley North) (Con)
The Secretary of State for Wales (David T. C. Davies)
The not very independent commission was set up by Welsh Labour Ministers and reports to them, but it was paid for by Welsh taxpayers. Its report was entirely in line with all the predictions I made: it contained more constitutional navel gazing and more calls for more powers, and nothing at all to address the problems that have been inflicted on Wales by the Welsh Labour Government.
Marco Longhi
It is deeply concerning that a so-called “independent” commission described Welsh independence as “viable”, despite the fact that the vast majority of people in Wales support remaining part of the Union. Of course, there is a difference between something that might be viable and something that is best. Does my right hon. Friend agree that independence for Wales would be hugely damaging to the Welsh economy and public services, and that any further exploration of this idea must be immediately ruled out by the Labour Welsh Government?
David T. C. Davies
I completely agree with my hon. Friend; it is hugely concerning that the Welsh Labour Government were even willing to consider independence for Wales with this commission. They should be sorting out the longest NHS waiting lists in the UK and doing something about the fact that we have the lowest educational standards and some of the highest business rates in the UK. As a result of the last bit of legislation, we also have some of the slowest speed limits in the UK. It is time the Welsh Labour Government addressed the real priorities of the people in Wales with the powers they already have.
Patrick Grady (Glasgow North) (SNP)
Is the reality not that the Conservative party never wanted devolution in Wales or Scotland in the first place, which is why it does not want to see powers extended to either the Senedd or the Scottish Parliament?
David T. C. Davies
I campaigned against the Senedd in the first place, but I was perfectly happy to accept the results of the referendum. I suggest that Scottish National party Members ought similarly to respect the results of independence referendums, be they about independence from the UK or independence from the European Union.
Dr Luke Evans (Bosworth) (Con)
The Secretary of State for Wales (David T. C. Davies)
The recent protests by farmers across the whole of Wales, including outside the Senedd, show the huge anger there is about the proposals for the Welsh Labour Government’s so-called “sustainable farming scheme”.
Dr Evans
One of the best ways we can support Welsh farmers is by choosing to buy British products. That is good for the environment, as it reduces food miles, and for our food security, as we support our farmers. Will the Secretary of State congratulate Morrisons, Aldi, Sainsbury’s and now Ocado, which have all signed up to my campaign to have a “buy British” button online so that consumers can easily find British produce?
David T. C. Davies
I completely agree with my hon. Friend about buying British, although I might go one step further and suggest we buy Welsh food, wherever possible. That will be a lot more difficult if Labour implement its plans to bury 10% of Welsh agricultural land under trees and to bury another 10% under ponds. That will increase food miles, decrease food security and destroy prime agricultural land in Wales. The Welsh Labour Government need to think again.
Jim Shannon (Strangford) (DUP)
The best way to support farmers in Wales, Northern Ireland, Scotland and England is to buy British. Does the Minister agree that we should all work together, across all this great United Kingdom of Great Britain and Northern Ireland, to promote farming everywhere?
David T. C. Davies
The hon. Gentleman is absolutely right. Let us encourage everyone to buy British and ensure we use as much of our land as possible for growing food, not covering it in trees. It is particularly hypocritical for the Welsh Government to tell farmers they have to plant trees on their land when the Welsh Labour Government are responsible for thousands of acres of forest. They are chopping down 850,000 tonnes of trees every year and even putting some of them into the boiler that heats up the Senedd—not that many trees are probably required to add to the hot air in there.
Afzal Khan (Manchester, Gorton) (Lab)
The Prime Minister (Rishi Sunak)
The Post Office IT scandal is one of the greatest miscarriages in our nation’s history. I am determined that the victims get the justice and redress they deserve. Today, we are introducing legislation to quash convictions resulting from this scandal. The Department for Business and Trade will be responsible for the new redress scheme, and we are widening access to the optional £75,000 payment. Hundreds of innocent sub-postmasters have fought long and hard for justice. With this Bill, we will deliver it.
This morning I had meetings with ministerial colleagues and others. In addition to my duties in this House, I shall have further such meetings later today.
Afzal Khan
Despite serious opposition from the Archbishop of Canterbury, three former Home Secretaries and three Government advisers on antisemitism, social cohesion and political violence, the Secretary of State for Levelling Up, Housing and Communities is due to widen the definition of extremism tomorrow. While Members on the Government Benches peddle far-right conspiracy theories about Islamists and Muslims taking over Britain, should the Prime Minister’s priority not be to get his own house in order and to stamp out extremism, racism and Islamophobia in the Conservative party? Will the Prime Minister finally take Islamophobia seriously and agree to the definition?
The Prime Minister
Discrimination has no place in our society. It is important to distinguish between strongly felt political debate on one hand and unacceptable acts of abuse, intimidation and violence on the other. I urge the hon. Gentleman to wait for the details of the strategy. It is a sensitive matter, but it is one we must tackle because there has been rise in extremists who are trying to hijack our democracy. That must be confronted. He talks about peddling conspiracy theories; I would just point him in the direction of the previous Labour candidate in Rochdale.
Mr Tobias Ellwood (Bournemouth East) (Con)
The Prime Minister
My right hon. Friend is right that our incredible NHS staff deserve our utmost thanks for their service. I am pleased that many NHS organisations, as he knows, have their own schemes in place to do that. We also recognise outstanding NHS staff through our honours system, and MPs are able to acknowledge their work through the NHS parliamentary awards. Nominations remain open and I encourage colleagues to avail themselves of that scheme. I will make sure that my right hon. Friend gets to meet the Secretary of State for Health and Social Care, to discuss his specific proposals further.
Keir Starmer (Holborn and St Pancras) (Lab)
May I welcome the legislation on the Post Office scandal?
Mr Speaker, this week we lost the formidable Tommy McAvoy, who served his hometown of Rutherglen and the Labour Government with loyalty and good humour. We send our deepest sympathies to his wife, Eleanor, and their family.
We also learnt that the right hon. Member for Maidenhead (Mrs May) will be taking her well-deserved retirement. She has served this House and her constituents with a real sense of duty, and her unwavering commitment to ending modern slavery is commended by all of us. We thank her for her service.
Is the Prime Minister proud to be bankrolled by someone using racist and misogynous language when he said that the right hon. Member for Hackney North and Stoke Newington (Ms Abbott)
“makes you want to hate all black women”?
The Prime Minister
The alleged comments were wrong, they were racist, and he has now—[Interruption.] As I said, the comments were wrong and they were racist. He has rightly apologised for them and that remorse should be accepted. There is no place for racism in Britain, and the Government that I lead is living proof of that.
Keir Starmer
Mr Speaker, the man bankrolling the Prime Minister also said that the right hon. Member for Hackney North and Stoke Newington should be shot. How low would he have to sink, what racist, woman-hating threat of violence would he have to make, before the Prime Minister plucked up the courage to hand back the £10 million that he has taken from him?
The Prime Minister
As I said, the gentleman apologised genuinely for his comments, and that remorse should be accepted. The right hon. and learned Gentleman talks about language. He might want to reflect on the double standards of his deputy Leader calling her opponent “scum”, the shadow Foreign Secretary comparing Conservatives to Nazis, and the man whom he wanted to make Chancellor talking about “lynching” a female Minister. His silence on that speaks volumes.
Keir Starmer
The difference is that the Prime Minister is scared of his party; I have changed my party—[Interruption.]
Mr Speaker
Order. I want to hear both the Prime Minister and the Leader of the Opposition.
Keir Starmer
Two weeks ago, the Prime Minister invited himself into everyone’s living room at 6 o’clock on a Friday evening. No one asked him to give that speech; he chose to do it. He chose to anoint himself as the great healer and pose as some kind of unifier, but when the man bankrolling his election says that the right hon. Member for Hackney North and Stoke Newington should be shot, he suddenly finds himself tongue-tied, shrinking in sophistry, hoping he can deflect for long enough that we will all go away. What does the Prime Minister think it was about the hundreds of millions of pounds of NHS contracts given to Frank Hester by his Government that first attracted him to giving £10 million to the Tory party in the first place?
The Prime Minister
Mr Speaker, I am absolutely not going to take any lectures from somebody who chose to represent the antisemitic terrorist group, Hizb ut-Tahrir, who chose to serve a Leader of the Opposition who let antisemitism run rife in this Labour party. Those are his actions, those are his values, and that is how he should be judged.
Keir Starmer
The problem is that the Prime Minister is describing a Labour party that no longer exists; I am describing a man who is bankrolling the Conservatives’ upcoming general election. [Interruption.] They can shout all they like. Two weeks ago, the Prime Minister marched them out like fools to defend Islamophobia, and now the hon. Member for Ashfield (Lee Anderson) is warming up the Opposition Benches for them. Yesterday, the Prime Minister sent them out to play down racism and misogyny until he was forced to change course. He will not hand the money back. He will not comment on how convenient it is that a man handed huge NHS contracts by his Government is now his party’s biggest donor. You have to wonder what the point is of a Prime Minister who cannot lead and a party that cannot govern.
Mr Speaker, national insurance contributions fund state pensions and the NHS, so is the Prime Minister’s latest unfunded £46 billion promise to scrap national insurance going to be paid for by cuts to state pensions or cuts to the NHS?
The Prime Minister
I am glad that the right hon. and learned Gentleman has brought up the Budget; it is about time that he spoke about his plans, because what have we heard from the shadow Chief Secretary to the Treasury—[Interruption.]
The Prime Minister
The shadow Chief Secretary to the Treasury has confirmed that the Labour party will not be sticking to the Conservative Government’s spending plans, so we now have a litany of unfunded promises on the NHS, mental health, dentistry and breakfast clubs. That does not even include the £28 billion 2030 eco-pledge that the right hon. and learned Gentleman is still committed to. We all know that while we are cutting taxes, Labour’s unfunded promises mean higher taxes for working Britons.
Keir Starmer
No, the Labour party will not be sticking to the Prime Minister’s completely unfunded £46 billion promise. He thinks that he can trick people into believing that simply shaking the Tory magic money tree will bring it into existence. Let us be clear: 80% of national insurance is spent on social security and pensions; 20% is spent on the NHS. He is either cutting pensions or the NHS, or he will have to raise other taxes or borrowing. Which is it, Prime Minister?
The Prime Minister
I know that it is not the right hon. and learned Gentleman’s strong point, but if he actually listened to the Chancellor last week, he would have heard that NHS spending is going up. It is a plan that is backed by the NHS chief executive officer, who says that we are giving her what she needs. At the same time, we are responsibly cutting taxes for millions of people in work, with the average worker benefiting from a £900 tax cut. What I am hearing from the right hon. and learned Gentleman is that he is against our plans to cut national insurance.
Keir Starmer
We have the highest tax burden since the second world war. I did listen to the Chancellor: £46 billion of unfunded commitments. The Conservatives tried that under the last Administration, and everybody else is paying the price.
Two weeks ago, the Prime Minister promised to crack down on those spreading hate. Today, he has shrunk at the first challenge. Last week, he promised fantasy tax cuts. Now he is pretending that it can all be paid for with no impact on pensions or the NHS. All we need now is an especially hardy lettuce and it could be 2022 all over again. Is it any wonder that he is too scared to call an election, when the public can see that the only way to protect their country, their pension and their NHS from the madness of this Tory party is by voting Labour?
The Prime Minister
The right hon. and learned Gentleman talks about pensions. Pensions are going up by around £900 this year. It is this Government who have protected the triple lock for the last 10 years. He talks about supporting working people. It is this Government who are cutting taxes for every single person in work. It is this Government who are investing in the NHS. All we have from him is a £28 billion unfunded promise. I had a look at “Make Britain a Clean Energy Superpower”. It is all there. He is still stuck to it, Mr Speaker, and if you look through it carefully, there is billions in spending that he has already committed to for Scotland, and billions for Wales. There is actually money for north London too, I notice. The problem is that none of it is funded, so why does he not come clean and tell us that under his plans the British people’s taxes are going up?
Richard Graham (Gloucester) (Con)
The Prime Minister
My hon. Friend is absolutely right that we stepped in with a £150 million financial lifeline to ensure the survival of premiership rugby league clubs during the pandemic. I am told that the Department for Culture, Media and Sport is working with Sport England, as the agent, to talk to borrowers with concerns about their loan agreements—any that have concerns should contact Sport England in the normal way. I can also proudly tell him that we are talking to the Rugby Football Union and the premiership league to secure the future not just of rugby union, but of his local Gloucester rugby.
Stephen Flynn (Aberdeen South) (SNP)
I begin by wishing Ramadan Mubarak to Muslims across these isles.
The Conservative party has accepted a £10 million donation from an individual who has said that one of our parliamentary colleagues in this Chamber “should be shot.” Why is the Prime Minister of the United Kingdom putting money before morals?
The Prime Minister
As I have said, the comments were wrong, the gentleman in question has apologised for them and that remorse should be accepted.
Stephen Flynn
This is complete rubbish. The gentleman in question apologised for “being rude”. He was not rude; he was racist, odious and downright bloody dangerous. On Monday, No. 10 said that we have
“seen an unacceptable rise in extremist activity, which is seeking to divide our society and hijack our democratic institutions.”
Is not the extremism that we should all be worried about the views of those Tory donors we have read about this week?
The Prime Minister
No, there has actually been a rise in extremist activity that is seeking to hijack our democratic institutions. It is important that we have the tools to tackle this threat. That is what the extremism strategy will do. I urge the hon. Gentleman to wait for the Communities Secretary to release the details.
Will Quince (Colchester) (Con)
The Prime Minister
I pay tribute to all postmasters who have campaigned tirelessly for justice, including those who tragically will not see the justice that they deserve. Today’s legislation marks an important step in finally clearing their names. Across the House, we owe it to them to progress the legislation as soon as possible, before the summer recess, so that we can deliver the justice that they have fought for. We continue to work with our counterparts in Scotland and Northern Ireland as they develop their plans, but regardless of where and how convictions are quashed, redress will be paid to the victims across the whole of our United Kingdom on exactly the same basis.
Ed Davey (Kingston and Surbiton) (LD)
The future of children’s cancer services in my constituency, and across south-west London, Surrey, Sussex and beyond, will be decided by NHS England tomorrow. The existing service is world leading and has saved the lives of countless children. Many of us who have engaged with the consultation process feel that the wrong decision is about to be made, ignoring risks to children’s cancer care by moving them to the Evelina London Children’s Hospital. If the Evelina is chosen tomorrow, will the Prime Minister intervene personally to delay any final decision until he has met me and concerned MPs from across the House so that he can prevent the risks to our children’s cancer services?
The Prime Minister
As the right hon. Gentleman knows, decisions about clinical provision are rightly made by clinicians in local areas across the country. More generally, we are investing in more oncologists, radiologists and community diagnostic centres, which is contributing to cancer treatment being at record levels, but I will of course ensure that he and colleagues get a meeting with the Secretary of State.
Miriam Cates (Penistone and Stocksbridge) (Con)
The Prime Minister
My hon. Friend makes a good point. That is why the strategy, which I urge her to wait for, will be one that she can support. It is our duty to ensure that the Government have the tools to tackle the threat that she rightly identifies and highlights. This is absolutely not about silencing those with private and peaceful beliefs, and nor will it impact free speech, which we on this side of the House will always strive to protect.
Janet Daby (Lewisham East) (Lab)
The Prime Minister
I am pleased that the latest published figures show that air pollution has reduced significantly since 2010, partly due to our legally binding targets to reduce concentrations. They will continue to reduce over the following years. On top of that, we have also provided almost £1 billion to help local authorities across the country to implement local plans to reduce nitrogen dioxide and to ensure that we can help those impacted by those plans.
Dame Andrea Jenkyns (Morley and Outwood) (Con)
I understand that the latest scheme being considered is to pay migrants thousands of pounds to leave Britain. Let us just leave the European convention on human rights and deport them for free. So far, more than 40,000 Brits have signed my petition with the Conservative Post calling for us to leave the ECHR. Will the Prime Minister commit to leaving the ECHR or, at the very least, have it in our manifesto to have a referendum and let Britain decide?
The Prime Minister
My hon. Friend is absolutely right that we must do everything we can to secure our borders and ensure that those who come here illegally do not have the ability to stay. That is why our Rwanda scheme and legislation are so important. As I have said repeatedly and will happily say to her again, I will not let a foreign court block our ability to send people to Rwanda when the time comes.
Liz Saville Roberts (Dwyfor Meirionnydd) (PC)
The Prime Minister
First, I am pleased that the National Theatre received significant funding from the Chancellor in the recent Budget to support its fantastic work across the UK. However, I am surprised to hear the right hon. Lady raise the NHS, when her party is propping up the Welsh Labour Government, who have absolutely the worst NHS performance of any part of the United Kingdom.
Sir Christopher Chope (Christchurch) (Con)
May I thank my right hon. Friend the Prime Minister for meeting me six weeks ago to discuss the plight of victims of covid-19 vaccine damage? Following that discussion, and his very sympathetic response during the GB News “People’s Forum” to Mr John Watt, who is himself a victim of covid-19 vaccine damage, will the Government be supporting my Covid-19 Vaccine Damage Payments Bill this Friday?
The Prime Minister
I thank my hon. Friend for raising the issue and for the conversation I had with him. I extend my sympathies to all those who have been affected. I will of course ensure that he can meet the Secretary of State to discuss his Bill. We are, as I committed to him, looking at the issue in some detail to ensure that our policies are providing the support that is needed.
Marsha De Cordova (Battersea) (Lab)
The Prime Minister
No, Mr Speaker. I am pleased that the gentleman is supporting a party that represents one of the most diverse Governments in this country’s history, led by this country’s first British Asian Prime Minister.
Harriett Baldwin (West Worcestershire) (Con)
I look forward to voting later today for a tax cut for thousands of my constituents; a national insurance tax cut that will mean £900 off the tax bill of thousands of my constituents. After listening to the rhetoric from the Leader of the Opposition today, does the Prime Minister expect that the main Opposition party will vote against this afternoon’s tax cuts?
The Prime Minister
My hon. Friend raises an excellent question, because while Conservative Members believe in a country where hard work is rewarded and people can keep more of their hard-earned money—which is why we are cutting their taxes by an average of £900 each—we hear consistently from Labour Members that they not only disagree with that approach, but continue to cling to unfunded spending promises that would put taxes up. Also, just yesterday the shadow Chief Secretary to the Treasury, the hon. Member for Bristol North West (Darren Jones), described our plan to end the double taxation on work as “morally abhorrent”. That is the contrast between us and them: Labour will put your taxes up, and the Conservatives will keep cutting them.
Patrick Grady (Glasgow North) (SNP)
The Prime Minister
When it comes to the issue of tackling illegal migration, when Parliament expresses a clear view on what it believes should happen and supports that with legislation, and when we believe that we are acting in accordance with all our international obligations, I have been very clear that I will not let a foreign court stop us from sending illegal migrants to Rwanda. That is the right policy and, in fact, the only way to ensure the security of our borders and end the unfairness of illegal migration.
Sir Edward Leigh (Gainsborough) (Con)
As a general election is not merely an expression of opinion but a serious choice, does my right hon. Friend agree that there is only one potential party of government that has the will, the inclination and the determination to stop mass illegal and legal migration, and that is the Conservative party? Let us unite our movement and do that.
The Prime Minister
I agree with my right hon. Friend entirely. We know this because not only has the Leader of the Opposition opposed the scheme, but he has been clear that even when the scheme is implemented and working, he would still scrap it. That tells us everything we need to know: on this issue, Labour’s values are simply not those of the British people. There is only one party that is going to stop the boats: the Conservative party.
Sarah Olney (Richmond Park) (LD)
The Prime Minister
It would not be right for me to comment on individual companies, but what I can say is that our ambitious storm overflow reduction plan is backed by £60 billion of capital investment. We now monitor every single storm overflow across England, and we have legislated to introduce unlimited penalties on water companies that breach their obligations. The independent regulator and the Environment Agency have the powers they need to hold water companies, wherever they are, to account.
Mrs Natalie Elphicke (Dover) (Con)
Later this year, a new digital EU border system will come in, yet key changes that are required and key details have still not been decided by the EU. Urgent decisions are needed on additional funding and preparation to keep Dover clear and traffic moving through Kent. Can my right hon. Friend the Prime Minister assure me that this issue is being taken seriously at the highest levels of Government, and that funding and support will be made available to keep Dover clear, support the residents of Dover and Deal—and Kent—and secure our vital cross-channel trade and tourism?
The Prime Minister
My hon. Friend is right to raise this issue, and I assure her that it is being discussed at the highest levels of Government between UK Ministers and our EU and French counterparts to make sure that we have practical and constructive solutions that will ease the flow of traffic in the way that she describes and benefit her local community.
Rachael Maskell (York Central) (Lab/Co-op)
The Prime Minister
I have said repeatedly that we are incredibly concerned about the growing humanitarian crisis in Gaza. Too many civilians have lost their lives, and nowhere near enough aid is getting through. In contrast to what the hon. Lady said, actually the UK is playing a leading role in alleviating that suffering. Just recently, we increased the amount of aid this year to £100 million. Just today, 150 tonnes of UK aid is due to arrive in Gaza, and a full field hospital, flown from Manchester to the middle east last week, will arrive in Gaza in the coming days, staffed by UK and local medics to provide lifesaving care. We are doing absolutely everything we can, working with our allies, to bring much-needed aid to the people of Gaza.
Cherilyn Mackrory (Truro and Falmouth) (Con)
Will my right hon. Friend join me in thanking the maternity team at the Royal Cornwall Hospital at Treliske in my Truro and Falmouth constituency for all the outstanding work they have done to improve maternity services over the last few years? Their sheer hard work, along with the coming new women and children’s hospital, means that there are no midwifery vacancies in Cornwall, which I think he will agree is a fantastic achievement.
The Prime Minister
I thank my hon. Friend for highlighting the improvement in maternity services at the Royal Cornwall. She is a tireless campaigner on reducing baby loss, and I commend her for her recent work on the introduction of baby loss certificates. As she knows, we are committed to a new women and children’s hospital for her local trust in 2030, as part of the new hospital programme.
Sarah Dyke (Somerton and Frome) (LD)
The Prime Minister
Conservatives in the south-west are rightly championing the reopening of local stations. Cullompton and Wellington will be among the places that receive funding as a result of our decision on HS2. It is because of that decision that we have now freed up billions of pounds of funding to invest in local transport across the country, and local leaders will be put in charge of that money to prioritise their local needs.
Several hon. Members rose—
Mr Mark Francois (Rayleigh and Wickford) (Con)
Prime Minister, in the 1930s, one of your less illustrious predecessors, Neville Chamberlain, so denuded the British armed forces of funding, until it was too late, that we failed to deter Adolf Hitler, and 50 million people tragically died in the second world war. Russia has invaded Ukraine, China is threatening Taiwan, and British shipping is being attacked by Houthis in the Red sea. Could you please assure me, as the son of a D-day veteran, and the House of Commons that we are not going to forget the lessons of history and make the same mistake again?
The Prime Minister
I thank my right hon. Friend for his tireless campaigning for our armed forces. He is right to champion them and the role they play. I agree with him wholeheartedly that sadly the world we are living in is becoming both more challenging strategically and more dangerous, and in response to those challenges we must invest more in our armed forces. That is exactly what we are doing, with the largest uplift since the cold war recently topped up with billions of pounds to strengthen our nuclear enterprise and rebuild stockpiles.
My right hon. Friend rightly mentioned the threats posed by the Houthis and by Russia in Ukraine. I know that he will be proud of the role that the United Kingdom is playing in both those situations. We are respected and valued by our allies. Most importantly, we on the Government side of the House will do whatever it takes to keep our country safe.
Gas-fired Power Stations
(1 month, 3 weeks ago)
Commons ChamberRead Full debate Read Hansard Text Watch Debate Read Debate Ministerial Extracts
Caroline Lucas (Brighton, Pavilion) (Green)
(Urgent Question): To ask the Secretary of State for Energy Security and Net Zero to make a statement on the Government’s plan to build new gas-fired power stations.
The Minister for Energy Security and Net Zero (Graham Stuart)
The second consultation of the review of electricity market arrangements was launched yesterday. It sets out the choices that we need to make to deliver a fully decarbonised electricity system by 2035. Since 2010, the Government have reduced emissions from power by 65% and thus made the UK the first major economy in the world to halve emissions overall. We have built record volumes of renewables, from less than 7% of electricity supply in 2010 to nearly 50% today, allowing us to remove coal altogether by October this year.
Our success in growing renewables is the reason we need flexible back-up for when the wind does not blow and the sun does not shine. Our main source of flexible power today is unabated gas. More than half of our 15 GW of combined-cycle gas turbines could be retired by 2035. Meanwhile, electricity demand is set to increase as heat, transport and industry are electrified. We must ensure that we have sufficient sources of flexibility in place to guarantee security of supply. We need up to 55 GW of short-duration flexibility and between 30 and 50 GW of long-duration flexibility. Our aim is for as much of that capacity as possible to be low carbon.
While low-carbon technologies scale up, we will extend the life of our existing gas assets, but a limited amount of new build gas capacity will also be required in the short term to replace expiring plants as it is the only mature technology capable of providing sustained flexible capacity. We remain committed to delivering a fully decarbonised electricity supply by 2035, subject to security of supply, and we expect most new gas capacity to be built net zero-ready. The Government have committed £20 billion to carbon capture, usage and storage, and are developing comprehensive support for hydrogen. In the future, unabated gas plants will run for only a limited number of hours a year, so emissions will be entirely in line with our legally binding carbon budgets.
Caroline Lucas
I am a bit tired of this Government shunning any scrutiny of their climate record and instead relying on a past record, because while the UK may indeed be the first major economy to cut its territorial emissions by half since 1990, we are not on track to achieve our 2030 targets, and if we factor in consumption emissions, the UK has cut emissions by only 23%. So let’s have a little less complacency from the Minister. He will know that the Government’s announcement on new gas-fired power stations does in fact, contrary to what he claimed, risk undermining our climate targets and leaving the country reliant on imports of expensive gas. Members should have been given the opportunity to question the Minister on its implications for the decarbonisation of the UK’s energy system by 2035, with 95% of UK electricity being low carbon by 2030.
First, why was the statement not made in Parliament? Why was it made instead at Chatham House, where Members were not able to question the Minister on the impact of this decision? Secondly, will the Minister explain how this proposal differs from the functioning of the existing capacity market, or will he admit that it is just the Government’s latest attempt to stoke a culture war on climate? Thirdly, the Climate Change Committee is clear that no new unabated gas plants should be built after 2030, so what is the Government’s timeline for developing these new gas-fired power stations?
I asked the Minister about this yesterday in the Environmental Audit Committee; I did not get a response. I also asked him what is being done to ensure that these gas plants are zero carbon by 2035; that was not set out either in the Secretary of State’s speech yesterday or by the Minister today. The Minister did tell the Environmental Audit Committee that the plants would be required to be both carbon capture and storage-ready and hydrogen-ready. That does not amount to a meaningful plan, so will he please give us more than his thus far unevidenced words of assurance, and will he explain what the Government’s plan is to support the development of batteries and long-term storage technologies and to drive innovation so that we can get off volatile gas for good?
Graham Stuart
It is rather odd to be asked about the ability to scrutinise this, when yesterday was the launch of a consultation that will go on for some time and, as the hon. Lady knows, I was in front of the Select Committee yesterday. It is rather strange that she should highlight that point.
The hon. Lady is confused, as she often is, because she is so political. She would appear to set politics always ahead of climate. She struggles to recognise that that United Nations framework convention on climate change rules are about territorial emissions—countries own the emissions in the territory where they take place. Her numbers on embedded emissions are wrong, but she does not care about that; she just carries on with a political diatribe against the Government, who have done more than any other in any major economy on this Earth to decarbonise their economy. And we have done it not as the hon. Lady would have us do it—by being reduced to living in yurts—but while growing the economy by 82%. It is people like the hon. Lady who make people on my side of the Chamber at times think that we are perhaps engaged in some form of madness; we are not, but she doesn’t half make it sound like we are.
Can these new gas plants be consistent with the Government’s commitment to decarbonise the power sector by 2035? Our published net zero scenarios for the power sector—I invite the hon. Lady to read them—show that building new gas capacity is consistent with decarbonising electricity by 2035. From those scenarios we expect that, even with new gas capacity, rather than the 38% of electricity generation which in 2022 came from gas, that figure will be down to 1% by 2035—or, if we follow the scenario set out by the Climate Change Committee, perhaps 2%. We are going to have that as a back-up. It is sensible insurance; it is about keeping the lights on while we carry on the remarkable transformation this Government have achieved in moving from the appalling legacy of the Labour party of less than 7% of electricity coming from renewables to nearly 50% today.
Sir Jacob Rees-Mogg (North East Somerset) (Con)
The announcement on gas-fired power stations is extremely welcome, but at the moment a kilowatt-hour of electricity in the UK costs 44 cents, against 17 cents in the US and 8 cents in both China and India. We have become fundamentally uncompetitive because of this green obsession. We want cheap electricity and we should have gas and we should have coal, and we should postpone net zero indefinitely because we are only 1% of global emissions. We are making no difference, and the US economy is growing consistently faster than ours because of cheap energy. This is a good first step against the net zero obsession. We need to go further.
Graham Stuart
I would chide my right hon. Friend with the science and evidence that are emerging all the time. There is a climate challenge and emergency, which is why we are looking to reduce our emissions. He is quite right to challenge that by saying, “We are less than 1% of global emissions, so how does this make sense?” That is why we hosted COP26 and got the rest of the world to commit to following us. We are bringing in the carbon border adjustment mechanism from 2027 precisely to ensure that we create an economically rational system that supports jobs in this country, while meeting the climate challenge that needs to be met.
Dr Alan Whitehead (Southampton, Test) (Lab)
I am little puzzled about what all this is about. The Committee on Climate Change and all credible energy experts have said that we will need a small residual of unabated gas in the system for the medium term, and that is consistent with a fully decarbonised power system. No one disputes that, and it is barely worth an announcement. We should extend the lives of existing plants to meet that need. If new-build plants are needed in the short term to replace some of those retiring gas-fired power stations, there is no disagreement, provided they are capable of converting to hydrogen or carbon capture, as the Government say they must be.
However, that is not what the Secretary of State said yesterday at the Chatham House meeting. The Government’s own analysis published yesterday shows that 24 GW of existing gas capacity could be maintained via life extension and refurbishment, and 9 GW of new capacity is already in the baseline under existing capacity market arrangements. That is an uncontroversial position and analysis, and hardly something worth making a huge fuss about. But again, that was not what the Secretary of State talked about at yesterday’s Chatham House conference.
Given that analysis, could the Minister enlighten us with the number of new gas plants that the Government are hoping to build, given there is no mention of that in the 1,500 pages of documents that were published yesterday? That is an important point, because it appears to show the Government’s intention to go beyond what is already in the analysis and build a large number of new gas-fired power stations for the future.
There is a great deal in the review of electricity market arrangements published yesterday that is worth discussing, not least the Government’s glaring failure to bring forward low-carbon flexible technologies such as long-duration storage, which everyone knows we will need. It is a shame that the Minister has not properly addressed that. Will he give us clarity on whether this is a meaningless announcement within existing policy arrangements? Or, as has been said, is it an attempt to conjure a culture war out of climate and energy policy, with announcements with no substance or value that show that the Government have no serious plan for energy in our country?
Graham Stuart
The hon. Gentleman asked whether new power plants will be hydrogen or carbon capture, utilisation and storage ready; we will legislate to make that a requirement. He asked how much there will be; around 5 GW, but that is dependent on so many interrelated things, such as the growth of low-carbon and flexible storage, which, as he referred to we are a world leader in developing and supporting both in innovation and through the capacity market. He suggested that none of that was clear yesterday, but it was made crystal clear.
We are a world leader, having announced £20 billion for CCUS. The hon. Gentleman will remember, because he has been around a long time, that in 2003 the then Labour Government said that carbon capture, utilisation and storage was urgent and that there was no route to 2050 without it, but then they proceeded to do nothing about it. This Government are getting on with it. We are putting our money where our mouth is and developing technologies such as carbon capture and hydrogen, in a way that the Labour Government failed to do—as they did with renewables, to boot. All they do is talk about climate, but the truth is that the greatest climate risk to this country is if the right hon. Member for Doncaster North (Edward Miliband) destroys the market and starts some state-run quango, which will wreck the renewables growth that we have seen.
Jerome Mayhew (Broadland) (Con)
I welcome the announcement. The independent Committee On Climate Change recognises that we will need unabated gas in the electricity market right up until 2035 and beyond, and more widely that even in 2050, 25% of our energy needs will come from hydrocarbons. Does my right hon. Friend agree that this is exactly the right way to maintain lower energy production costs, while still meeting our net zero targets?
Graham Stuart
I do agree with my hon. Friend. The point is to have a wide range of back-up capacity, but not to use it very much with fossil fuels, and, as I think has long been the case, to ensure that any new gas generation should be carbon capture-ready. We look forward to it being hydrogen-ready, too. We are in a very similar position to Germany and other countries that are looking at exactly that. For instance, I think both Germany and Ireland, as part of their growth in renewables, recognise the need for gas, albeit used less and less, to ensure that the lights stay on and there is appropriate insurance in place.
Dave Doogan (Angus) (SNP)
What a cluster—it is unbelievable that we are in this situation. In the Secretary of State’s letter to Members today, she said that the Government are taking steps to make sure the lights stay on. That is the legacy of 14 years of the Conservatives in charge of energy. Uncomfortably, I find myself in agreement with the right hon. Member for North East Somerset (Sir Jacob Rees-Mogg). This is a significant departure, and one we should be alarmed about. Where is the Government’s precious nuclear baseload now? Where is the exemplar of CCUS working at the necessary scale, from which the Government are taking inspiration? Would it not have been an elegant solution to have unabated gas winding down at the same time as battery storage and long-duration pump storage was winding up? We cannot have that, because the Government have dragged their feet on both things. What does the Minister say to people who are having infrastructure for transmission put throughout their communities and are being told to suck it up because that is what we need to get gas out the system, when the same Government are now building gas-fired power stations?
Graham Stuart
The hon. Gentleman, who is supposed to lead on this subject for his party, should have listened to what I said earlier. In 2022, 38% of generation came from gas. By the mid-2030s, it will be 1% or 2%. Why are we having it? To balance the renewables we are growing, particularly in Scotland, and support Scottish jobs. Of course if we put generation in Scotland when the demand is in the south, we have to provide connecting infrastructure. Previous generations had to wire up the UK to become the rich and prosperous country we are today. We need to do it again now. We are working with local communities, listening to their voices and making sure they are not misled by people who come up with such nonsense as the hon. Gentleman just did.
James Wild (North West Norfolk) (Con)
I commend my right hon. Friend for his refreshingly clear articulation of our strong record in this area, both in the House today and in the media yesterday. Obviously, security of supply must come first. How will the plans incentivise investment in back-up gas-fired power stations, while minimising costs to consumers, which is also very important?
Graham Stuart
I thank my hon. Friend. He and my right hon. Friend the Member for North East Somerset (Sir Jacob Rees-Mogg) are absolutely right to focus on the economics. We have to get the economics right. We have used an auction-type mechanism in the capacity market to ensure flexible capacity. We are incentivising more and more of that to be low carbon, with batteries coming in at scale, as well as pumps and potentially hydrostorage. We also need hydrogen and carbon capture. We are ensuring a balanced system with discipline built into it to drive costs down. When CBAMs and so on come on stream, I firmly expect that in the 2030s we will have lower-cost energy than our neighbours and we will, as my right hon. Friend the Member for North East Somerset referred to, be more economically competitive.
Angus Brendan MacNeil (Na h-Eileanan an Iar) (Ind)
Thank you, Mr Speaker—tapadh leibh.
It is concerning that this was announced in Chatham House and not here in the House, and that the Secretary of State is not here today. Off-piste speeches have cost in the past. My Committee heard this morning that an Energy Minister made a speech a decade ago that, with the effect it had on investment, cost 1,000 jobs. The Minister says that this is a consultation, but have the Government picked a winner? What room have they given for storage to be in the mix? Are they confusing energy security—we have learned from the Ukraine war important how that is—with continual electricity supply? Given what the Minister says about the percentage of gas used by 2030 and after, what percentage of capacity will this provide, and what percentage does he envisage will be used day to day? What thought has been given to consideration of other technologies in his gigawatt demand?
Graham Stuart
I thank the hon. Gentleman for his question. I suggested, on different scenarios, about 1% or 2% of total generation coming from gas in future, compared with 38% in 2022, on an annualised basis. Clearly, as the hon. Gentleman should know better than anybody here with his deep knowledge of the subject, it is based on intermittency. It depends on how much the sun shines and how much the wind blows, but we will ensure we have a robust system. That is exactly what we are doing. I would love it if people could celebrate this country’s global leadership and the fact that we are driving this forward, especially those such as members of the Green party, who are supposed to care about climate change. We are doing this in a way that maintains security of supply and, by bringing in more and more renewables, with the lowest-cost and most flexible system to back it up, doing so in a more and more economical fashion.
Alexander Stafford (Rother Valley) (Con)
I welcome the announcement today. It is pure common sense. When the wind is not blowing and the sun is not shining, we need security of supply. Although we need to deal with climate change in the medium to long term, we must also deal with security of supply in the short term, so I welcome the announcement. Does the Minister agree that for medium and longer-term security of supply, we must upscale what we are doing in the hydrogen sector, with more hydrogen production and usage, and be a world leader in hydrogen? For the moment, we are slipping behind a bit.
Graham Stuart
I agree with my hon. Friend about the importance of hydrogen. Where I disagree with him is that, having seen the projects in hydrogen allocation round 1—eight projects, I think—I do not think there is any indication that we are slipping behind. The truth is that the whole world needs to do this, because everyone’s analysis, from the International Energy Agency to the Climate Change Committee to my own Department, suggests that hydrogen and carbon capture are necessary to bring about the decarbonised system we seek. He is absolutely right on the importance of hydrogen. He can expect more developments, because this country is leading on that, as it is on CCUS.
Sir Mark Hendrick (Preston) (Lab/Co-op)
I have a great deal of respect for the Minister and his knowledge of the subject, and the fact that he, like most of us in this Chamber, recognises the need to cut carbon. I am sure he is not one of those who, like the right hon. Member for North East Somerset, would follow the flat earthers. But clearly, a great deal of trust and reliance is being put on carbon capture and storage, and on hydrogen. Both are still quite new technologies. We have talked about this stuff for 25 years. The Minister seemingly forgets that this Government have been in power for the past 14 years and we are still not off the blocks on hydrogen and carbon capture and storage. Is it not the case that the Government are taking this position because it is a nod and a wink to the gas and oil industries whose support they will probably need before the election this year, and that this is part of the whole agenda of placating the right wing of his own party?
Graham Stuart
I was with the hon. Gentleman nearly all the way. He is right: the whole world is looking at carbon capture and hydrogen, because that is what the science says. Everybody who analyses it says that we need it bur that it is not yet at a great level of maturity. Just as in so many other areas, this country is leading the way. We have cut emissions more than anyone else. He knows the dire legacy left by his party in 2010, with less than 7% of electricity from renewables, which was just appalling, and the real danger if we go back to that. That is why we have gas power as a back-up, so that we have a completely sound system. We will seek to deliver a decarbonised system by 2035. The biggest risk to that would be if the right hon. Member for Doncaster North were to come in and start to mess with a system that has lifted us from the back to the front of climate leadership. That is the real danger, and that is what we need to avoid.
Mrs Heather Wheeler (South Derbyshire) (Con)
Will my right hon. Friend stop by South Derbyshire, specifically the Willington site, which already has planning permission for a new gas power station, and cut the ribbon when it opens? We want spades in the ground, so I welcome the announcement. I invite him to come and have a look at that site, which is ready to go.
Graham Stuart
I agree with my hon. Friend and I applaud those who are investing in our system. We have made ourselves one of the most investable countries in the world for clean energy. Gas has an important part to play in that balance, and with the development of carbon capture and hydrogen there is every opportunity for such assets to have an even longer life in a green fashion. I would love to come and see my hon. Friend.
Wera Hobhouse (Bath) (LD)
Oil and gas are the energy sources of the past, and we need an intermittent energy source. Gas power plants are not intermittent. They sit there, and then because there is too much renewable energy it is shut off, and gas—the carbon energy—continues to flow. That is the reality of today: we are wasting renewable energy. The Government do not recognise that reality, and do not respond to it.
My question is this, however. How many times have Ministers met representatives of the oil and gas industry, and how does that compare with the number of meetings with representatives of the renewables industry?
Graham Stuart
As so often—the hon. Lady does it spectacularly well—she is completely and utterly wrong. Renewables are turned off, as she would say, because of constraints within the system, and gas is turned on because the system could not cope otherwise. That is why we have the transmission acceleration action plan and the connections action plan. [Interruption.] Every time we try to build out the infrastructure, the hon. Member for Angus (Dave Doogan) opposes it. He says that he and the Scottish National party want to be a friend of the renewables industry and Scottish jobs, but then he opposes the infrastructure that is required for it.
Graham Stuart
I meet representatives of the oil and gas industry a lot, because the truth is that even given our world leadership—and we have cut emissions by more than any other major economy on the planet—75% of our primary energy today is still from oil and gas. We will still be dependent on oil and gas in 2050, when we are at net zero. That is why it is so crazy that the Opposition parties, including that of the hon. Lady, believe in opposing licences when we are actually dependent on the product. All that ending licences would do is lead to the loss of British jobs and the import of higher-emission products from abroad. I really do hope that Opposition Members will think a bit more deeply and we can hear some common sense. I hear it in the Corridors from Back Benchers, but from the Front Benchers and the hon. Lady I hear nothing but nonsense.
Martin Vickers (Cleethorpes) (Con)
I welcome this policy decision, which is a recognition of reality. Can the Minister confirm that the new plants will be able to convert to low-carbon alternatives in the future?
Graham Stuart
I thank my hon. Friend. We will be legislating precisely to create exactly that obligation for carbon capture and/or hydrogen readiness.
Sammy Wilson (East Antrim) (DUP)
I hope that this decision is indicative of a realisation that seems to be slowly dawning on the Government about the impact of the madness of their net zero policy, which has damaged the UK economy. We have higher electricity prices than most of the other G7 countries, we have lost vast numbers of jobs in energy-intensive industries, and now it has been recognised that because of the intermittency of wind and solar there is a risk of blackouts.
I welcome this common-sense decision, but given that we are going to use gas to power these stations, why does the Minister not take the next logical step and legislate to allow us to tap into our vast UK gas resources? As the United States has shown, that would bring down prices, give us energy security, and make our economy more competitive.
Graham Stuart
The right hon. Gentleman could not be more wrong: we have record levels of employment, and we overtook France recently to become the eighth largest manufacturer in the world. I would not expect him to join the dismal party opposite in talking this country down. In truth, we are leading the world in tackling climate change, and we have created more jobs than at any time in British history. Going forward into the 2030s, by harnessing more and more British low-carbon, renewable energy we will lower bills for families and increase our competitiveness. As I have said, in a world that is increasingly recognising the need for action and seeking to introduce measures such as the carbon border adjustment mechanism—effectively, carbon taxes at the border—the UK is in pole position to grow from its already strong economic position into an even stronger one as a result of the net zero policies of this Government.
Bob Blackman (Harrow East) (Con)
Across London and the south-east, many much-needed developments that are required for the increasing population have literally been frozen because of a lack of supply from the grid. Nuclear power can provide the baseload; renewables are unreliable, and obviously gas is required at peak times in particular. Does my right hon. Friend agree that this is all about topping up the grid at peak times, when people want to use electricity, because gas is the fastest way to bring a power station on to the grid and is also the fastest to shut down?
Graham Stuart
My hon. Friend will be aware of all the work we are doing to speed up transmission. We are halving the timeline from 12 to 14 years to seven, and the connections action plan has already moved forward connection dates for projects amounting to 40 GW. We are putting in a lot of work across the piece. This gas capability is there as a back-up, but the usage and the emissions resulting from it will fall precipitately over the next 10 years, and we can all celebrate that.
Deidre Brock (Edinburgh North and Leith) (SNP)
After their years of delaying meaningful investment in clean, cheaper, reliable renewable energy technologies such as tidal and long-duration pumped hydro storage, it is no surprise that the Government are now having to scramble to create new dirty gas-powered plants. How much does the Department estimate the new plants will cost, where is it suggesting they should be built, and what does the Minister mean by carbon-capture-ready? Does he mean carbon-capture-operational?
Graham Stuart
As I have said, further legislation will come forward in the not-too-distant future, and the hon. Lady will be able to scrutinise it—but it is extraordinary that she should say of a country whose renewable energy generation has risen from less than 7% to approaching 50% that we have gone slow on renewables. We have decarbonised our power system faster than any other major economy on the planet.
The reality denial that we hear from the Scottish National party is quite extraordinary. The hon. Lady highlighted tidal energy. Well, guess which country in the world uses the most tidal energy. The right hon. Member for Orkney and Shetland (Mr Carmichael), who is one of the greatest champions of tidal, could tell the hon. Lady, if she is really so ignorant. He is a fellow Scottish MP, and he could tell her that the UK has more tidal deployment than any other nation. We are proud of that, we are proud of the transformation, and it is about time the SNP and the Labour party stopped misleading the people and the House.
Patrick Grady (Glasgow North) (SNP)
The Minister said earlier that we faced a climate challenge, after struggling for words to describe what we are facing. Why can the Government not join the global consensus and admit that what we are facing is a climate emergency? As the Secretary-General of the United Nations has said, the year of climate warming is over and we are in an era of climate burning.
Graham Stuart
Unlike the hon. Gentleman, I am not primarily concerned with words—I am primarily concerned with action—but in fact I did use the “emergency” word. I do not know whether I broke some golden rule which says that Ministers should not use it, but I do treat this as an emergency. I see the world warming up, I see the negative impacts of climate change, and that is why I spend every single day feeling proud to be part of the Department that is decarbonising its country faster than any other in the world. The hon. Gentleman should get away from rhetoric and start to focus on action.
Jim Shannon (Strangford) (DUP)
I thank the Minister for all his answers. While there is certainly an urge to prioritise our net zero promises, I am grateful to the Government for taking back-up precautions into consideration. As the Minister has often recognised in responding to questions from me, Northern Ireland plays an important role in our contribution to meeting the net zero targets. Will he therefore ensure that Northern Ireland is prioritised as a leading location for any new gas-powered stations that are to be built?
Graham Stuart
The hon. Gentleman sometimes gives the impression that he would like me to be running the energy system in Northern Ireland, but it is devolved—and we have Ministers there again, which is a cause for celebration. I will work closely with Ministers in Northern Ireland, as I do with Ministers in other devolved Administrations, because if we are to meet our net zero targets, Northern Ireland must deliver its own targets. Scotland has to deliver its targets, as does Wales.
We must work together, in a spirit of collaboration. We can do that, and if the hon. Gentleman can persuade his right hon. Friend the Member for East Antrim (Sammy Wilson), who is sitting beside him, that it can be done in a way that strengthens our economy as well, we really will have something to celebrate.
Post Office Legislation
(1 month, 3 weeks ago)
Commons ChamberRead Full debate Read Hansard Text Watch Debate Read Debate Ministerial Extracts
The Parliamentary Under-Secretary of State for Business and Trade (Kevin Hollinrake)
With permission, Mr Speaker, I shall make a statement about Post Office legislation and the Horizon redress schemes.
I am very pleased to be able to announce that today we are introducing a new Bill that will quash the convictions of postmasters in England and Wales affected by the Horizon scandal. As set out in my written statement last month, this legislation will quash all convictions that meet a clear set of conditions. Those in scope will have their convictions quashed on the day that the new legislation is brought into force. Subject to parliamentary passage, our aim is for Royal Assent to be received as soon as possible before the summer recess.
We accept, and have always been clear, that the legislation may overturn the convictions of some people who are guilty of genuine wrongdoing, but we believe this is a price worth paying to ensure that many innocent people are exonerated. However, the Government will seek to mitigate the risk of people receiving financial redress when they have not been wronged.
The Government also accept that this legislation is unprecedented. It is an exceptional response to a factually exceptional situation. I want to be clear that this does not set a precedent, and neither is it a criticism of the judiciary or the courts, which have dealt swiftly with matters brought before them. The fact remains, however, that three years after the first convictions were overturned, only around 100 have been quashed. Without Government intervention, many of these convictions could not be overturned, either because all the evidence has long been lost or because, quite simply, postmasters have lost faith in the state and the criminal justice system, and will not come forward to seek justice.
The legislation will apply to England and Wales only. However, we are fully committed to working with the Scottish Government and the Northern Ireland Executive through regular, weekly official-level engagement to progress their own approaches. I have met my counterparts in the Scottish Government and the Northern Ireland Executive to offer support and address their concerns, and I will have further meetings. The financial redress scheme will be open to applicants throughout the UK, once convictions have been overturned.
I thank the Business and Trade Committee, which recently published a report that includes some recommendations for the Government regarding Horizon redress. We will respond to them in the usual way, but today I would like to address two of the Committee’s recommendations. The first is that responsibility for redress should not lie with the Post Office, as it should be subject to independent oversight—something that has also been recommended to us by the Horizon compensation advisory board. I can announce today that the Department for Business and Trade, rather than the Post Office, will be responsible for the delivery of redress for overturned convictions. Final decisions on redress will be made by independent panels or independent individuals.
With your permission, Mr Speaker, I shall return to the House at a later date to provide details on how we intend to deliver redress for those who have their convictions overturned by the Bill or via subsequent measures taken in Scotland and Northern Ireland. We are discussing the details with the advisory board. The Financial Secretary to the Treasury, my hon. Friend the Member for Mid Worcestershire (Nigel Huddleston), will introduce legislation to make any payments made via the new scheme exempt from tax.
Secondly, the Select Committee recommended that the Government introduce legally binding timeframes to deliver redress for sub-postmasters, with financial penalties for non-compliance. I strongly support the Committee’s desire to speed up redress, but we feel that its proposed regime would have the opposite impact. It would potentially mean imposing penalties on forensic accountants or others who are helping postmasters to prepare their claims. Doing that would probably cause some of them to withdraw from this work, which would slow down the delivery of redress. Furthermore, we do not want to be in the position of rushing postmasters into major decisions about their claims and the offers they receive, which would possibly mean that some are timed out of redress altogether. The advisory board has said that its “strong view” is that
“this would be a backward step”,
which is why we passed legislation less than two months ago to remove the arbitrary deadline from the group litigation order scheme. We do not want to reverse that change.
However, the Government are acting to ensure that redress is delivered as quickly as possible. First, we are working with claimants’ lawyers to reduce the number of cases that require expert evidence—for example, from forensic accountants—or medical evidence, which delays claims. We will pilot that approach and, assuming that the pilot succeeds, we hope to expand it rapidly.
Secondly, the advisory board and I have asked for monthly reports on each scheme. They will come from schemes’ independent case managers, where such managers are in place. We will publish the reports, which will give us the best basis on which to assess measures for speeding up redress.
Finally, we are introducing optional fixed-sum awards. In January, the Government announced that they would offer an optional fixed-sum award of £75,000 to those in the group litigation order scheme. As of 5 March, 110 offers have been accepted, and over 100 people have taken the £75,000 fixed payment. Of those who have accepted the fixed payment, three quarters are new claimants, so the fixed offer has already meant that over 100 claims have been resolved promptly. In some cases, those people will have got more than they would have asked for. The fixed offer has also had a helpful effect on other claims, because it substantially reduces work on small claims by claimants’ lawyers, making more resource available to progress larger claims more quickly.
I am pleased to announce today that the £75,000 fixed-sum award offer will now be extended to the Horizon shortfall scheme, to ensure that everyone is treated fairly across all the schemes. Those who have already settled their claim below £75,000 will be offered a top-up to bring their total redress to that amount; over 2,000 postmasters will benefit quickly from this announcement.
We are mindful that claims are not being submitted to the GLO scheme as swiftly as we would like. We have already announced the optional fixed-sum award of £75,000, but to ensure that we get help to claimants more quickly, I can announce today that anyone who chooses not to take that offer, and instead submits a full claim for individual assessment, will have their interim payment topped up to £50,000 straight away.
Many postmasters’ lives have been ruined by the Horizon scandal, and we are working hard to deliver redress. We have set up the Williams inquiry, which will discover the truth. We will provide fair financial redress as promptly as we can, and we will exonerate those who were so unjustly convicted of crimes that they did not commit. I commend this statement to the House.
Rushanara Ali (Bethnal Green and Bow) (Lab)
I thank the Minister for advance sight of his statement. Before I respond to it, I would like to put on the record my deep disappointment at the Minister’s comments this morning on “BBC Breakfast”. He failed to categorically condemn the Tory party donor Frank Hester’s horrific and racist remarks about the right hon. Member for Hackney North and Stoke Newington (Ms Abbott). Despite No. 10 finally, after much delay, describing the remarks as “racist and wrong”, the Minister appeared to contradict that position this morning.
Shailesh Vara (North West Cambridgeshire) (Con)
On a point of order, Mr Speaker. This is a statement on Post Office legislation. May I respectfully say that what the hon. Lady is saying is irrelevant to this statement?
Rushanara Ali
I will move on. I simply hope that the Minister will reflect on the reversal of the statement he gave this morning, in which he took the position that he would take a donation from that donor. I hope he reflects on the impact that the issue is having on many of us.
I turn to today’s crucial statement. The Horizon scandal is truly shocking, and is one of the most devastating miscarriages of justice in British history. The scandal has brought devastation to the lives of hundreds of falsely convicted sub-postmasters. Over 20 years on, they and their families still suffer from the consequences and the trauma of all that they have been put through. I pay tribute to them for their determination in pursuing justice, and to Alan Bates and the sub-postmasters who pioneered the campaign and worked tirelessly to seek justice. Without their bravery and perseverance, the campaign would not be where it is today. I also pay tribute to my right hon. Friend the Member for North Durham (Mr Jones) for all his work, to Lord Arbuthnot for his campaigning on this issue for many years, to others in this House and the other House, and to members of the Business and Trade Committee and its Chair, my right hon. Friend the Member for Birmingham, Hodge Hill (Liam Byrne).
We of course welcome the legislation that is being laid before Parliament today, but before giving a full verdict on it, we will need to properly scrutinise the details and analyse its potential impacts. In the first instance, the legislation leaves a series of outstanding issues, and the question of when justice and compensation will be delivered, and to whom. First, I will address the territorial scope of the legislation, which currently applies only to England and Wales, even though the Post Office is not devolved, and the Horizon system and the impacts of the scandal are UK-wide.
Approximately 30 cases need overturning in Scotland and Northern Ireland, but a series of outstanding questions remain as to when sub-postmasters in Scotland and particularly Northern Ireland will receive justice and compensation. I welcome the Minister’s assurance that there will be regular dialogue with the devolved Administrations, but I would be grateful if he provided more detail on how that will work in practice, given the different legal processes.
As we know, 80% of the redress budget is yet to be paid out. There remains considerable uncertainty about when sub-postmasters will receive their compensation. I am sure that we can all agree that they have waited long enough, and the delays are causing further financial distress and suffering. We note the Business and Trade Committee’s recommendation that there be a legally binding timeframe for the period between an offer being first tabled and a settlement being reached. If those legally binding targets are not adopted, what assurances can the Minister give that he will meet his target of ensuring that all compensation is out of the door by the end of the year? What mechanisms will he put in place to ensure that there are no further delays? I know that he is committed to ensuring that there are no further delays, but sub-postmasters will want to know that this will actually happen.
Given the recent chaos in the Post Office’s leadership, we welcome the decision to take the Post Office out of the redress process. As the Minister said, redress must have independent oversight. The Post Office is in disarray, and we need focus and efficiency in ensuring that compensation is paid to the sub-postmasters as soon as possible.
Financial redress alone cannot come close to repaying sub-postmasters for their suffering, though it is so important that we get it right. The very least the Government can do is ensure that sub-postmasters receive fair compensation and exoneration as soon as possible. There are those impacted by the scandal who have sadly passed away, and did not live to see their innocence proven or to receive the compensation that they deserved. It is vital that the Government act with the urgency and speed that is needed to correct this terrible injustice.
Kevin Hollinrake
The shadow Minister’s comments are on the record, so I shall deal with them briefly. I think this is the second time she has made comments at the Dispatch Box that have been unfair or factually incorrect, and I hope that she will correct the record. If she had actually watched the interview I gave, she would know that I absolutely did condemn the words of Mr Hester. I said they were wrong. I said they were racist, and I think it is absolutely right that he has apologised. She should watch the full broadcast, and I hope that she will apologise to the House and correct the record.
The points that the hon. Lady raised pertain largely to the Scottish and Northern Ireland devolved Administrations. I quite understand the concern around those issues, and I am very keen to ensure that we get this right across the United Kingdom. As she acknowledges, there are different legal processes in those areas, and we think it would be inappropriate for us to legislate for parts of the United Kingdom that have different legal processes and different prosecutors. Justice is devolved, although the Post Office is a UK-wide organisation, as she rightly says. That is why we think the legislation should allow devolved Administrations to legislate for themselves, if they choose to. We will work closely with them. Officials meet them weekly to assist wherever we can, so that compensation can be delivered UK-wide; that is how the scheme operates.
I think the hon. Lady said that 80% of compensation was yet to be delivered. I may be wrong there, so I will check the record. Across all the schemes, in around two thirds of cases, full and final compensation has already been received. That being the case, about 2,000 people will be topped up to £75,000, as I announced earlier, but it is not right to say, as I think she did, that the majority of people are waiting for compensation.
The hon. Lady asked whether we wanted to deliver the compensation by the end of the year. Absolutely we do, but as I said, not everything is in our gift. We cannot compel a claimant to submit a claim, or know when that will happen. If somebody puts in a claim right towards the end of the year, for example, it may not be possible to deal with it before the end of the year. Not everything is in our gift, but we are keen to expedite anything that is.
It is absolutely critical that we have independent oversight; all schemes have it. In the overturned conviction scheme, we have retired High Court judge Sir Gary Hickinbottom, and the £600,000 fixed-sum award; but on Mr Hickinbottom’s advice, we have also introduced the £450,000 payment as soon as a full claim has been submitted. We are doing everything we can to make sure that people are compensated as quickly as possible.
Paul Scully (Sutton and Cheam) (Con)
I welcome the Minister’s statement, and the pragmatic way that he has looked to speed up claims, and to take this in-house as best he can. I also welcome the proposed legislation, and the extension of the £75,000 to those in the historical shortfall scheme. I point the Minister to an article in The Times this morning about people who may reportedly be excluded from the legislation. Can he give any assurances that people who have gone through this process and whose original conviction was based substantially on the Horizon problems will indeed be exonerated and therefore able to get compensation?
Kevin Hollinrake
I thank my hon. Friend for his question, for his tireless campaigning in this area, and for his tireless work as my predecessor in this role. He did some great work to help us get where we are today. He is right to say there are some people who are not exonerated through this process—for example, people who have been before the Court of Appeal—but they will be able to appeal again in the light of our legislation. Of course, they had the right to do that anyway, but we will support them where we can in bringing forward their case to the Court of Appeal, and we very much hope that innocent people who follow that process will be exonerated.
Marion Fellows (Motherwell and Wishaw) (SNP)
Thank you, Mr Speaker, and apologies for being slightly late. I thank the Minister for giving me prior sight of his statement. I welcome the announcement of the legislation. It will hopefully go a long way to speeding up full and fair financial redress for a large number of Horizon victims, and will bring them closer to justice. Furthermore, I welcome the enhanced financial redress for those who experienced Horizon-related shortfalls, and the fact that those who have already settled for less than £75,000 will have their redress topped up.
I pay tribute to the Minister for his hard work on this, to the Horizon compensation advisory board for its sterling work, and to Sir Wyn Williams and his inquiry for their ongoing work. Most of all, I pay tribute to the victims, following the unimaginable pain that they have been forced to endure at the hands of Post Office Ltd and successive UK Governments. I hope that today’s announcement can give them some hope, and that there is an end in sight to this sorry chapter.
I welcome the administration of financial redress schemes being taken out of the hands of Post Office Ltd —not before time. Post Office Ltd has demonstrated obfuscation and incompetence at every stage. From a Scottish perspective—I am sure my Northern Irish colleagues will agree with me—I am deeply disappointed that the legislation is confined to England and Wales only. That needs to be addressed. We should include Scotland and Northern Ireland to ensure parity. The Westminster Parliament is sovereign, but the Scottish Parliament can be challenged on its legislation, and this needs to be looked at.
The devolution process also risks slowing things down. Will the Minister guarantee today that any relevant orders under section 104 of the Scotland Act 1998 will be processed quickly by his Government? Scotland has no direct equivalent Minister for postal affairs, as only Westminster and his Department have a remit for the Post Office. Will he ensure that the Bill contains provisions requiring Post Office Ltd to fully co-operate with the Scottish Government and to supply all needed materials? It is vital that victims in Scotland and Northern Ireland do not have to wait any longer for justice than their English and Welsh counterparts. Victims across these isles suffered enormously at the hands of a wholly reserved institution, so complete parity is essential.
Kevin Hollinrake
I thank the hon. Lady again for all her work in this area. She has been a tireless campaigner. We would all like to be further along, but she has made an important contribution to our work.
The hon. Lady is right to say that victims should be front and centre when it comes to compensation, which must be delivered fairly and as quickly as possible. Some of the changes I have announced today, including in my statement, have been brought forward on the basis of feedback from victims and their legal representatives. We are listening to them, and we will make sure that we deliver any changes where we can.
I fully understand the hon. Lady’s point about Scotland and Northern Ireland, and she will understand the constitutional sensitivity of this area. These are tough decisions, and I understand that Scottish Ministers will have to make similar decisions. They can decide to do what we are doing and, if they do, we will support them in how they legislate. Given the sensitivities, we thought that, where justice is devolved, the devolved Administrations should make the decision. I again commit to making sure that we work across the piece, wherever we can, to deliver the consistent compensation that she requires, without forgetting that the redress schemes are UK-wide. As soon as people’s convictions are overturned, they will be able to access compensation, just as they can in England and Wales.
Sir Robert Neill (Bromley and Chislehurst) (Con)
Everyone wants to see the sub-postmasters’ suffering brought to an end as swiftly as possible, and I welcome what the Minister has said about simplifying and speeding up the compensation scheme. He will know that claimant lawyers such as Neil Hudgell, who gave evidence to the Business and Trade Committee, have real expertise in this field, and I hope he will work very closely with the sector to maximise that expertise in designing the scheme.
I sound one note of caution. The Minister says this is exceptional, and it is constitutionally unprecedented to overturn, through legislation, convictions imposed by our courts in good faith, based on the evidence before them at the time. Frankly, it is most undesirable that we should ever go down that route.
Some of us will need to see the detail of the legislation and what evidence the Government have that it will be quicker and more comprehensive to quash convictions via this constitutionally unprecedented route, rather than leaving the courts to deal with it, with assistance. As the Minister knows, this could have been dealt with via a presumption in favour of sentences being quashed where they depended on Horizon evidence, rather than this wholesale measure. In particular, will he look at what impact it will have on rehabilitation of offenders legislation, and at whether convictions quashed by this Bill will be removed effectively so that people can, for example, travel to the United States or other foreign jurisdictions where they may need a visa, for which they need to show that they do not have an outstanding conviction?
Kevin Hollinrake
I thank my hon. Friend for his question and all his work on this subject. Our engagement with him throughout the process has been very important. He has much expertise in this area.
We agree that this is unprecedented and undesirable, but we believe it is the least worst option. We want to see this delivered more quickly as, of the 790 or so sub-postmasters whom we believe this legislation will affect, only around 100 convictions have so far been overturned. We think that situation is untenable, which is why we decided to take this route. Of course, I will continue to work with him and listen to his wise advice.
I think I am right in saying that, for convictions overturned by the Court of Appeal, the record is marked “Overturned by the Court of Appeal”. We foresee these records being marked in a similar way—“Quashed by Parliament” or something along those lines. Again, I am happy to engage with my hon. Friend to make sure we get it right.
Liam Byrne (Birmingham, Hodge Hill) (Lab)
I welcome the Minister’s statement and thank him for the collegiate way in which he is working across the House to try to secure justice for those who have suffered.
This is a welcome step forward. I am glad to see the Minister taking on board some of the recommendations made in the Business and Trade Committee’s report last week, setting out how we can deliver fair, fast and independent redress. The Government have today proposed how they will overturn convictions. They have taken the Post Office out of some, but not all, claim processing and, crucially, they have increased the number of people who can apply for fixed-term remuneration. However, the Post Office is still handling the claims of at least 100 people with overturned convictions when it is patently not fit for purpose.
For those who seek to contest their claim, the Minister says there will be no legally binding timeframe between the submission of a claim and an initial offer being made by his Department, which is a problem. There is no standard tariff proposed for compensation under key heads of terms, such as loss of reputation. That, too, is a problem. The Bill is far more than a half measure, that is true, but it is not yet a full solution.
I leave the Minister with the words of Jo Hamilton, who messaged me last night to highlight the plight of the GLO litigants, in particular, and the way in which they
“have to justify every last penny even if some of their claim is for actual monies stolen from them by the Post Office… Why can’t the Government do the right thing before even more victims die?”
Those words need to ring in our ears as we seek to perfect this Bill.
Kevin Hollinrake
I thank the right hon. Gentleman for his comments and collaboration. It is important that we listen to his Committee’s recommendations and its very informative evidence sessions—I sat through all five hours.
At this point, we believe the Post Office should continue its work on the 100 or so cases before it. We currently have no capacity in the Department to handle those claims, although we clearly will by the time the Bill comes into effect. We do not want to pause between the Bill coming into effect in July and compensation payments being made. We think we can get those payments to people in August using that route.
There may be some people left in the first tranche of overturned convictions, for people who have been through the Court of Appeal. We will certainly look at the Committee’s recommendations on whether we should bring those cases back in-house or leave them with the Post Office. We will keep an open mind on that.
We already have fixed timescales to respond to offers or service level agreements in the GLO scheme. We commit to responding to 90% of full claims within 40 days of submission. I am happy to look at how we might put some benchmarks in place to make sure the new scheme has a similar speed of response. I am sure the right hon. Gentleman heard what I said about our new pilots under which lawyers can submit claims without forensic accountants and medical reports. That may do something along the line he says, and I will happily have an ongoing conversation with him.
Thus far, 128 of the 490 claims have been submitted to the GLO scheme, and 110 of them have been settled. To my knowledge, only one claim has gone to independent dispute resolution before going to the independent panel, which hopefully indicates that, generally, the offers are fair and have been accepted almost straightaway.
I understand what Jo Hamilton says, and I met her to discuss some of the processes she had to go through to prove her claim. We are determined to reduce those frictions and evidence requirements, certainly for things that are not essentially material. There are three things that we have to get right in delivering compensation: we have to be fair to the individuals and families affected; we have to be fair to all the other sub-postmasters to make sure there is consistency across the scheme; and, of course, we have to be fair to the taxpayer. There is no cap on what we will pay people, as long as it is fair.
Duncan Baker (North Norfolk) (Con)
I thank the Minister for bringing this statement to the House, as it clearly moves things in the right direction for closure. I have talked many times in this House about similar issues. The Government have put £1 billion aside to deal with all this, despite the fact that the Post Office has taken millions upon millions off postmasters—innocent people. We have never had the figure of what was taken, although I have asked for it before. I want a second figure, because Fujitsu has said on the record that it would help to compensate victims as well, by adding to the remuneration pot. What progress have we made on making Fujitsu pay also for being culpable in this fiasco?
Kevin Hollinrake
I thank my hon. Friend for his regular contributions in this area, as it is always good to have the views of the only former serving postmaster in this House. We are looking to try to identify the figure he refers to and we hope to come back to him at some point; it is complicated, as a lot of these records go back a long way. However, that is a body of work we are undertaking with the Post Office. The Secretary of State had a conversation yesterday with the global chief executive of Fujitsu; we are keen to make sure that Fujitsu contributes and it has already said that it will—it said it has a moral responsibility to contribute. My hon. Friend mentions a figure of £1 billion, but we do not know the final figure for compensation. However, we would expect a significant element of it to come from Fujitsu.
Mr Alistair Carmichael (Orkney and Shetland) (LD)
Like others, I thank the Minister for advance sight of his statement but, novelly, I also thank him for advance sight of the Government “top lines to take”. That latter document includes this passage:
“So far we have identified up to around 800 cases that are potentially in scope [Note: if we use this number in public we are going to get held to it. There is a risk that we may deliver fewer overturns or award redress”—
to—
“fewer individuals, we will then have to explain that]”.
If it is the view of officials in the Minister’s Department that accountability and transparency are some sort of problem, does he really think that they are best placed to exercise oversight of the compensation scheme? Should that not be put now in the hands of someone who is independent of both Government and the Post Office?
Kevin Hollinrake
The figure the right hon. Gentleman uses and the document he references, which I was unaware he had, are interesting. Me being me, I had not read that line, although my previous comments might indicate that I had because I mentioned that exact figure. I am not afraid to be transparent or accountable for any of the delivery of these compensation schemes.
Shailesh Vara (North West Cambridgeshire) (Con)
I congratulate my hon. Friend on all that he is doing, working night and day to bring this painful issue to a conclusion for the many postmasters and their families who have suffered so much over so many years. Where people do not accept the fixed offer but wish to pursue an individual claim, may I seek his assurance that such claims will be treated expeditiously, and that resources will be made available to deal with those claims quickly and efficiently? Will he also give an assurance that claimants will have a named individual responsible for their file, rather than whoever happens to pick up the file on a specific day?
Kevin Hollinrake
I thank my right hon. Friend for his question and can absolutely give him the assurance he seeks. A fixed-sum award is only one route; it is not right for everybody. Some people have higher levels of claims, and we will support them where we can. In my remarks, I announced new measures we are using to do that, including a pilot scheme where expert reports are not required. That should significantly abbreviate the timescale between being able to submit a claim and getting a response. As for expediting in this area, in the GLO scheme we set a target that in 90% of cases we would respond to a final claim within 40 days. Currently, we are on 87% against that measure, so we are delivering this more quickly. He makes an interesting point about a named claim manager or something along those lines, and, if I may, I will take that away with me.
Clive Efford (Eltham) (Lab)
I welcome the statement, the legislation and the removal of the Post Office from the process to the extent that we have seen so far. However, I do not think the Post Office is able to deal with any claims credibly. I wrote to the Minister on 12 February about my constituent who came forward after the TV programme. She had had problems with Horizon, had agreed compensation with the Post Office, which was way below what her losses were, and had signed a non-disclosure agreement. At the time she had been dealing with a terminally ill partner, who has since passed away, and so was in no fit state to take on the Post Office. She is seriously out of pocket, so I would expect her to be able to fall under the Horizon shortfall scheme. I hope that the Minister will confirm that in the letter he will doubtless send me.
Kevin Hollinrake
I have not seen the letter the hon. Gentleman mentions yet, but I look forward to it and I understand his points about the Post Office handling claims. I am responding personally to every letter I get on this matter from colleagues; we always do that, but I am doing so even more on this occasion. I am sorry to hear about his constituent and the situation she is in. If she has accepted less than £75,000, she will get an automatic uplift to £75,000. We are determined to ensure that, across every scheme, people are treated fairly and feel that they are being treated fairly, and I am keen to look at the hon. Gentleman’s letter and make sure that is the case for his constituent.
Virginia Crosbie (Ynys Môn) (Con)
I welcome this important new Bill. I know that the Minister and his team have worked exceptionally hard to make it happen. Will he join me in thanking Mr James Evans from Llanfair P.G., who worked as a sub-postmaster in Llanfairpwll for 47 years, with a post office service record of 60 years, for bringing together sub-postmasters and those on Ynys Môn affected by this gross miscarriage of justice to ensure that they receive the correct support, compensation and, importantly, exoneration?
Kevin Hollinrake
Again, I thank my hon. Friend for her work on this, and I absolutely thank Mr Evans. We are here now because the victims of this scandal are supporting each other, led of course by Alan Bates. So I welcome Mr Evans’s work, and if I can assist him or his group at all to make sure that they get compensated fairly, whatever their circumstance within these schemes, I am happy to do that.
Jonathan Edwards (Carmarthen East and Dinefwr) (Ind)
My constituent Mr Ennion ran the post office in Llandovery in Carmarthenshire between 2000 and 2018. In a recent BBC interview he estimated that he had lost about £75,000, and said that, in addition, his health has deteriorated severely. He said he had no faith in the Horizon shortfall scheme and making an application to it, because he has not kept any records and because he just does not think he is well enough to take on the Post Office for a second time. I know that the Minister is working extremely hard, and I pay tribute to him for the work he has done, but what more can he do to encourage people such as Mr Ennion to make an application through the scheme?
Kevin Hollinrake
I thank the hon. Gentleman for his kind words and for representing his constituent so effectively. I hope that what we have announced today will be absolutely the right route for his constituent, as it means he would not have to go through what can be a complex process of submitting a detailed claim; he can simply opt for the £75,000 fixed-sum award and walk away. There is no claim form to be filled in—a simple letter needs to be signed and that is it. If he feels he should be compensated for more than that, he can go through the Horizon shortfall scheme. That takes a little longer, but he will still end up with compensation both for the financial impact and the impact on his health. I am happy to help, wherever I can, with his case.
Sammy Wilson (East Antrim) (DUP)
I welcome the Minister’s statement. He promised the House that he would bring forward legislation quickly, and he has done so. However, I must express the disappointment of all Northern Ireland representatives that Northern Ireland is not included in the Bill, and the reasons that the Minister has given for that do not stand up.
The Minister has argued that this is a sensitive constitutional issue—it is not. The First Minister, the Deputy First Minister and the Justice Minister have all made it clear that they would be quite happy for Northern Ireland to be included in the legislation. He has argued that the systems are different. There have been many occasions when Northern Ireland has been included in legislation here even though the judicial system is different. This Bill is about exonerating people, not about interfering with how the system works. The last thing he said was that including Northern Ireland might slow down the legislation. Since the legislation is going to go through the House following the normal process, there is absolutely no reason why, as has happened on previous occasions, he could not include a Northern Ireland clause at a later stage in our consideration of the Bill.
I ask the Minister to look again at the arguments he has made, because I do not think they stand up. There is a way forward to ensure that those affected in Northern Ireland are treated in the same way, and at the same time, as those in England and Wales.
Kevin Hollinrake
I thank the hon. Gentleman for all his contributions, and for representing his constituents, and others in Northern Ireland, who have been affected by the scandal. I understand his point and am very sympathetic to it. We took a very difficult decision. Clearly, we are happy to work with the authorities in Northern Ireland. As I said in the statement, I have spoken to my counterpart in Northern Ireland. We are today introducing a 10-clause, 10-page Bill, and we hope we have put together a relatively straightforward piece of legislation. We are happy to lend our support so that Northern Ireland is able to do the same as we are doing, if that is the choice that is made. As he has outlined, that is the political consensus in Northern Ireland, which I welcome.
Stephen Farry (North Down) (Alliance)
This is a national scandal that requires a national solution. As has just been stated, the political leaders in Northern Ireland are unanimous that they want Westminster to act in this sphere. The Minister will not be stepping on anyone’s toes constitutionally if he proceeds on that basis. The Justice Minister advises me that what is required to include Northern Ireland is relatively straightforward. It is not complicated in any shape or form. The stark reality is that the newly restored Executive does not have the capacity to pass such legislation at the same time as Westminster, so there will be an iniquity across the UK on this reserved matter. Can I ask the Minister one more time to listen to the voices from Northern Ireland? I understand that he says he will work with the Executive, but will he take on board what the Executive are saying and include Northern Ireland in the Bill?
Kevin Hollinrake
I thank the hon. Gentleman for his points. To reiterate what I said in response to earlier questions, we are very sympathetic. We are keen to lend support, and not just moral support but help in drafting the Bill. Of course I will continue to listen to him and others with similar views about the involvement of the devolved Administrations. We are keen to make this work UK-wide. The redress schemes will be available UK-wide, if we can get those prosecutions quashed on a UK-wide basis.
Jim Shannon (Strangford) (DUP)
I thank the Minister and pay tribute to his perseverance in bringing about a legislative change. It is fantastic to hear that the legislation will quash convictions relating to the Horizon scandal. This has been a long time coming and those affected must be praised for their long journey to justice. However, unfortunately there are many who have not lived to see this. What steps will he take to ensure the legacy of those who were affected but have passed away will live on, and that their families are supported through the redress payment scheme, to lessen the years of pain that they have endured?
Kevin Hollinrake
I thank the hon. Gentleman for his work on the issue, and for his regular contributions on this and many other matters. The legislation has taken too long, as he rightly says, and sadly some people have passed away, which is terrible for the families. Those people will never live to see their convictions quashed and names exonerated. The redress schemes work for the estate, so if somebody has passed away, the family can come forward and submit a claim, or they can choose a fixed-sum award and pursue their claim in that way, which is a quicker process. That happens for families in the sad situation the hon. Gentleman outlines. I am happy to work with him to ensure that we deliver for his constituents.
Point of Order
(1 month, 3 weeks ago)
Commons ChamberRead Full debate Read Hansard Text Watch Debate
Paula Barker (Liverpool, Wavertree) (Lab)
On a point of order, Madam Deputy Speaker. Can you give me some advice on how I can pursue an urgent response from the Secretary of State for Education? I wrote to her on 28 February, outlining urgent concerns about King’s Leadership Academy, a secondary school, being unable to open in my constituency despite the Department for Education providing a DfE unique reference number and DfE number, both of which are required for the local authority to offer in the admissions brochure.
The Department recently went on to instruct the local authority to remove King’s Leadership Academy from the admissions process. Parents have now been informed that the academy will not open in September and their children have been allocated secondary schools that were not one of their preferred choices, causing distress and logistical nightmares. It is completely unacceptable not to have received a response on a matter of such urgency, and unacceptable for the Department not to have raised any potential issues earlier. I seek your advice, Madam Deputy Speaker.
Madam Deputy Speaker (Dame Eleanor Laing)
I thank the hon. Lady for her point of order. As Mr Speaker has said many times, the Chair is not responsible for the content of Ministers’ answers. However, Mr Speaker has also said many times that he expects, and that Parliament expects, Ministers to provide timely answers to questions from Members. It sounds as though the hon. Lady has had difficulty in that regard. Although I cannot answer her questions, I am sure that those on the Treasury Bench will have heard what she has said and that the matter will be passed on to the relevant Minister. I can advise her that the Table Office will be able to offer guidance on how she might pursue the matter further, if she wishes so to do.
Bill Presented
Post Office (Horizon System) Offences
Presentation and First Reading (Standing Order No. 57)
Secretary Kemi Badenoch, supported by the Prime Minister, the Chancellor of the Exchequer, Secretary James Cleverly, Secretary Grant Shapps, Secretary Michelle Donelan, Secretary Claire Coutinho, Secretary Lucy Frazer and Laura Trott, presented a Bill to provide for the quashing of convictions in England and Wales for certain offences alleged to have been committed while the Horizon system was in use by the Post Office; to make provision about the deletion of cautions given in England and Wales for such offences; and for connected purposes.
Bill read the First time; to be read a Second time tomorrow, and to be printed (Bill 181) with explanatory notes (Bill 181-EN).
Sites of Special Scientific Interest (Designation)
Wednesday 13th March 2024
(1 month, 3 weeks ago)
Commons ChamberRead Full debate Sites of special scientific interest (designation) Bill 2023-24 View all Sites of special scientific interest (designation) Bill 2023-24 Debates Read Hansard Text Watch Debate
A Ten Minute Rule Bill is a First Reading of a Private Members Bill, but with the sponsor permitted to make a ten minute speech outlining the reasons for the proposed legislation.
There is little chance of the Bill proceeding further unless there is unanimous consent for the Bill or the Government elects to support the Bill directly.
For more information see: Ten Minute Bills
This information is provided by Parallel Parliament and does not comprise part of the offical record
Derek Thomas (St Ives) (Con)
I beg to move,
That leave be given to bring in a Bill to transfer the power to designate sites of special scientific interest from Natural England to the Secretary of State; to make provision about the exercise of that power by the Secretary of State; and for connected purposes.
I am conscious that I stand in the way of legislation that will provide a tax cut for 29 million people, so I will not detain the House for long.
Sites of special scientific interest are the most precious natural landscapes in this country, and they are vital to our biodiversity. Their importance has long been recognised—long before the word “biodiversity” was coined. For 75 years, additional protection has been given to areas that are of special interest by reason of their flora, fauna or geological or physiographical features.
The current system of notification was put in place by the Wildlife and Countryside Act 1981. That law, as amended, gave the decision to designate an area as an SSSI to Natural England, and Natural England exists
“to ensure that the natural environment is conserved, enhanced, and managed for the benefit of present and future generations”.
That important aim is now at the heart of Government decision making. In fact, the Environment Act 2021 goes further and says that the Government as a whole must have regard to environmental principles; not just conserving or even just enhancing the natural environment, but actually restoring nature. That being so, there is no longer any reason for decisions about the notification of SSSIs to be outsourced. No protections would be lost if this power were transferred to the Secretary of State, which is why I am bringing in this Bill.
I hope that Ministers will note that the Bill is supported by a former Secretary of State for Environment, Food and Rural Affairs, two former DEFRA Ministers, the Chair of the Environmental Audit Committee, the Chair of the Environment, Food and Rural Affairs Committee, and several other MPs who have demonstrated their support for and understanding of our natural environment, and how that can be enhanced in harmony with producing the food the nation needs.
Should the Government adopt the Bill—and I hope they do—there will still be a place for Natural England in identifying sites for designation and collating the data and scientific evidence, but it would be for the Secretary of State for Environment, Food and Rural Affairs to interrogate this evidence and decide whether Natural England is correct in its assessment.
At the moment, Natural England is marking its own homework, and the experience of farmers in my constituency is that it could do better. Last year, 3,044 hectares of West Penwith were confirmed as a site of special scientific interest. It was no surprise that Penwith moors and downs were identified as a candidate for notification. It is the most beautiful part of the world—I happen to live right on the edge—with unique heathland that provides a habitat for many rare species, including birds such as the Dartford warbler, which has a breeding population; invertebrates such as the rare Perkin’s mining bee and the tormentil nomad bee; and vascular plants such as the coral necklace.
It is also a man-made landscape, with a long history of agriculture and livestock grazing, with many of the 4,000-year-old field systems still being used for their original purpose. The farmers on the land know that the richness of Penwith moors is the result of their careful management of the land for many years, over multiple generations, and so they were shocked by the high-handed way in which Natural England approached the designation.
In October 2022, SSSI notification packs landed on the doormats of landowners and farmers, and, contrary to our expectation, close to 1,000 acres of clean land—pastures, paddocks and land on which crops or even animal feed could be grown—were included. The notification documents did not include clear evidence or reasons why their clean land had been included. It became very clear that Natural England’s case relied on scientific evidence that was not much more than desktop studies and old survey data.
To take an example, after Natural England’s hearing last year, which I attended, its experts admitted that they did not have evidence to include the 700-plus acres of good pasture farmland—by this time, more than 200 acres had been successfully challenged by landowners and removed from the SSSI—and that the only reason for including clean land was “the potential for pollution”. Probably even less clean land would have been included had all landowners had the funds to mount a legal challenge.
The theory was that excess nitrate in surface water would reach the valley mires to the detriment of the special flora and fauna. This was highlighted by Farmscoper, a free desktop tool that offers generic assessment, but with the disclaimer that its results should be checked by on-site testing. That testing was not carried out prior to notification and, as far as I am aware, the checks are yet to be carried out. Likewise, bird surveys were undertaken for a year, not the three to five years specified by Natural England’s own guidance, and invertebrate surveys relied on a single year, rather than the three years that it should have been.
Natural England could have easily engaged constructively with farmers and landowners to establish a more robust scientific case for designating accurately any area that justifies such a significant level of protection—it did not. Even at the public hearing in June last year, the chair of Natural England, its legal team and senior officials refused to accept responsibility or ownership of these failures, and pressed ahead with notification. It is not accountable to the farmers, to members of the Government or to Members of this House.
Why does this matter? Because now, following confirmation of the SSSI, farmers are subject to the same Natural England staff dictating how they operate their farms. That includes their demanding that farmers apply for consent to milk cows or keep livestock. There is the risk that farming businesses will become unsustainable, which will impact on the rural economy and food security, while no meaningful benefit to the environment is delivered. Farmers are already selling their businesses.
I will give just one example of a farm in my constituency. This farm has two fields with a mixture of acid pasture, ferns and heather, and grassland, which Natural England included in the SSSI with the rest of the farmland and which is already in Natural England’s higher level stewardship scheme. The farmers objected to the inclusion of the two fields, which were used for winter feeding of yearling Red Ruby Devon heifers. As far as Natural England was concerned, there was no boundary between the rough land and the main grass pasture, and so all of it was in the SSSI and hence under restriction.
The farm naturally decided not to squander money on a fence, but to reduce stocking levels. What is shocking is not just that the farm is losing out from unjustifiable restrictions—I shall talk about the economic benefits later—but that these restrictions will do the reverse of what is intended. Reduced grazing on the moorland will make way for invasive species such as brambles and rhododendrons to take over, and this will actually reduce biodiversity, unless the state is prepared to spend large sums of money on eradication.
My Bill would allow the Environment Secretary to interrogate the science and scrutinise Natural England’s decisions. My experience from engaging with the Department is that it fully understands the concerns that I have raised, including on the viability of farms if good farming land is included without assessing its risk to the rough land. It is Natural England that seems to have ridden roughshod over farmers’ countryside management and their understanding of how to care for their natural environment. This is not the only part of England where serious tensions exist between Natural England and organisations and individuals who have devoted their lives to the careful stewardship of the countryside.
My Bill would also give the Secretary of State the power to consider other factors in designation—factors that Natural England cannot consider. Last year, I spoke in an Adjournment debate about the way in which Natural England did not consider—and could not consider—the social, cultural and economic implications of notification. As I have stated, Natural England was not concerned with the viability of the farms, and it was not concerned with the rural properties off the grid for which boreholes are the only source of water. Boreholes in SSSIs can only be used with Natural England’s consent.
The Minister’s predecessor, my hon. Friend the Member for Copeland (Trudy Harrison), agreed with me, saying:
“It is high time that we looked at how those protections impact the economy and the social and cultural side of farming, and we will be doing just that. If we are to truly halt the decline of nature, we need our farmers to do all they can for environmental stewardship.”—[Official Report, 18 September 2023; Vol. 737, c. 1211.]
It is indeed high time, and my Bill would give the Environment Secretary the power to do so. If our farmers are to do all they can for environmental stewardship, they need a Department that will support them. They need a Department that is responsible for SSSIs and the funding to support landscape recovery, and a Department that can strike harmony between the public goods of conservation and food production, and the need to ensure that farms are viable and that the rural economy thrives. The notification of a SSSI impacts on the environment, food and rural affairs; it should therefore be the responsibility of DEFRA to make that decision.
Question put and agreed to.
Ordered,
That Derek Thomas, Dr Thérèse Coffey, Trudy Harrison, Philip Dunne, Sir Robert Goodwill, Steve Double, Selaine Saxby, Sir Bill Wiggin, Greg Smith, Simon Jupp, Maggie Throup and Mark Menzies present the Bill.
Derek Thomas accordingly presented the Bill.
Bill read the First time; to be read a Second time on Friday 26 April, and to be printed (Bill 180).
National Insurance Contributions (Reduction in Rates) (No. 2) Bill (Allocation of Time)
Ordered,
That the following provisions shall apply to the proceedings on the National Insurance Contributions (Reduction in Rates) (No. 2) Bill:
Timetable
(1) (a) Proceedings on Second Reading and in Committee of the whole House, any proceedings on Consideration and proceedings on Third Reading shall be taken at today’s sitting in accordance with this Order.
(b) Proceedings on Second Reading shall (so far as not previously concluded) be brought to a conclusion three hours after the commencement of proceedings on the Motion for this Order.
(c) Proceedings in Committee of the whole House, any proceedings on Consideration and proceedings on Third Reading shall (so far as not previously concluded) be brought to a conclusion four hours after the commencement of proceedings on the Motion for this Order.
Timing of proceedings and Questions to be put
(2) When the Bill has been read a second time:
(a) it shall, despite Standing Order No. 63 (Committal of bills not subject to a programme order), stand committed to a Committee of the whole House without any Question being put;
(b) proceedings on the Bill shall stand postponed while the Question is put, in accordance with Standing Order No. 52(1) (Money resolutions and ways and means resolutions in connection with bills), on any financial resolution relating to the Bill;
(c) on the conclusion of proceedings on any financial resolution relating to the Bill, proceedings on the Bill shall be resumed and the Speaker shall leave the Chair whether or not notice of an Instruction has been given.
(3) (a) On the conclusion of proceedings in Committee of the whole House, the Chair shall report the Bill to the House without putting any Question.
(b) If the Bill is reported with amendments, the House shall proceed to consider the Bill as amended without any Question being put.
(4) For the purpose of bringing any proceedings to a conclusion in accordance with paragraph (1), the Chair or Speaker shall forthwith put the following Questions in the same order as they would fall to be put if this Order did not apply:
(a) any Question already proposed from the chair;
(b) any Question necessary to bring to a decision a Question so proposed;
(c) the Question on any amendment, new Clause or new Schedule selected by the Chair or Speaker for separate decision;
(d) the Question on any amendment moved or Motion made by a Minister of the Crown;
(e) any other Question necessary for the disposal of the business to be concluded;
and shall not put any other questions, other than the question on any motion described in paragraph (15)(a) of this Order.
(5) On a Motion so made for a new Clause or a new Schedule, the Chair or Speaker shall put only the Question that the Clause or Schedule be added to the Bill.
(6) If two or more Questions would fall to be put under paragraph (4)(d) on successive amendments moved or Motions made by a Minister of the Crown, the Chair or Speaker shall instead put a single Question in relation to those amendments or Motions.
(7) If two or more Questions would fall to be put under paragraph (4)(e) in relation to successive provisions of the Bill, the Chair shall instead put a single Question in relation to those provisions, except that the Question shall be put separately on any Clause of or Schedule to the Bill which a Minister of the Crown has signified an intention to leave out.
Consideration of Lords Amendments
(8) (a) Any Lords Amendments to the Bill may be considered forthwith without any Question being put; and any proceedings interrupted for that purpose shall be suspended accordingly.
(b) Proceedings on consideration of Lords Amendments shall (so far as not previously concluded) be brought to a conclusion one hour after their commencement; and any proceedings suspended under sub-paragraph (a) shall thereupon be resumed.
(9) Paragraphs (2) to (7) of Standing Order No. 83F (Programme orders: conclusion of proceedings on consideration of Lords amendments) apply for the purposes of bringing any proceedings to a conclusion in accordance with paragraph (8) of this Order.
Subsequent stages
(10) (a) Any further Message from the Lords on the Bill may be considered forthwith without any Question being put; and any proceedings interrupted for that purpose shall be suspended accordingly.
(b) Proceedings on any further Message from the Lords shall (so far as not previously concluded) be brought to a conclusion one hour after their commencement; and any proceedings suspended under sub-paragraph (a) shall thereupon be resumed.
(11) Paragraphs (2) to (5) of Standing Order No. 83G (Programme orders: conclusion of proceedings on further messages from the Lords) apply for the purposes of bringing any proceedings to a conclusion in accordance with paragraph (10) of this Order.
Reasons Committee
(12) Paragraphs (2) to (6) of Standing Order No. 83H (Programme orders: reasons committee) apply in relation to any committee to be appointed to draw up reasons after proceedings have been brought to a conclusion in accordance with this Order.
Miscellaneous
(13) Standing Order No. 15(1) (Exempted business) shall apply to proceedings on the Bill.
(14) Standing Order No. 82 (Business Committee) shall not apply in relation to any proceedings to which this Order applies.
(15) (a) No Motion shall be made, except by a Minister of the Crown, to alter the order in which any proceedings on the Bill are taken, to recommit the Bill or to vary or supplement the provisions of this Order.
(b) No notice shall be required of such a Motion.
(c) Such a Motion may be considered forthwith without any Question being put; and any proceedings interrupted for that purpose shall be suspended accordingly.
(d) The Question on such a Motion shall be put forthwith; and any proceedings suspended under sub-paragraph (c) shall thereupon be resumed.
(e) Standing Order No. 15(1) (Exempted business) shall apply to proceedings on such a Motion.
(16) (a) No dilatory Motion shall be made in relation to proceedings to which this Order applies except by a Minister of the Crown.
(b) The Question on any such Motion shall be put forthwith.
(17) (a) The start of any debate under Standing Order No. 24 (Emergency debates) to be held on a day on which the Bill has been set down to be taken as an Order of the Day shall be postponed until the conclusion of any proceedings on that day to which this Order applies.
(b) Standing Order No. 15(1) (Exempted business) shall apply in respect of any such debate.
(18) Proceedings to which this Order applies shall not be interrupted under any Standing Order relating to the sittings of the House.
(19) (a) Any private business which has been set down for consideration at a time falling after the commencement of proceedings on this Order or on the Bill on a day on which the Bill has been set down to be taken as an Order of the Day shall, instead of being considered as provided by Standing Orders or by any Order of the House, be considered at the conclusion of the proceedings on the Bill on that day.
(b) Standing Order No. 15(1) (Exempted business) shall apply to the private business so far as necessary for the purpose of securing that the business may be considered for a period of three hours.—(Joy Morrissey.)
National Insurance Contributions (Reduction in Rates) (No.2) Bill
Wednesday 13th March 2024
(1 month, 3 weeks ago)
Commons ChamberRead Full debate National Insurance Contributions (Reduction in Rates) Act 2024 View all National Insurance Contributions (Reduction in Rates) Act 2024 Debates Read Hansard Text Watch Debate Read Debate Ministerial Extracts Amendment Paper: Committee of the whole House Amendments as at 13 March 2024 - (13 Mar 2024)
16:33 - The House divided: - Ayes: 44 / Noes: 300 - Question accordingly negatived.
16:47 - The House divided: - Ayes: 304 / Noes: 43 - Question accordingly agreed to.
Madam Deputy Speaker (Dame Eleanor Laing)
The reasoned amendment in the name of the Scottish National party leader has been selected.
The Exchequer Secretary to the Treasury (Gareth Davies)
I beg to move, That the Bill be now read a Second time.
For the second time this year, we are cutting taxes for 29 million working people across the country—something that is particularly remarkable in the aftermath of the worst pandemic in 100 years, the worst war in mainland Europe since 1945, and the highest energy spike since the 1970s. The Government have had to take difficult decisions to restore the public finances, and those decisions are starting to pay off. Our economy is growing, and debt is forecast to reduce. Inflation is down significantly, unemployment is at near-record lows, and wages are rising. As the outlook improves, our priority is to return money to working taxpayers while keeping the public finances on track.
We believe that the tax system should be fair and simple, and should reward hard work, yet the way we tax people’s income is particularly unfair. People who get their income from having a job pay two types of tax: national insurance contributions and income tax. People who get it from other sources pay only one. The result is a complicated system that does not support work as best it could. For that reason, the Bill will build on the changes to national insurance contributions in the autumn statement.
The Bill contains two measures: a reduction in the NICs employee class 1 main rate, and a reduction in the NICs class 4 main rate. Both measures are important. Allowing working families to keep as much of their hard-earned money as possible is a priority for the Government. The Chancellor has always been clear that when we can cut taxes, we will.
Mr Louie French (Old Bexley and Sidcup) (Con)
My hon. Friend is making a great speech, and I fully support the Government’s efforts to reduce the taxes of working people, alongside the pledge to increase the money going to pensioners through the triple lock. Does he agree that it is disgraceful that, while the Conservatives are working hard to cut taxes and help working people, Labour is increasing the share of council tax for all Londoners, and hitting drivers with charges of up to £12.50 per day thanks to the ultra low emission zone?
Gareth Davies
My hon. Friend is consistent in holding the administration in London to account. He is right: as we are still not out of the woods when it comes to the cost of living crisis, the Conservative party has made it clear that we disagree with the Mayor of London’s approach of making motorists poorer.
As I said, building on the changes in the autumn statement, we will once again be supporting working families by reducing the main rate of employee class 1 NICs by two percentage points to 8% on earnings between £12,570 and £50,270 from 6 April 2024. That will cut taxes for over 27 million employees. The average worker on £35,400 a year will save £450 a year, and the majority will see the benefit in their payslips at the start of the new tax year. Taken together with the cuts to NICs in the autumn statement, this tax cut is worth some £900 a year to the average worker.
In addition, we are implementing a further reduction in the main rate of class 4 NICs for the self-employed. The Chancellor announced in the autumn statement that the main rate of class 4 will be reduced from 9% to 8% from 6 April. Today, we are cutting the rate by an additional two percentage points from 8% to 6% from April 2024. That is a total cut of three percentage points in just six months. Combined with the abolition of the requirement to pay class 2, which was announced in the autumn statement, that will save an average self-employed person £650 a year, and benefit over 2 million people across the country.
Together with the autumn statement cuts, this is an overall tax cut worth some £20 billion per year—the largest-ever cut to employee and self-employed national insurance. Because of the action that we have taken, the average earner in the UK now has the lowest effective personal tax rate since 1975. The Government are committed to tax cuts that reward and incentivise work and that grow our economy sustainably and boost productivity. The Office for Budget Responsibility has said that the national insurance cuts announced in the spring Budget will increase the total hours worked by the equivalent of almost 100,000 full-time workers by 2028-29. Because of the cuts, just over 30,000 people will move into work. These reductions in tax will drive more people to seek employment. This is our plan for a simpler, fairer tax system that makes work pay.
Alexander Stafford (Rother Valley) (Con)
My hon. Friend is making a powerful Conservative speech about the importance of not just cutting tax but getting more people into work. Has the Department estimated how much more tax revenue will come in as a result of more people working because of these changes, so that we can show that lower taxes actually increase tax revenues for the Exchequer?
Gareth Davies
My hon. Friend is right to point that out. A fundamental benefit of reducing tax is that it improves growth in our economy, because more people will be in work and working longer hours. That obviously generates more productivity for our economy, and ultimately more tax revenues for the Exchequer. It is a fundamental Conservative principle that we want lower taxes, and we are delivering that today because it is fiscally responsible to do so, and we are able to do so.
Anna Firth (Southend West) (Con)
I am grateful to my hon. Friend for making such a powerful case for cutting taxes, a fundamental Conservative principle. The Bill will put £960 back into the pocket of the average worker in Southend, who earns £36,400, and will put £1,920 back into the pockets of a family in Southend with two people on the average wage. Does he agree that that is a considerable and welcome tax cut for hard-working people in Southend?
Gareth Davies
My hon. Friend is right to point that out. I would add to those figures: since 2010, we have lifted millions of people across the country, including in Southend West, out of paying any tax at all by doubling the point at which people start paying tax in our country. People can now earn £1,000 a month without paying any tax, and that is a great achievement of a Conservative Government.
Although I welcome the fact that Labour Members will apparently vote for our tax cuts today, I hope that they will forgive me for sounding slightly sceptical about their sudden conversion to the cause of lower taxes for working people. While they do not oppose the measures, they also did not propose them. In fact, Labour has consistently voted against successive Conservative-led tax cuts between 2010 and 2021, which delivered a doubling of the personal allowance, as I mentioned to my hon. Friend the Member for Southend West (Anna Firth). On the one hand, they bemoan the level of taxation, but cannot tell us a single tax that they propose to cut, or what the level of taxation would be under Labour. On the other hand, the shadow Chief Secretary to the Treasury, the hon. Member for Bristol North West (Darren Jones), described our ambitions to remove unfairness in the tax system as “morally abhorrent”. Labour Members still cannot tell us how they will pay for their many spending commitments. They are completely all over the place. It is only the Conservatives who truly believe in reducing taxes on working people.
Richard Fuller (North East Bedfordshire) (Con)
The Minister is giving a clear explanation of why the Conservatives want to cut tax, and the economic benefits of cutting taxes for working people. He will know that the origins of national insurance were basically a form of social insurance: having paid national insurance, it would look after us later in life. The Labour party took the insurance out and put the socialism in, which is why we have ended up with a system that is essentially the same as income tax. As we think beyond today’s welcome cuts to what is in the Opposition new clause, has the Minister thought about using any further cuts to go into the compulsory savings of individuals introduced under the coalition Government after 2010—essentially building, in place of a dependency state, a savings state built on Conservative principles?
Gareth Davies
Yet again my hon. Friend makes a valuable contribution. I commit to taking his idea away to consider, as we look at reducing the unfairness in the tax system in future and reducing national insurance contributions when it is prudent and responsible to do so.
The Labour party is completely all over the place on this. As a Conservative Government, we have delivered a clear message to the British people, and it is based on the delivery of the lowest personal taxation level since 1975. We have almost doubled the personal allowance, bringing the lowest earners out of paying any tax at all, and we have delivered a thriving jobs market, which is ultimately the best way to ensure that people are brought out of poverty.
Clive Lewis (Norwich South) (Lab)
I hope to speak a bit later on this. I may have a slight difference of opinion with the Minister on tax cutting, but I want to deal with the facts as I see them. He is making a great amount of noise about the tax-cutting vim and vigour that his party has had over the past 10, 20 or 30 years, or even longer than that—it is meant to be something that goes to the heart of the Conservative party—but according to the OECD, for every £1 generated in the UK, the Government collect 35.3p of it as tax. That figure is projected to keep on increasing to 37.7p by 2029, despite this 2% tax cut. Can the Minister explain how, if the Conservatives are the party of tax cuts, actual tax levels will in fact be going up, according to the OECD? How do the Government square that circle?
Gareth Davies
I am grateful for the opportunity to clarify that, because there has been a lot of noise from the Labour Benches, too. It is true that we have had to make some difficult decisions about overall taxation on the back of the pandemic, but today we are cutting taxes on work, because that is the way to grow our economy. As I said, we now have the lowest personal taxation level since 1975. Some taxes have gone up, absolutely—supported by the Labour party—as we have increased tobacco duty and other items, for example, but we are focused on ensuring that if people are in work and have a job, their tax level will be reduced. Today, that work of reducing tax on work continues. We are cutting taxes for millions of people across this country. That is why I commend the Bill to the House.
James Murray (Ealing North) (Lab/Co-op)
Let me start by saying that the official Opposition will support the national insurance reductions before us. We have long said that the tax burden on working people is too high and should come down in a responsible way. In fact, when the now Prime Minster was pushing through a national insurance increase two years ago, we opposed it. Labour has consistently said that we want taxes on working people to be lower. Just as we supported the reductions in national insurance in January, we support the further measures announced in the Budget last week that are before us today.
The truth is, however, that neither the national insurance cuts nor anything else in the Budget changes the fact that people across Britain are worse off under the Conservatives. The Government are giving with one hand, but are taking far more with the other. Figures from the Office for Budget Responsibility show that for every £5 that working people will get back from the Government’s national insurance cuts, they will be losing a total of £10 thanks to the Conservatives’ tax plan. That tax plan will leave the average household £870 worse off and will drag 3.7 million more people into paying tax by 2028-29. Last week’s Budget confirms that, even after the changes we are considering today, the tax burden will continue to rise in each and every year of the forecast period, with the UK still set to have its highest tax burden in 70 years. That is the reality of Britain under the Conservatives, and that is why people across the country are saying it is time for change.
The national insurance reductions in the Bill were mentioned by the Chancellor toward the end of his Budget statement last Wednesday. The cuts had of course already been confirmed in the media by Government sources in the days before, so they came as no surprise. Many of us in the Chamber were wondering whether the Chancellor would follow the time-honoured tradition of ending his Budget by pulling an unexpected, and as yet unannounced, rabbit out of the hat. It turns out he did have a rabbit, but even after all the chaos of the Conservatives over the past few years, many of us could not quite believe what we were hearing: the Chancellor’s big pitch to the British people in the last Budget before the general election was a £46 billion unfunded tax plan.
As people across Britain continue to suffer the impact of the disastrous mini-Budget of 2022, the Conservative Chancellor announced that he would go into the general election with a plan to abolish national insurance, leave a £46 billion hole in the public finances, put family finances across the country at risk, and create huge uncertainty for pensioners. It is frankly the height of irresponsibility for the Chancellor to use the opportunity of last week’s Budget—an opportunity that should have been used to set out a long-term plan to grow the economy—to follow in the footsteps of his reckless predecessor with a £46 billion unfunded tax cut.
In fact, though, perhaps my comment is unfair to the Chancellor’s predecessor, because even he now seems to be critical of the current Chancellor’s approach. Yesterday, the right hon. Member for Spelthorne (Kwasi Kwarteng) told the BBC’s “Politics Live” that he thinks the Chancellor should indeed spell out how he will pay for the abolition of national insurance. It is quite something when the Chancellor who crashed the economy after his disastrous mini-Budget publicly calls on the current Government to be more responsible.
The truth is that promises of unfunded tax cuts have nothing to do with growing the economy, and everything to do with propping up a weak Prime Minister who is desperately trying to survive in a divided Conservative party. This reckless behaviour shows that the Conservatives are blindly putting party first and country second. For the good of the economy and of the millions of hard-working people who are still paying the price for the disastrous mini-Budget, I urge Treasury Ministers when they respond finally to come clean about how they will pay for their £46 billion unfunded tax plan.
Over the past week, we have seen Ministers struggle with that question. The day after the Budget, the Secretary of State for Work and Pensions implied that he did not feel the need to explain how the commitment would be funded as it was only “an aspiration”. On Sky News that day, the Exchequer Secretary to the Treasury seemed to think that the Conservatives do not need to explain how they will fund their promise as it may “take several Parliaments”.
The position of the Prime Minister and Chancellor is clear, however. In an email to his party members on Budget day, the Chancellor confirmed that abolishing national insurance would be a priority for the next Parliament, if the Conservatives win. The next day, he suggested that that could be achieved by merging national insurance into income tax, a move that raises the prospect of a huge tax hike for pensioners. On the Saturday after the Budget, the Prime Minister confirmed again that abolishing national insurance would be a priority for the Conservatives in the next Parliament, if they are still in Government.
Let us be clear: this is a £46 billion unfunded tax plan. It is a plan that comes from the top of the Conservative party about what they would do in the next Parliament. It comes straight out of the same playbook as the Conservatives’ disastrous mini-Budget that crashed the economy. This unfunded plan is yet more chaos and recklessness from the Conservatives. Only Labour will bring stability and security back to the British economy.
If Treasury Ministers disagree that their party is the reckless party, they can clear this up today by explaining how they will pay for their £46 billion tax cut. Will it be funded by higher income tax? Will it be funded by cuts to public services? Will they push up borrowing? The Conservatives’ unfunded tax plan blows a £46 billion hole in funding earmarked for the state pension and the NHS. They need to come clean today about what that means for people’s tax bills, pensions and public services.
To be fair, the Chancellor has at least hinted how he thinks that the Conservatives could pay for the abolition of national insurance: his proposal to merge national insurance with income tax. Of course, taking that route and replacing the revenue from employee and self-employed national insurance contributions with greater basic and higher rates of income tax would mean rates of income tax going up by 6.5%. That would hit all income tax payers and cause particular alarm for pensioners. Under the Chancellor’s planned merger, pensioners—who do not currently pay national insurance—could see an average tax hike of about £800 each. A retired pensioner with an income of £25,000 from a mix of private and state pension paying an extra 6.5% on their income above the personal allowance would see their income tax bill rise by more than £800.
Furthermore, national insurance contributions are what determine people’s entitlement to the basic state pension. The Conservatives’ plan to abolish national insurance in the next Parliament would sever the link between contributions and pension entitlement. Will the Minister explain, under their plan to abolish national insurance, how people will know what their future entitlement to the state pension will be? What would be the basis for state pension entitlement without employee national insurance contributions? Does their plan mean the end of the state pension as we know it? I hope that the Minister will take this opportunity to give clear answers to all those questions, or else confirm that the Conservatives have dropped their unfunded plan to abolish national insurance altogether.
Alexander Stafford
I have a lot of respect for the hon. Gentleman. He comes from a professional background, and, compared with most people on the Labour Benches, normally knows what he is talking about. However, I want to follow his logic when it comes to what he claims is a reckless potential abolition of national insurance. If abolishing all national insurance is reckless and will lead to the country going to hell in a handcart, as he so wants to portray it, why is Labour not opposing a reduction in national insurance? Surely, if he does not oppose a reduction in national insurance, his argument completely falls down, because that means that national insurance can be got rid of.
James Murray
I thank the hon. Member for his intervention—I think. He misses the point. The commitment by the Chancellor, the Prime Minister and, I think, the Treasury Ministers, although they seem to oscillate a little in their position, is to get rid of national insurance entirely—to abolish it at a cost of £46 billion—but they are refusing to say how that would be funded. We saw what happened in autumn 2022 when unfunded tax cuts were proposed by the Conservative Government: it crashed the economy and pushed up people’s mortgages and rents. That is the risk of the Conservatives to the British people, that is the risk to the economy, and that is why we need a general election.
If the Conservatives want to move on from this discussion, they should give assurances on the matter when they respond to the debate. If they do not give those assurances and are not able to distance themselves and rule out their plan to abolish national insurance, we will know that they have essentially given up on governing, are incapable of acting responsibly, and are putting their party before the country with their reckless plans.
As I said at the start of my speech, we will support the Bill because, after 14 years of the Conservatives and 25 tax rises in this Parliament alone, the tax burden on working people is too high. Labour wants the tax burden on working people to come down in an economically and fiscally responsible way. However, let us be clear about the context of this Bill and the changes it makes to national insurance. Even with the Bill’s national insurance cuts in place, households across Britain are set to be an average of £870 worse off as a result of the Conservatives’ tax plans, and the tax burden in the UK is still set to rise to its highest in 70 years.
To make people better off and support public services, we need a plan to get the economy growing. We needed last week a Budget with a long-term plan to bring about growth and help to rebuild our public services. That is what the country needs, and that is what Labour is offering with our plan to grow the economy through stability, investment and reform. That is not what we saw last week, however. According to the British Retail Consortium, the Chancellor did
“little to promote growth and investment”.
The British Chambers of Commerce said this morning:
“the UK stills lacks a clear industrial strategy to unlock long-term growth.”
Faced with a record tax burden, failing public services and no plan for growth, we see the Conservatives grasping desperately for positive headlines by announcing a reckless, irresponsible and unfunded £46 billion tax plan.
I wonder whether the former Prime Minister, the right hon. Member for South West Norfolk (Elizabeth Truss), approves of this plan. Maybe she feels outdone, with this unfunded tax plan coming in at £1 billion more than hers. Either way, the conclusion is clear: chaos and recklessness are the currency of the Conservatives. Only Labour will bring stability, security and responsibility back to the economy, and only a general election will give the British people the chance to vote for change.
Priti Patel (Witham) (Con)
There is quite a lot to say after the contributions from both Front Benchers, which I will come to in a minute. I welcome the opportunity to speak in this important debate. I support the reduction in the rate of national insurance. I will use my time to discuss longer-term tax reforms that should be introduced.
Before I speak to the cuts and changes to national insurance that are the basis of this important Bill, I will, if I may, make some observations on the debate thus far having heard both Front Benchers. This is a very serious issue; we are speaking about fiscal matters that affect all our constituents across the United Kingdom, at a time when we should be really honest with the British people. We should level with them: taxes have gone up. I do not think that they want to hear trivial arguments from this House about who is outscoring whom. A degree of maturity is needed right now, because these have been difficult times, post-pandemic and off the back of Russia-Ukraine and everything that has followed. We need to look at what is being proposed in a constructive way. The irony of today’s debate—I will touch on wider public spending—is that tomorrow we will be here talking about estimates. Given the book and the numbers that I have gone through this morning, a lot more can be done to ensure that Government spending is much more efficient, but we will save discussion that for tomorrow.
This is an important Bill. It follows clearly the decisions that previous Conservative Chancellors have taken to reduce the taxes taken from national insurance. Members who review the details of successive Budgets since May 2010 will note that the Government have progressively reduced the national insurance tax burden in recent years—Members may recall that the employee threshold level was £5,725 back in 2010, so that has been the trend. Two years ago, the increase in the primary threshold jumped from £9,568 to align with the tax-free threshold—with which I like to think we in this House are all familiar—of £12,570 in 2022-23. That 2022 change alone has already put around £330 per person back into the pockets of hard-working families. The changes at the autumn statement—which, if I remember rightly, were well debated on the Conservative side of the House, while the Opposition were a little absent—meant that average earners would be around £900 better off.
Alongside that, I also welcome the reduction in NICs for those who are self-employed. As an Essex MP, the majority of my constituents are self-employed. Over 80% of my constituents work in self-employed small and medium-sized firms. Those who are self-employed and pay class 4 contributions, including many of my constituents, make a huge contribution to our economy. We should reflect on that. More always needs to be done—that is fact—to grow the economy, on supply-side reforms, and to stimulate employment, but the measure is huge for those people because it gives them security in employment, and that is a fundamental principle that we should all work to. It is a big difference and tax cut.
The impact of raising the income tax-free threshold from the £6,475 in 2010 to £12,570 today was significant because it was worth over £1,000, or 20% of the £6,095 increase. The £900 average from the cuts to national insurance in the last two fiscal events is significant. We should all recognise what that means not just for the economy but for the money in people’s pockets. Those measures will have helped taxpayers to keep around £2,400 more of the money they earn. Let me be frank: that is not just good; it is valued and welcome. As colleagues have already touched on, those are timeless Conservative values that fulfil our mission to deliver economic freedoms and lower taxes, notwithstanding the tax backdrop of recent years.
I listened to the Labour Front Bencher, the hon. Member for Ealing North (James Murray), and I always welcome his contributions and enjoy our debates. Our approach to national insurance and easing the burden contrasts with what we saw under the previous Labour Governments, when we saw increases. We need to work collectively to be on the side of hard-pressed families right now. That is absolutely crucial. I could go back to the Budgets of Gordon Brown and list some of the calamities that took place, but what is the point? We have to speak about the fiscal—[Interruption.] No, we have to speak about the fiscal footprint that we have now, about the Budget resolutions that we voted on last night, and about this Bill in particular. It is really important that we stand by our record, our commitment to lowering taxes on income, and our ambition to go further.
This will be a debate—I have no doubt about that. I have stood in this Chamber before saying that we should go further on tax reforms, and I believe that. I have even suggested previously that we look at merging NI and income tax, and previous Conservative Governments have looked at that as well. As all Members know, including Opposition Front Benchers, it is not straightforward; it is complicated, and some of the points that have been raised today indicate why. However, I believe that we have to continue on this pathway. Without recapping the Budget debate that we have had in recent days, it contains important fiscal measures that mean that the public will be better off, including the fuel freeze, but the direction of travel is also important. Treasury Front Benchers hear a lot from me and other Members about this issue, and I know they would like to go further in reducing the tax burden. They know my personal views on public spending, which I believe is far too high right now and needs addressing, but we also need to think about long-term reform.
If I may, I will touch on the ambition expressed by the Chancellor to end the double taxation on jobs, and the suggestion that national insurance is either phased out or subject to reform. I have been a long-standing campaigner for lower and simplified taxes, and I am on the record as having even looked in the past at a merger. George Osborne looked at that during his chancellorship, as did the Office of Tax Simplification—that is well documented and on the record. Although those plans were not taken forward because of the complexities I have touched on, it is important that those debates continue, because we need to simplify our tax system in this country. As Conservatives, we must always look to do that; we must always stand up for not just lower taxes, but simplifying the tax system. I say that as the new tax year is due to begin, with people still getting letters from His Majesty’s Revenue and Customs. For businesses in particular, the burdens that they face and the complexities involved in tax returns are mind-blowing.
Both national insurance and income tax are taxes on income, and the thresholds at which they are both paid are now aligned at £12,500 per year. That is something that we need to look at—I have made that point before. My hon. Friend the Member for North East Bedfordshire (Richard Fuller) touched on the contributory principle of national insurance as set out in the National Insurance Act 1911 and further measures following the second world war. Those measures were brought in to support health and medical benefits and unemployment benefits, and the receipts raised are paid into the national insurance fund investment account. That distinction in the way that national insurance is raised and dealt with, compared with other taxes—which end up in the consolidated fund—has stood the test of time. I think all Treasury Ministers, those on the Front Bench today and others, recognise that. That distinction is ingrained in the fabric of our tax system and the thoughts of many of our constituents.
We are now starting the debate about lower taxes and how we can simplify the tax system, and I genuinely believe that this is an important Bill. It is a very important signal in terms of supporting the self-employed and hard-pressed families around the country, and the Government’s direction of travel is very welcome. Through this debate, we are starting to provide a clear, distinct Conservative way forward and Conservative approach. We have had debates over the past week about high-tax, high-spending policies; those debates and discussions are not going to go away. Public spending is over £1.2 trillion. We have to be mature in the debates we have in this House, and about how as a Government we prioritise public investment but spend taxpayers’ money wisely. I am pleased that this Bill has been brought forward, and I hope it will start a positive direction of travel when it comes to reducing the overall tax burden on hard-pressed families.
Kirsty Blackman (Aberdeen North) (SNP)
I beg to move an amendment, to leave out from “That” to the end of the Question and add:
“this House declines to give a Second Reading to the National Insurance Contributions (Reduction in Rates) (No. 2) Bill because, while acknowledging that the measures in the Bill reduce the National Insurance Contributions (NIC) burden on some employees, it considers the Government should prioritise investment in public services spending over yet more cuts in spending which would be the result of lowering tax revenue by reducing NIC rates.”
The amendment stands in the name of my group leader, my hon. Friend the Member for Aberdeen South (Stephen Flynn); my colleague on the Front Bench, my hon. Friend the Member for Inverness, Nairn, Badenoch and Strathspey (Drew Hendry); and myself and other SNP Members.
The Bill is the wrong measure at the wrong time. We are quite comfortable having clear water between us and the Conservatives. When it comes to tax, they have a different ethos and ideology from ours. What is distressing, though, is the fact that the Labour party seems wedded to some of the fiscal rules and public sector cuts that the Tories have introduced. In fact, it is difficult to see a significant difference between the two parties at this point, whereas SNP Members are making a clear statement that we do not agree with this measure. We do not think it is the right time to introduce it, and we think the focus should be on public services.
The national insurance cuts will have a disproportionately positive impact on higher earners and a disproportionately negative impact on lower earners. Lower earners, higher earners, middle earners and non-earners are all able to benefit from access to universal public services. They are able to benefit from accessing an NHS that is free at the point of use—in Scotland, that is, not in England, where people have to pay prescription charges. They are able to benefit from their children being able to go to schools and get educated, from colleges, from mental health services, and from potholes being filled and bins being emptied. Everybody can benefit from all of those things; those public services are universal. Cuts in public services and continued austerity mean that the lowest earners and those who are not earning lose out the most, because those public services mean more to them than they do to people who are earning £120,000 a year. There have already been 300,000 excess deaths in the UK from austerity—this cannot continue.
To give an illustration, the national insurance cut means that a band 2 NHS staff member will pay £343 less in national insurance next year than they did this year. For an MP, the national insurance cut is worth £1,320, nearly four times what that NHS staff member will get. For someone earning £11.44 an hour and working 20 hours a week, the national insurance cut means nothing—they do not benefit from that cut at all. It is almost the least progressive measure that the Government could have taken at this point. It also does not impact pensioners: they do not pay national insurance, so none of them will gain from this cut.
In Scotland, we are doing what we can to protect people’s incomes through a council tax freeze, whereas the UK Government are allowing a council tax hike. Someone who lives in Lancashire will pay £79 extra on their council tax next year; someone who lives in North Tyneside will pay £92.37 extra. That is not to mention the water rates, which are significantly different in England from what they are in Scotland.
It is not just us in the SNP who are saying this. I want to contribute several quotes from various organisations about the Chancellor’s budget, the ruin in public services that will result from it, and its disproportionate impact. The Joseph Rowntree Foundation said:
“Last year nearly 4 million people in the UK experienced destitution, including 1 million children. The number of people experiencing destitution has more than doubled in the last 5 years. A 2p cut in National Insurance will not help those who need it the most”.
Miatta Fahnbulleh, former chief executive of the New Economics Foundation, said:
“Key take away from #Budget24. Household incomes won’t recover to pre-pandemic levels until 2025. An entire Parliament where incomes will not have grown. That’s @RishiSunak’s record right there.”
Harry Quilter-Pinner, director of research and engagement at the Institute for Public Policy Research, said that this was a
“‘slash and crash’ budget that prioritised tax cuts now at the expense of crashing public services and investment in the future. This isn’t economically desirable, fiscally credible nor politically popular.”
Rachael Henry, head of advocacy and policy at Tax Justice UK, said:
“We have the sugar rush of tax cuts now that will be paid for by deep public spending cuts to come.”
Andrew Harrop, general secretary of the Fabian Society, said:
“High earning households will be up to £1,500 a year better off after two rounds of National Insurance cuts and the wealthy will see sizeable tax cuts on profits from property sales and ISA investments. Meanwhile low earners gain little or nothing from the tax changes, and many of the poorest will actually see their incomes drop with the scrapping of cost of living payments.”
Chris Thomas from the IPPR said:
“As of Autumn statement 2022, the government expected NHS revenue spending to be £180.4bn in 2024-5 and capital to be £12.6bn. For all the talk of NHS investment by CX just now, the Spring Budget 2024 expects equivalent figures to be £179.6 and £12.6bn”.
That is less—less money for the NHS than was announced in the autumn statement.
Victoria Benson, the chief executive of Gingerbread, said that
“we urgently need to see an uplift to Universal Credit to protect those on low incomes who have been struggling for too long”.
Alison Garnham, the chief executive of the Child Poverty Action Group, said:
“This was a Budget all but blind to buckling family budgets and broken public services and will leave a legacy of crumbling classrooms, cold homes, and empty tummies.”
Lastly, and most damningly, the Samaritans said:
“The Government has chosen to waste another opportunity to save lives today.”
In Scotland, we prioritise public services. In the SNP, we prioritise public services. Per 1,000 people in Scotland, we have 8.4 nurses or midwives, while England has only 6.3 nurses or midwives. Our nurses are also paid more than they would earn in England in an equivalent band, and those earning under £28,000 a year are taxed less than they would be if they lived in England. In NHS Scotland, we have 28.9 wholetime equivalent staff per 1,000 of the population, but NHS England has only 22.9 staff. We have put in place the baby box, which is a universal gift to new parents to provide extra support for their children. We have the Scottish child payment, which has kept 100,000 kids out of poverty. We have free buses for under-22s, eligible disabled people and the over-60s, and we have P1-5 free school meals.
What happened to those who are just about managing? This Government have done amazing things for them: they have managed to massively increase the number of people who are just about managing; and they have managed to tip so many people from just about managing into absolutely not managing and living in desperation. People want their bins to be collected, their potholes to be filled, their children to be educated and their NHS to be available when they need it. They want all these services to be available to them. The cuts that the Tories are making to public services will damage even further the society we are living in. People will lose the very little support measures that they have left, and I absolutely condemn this decision and this Bill.
John Redwood (Wokingham) (Con)
I have declared my business interests in the Register of Members’ Financial Interests.
I welcome the reduction in the tax on jobs. The level of overall taxation in our country is too high. The reason it is so high is primarily the huge expenditure the country, by general agreement, incurred to tackle the covid lockdown. This is why I find the Opposition’s criticism of this Government’s tax record so difficult to grasp. After all, they wanted us to lock down tougher and they wanted us to lock down for longer. While a lot of money was rightly offered by this Government to individuals and companies to replace their lost incomes —colossal expenditure on a scale we have never seen before—Labour wanted to spend more on those causes, as well as wanting the lockdown to go on for so much longer.
What we demonstrated was that if we lock down a country for a year or more, stop a very large number of people earning their livings or livelihoods at all, and close down a large number of companies for the duration and maybe for longer, it is an extremely costly process. Of course, we needed to offset that to prevent a complete collapse in the economy and to sustain some lifestyles for those who otherwise would have no income. So we as a nation have this burden of extra expenditure, which we are now having to tackle by tax levels that are higher than we like.
We are at this very important point where the higher taxes are all in place—some of them are doing their job, and some of them will disappoint because higher tax rates do not always deliver the extra revenue that Treasury and OBR planners seem to think they will—and the Government are rightly saying, from the autumn statement through this Budget and on to future fiscal events, as they are now called, that we want to get back to getting the level of taxation and the burden of the rates down. It does not mean that we want to reduce the amount of taxation—indeed, the Government, understandably, want to collect a lot more taxation, as do the Opposition—but the fundamental policy debate is about how best to do that, and it is surely right that we are going to have a more prosperous economy and more public expenditure can be afforded if we have tax levels that promote growth, particularly if we reduce the taxation that is otherwise a big burden on work, on enterprise and innovation, and on small companies and the self-employed.
I am delighted that the self-employed have been included in the national insurance cuts in both the autumn statement and this Budget, but I still think the Government need to reform or push back the changes they made to IR35. We have lost 800,000 self-employed over the covid period. Some of that is because of the damage the covid lockdown has done, but some of it is deliberate tax policy in telling people that they cannot be self-employed, or so undermining the credibility of their status as self-employed in the eyes of others that they do not get the contracts they used to get from businesses that are nervous about the tax issue.
I urge my hon. Friends on the Front Bench to find time to look again at the second part of the self-employment package. I welcome the national insurance part, but I think we need to look at IR35, because we need that extra capacity. It would be good to get back some or all of those 800,000, and to add many new ones—younger ones—to that crucial army, because I am sure all Members in the House, being honest, would agree that the self-employed make such a valuable contribution in our constituencies.
Priti Patel
Does my right hon. Friend share my view that over the decades we have seen such a fall or drop-off in individuals starting their own business, younger people in particular, because of these concerns about the tax burden, how regulated it is and how difficult it is? By dealing with the whole long-standing issue of IR35, we could open up a new marketplace and encourage a new generation of entrepreneurs and small business leaders to come in and really help to grow the economy.
John Redwood
I largely agree with my right hon. Friend, but if we look at the numbers, I think the fall-off was from 2020 to 2024. Prior to that, with good Conservative policies and lower taxes, we were growing the self-employed army very noticeably, and it was making a very important contribution to general growth and the way all our local communities are serviced. It is so often self-employed people who allow us to make personal contact in a way that large companies do not seem to want any more. They are the people who turn up in the evening or at the weekend, if necessary, to get work done, and they are the people who wrestle with the increasingly impossible streets created by Labour and Liberal Democrat councils, which make it more difficult for them to get their vans around.
Clive Lewis
Does the right hon. Member not understand that perhaps the other reason for the decline in the self-employed and small and medium-sized enterprises is the growth of large businesses or large corporations that push them out of the marketplace and that monopolise and dominate? That is a big part of it, and it is a massive part of how our economy has developed over the last 30 or 40 years.
John Redwood
No, I do not think that is the main point. I think the two main points are the ones I have made—the covid lockdown and the tax regime affecting the ability to set oneself up. I will meet the hon. Member a little of the way, because I do think that the 2021 reforms in particular put companies off dealing with the self-employed, and the self-employed often need business from other companies, as well as directly from the public, and that has been a problem. If he and his party are seriously interested, they should look at the 2017 and 2021 reforms, which I think they supported, to understand how they have backfired. That is a good example of the OBR and the Treasury thinking that they can get more money out of the self-employed by forcing more of them to be employed but ending up with a far less successful economy with far fewer people working.
Richard Fuller
It is an absolute pleasure to listen to my right hon. Friend. I want to reinforce his point about IR35 so that our colleagues on the Government Front Bench are clear about how important this is. He talked about how Labour in the past supported those measures, but does he share my concern that perhaps Labour has now recognised that those changes to IR35 have backfired and that it would be disastrous for the Conservative party to go into the next election not having made those changes while the Labour party is offering to do so?
John Redwood
I will not join my hon. Friend in suggesting that it could be disastrous to go into the election—I hope that, when we get to the election, it will be looking rather better. But I do agree that it would be great to have sorted out the IR35 taxation mess before we get to the election—after all, there could still be many months of happy Conservative Government ahead if that is the Government’s wish—as that would be a much better outcome. Failing that, it would be good to put it in the manifesto, but the self-employed would be quite right to say to the Conservatives, “If you have now got to the point of putting it in the manifesto because you think it needs changing, why didn’t you just fix it?”
Anna Firth
My right hon. Friend is making a brilliant speech. He is talking about the self-employed, and in Southend and Leigh-on-Sea more than 98% of my businesses are small or medium-sized—in fact, the vast majority are micro. Does he, like me, welcome the raising of the VAT threshold in the Budget? Does he think that over time it would be welcome to continue moving that threshold, which is such a brake on the growth of small businesses? It is a brilliant thing that we have done, but could we take that further?
John Redwood
My first request of Chancellors in recent Budgets has been that there should be a sizeable increase in the VAT threshold. I opened the bidding at taking it up to £250,000, because I think we should want get on with these things, and we should want to allow the self-employed to take on their first one or two employees and get their business to a certain scale before this colossal bureaucratic burden comes down upon them. I have not yet persuaded my hon. Friends in the Treasury. I am pleased that Chancellors have moved from saying, “No, we don’t want to do that at all,” to saying, “It can now be done.” But if the Government are to do it, they should get on with it, mean it, and look as if it is going to make a real impact.
Five thousand pounds is not much. Lots of people get their business to around £75,000 to £80,000—I have met them in my constituency, as I am sure have most Members in theirs—and then they say, “I’ll have a month off,” or, “I’ll close the B&B for more of the off-season period,” or, “I won’t take on any more contracts, because I really don’t want all that hassle.” They will say, “I’m just a self-employed plumber”—or caterer or whatever—“and I’m good at what I do. I don’t want to become a VAT expert and I don’t want to have to spend a fortune on consultants to take me through this rigmarole of trying to keep the books straight on VAT.” I think we would benefit greatly from allowing that flexibility. The Bill helps, because it does reduce self-employed national insurance costs, but, as my hon. Friend the Member for Southend West (Anna Firth) said, it would be much greater if we dealt with the VAT threshold at the same time.
I would like to extend the conversation, which the Opposition clearly want to have and the Government need to respond to, about affordable and unaffordable tax cuts. First, I note that the Opposition dub all tax cuts—apart from the odd one they vote for—as unaffordable, whereas any amount of public spending is affordable. That is a strange asymmetry. The truth is that the Budget deficit is a combination of increased spending and reduced taxation, and one needs to look at both sides, which should be treated similarly.
The other thing that the Opposition must understand, from listening carefully to Ministers, is that getting rid of all national insurance employee contributions is just an idea; it is not a pledge and it is not a policy. It is clearly not baked into the next five years of figures. We have the Government’s five-year financial plan in the Budget, which sets out in general terms what the levels of tax revenue and overall spending will be—we await more detail for future years on spending from the public spending review in due course—and we know what the current feeling is on taxation, because we are just voting that through at the moment, based on the Budget. We know that future Budgets will make changes to taxes.
I am sure that Conservative Budgets will make reductions in taxes—assuming continuity of Conservative Government—but the Government are not promising to take off all this national insurance in one go, or indeed to make any particular change to national insurance next year or the year after. That is the right position to be in. However, given that there is plenty of time to think this through—it is not urgent policy—I urge my hon. Friends in the Treasury to set out more of the consideration than the arguments before coming up with a firm pledge or a timetable for implementing a tax cut that they want.
We do need to begin with the contributory principle, which is still the main feature of the national insurance fund as we have it today, relating almost entirely to the state retirement pension. The old contributory benefits for unemployment and sickness have been largely removed from the national insurance fund—there are only residual, small amounts left—and now come out of general taxation and are voted on in the normal way. The contributory fund is primarily for the pension, which is reflected in the fact that everyone in receipt of a state retirement pension—or in expectation of one when they get to the relevant age—will have their pension based on their contribution record.
It is also true that Parliament over the years has amended how one qualifies for those contribution records—in some circumstances one can be at home and qualify for deemed contribution, which is all good and fair—but it is still very much a contribution-based system. If we suddenly went away from such a system, we would need to answer the question: how do we settle eligibility for state pension? Many of my constituents would not think it a good idea if we invited in migrant workers in their 60s to do two or three years’ work here, having settled here quite legally, and then said, “You can have a full state pension.” They would feel that was not quite what people had in mind, because all previous generations have had to be here and work for many years to gain that entitlement. So there would be issues of fairness.
If the Government’s proposition is only that they would quite like to get rid of all employee contributions, I suppose we could keep the contributory principle by proxy, because people would have an employer contribution record, which I guess modern computers could divulge in a form that made a proxy for the eligibility of that person for a pension. However, it would still leave a hole in the national insurance accounts, because with just employer revenue we would have less national insurance revenue coming in than pension going out, so there would need to be technical adjustments or the abolition of the fund and some other reassurance mechanism that people would get their entitlements for the state pension, however those new entitlements were calculated.
This is a complicated area. I have been around this policy area on several occasions in the past for various leaders, Chancellors and shadow Chancellors, and I have always concluded that it would not be a good idea to try to merge the whole of the national insurance taxation system with the whole of the income tax system. I still think there is some merit in keeping the contributory principle. It now mainly relates to the pension, which is probably what one settles for, given how much other benefits have gone up and how one could not put all that extra burden on additional national insurance contributions.
I therefore urge the Government to ask themselves questions about the timetable, affordability, wisdom and, above all, what they wish to do with the national insurance system as a whole, the contributory principle—which still means a lot, particularly to older users of the system—and what a more modern system might look like. That is Green Paper and policy discussion territory, and it is invited as part of this debate because the Opposition have tabled amendments to try to tease some of these matters out. We cannot settle this today, however; we need a lot of documentation and research to update some of the numbers and complexities, which I remember poring over in the past, so we can see how this might work.
So, it is good news that we are getting a tax cut, and good news that we can have some more tax cuts to come, but I ask the Government please not only to think about cutting national insurance, on which they have done a big and a good job, but to think about some of the other taxes, such as the VAT threshold and IR35, and such as taxes on energy where we are still completely uncompetitive in this country because energy taxation is so high, relative to China and the United States of America, let alone relative to our European competitors—they tend to have higher energy prices but we are still uncompetitive against them.
So we need to look at all of that, and when we are looking at future Budgets we need to work away at finding more headroom. I am very pleased that this national insurance cut is effectively allowed under Office for Budget Responsibility rules because the Government have seized the initiative on the productivity decline, which has been very sizeable over the covid period in the public services, and the Government are putting back around £20 billion of lost productivity in future years. That is a modest target given the scale of the decline, and it is another reason why the public finances have been thrown into disarray by covid: we did not merely have all the extra costs during the covid period, but we now have ongoing considerable extra cost to run our public services because we cannot even get them back up to the levels of productivity they had hit in 2019 before the covid crisis. We need to look at other ways of finding headroom. Productivity is a good mine for finding headroom so we can improve the quality and cut the cost of what we deliver in the public sector.
I still think the Bank of England should be stopped from selling its colossal bond portfolio at huge losses and sending the bill to the taxpayer. That is unsupportable and the fact that taxpayers and the Treasury have had to find £34 billion year to date to cover the whole range of Bank of England losses, which include capital losses on the bonds, is a sign of how out of control this is. We need to stop that kind of thing. It would also be very helpful in getting us out of this technical recession, because the monetary policy has shifted from being massively too expansionary and inflationary, as it was during the covid period, when some of us warned about the way the Bank carried on for too long with printing money and buying bonds. I was very happy with the first tranches because it was essential to offset, but the last tranche was over the top. The Bank has now lurched to being too tough and has therefore created a technical recession that we need not have had, and if it stopped quantitative tightening bond sales, that would start to ease the markets up a bit more and allow us to grow a bit more rapidly and therefore generate more tax revenue.
So I hope there is some food for thought here for the Government when they look at their progress so far. The national insurance cuts are good, but they should study the overall reform rather more carefully and think it through and not make it the only kind of tax cuts in the future. There are other tax cuts now that are more urgent and that would grow the economy more quickly, and they would be targeted rather more on enabling more people to work for themselves and more small businesses to grow, and on us having more capacity, particularly in high energy using areas.
Clive Lewis (Norwich South) (Lab)
It is always good to speak after the right hon. Member for Wokingham (John Redwood), because he genuinely makes the idea of deepening economic inequality sound so plausible and convincing. If I could do the same from these Benches for the idea of deepening economic equality, I would feel that I had achieved something. He does it so well. When listening to our opponents on the Benches opposite, such as the right hon. Gentleman and the right hon. Member for Witham (Priti Patel), it is as interesting to think about what they do not say as what they do say, and one thing they always seem reluctant to talk about is taxing wealth. I imagine that I will be a lone voice in this debate, but I intend to make the point none the less that there is a route by which we can have public services that actually work and a fairer economic system, and it requires an increase in the burden on those with the most, not those with the least.
The Bill is not just another arbitrary, reckless and misguided act by this Government; rather, it comes from a long and distinguished line of such Bills stretching back to the 1970s, although their pedigree is far older. This Bill is integral to an economic creed that we have heard much about today, which preaches low tax and small privatised public services, and a belief that inequality is good because it drives competition—competition for jobs and for resources. The creed says that we need not worry about the losers, because we will have something called “trickle-down”, whereby the riches of the few flow down for the many to enjoy.
The only problem is that 60 years later, we are still waiting at the bottom and it has not come down to us yet. Perhaps the Minister can tell us—the millions waiting for that trickle-down who are now routinely using food banks and worrying about how they will pay the next bill—when that trickle-down will arrive. This Bill is the culmination of 60 years of tax cuts, outsourcing, privatisation, impoverishment, profiteering, corruption and greed; 60 years that have left this country more divided than ever, susceptible to climate threats and deeply unequal in everything from income to life expectancy.
What we need is a Government and a legislative programme that will reverse that decline and invest in infrastructure, healthcare, jobs and, yes, people. What we have instead is this Bill making a national insurance tax cut that will, according to Tax Justice UK, see the average worker benefit by—wait for it—£8 a week. It is small beer compared with the £3,000 they have lost to inflation in the last couple of years.
Of course, in keeping with the creed of those on the Government Benches, the better off people are, the more this tax cut will pay out to them. For those on £20,000 a year or so, the cut is worth about £150 a year; for those on £50,000 and above, it is worth almost £750. But whether it is a tax cut of £150 or £750, this Bill does nothing to rebuild our shattered public services, nothing to bring down NHS waiting times, nothing to adapt this country to the approaching climate crisis, and nothing to fix our broken adult social care system. As the Resolution Foundation noted, public sector investment spending—a key driver of growth—is set to fall by 31% as a share of GDP between 2024 and 2029. That is a real-terms cut equivalent to £17 billion.
What does that mean for my constituency? What does that mean for people in my community? Norfolk and Waveney has the highest rate of malnutrition in the United Kingdom. A little while ago, I went to a school in West Earlham in my constituency and spoke to the headteacher about a national article that said it was routine, after 13 years of this Government, for children to have parents who use food banks and to turn up to school with bowlegs. I said to her, “When you’re teaching these children, how do you know that they’re hungry?” She said, “It’s quite clear. They eat the sand in the sandpit.” Those are the signs that teachers look for to know that children are genuinely hungry.
Norfolk and Suffolk have the worst mental health services in the country. Norfolk and Waveney is among the top five dental deserts in England. Ambulance delays have been going on for over a decade with little sign of improvement. This national insurance cut will do nothing for those services. On the day of the Budget, I spoke to the BBC. The interviewer, Andrew Sinclair, said to me, “Clive, there’s a cost of living crisis, and you want more money in the pockets of your constituents.” I said, “Yes Andrew, I do, but I also want functional public services.”
With those few hundred extra pounds each year in someone’s pocket—£8 a week—they will not be able to pay for a private surgeon for their hip operation that they are waiting for. They will not be able to pay for a private dentist to extract their teeth, do dental surgery or work on their teeth. They will not be able to buy a classroom for their child, who is sitting in one with rotting concrete. That will not help them. The Budget, and this Bill, will not help my constituents who are waiting for mental health services. I heard this week at a meeting that I organised with my Conservative colleagues about our failing mental health care system that children have killed themselves because they cannot see a psychiatrist or psychologist. The Bill will do nothing for them.
Who will pay for those services? There is an answer. We are one of the most unequal economies in the western world when it comes to wealth. Let us look at wealth. In this country, those with the lowest incomes are likely to have a combined tax rate on income and wealth of approximately 44% per annum. Meanwhile, those in the highest decile of earners are likely to pay no more than 21.5% per annum on their combined income and wealth. The answer is clear. We can raise billions to pay for the public services we need without raising tax on the lowest paid or middle earners, and without increasing the income tax burden, by putting a little more tax on those with the greatest wealth and the broadest shoulders—those who should pay their way and contribute to our public services, which are so badly needed. This Bill does none of that.
David Simmonds (Ruislip, Northwood and Pinner) (Con)
I welcome this Bill, as I did the previous one that reduced national insurance contributions. As a starting point, we must recognise that a lot of the lobbying about our economy tends to come from the biggest organisations with the deepest pockets. Around 70% of people employed in this country work in an enterprise with fewer than five staff. Those businesses do not necessarily have a big public affairs department or a collective sector or trade body to represent them, but they will benefit enormously and directly in their pockets from the decisions that we take this afternoon.
It concerns me a little to hear those on the Opposition Benches who scorn the value of the money that the Bill puts back into people’s pockets, because £8 a week might not seem like a huge amount—in the context of an MP’s salary, perhaps it is not—but particularly for lower income households, that £8 a week accumulated over the period of a year is a valuable contribution towards a better standard of living. It is more money to spend on the rising costs that households face—car insurance and other bills—or to put towards a family holiday, a better Christmas or more treats for the children. We should recognise that all of that contributes to a higher standard of living for people in this country. A lot of today’s debate has been party political in tone, perhaps regrettably, given how empty the Opposition Benches are.
I was elected to public office for the first time in 1998—a year after the last Labour Government took office. Many of us will recall that that Government were elected on a pledge that they would stick to the spending plans put in place by the outgoing Conservative Government in 1997 for their first three years in office. Thereafter, they spent, in broad terms, 10% more taxpayers’ money every single year than they raised in taxation revenue. When the country faced a significant financial crash in the late 2000s, there was already a huge national debt as a result of the Labour party’s failure ever to meet their committed expenditure through tax rises, productivity growth or any other method.
For me as a local authority councillor, that meant a Labour Government who said, “We are introducing entitlements to higher standards of care and an expectation that you will fund it through introducing charges for the most vulnerable people.” That Labour Government required every single local authority to make massive efficiency savings every year in every other part of public services to balance the budget. Given some of the pledges that Labour made in the Budget debate, whether on the environment, VAT on school fees or windfall taxes, if there is to be a change of Government, we will see yet another period of a Labour Chancellor saying, “We failed to raise this money in tax, we have not generated the income, so we are going to borrow, borrow and borrow, and the national debt will continue to rise.”
The taxable capacity of our economy and the economies of every country in the western world is an important consideration for us. Every major economy has been affected by covid and Russia’s illegal war in Ukraine. We must be careful about how we allocate taxpayers’ money to ensure that we are contributing to growth and focusing on the things that make the biggest difference to our constituents’ standard of living.
The Treasury team has been lobbied a great deal on issues from inheritance tax to stamp duty, higher rate tax and additional rate tax. I was pleased to see in the Budget that measures have been taken or work has begun on things like reducing the cliff edges that affect people, such as in child benefit. However, we need to recognise that around 11% of taxpayers in the UK currently pay higher rate tax, whereas the national insurance cut benefits, as my hon. Friend the Minister said at the Dispatch box, around 29 million working people—the vast majority of people in this country.
According to the Barclays insights report for my constituency, which I received recently, as I think did every other right hon. and hon. Member, the biggest increase in discretionary expenditure has been on lower-income working households. That suggests that the measures taken by the Government to date are beginning to feed through.
Let me turn briefly to a number of points that have been raised about the use of national insurance contributions. We heard the Leader of the Opposition, the right hon. and learned Member for Holborn and St Pancras (Keir Starmer), asserting very clearly at the Dispatch Box in Prime Minister’s questions earlier that a reduction of national insurance meant a cut in the budget for the NHS. It is worth reflecting on the Government Actuary’s quinquennial review, which sets out in a lot of detail how national insurance contributions are used, some of their history and how they came to be that way.
When national insurance was introduced in 1911, it was intended to represent—in a physical sense, with an actual stamp on a card—a direct contribution towards someone’s benefits and pension. It evolved, in particular with the 1948 reforms, into the shape we see today. But there is no direct hypothecation between the vast majority of national insurance contributions and any part of public services. In fact, around 94% of the national insurance fund is spent directly on funding retirement pensions. It is a subset of other categories of national insurance contributions that represent the biggest single transfer from NICs paid by our constituents into the national health service.
As I learned in my time engaging with a whole variety of different bits of government, such as the teachers’ pension scheme, people pay in, it goes into a pool of Government funding and decisions are then made by the Treasury on how to distribute that. In the case of the national insurance fund, we know that one of the issues the Budget begins to deal with really effectively is the recognition of a 17% statutory maximum on any Treasury contribution to cover shortfalls in that expenditure. Yet by the middle of this century, as a result of our changing demographics, we know that those shortfalls will become quite significant.
The steps made through such measures as the removal of a lifetime limit on pension saving and the uprating of auto-enrolment are examples of a Government not just thinking a couple of years ahead with an election in mind, but thinking 30 years and 40 years ahead to ensure that we have a sound financial basis for the biggest single item of Government expenditure in the middle of this century, when all those bills will be coming home to roost. That is evidence of a responsible and Conservative approach: looking at how we can make decisions within our taxable capacity that reflect a proper understanding of what the data tell us about the long-term position. That supports things like an increased savings rate—again, all the data we are getting demonstrates that our constituents are beginning to take that seriously—with a view to ensuring long-term stability.
On that note, I conclude by saying that the Treasury and the Government have taken exactly the right decision. They recognise that the benefits provided to pensioner households in particular over the past 14 years mean that they are now much, much wealthier, relatively speaking, than they used to be, supported by the triple lock. They now need to acknowledge that working people, who have borne a significant burden because of covid and the war in Ukraine, need extra money in their pockets. We must set that against the backdrop of an economy where, on average, 800 jobs have been created for every single day that the Conservatives have in office since 2010, where the youth unemployment rate has halved since the last Labour Government, and where foreign investment is supporting the creation of jobs and investment in productivity, which gives us cause to be optimistic and positive that this is genuinely a Budget for a better future.
Sarah Olney (Richmond Park) (LD)
The Liberal Democrats support measures to reduce the tax burden on hard-hit households during the cost of living crisis, but the Bill is yet another deception from the Conservative Government. Everyone can see what this alleged tax cut really is: a badly executed swindle from this Chancellor in his desperate attempt to convince people he is cutting taxes. Yet the British people will not be fooled. It is clear that, despite his claims to the contrary, the Chancellor is continuing to stealth-tax millions of hard-working families and pensioners through the freeze on national insurance and income tax thresholds, which is subjecting them to the highest tax burden since the second world war.
Since last April, a typical household has already paid almost £1,500 extra because of the Chancellor’s stealth tax hit, while enduring higher mortgage or rental costs, sky-rocketing energy bills, and soaring food prices at the till—all as a result of decisions made by this Conservative Government. Despite all that, the Chancellor is still trying to pull the wool over our eyes. Even after the measures proposed in the Bill today are enacted, that same typical household will be paying an additional £366 next year, because the Chancellor has frozen their tax-free personal allowance. Worse still will be the hit to pensioners, who will see almost half the gains they receive from the basic state pension over the next four years wiped out by these Conservative stealth taxes. That is an £8 billion pensioner penalty, all as a result of this Conservative Chancellor effectively taking a bolt cutter to the triple lock. It is therefore clear that these deceptive Conservative claims to be cutting taxes simply are not worth the paper they are written on.
In his Budget last week the Chancellor could have given real support to hard-hit households suffering through the cost of living crisis, but instead he delivered yet more of the same from this out-of-touch and out-of-ideas Conservative party. The Liberal Democrats have called on the Government to give valuable support to those who are struggling to make ends meet, including a mortgage protection fund paid for by a reversal of the Conservative tax cuts for the big banks so that struggling families do not lose their homes, support for renters through the banning of no-fault evictions and the introduction of longer standard tenancies, and further help for all households with their energy bills through a doubling of the warm home discount.
Those steps would have made a real difference to families struggling in the middle of a Conservative recession. The Chancellor sat on his hands, opting instead for a last-ditch attempt to cling to power; but across the country, people will not be fooled. That is why I tabled new clause 2, which I will speak about in more detail in Committee, and to which I hope Members on both sides of the House will lend their support. The new clause, if accepted, would lay bare this Conservative Government’s stealth tax deception by shining a light on the millions of people who will be dragged into paying national insurance as a result of the freeze on tax thresholds.
The Liberal Democrats support measures to ease the tax burden on hard-working families during the cost of living crisis, but we will not be supporting this deceptive Conservative legislation today. For too long the Chancellor has claimed to be cutting taxes, seemingly giving with one hand while taking more with the other. That is why voters throughout the country are sick and tired of this out-of-touch Conservative Government and are switching to the Liberal Democrats. In seats all over the country, it is clear that the choice at the next election will be between an out-of-touch Conservative MP and a hard-working Liberal Democrat one.
Robin Millar (Aberconwy) (Con)
I must confess that I have not spoken in many Budget-related debates in the House, partly because I am well aware of the expertise of many other Members. It is a matter of some interest and pleasure for me to listen to the likes of my right hon. Friends the Members for Witham (Priti Patel) and for Wokingham (John Redwood) as they explain the consequences of, and the reasoning behind, measures such as this, and for that I am grateful. I am also grateful to the hon. Member for Norwich South (Clive Lewis), who is not in the Chamber at the moment, for showing up. As my right hon. Friend for Witham said, it is good to have a debate about these issues and it is important that we do so, but that is difficult when the Labour Benches stand empty before us.
In the words of my office manager, Barbara—who will enjoy the reference—I am a bear of little brain, and I therefore think of Budgets in simple terms. There is money coming in and there is money that must go out, and hopefully there is a surplus between the two sums. My right hon. Friends the Members for Witham and for Wokingham have already covered issues such as growth and productivity so well that I will not deal with them now, but the points that they made bring me to my own first point, which is that Budgets are about choices. Much as Opposition Members want to make out that this is a single-issue debate that is all about spending, there are choices involved in how a Government must spend any money that they have, or must borrow in order to spend.
The first of those choices is “Do we spend on public services?”, and the Chancellor has said, very clearly, “We do.” An extra £150 billion is being spent on public services, and that is in the context of a health budget of about £176 billion a year and a pensions budget of £124 billion. It is not an insignificant amount. It is not an afterthought. It is not a rounding-up error that slipped past the accountants’ eyes in the preparation of the Budget. It is a serious commitment to public services.
At this point, I must refer to my own constituency and the Chancellor’s inclusion of cultural projects of national significance, with £10 million for Venue Cymru in Aberconwy. We are exceedingly grateful for that, and I know that the council was delighted and surprised, but I did work hard to make the case for it with the Chancellor. As he pointed out, culture is an investment with a real economic return, and that is something that the students at Ysgol John Bright in my constituency understood. Just last week I was talking to the cast of its production of “Chicago”, and Lily, Arron, Isobel and others said how much they appreciated the chance to take part in productions not just in the school hall but in the local theatre. They saw the value of an investment in that theatre enabling future generations to have the same experience.
That brings me to my second point about how we choose to spend our money. We can invest it, as the Chancellor has demonstrated—for example, in his reference to a productivity programme. I think he set aside £140 million or £150 million for productivity within the NHS. No one can describe this as a short-termist Budget, or one that is only thinking about some event that may happen later this year—I cannot imagine what. This is a really forward-looking Budget.
The third thing that a Chancellor can do with a Budget is repay debt, which I feel very strongly about. The argument was made by the hon. Member for Norwich South that we can pay more and more into public services. Usually, the argument is that we can pay a penny here or a penny there, which never sounds like much, but the debt that builds up when we have to borrow to make payments is considerable. Let us not forget that the narrative of “just a penny more” or “just give us more money and we’ll get it done” was tested to destruction in 2010. By the time we got to 2010, what was the legacy? A note saying, “There’s no money left.” I did not write the note; it was a Member now on the Opposition Benches—then a Minister, no less. We have to address the idea that we should simply throw more money into public services. We have a duty to members of the public to change the narrative of, “This party is bad because it doesn’t spend; that party is good because it does spend.” It is not the answer, which is why we have a moral duty—never mind an economic and financial one—to properly make the case for reform. Again, I refer back to the Chancellor’s decision to put £140 million or £150 million into a productivity boost for the NHS.
Debt levels are increasing—that is for sure. Health and pensions will receive £176.2 billion and £124.3 billion respectively this year. The third biggest public sector spend this year will not be on policing, defence—that is a subject for another debate—education or universal credit, but on the interest on debt repayments. I am sorry to pick on the hon. Member for Norwich South, and even sorrier that he is not in his place to hear this, but to keep reducing everything to the number of nurses we might be able to recruit, or to the number of hospitals we might be able to build, is an irresponsible way of looking at public services. The repayment that we make on debt is forecast to be £94 billion this year. In simple maths, that is the equivalent of building two new primary schools every single hour of every single day this year. If we want to reduce stuff to such a level, let us have that conversation, because our debt repayments are costing us two new primary schools, at £5 million each, every hour—24 hours a day, 365 days a year. Maybe I have got the price slightly wrong, but we can work out the numbers
We know that debt levels increased under the last Labour Government. I will not be drawn into that discussion—much as I would like to—because this debate is about national insurance, but I will make the point that debt has increased. How have the Conservative Government done that over the last 14 years? They have spent money on the things that this country has needed. Apart from empty coffers, we inherited a global financial crisis. We introduced a programme of austerity, and we had to work that through with three programmes of quantitative easing, worth about £350 billion. We were then unexpectedly hit by a pandemic, for which our expenditure was about £410 billion—equivalent to about £6,000 per head of population. That costs money to service, and we are now paying it back.
None of us knew that the pandemic was coming. None of us knew that a war was coming in the east of Europe. None of us knew that an energy crisis was coming. None of us knew that there was going to be inflation across the economy. None of us knew these things, but this Government responded and we wrote the cheques. When the energy crisis came up, the Government spent £67 billion on supporting businesses and members of the public. During the covid crisis, £140 billion of that £410 billion went on shielding business so that when we came out, the economy bounced straight back to where it had been. This is an understanding of how the economy works and of how public finance works. It is distinctively Conservative that this is so, and we have shown this.
There is a fourth thing we can do with that spend. If we are not spending it on public services, investing it or drawing down debt, we can choose to cut taxes, and that is where we have come to. It was on the streets of Llandudno that I encountered the first person to ask me, “Who is going to pay for all of this?” It was during the covid pandemic, on the King’s Drive in Llandudno, where a resident and I were having a chat across his garden wall—suitably spaced at the time, of course. The area has it challenges, and it might be expected that people there would be looking for help from the Government, and indeed they did, but that gentleman, who had lived on that street for six decades, was the first person to look me in the eye and say, “Someone is going to have to pay for all this.”
That is an important point. We talk about being honest, and I was sorry to hear some of the comments from the hon. Member for Richmond Park (Sarah Olney) about being honest and not pulling the wool over people’s eyes. Let us start by saying, “This costs, and someone has to pay for it. Someone has to be responsible for looking at how this is paid for.” The choices we make to spend are matched by the choices we make on how we spend and where the money goes.
This Government have chosen to make a cut in national insurance, and I fully support that. I would say that 2% is a distinctively conservative amount, in a distinctively Conservative approach to tax cutting. It matters; it is making a difference. We hear that for someone on the UK average salary of £34,500, that will be worth about £900, taking the two cuts of 2% together. A 4% cut will be worth about £900. In my constituency the average salary is considerably less; it is about £28,000. Iusb know that some who are listening to this will doubt that, but that is the figure. To somebody on £28,000, that 4% cut will be worth about £600, and that makes a difference. That £50 a month will make a difference.
That brings me to my first comment about the national insurance cut, which is that it is targeted. This is deliberately intended to make a difference. This is not gesture politics. This is not unfunded. This is not careless. This is not something that is done casually or without thought or regard. It is targeted, and 27 million people are better off. There has been talk of why pensioners have not been included, but pensioners have benefited from the triple lock. There has also been talk that the better-off receive more of a cut. The nature of tax is the more you receive, the more you pay. That was exactly the argument made by the hon. Member for Norwich South, and I might characterise it as “soak the rich”, yet that somehow seems to be an argument against providing a tax cut. That is nonsense and it demonstrates a misunderstanding of finance that exists on the Opposition Benches.
This measure is targeted because it is aimed at those who are in work. It is distinctively Conservative to encourage and reward those in work and to say to them, “At the end of this month you will have more left over in your pay cheque than you did before. Why? Because the Government have made that decision to impact your pay cheque so that you can take home more.” If we are going to talk about comparisons, we should go back to 2010 and say that over these 14 years the attitude to work and the understanding of the importance of work are reflected in the fact that, on average, 800 new jobs a day have been created under this Conservative Government. It is a distinctively Conservative thing to target finance intelligently and to do it to encourage people into work and encourage them in that work.
My second point is that it is the second cut in a row, and dare I say it—oh, there is no one on the Opposition Benches to listen to this—there is a plan to reduce the tax burden. We have established that there was a need for the Government to make payments to support people and businesses through the pandemic, the energy crisis and inflation, but we are now cutting the rates to encourage work, and it is a plan. It is distinctively Conservative to have a plan, and 4p off the tax on my wages and their wages is a big cut by any estimation.
The hon. Member for Richmond Park talked about the Chancellor taking a bolt cutter to the triple lock, and I remind her that pensions are structured in such a way that people do not pay tax when they pay in, so that the sum builds up and they benefit from the interest it accrues—it grows faster over time. The other side is that they pay some tax when they take their pension. The pension was never intended to be tax free, and there has always been an expectation that there will be some payment to be made. That is not taking a bolt cutter to the triple lock.
It was this Chancellor who committed to the triple lock, and that commitment, depending on the estimate, has cost the Government £10 billion. There are other ways to calculate the pension, such as having a double lock, measuring it against the consumer prices index or measuring it against earnings, but saying that, no, the triple lock stands has cost the Government £10 billion more, which is £10 billion in pensioners’ pockets. Let nobody say that this Government do not care about pensioners or the elderly—and I say that as an MP representing a constituency where 27% of my constituents are over the age of 65. Again, we all have to make a payment, and this is about talking straight.
We may have forgotten the capital reliefs—the full expensing—announced in the last autumn statement. Again, that has a cost, but it is a real benefit to business. That is £50 billion over five year. There might be questions about that estimate, but it is another big commitment, this time not to pensioners but to business. To come back to my point about a plan, we have made a commitment to pensioners—an expensive one, but the right one—and we have made a commitment to business to encourage growth, so it makes sense that in this Budget we have made a commitment to workers. Again, this sounds like a plan; it sounds to me like there is an intentionality that I simply do not see or hear from Opposition Members.
My third point is that I am very happy with the aspiration to reduce further or eliminate national insurance. It is distinctively Conservative to want to reduce tax further, and it is distinctively Conservative to make tax simpler. This is perhaps not the time to debate other tax methods or flat taxes, but I see no problem with suggesting our direction of travel. What I find remarkable is that the Opposition’s immediate reaction is to say, “Oh, that’s unfunded.” At some point in the management of the public finances, we have to balance where the money comes from with where it is going. It is completely reasonable to say that we have an aspiration to reduce taxes. If it is a case of eliminating national insurance, so be it.
I will bring my remarks to a close—[Interruption.] I can hear the chuntering from the small number of Opposition Members present, and I thank the hon. Member for Batley and Spen (Kim Leadbeater) for joining her Front-Bench colleagues. The doctor says that sometimes medicine does not taste so good, and I have a feeling that some of the things I am talking about do not taste good to those on the other side of this House, because this is medicine; I am talking about a responsible approach to public finance, telling the truth, and dealing with people as adults by saying, “Money has been spent and now money is having to be paid back.”
The key point is that we are still managing to bring cuts to the tax paid by workers. As I said, we have a trajectory on that: we have given money to pensioners—those who need it; we have given money to businesses, through capital relief and full expensing; and now we are doing this for workers. This is distinctively Conservative because of the intentionality, the plan and the focus on those who need it, the businesses that create growth and wealth, and the workers we wish to incentivise with it. We understand that the Opposition will vote for these cuts, but they cannot muster any enthusiasm for them—they certainly cannot muster any debate about them. We know that Opposition Members are here somewhere, because, presumably, they will all turn up to vote in a minute, but they are not on the Benches now. The question is: what is the Labour plan for tax?
David Simmonds
I am very much enjoying what my hon. Friend has to say to the House about this Budget. He will have heard the saying many times in the local government world that, “Culture eats strategy for breakfast”. One Opposition party has a strategy of trying to pretend it has no funding commitments but it has a deeply ingrained culture of tax and spend, whereas we have a party of government whose culture and strategy is very much about a long-term trajectory of tax cuts and living within our means. Does he agree that it is the culture in the Government of living within our means that will out after this election?
Robin Millar
My hon. Friend makes a good point, in that, first, culture does eat strategy. We can strip away all the words about this but his point about cutting our cloth and living within our means describes exactly what we have seen happening. I have tried to set out, albeit perhaps rather clumsily—I ask Members to forgive me if that is so—that there is a 10-year story here of inheriting no money, and running into a pandemic that nobody expected, a war that no one planned, an energy crisis and global inflation. Yet this Government turn up with a Budget that says to the worker, “4p less in the pound is what you are having to pay.”. That is remarkable.
We might argue about the hows, whys and wherefores, but we have to be honest about the fact that the headwinds we have encountered as a nation over the past decade were not expected. Given that we started from a point of having no money—to use the phrase on the note left by the Labour Minister—it is extraordinary that we are here today debating another 2p off tax. It is even more extraordinary to me that the Opposition have not got the bottle to turn up for a debate as important as this.
Drew Hendry (Inverness, Nairn, Badenoch and Strathspey) (SNP)
I have to follow the comments made by the hon. Member for Aberconwy (Robin Millar). I was listening carefully and trying to pick out something useful from his speech, and I did find a line: someone is going to have to pay. SNP Members know that public services are going to have to pay for this measure, which is why we tabled our reasoned amendment; there is going to be a crushing effect on them.
The hon. Gentleman also talked about debt levels, but, unfortunately, like the Labour and Tory parties, he did not talk about debt levels accruing in households because of the cost of living crisis. They never mention people in their houses who are struggling through the situation they are faced with at the moment. That is for something else, but those are the effects on people in real life while we are just talking around the subject. I think I heard the Labour Front Bencher say that in this Budget for every £5 people get back, they will lose £10. [Interruption.] That is not being disagreed with, so I believe it is correct, and yet Labour will still back this Bill; Labour Members will not vote against it today. This is another measure on that journey to take money out of people’s pockets.
It was good to hear the hon. Member for Norwich South (Clive Lewis) speaking about the issues, including the reasons why we have brought forward our reasoned amendment. He talked about the long “economic creed” of this type of Bill that privatises public services. I enjoyed his speech and agreed with it. I hope he will persuade his colleagues and try to change their minds, so that they come back and vote against the Bill. I hope he will join us in the Lobby as well—it is a shame he is not in his place to hear that just now.
This is a Parliament of flatlining growth and falling living standards. The Labour party keeps asking where the money is coming from, yet it is afraid to ask that question about the measures set out in this Bill because it does not want to tackle the subject. When the Institute for Fiscal Studies calls out both the Government and the Labour party for “a conspiracy of silence” over the effects of the Chancellor’s Budget, including these measures, it is not hard to drill down to see why the Bill should be opposed.
Drew Hendry
Go on. The hon. Gentleman has had 20 minutes, but I will give him another go.
Robin Millar
The hon. Gentleman is being generous; I appreciate that he has a speech to give. The fact is that somebody on the national living wage, or the minimum wage as it was in 2010, is now, in 2024, 35% better off in real terms. That is not a trajectory of decline: somebody on the bottom rung of society, in terms of earnings, is better off.
Drew Hendry
I thought the hon. Gentleman had got through all that stuff in his speech. I will let him know just now that, because of this measure, anybody earning up to £19,000 per annum will still be worse off, or at least no better off, because of frozen thresholds under the control of his Government. The biggest gainers are those earning over £50,000 per annum. As a result of the changes and frozen thresholds, someone working full time and earning the minimum wage will see a net tax increase of more than £200, according to the Institute for Fiscal Studies. The Resolution Foundation said that there will be a 0.9% fall in real terms in household disposable income between 2019 and 2025.
The Office for Budget Responsibility pointed out again this week that the Government make their own fiscal rules. They decide what they are going to do and make decisions that they take forward. There is not some magic envelope that they have to work within, where they have no flexibility and are unable to move outside that envelope or do anything different. They can make choices, but the choices they are making are bad ones. Austerity is a choice that this Government have made time and again, with the same outcome: 2010, 2015, 2017 and 2019—failure, failure, failure and failure. If that is not enough, throw a disastrous Brexit and a toxic mini-Budget into the mix and see what happens.
The measures in the Bill are a grubby election gimmick that makes things much worse for everyone. People are struggling. They are struggling with food prices, which have been boosted by Brexit to over 25% more than they were a couple of years ago. Millions of people are paying hundreds of pounds more on mortgages. Opening letters, emails and apps shows the sharp interest they are paying for energy costs. The measures, along with the lack of investment in public services, leaves public service cuts beyond reasonable imagination.
It is not just me saying that. The Institute for Government has said:
“The reality is that these spending plans will be impossible to deliver”,
as have other institutes. The Resolution Foundation says they are “fiscal fiction”. Let us think about the impact of that. Where is the Labour party on that subject? Where is the so-called “party of labour” on the subject? Missing in action when its Members should be here. What is the point?
Gavin Newlands (Paisley and Renfrewshire North) (SNP)
The Labour party in Scotland has made the point that change is coming, but can my hon. Friend explain to me, other than changing the colour of the rosette over No. 10 Downing Street, what that change actually is? Given that Labour Members are not voting against this Budget and they have agreed with the Government on Gaza and on multiple other policy areas, what is the point of Labour?
Drew Hendry
My hon. Friend makes a good point. That was underlined the other day when the Labour leader was interviewed by Sophy Ridge, and he was not willing to say what Labour would do differently. It was also underlined by the campaign co-ordinator, the right hon. Member for Wolverhampton South East (Mr McFadden), who would not disagree with any part of the Tories’ horrible Budget. What is the point of Labour?
What is the point in this Government continuing along this disastrous path that they have put in place? They say that they want to increase productivity in the UK, but their productivity aims are destined to be fatally undermined by inevitable public sector industrial action, which workers will be right to take. They will also then have to face the policy panics that will follow. No, sorry, the Conservatives will not be in Government. It will be Labour that will have to face those policy panics and the U-turns that will inevitably have to be made.
This Bill has been designed by losers. It will mean that many more people will be losing what they value: decent public services. It is not only, as the Chancellor said, Scottish oil and gas that are losing out. Other losers include: action on climate change, the just transition and, yes, let us not forget Labour abandoning its £28 billion a year promise to invest in the green economy. That has turned to dust as well.
What we needed in the Budget were measures to help people with food, with mortgages, with rent and with energy costs. We needed public services protected, and proper investment in the NHS. This is a desperately shoddy Bill that plunges our public sector into a desperate and dark future that helps few and hurts many. The nations of the UK needed better, and Scotland deserves to be out of this Westminster austerity nightmare.
Steve Double (St Austell and Newquay) (Con)
Being the last to speak in these debates has become a bit of a habit—and with you in the Chair, Mr Deputy Speaker.
I rise to speak very much in favour of this Bill. It delivers a 2% cut in national insurance, which will be hugely welcomed by thousands of households in my constituency, and indeed across the country. For someone on the average wage, this change, combined with the 2% cut that we introduced in January, will mean a £900 cut, which, for a household with two people earning, is £1,800 a year. Although that is not life-changing money, for many working households across this country, that £150 a month will make a significant difference in easing the pressures on their household budgets and the challenges they currently face.
We must acknowledge that we can make this cut only because of the difficult decisions that we have consistently made over many years to be responsible in our handling of the public finances. I know I said that yesterday, but it needs to be continually repeated. This is against a backdrop of two of the biggest shocks to our economy and public finances that any of us will ever live through: the pandemic and then the war in Ukraine and the energy crisis it produced. The Government have spent nearly half a trillion pounds supporting the country, keeping people in work, and supporting businesses and households.
I know that Labour bangs on about the fact that we have had to increase taxes to pay for all of that, but we all know that, had Labour been in power over the past few years, the bill would have been even higher, because it wanted longer lockdowns and tighter restrictions. Every time we came forward with measures of support, Labour said that they were not enough and that we should be spending more. Therefore, as much as Labour Members may criticise—and they think it is their job to do so—the country knows that, had they been in power, the bills would have been higher and we would have had to put up taxes by even more in order to balance the books. But because of the difficult decisions that we have made, we are now able to start to cut taxes for people, which is hugely welcome.
Despite all that is being said, the reality is that the effective tax rate is at the lowest it has been since 1975. Let us not forget that shortly after 1975, under a Labour Government, the top tax rate in this country was 83%. I know why Labour Members talk about high taxes; it is because they know more about high taxes than anyone else. We also have to put this in the context of the personal allowance being increased since 2010, when it was £6,475. It is now £12,570. The personal allowance has almost doubled, which has been a welcome and important measure. The Labour party criticises us because we have had to make the difficult decision to freeze the personal allowance for a few years, but let us remember that, between 2010 and 2021, Labour voted against every single Finance Bill that we introduced to increase the personal allowance. Every time we tried to increase the personal allowance, Labour opposed it, so we will take no lessons from Labour when it comes to personal allowances.
I welcome the Government’s ambition to continue to reduce national insurance and ultimately scrap it, because it is a double tax on work. That is the right ambition, and let us be clear that it is an ambition. I know that Labour Front Benchers are enjoying making a point about that. After the fiasco of Labour’s £28 billion green deal promise—which was not a promise, then was, and now is not—I would have thought that Labour would know the difference between an ambition and a promise. It is an ambition, and it is absolutely right to have that ambition. I looked up a headline from 2020 in The Guardian—not the most pro-Conservative, right-wing newspaper—which said, “A truly bold Chancellor would scrap national insurance”. I am very happy that we have a bold Chancellor who has said that the Government’s ambition is to scrap national insurance.
Gavin Newlands
The hon. Member mentioned the green deal. I have hundreds of constituents who were essentially screwed under the 2010 Government’s green deal with the Lib Dems. Rogue builders were allowed to screw them out of thousands of pounds. The Government have done nothing for my constituents. What does he have to say about that?
Mr Deputy Speaker (Mr Nigel Evans)
Order. Mr Newlands, you are incredibly intelligent. Maybe next time you will think of a different way of expressing that.
Steve Double
I am not sure what the hon. Member’s intervention has to do with the Bill, but I am sure that all his constituents who are in work will welcome the 4% cut in national insurance. The Scottish National party has raised taxes to their highest level anywhere in the United Kingdom, so I am sure that his constituents will be grateful for the Bill.
Like my hon. Friend the Member for Aberconwy (Robin Millar), I represent a constituency with a higher-than-average number of pensioners. Some of them have been in touch with me questioning why, as far as they could see, there was nothing in the Budget for them. Clearly, cutting national insurance does not affect them because they do not pay it. We have to remember that the Government have kept the triple lock commitment. Pensioners rightly had a 10% rise in their pensions last year. I was one of those who fought hard in the autumn of 2022 to ensure that we kept that commitment. Next month, they will rightly get a further 8.5% rise in their pensions. When those measures are combined, pensions will have gone up by 18.5% over two years, which is a significant rise. We have rightly kept our promise to pensioners. It is in that context that the Government have now rightly focused on supporting people in work and in jobs, which is very welcome.
We have to set this Bill and the 2% cut that it delivers in the context of the 2% cut that we made in January and the fact that, because of our careful management of the public finances and the economy, inflation is coming down and the green shoots of growth are back in our economy. For those reasons, we are able to make the decision to cut national insurance. I am happy to vote for the Bill this evening.
Mr Deputy Speaker (Mr Nigel Evans)
To start the wind-ups, I call Tulip Siddiq.
Tulip Siddiq (Hampstead and Kilburn) (Lab)
Thank you, Mr Deputy Speaker.
Labour will always support policies that ease the burden on working people. Labour has said consistently that we want taxes on working people to be lower. That is why, two years ago, when the current Prime Minister wanted to increase national insurance, we opposed it. That is why we supported the cut to national insurance last autumn and why we will support these measures we are debating to bring down national insurance by a further 2p. Let us be clear, however, that the measures come in the context of the highest tax burden on working people since 1949—a tax burden that is continuing to rise. The British public face not just further tax rises, but stagnant growth and wages, prices still going up in the shops, and higher mortgages and rents. Indeed, this will be the only Parliament on record in which living standards have fallen.
Unwilling and unable to fix the economic mess that they have created, the Government have resorted to empty promises—pledge after pledge, but never a plan. Last week, the Chancellor made a £46 billion unfunded promise to abolish national insurance altogether, with no explanation of how he would pay for it. I look forward to the Minister explaining in his speech exactly how it will be paid for. The British people are sick and tired of Conservative spin.
Let us take the Government’s claim that a person on average earnings will be £900 better off as result of this national insurance cut, when combined with the changes made in January. That completely ignores the Chancellor’s own stealth tax rises. His decision not to increase tax thresholds in line with inflation means that the tax burden is forecast to rise by another £41.1 billion over the next five years. That fiscal drag will create 3.7 million new taxpayers by 2028-29. OBR figures show that for every 10p extra that working people pay in tax under this plan, they will get back only 5p as result of the combined cuts to national insurance contributions. As usual, the Conservatives give with one hand, and take with the other, and they expect the British public to be grateful.
Paul Johnson, the director of the Institute for Fiscal Studies, said after last week’s Budget that
“this remains a parliament of record tax rises”,
and that is before we consider the rising cost of bills, with food prices up by 25%, rents by 10% and mortgages by an average of £240 a month. Rather than people being £900 better off, as the Conservatives claim, household income is set to fall by £200 over the course of this Parliament.
A week ago, the Chancellor had the opportunity to deliver a Budget that would finally break our country out of the low-growth, low-wage, high-tax cycle that we have been trapped in because of 14 years of economic failure. The British people needed a Budget for the long term to bring prosperity and rebuild our public services, and yet the Chancellor ended his Budget with a £46 billion unfunded tax plan to abolish national insurance. That would leave a gaping hole in the public finances, put family finances at risk and create huge uncertainty for pensioners. I have not heard one attempt from the Government Benches to explain where that money will come from. I look forward to the Minister’s response, because I am sure he will break down exactly where that £46 billion will come from.
Gavin Newlands
If the measure is so bad, why is the hon. Lady not voting against it?
Tulip Siddiq
I will not take any lectures from a party that puts oil and gas companies ahead of working people. If the hon. Member wants to change his policy on oil and gas companies having priority over working people, he can intervene again, but somehow I do not think that it will change.
The last time the Conservatives implemented a proposal like this, just 18 months ago, they crashed the economy. In fact, the Chancellor’s plan to abolish national insurance contributions would cost more per year than the proposals in that disastrous mini-Budget. The Conservatives might deny it, but millions of people are still paying the price of their last ideological experiment: the typical family faces an extra £240 a month when remortgaging this year. The Chancellor’s commitment last week exposed a Conservative Government who are putting party first and country second.
Labour is under no illusions about the state of the public finances after 14 years of Conservative government. We know that if we are elected at the next general election, we will have to take tough decisions in government, but instead of the chaos and recklessness we have seen under the Conservatives, Labour will bring stability and security back to the economy. We will never make a commitment without first saying where the money will come from. We will always be honest with the public because that is the responsible approach.
I hope that the Minister, whom I like very much, will finally come clean with the British people in his response. I hope that he will finally break with his party’s irresponsible promises and endless spin. I hope that he will be honest and say that, as a result of decisions taken by his Government, the tax burden on working people is forecast to go up each year over the next five years, and that for every 10p extra that working people pay in tax under the Conservatives, they will get only 5p back. Most importantly, I hope that he takes the opportunity to be straight with the British people, as we have repeatedly asked him to do, by setting out exactly how his Government will pay for their unfunded £46 billion promise to abolish national insurance.
Tulip Siddiq
No, I am finishing.
The British people deserve better. This is just another Conservative pledge without a plan. The Conservatives should call a general election now.
The Financial Secretary to the Treasury (Nigel Huddleston)
I thank all right hon. and hon. Members for their contributions. I think it would be fair to say that a range of perspectives have been presented, but most of us—certainly on the Government Benches—agree that this is an important piece of legislation. It will deliver tax cuts that make the tax system fairer, while rewarding and incentivising work, and growing the economy in a sustainable way. The national insurance cuts are an important part of that, and they are policy.
I want to respond to the confusion of the hon. Member for Hampstead and Kilburn (Tulip Siddiq), which is understandable given that we have heard promises, policies, aspirations and ambitions from the Labour party in relation to the £28 billion. Let me be clear: it is my party’s ambition to eliminate national insurance. I know that Labour Members do not understand what the word “ambition” means and that it is difficult, but it is an ambition. That is the difference.
I will briefly reiterate the Bill’s main measures and what they seek to achieve. First, the Bill builds on the cuts to national insurance announced in the autumn statement by reducing the main rate of class 1 employee NICs from 10% to 8%. That change will come into effect from 6 April 2024, with employees benefiting from April onwards as employers make the changes to their payroll systems. Secondly, the Bill reduces the self-employed class 4 main rate of NICs from 8% to 6% from 6 April. That follows on from the one percentage point reduction to the main rate of class 4 NICs from 9% to 8% announced in the autumn statement 2023.
Now that inflation is falling and the economy is improving, as we saw in this morning’s figures, which I am sure the Opposition welcome, we can responsibly return some money to taxpayers, but it is important to do so in a way that supports work and grows a sustainable economy for the future. A UK employee can already earn more money before paying income tax and social security contributions than an employee in any other G7 country, and thanks to the NICs cuts in the autumn statement and the spring Budget and above-inflation increases to thresholds since 2010, an average worker on £35,400 in 2024-25 will pay over £1,500 less in personal taxes than they would have done if the thresholds had just increased in line with inflation. As my hon. Friend the Member for St Austell and Newquay (Steve Double) pointed out very well, in contrast to the comments of the hon. Member for Hampstead and Kilburn, we have reduced the amount of tax paid by increasing the threshold from £6,500 to more than £12,500 over the period in which we have been in office. Labour opposed many of those threshold increases.
My hon. Friend the Member for St Austell and Newquay also made the important point that the measures we have taken in recent fiscal events have been focused on helping 29 million workers. Some 27 million employees will benefit from an average £900 saving in national insurance, but of course, we also care deeply about pensioners. Those on the full basic pension will receive an extra £700 in April and those on the full new state pension will receive an extra £900, so 12 million pensioners will also benefit from the significant increases that we will provide through the triple lock. Of course, it is perfectly fair that workers also get some advantage—they will be receiving the benefits I have outlined. The Government are cutting taxes in a responsible way, and have taken difficult but responsible decisions to restore the public finances in the wake of global crises.
Drew Hendry
The Minister has used the word “responsible” a number of times. As has been pointed out by many organisations, not least the Institute for Fiscal Studies and the OBR, there will be substantial cuts to public services. With many English councils already in special measures—effective bankruptcy—where does the Minister see those cuts falling? How will they filter through to the public, and what will be the effect on public sector jobs?
Nigel Huddleston
As the hon. Member will be aware and as the Chancellor outlined, based on current spending assumptions, total departmental spending will still be £86 billion higher in real terms by 2028-29 than at the start of this Parliament. If he was listening to the debates earlier this week, he will be aware that we will increase spending in real terms by 1% during the forecast period.
The hon. Member and others have raised points about fairness and making sure that we look after the most vulnerable in society, which is of course something we are committed to. Distributional analysis published alongside the spring Budget shows that the typical household at any income decile will see a net benefit in 2024-25 as a result of Government decisions made in the autumn statement—and, indeed, from the autumn statement 2022 onwards—and that low-income households will see the largest benefit as a percentage of income.
We have mentioned many times our commitment to the national living wage. It will soon increase by 9.8% to £11.44, which is expected to benefit around 2.7 million workers. It is important to stress that from April, a full-time national living wage worker’s take-home pay will be 35% greater in real terms than it was in 2010, due to successive increases in the national living wage and changes to personal tax rates and thresholds.
To respond to a few other comments made by right hon. and hon. Members, my right hon. Friends the Members for Witham (Priti Patel) and for Wokingham (John Redwood) both gave excellent speeches, in which they not only championed workers—including the self-employed—but highlighted the fact that we have to operate in a particular context. As has been mentioned many times today, we are in a difficult financial situation because of a global pandemic that hit the global economy, which was followed by the invasion of Ukraine and the significant impact it had on inflation around the world.
The question, as my right hon. Friend the Member for Wokingham pointed out, is how much higher taxes would be if Labour had been in charge. Throughout the pandemic, the Government received a lot of support from Members on both sides of the Chamber. That was completely right, but many Members were calling for even greater intervention and even longer lockdowns, which would potentially have done immense damage to the economy.
Some hon. Members raised the contributory principle. In our ambition for further reductions in national insurance, we will make sure that the future tax system has the right mechanism for establishing entitlement to contributory benefits, including the state pension. My right hon. Friend also mentioned the rise in the VAT threshold, which is really important. It will go from £85,000 to £90,000, which means that 28,000 fewer small businesses will be registered for VAT. My hon. Friend the Member for Ruislip, Northwood and Pinner (David Simmonds) highlighted this Government’s record on jobs in creating 800 jobs a day and in significantly reducing youth unemployment, of which we can all be proud.
My hon. Friend the Member for Aberconwy (Robin Millar), who raised many important points in his speech, pointed out the rather irresponsible scaremongering we have heard today from those on the Labour Front Bench relating to spending on pensions and the NHS. The Opposition should be well aware, especially if they wish to form a Government, that the money raised by NICs does not determine the amount going to the NHS and state pensions. We have announced increasing funding to the NHS and we are uprating state pensions by 8.5% this year, as I have mentioned. We on these Benches can tolerate a decent debate—we are fairly robust— but we will not tolerate irresponsible scaremongering, especially when targeted at the most vulnerable in society, purely to try to take political advantage from making up policies that do not exist. I hope that at some point the Opposition will either get some economic competence or apologise for that.
This really important Bill delivers tax cuts for over 29 million working people. A yearly saving of over £450 for the average worker will result from this Bill alone. Taken together with the cuts to NICs at the autumn statement, it will be worth over £900 per year for the average worker. This will benefit households throughout the United Kingdom and in every single constituency represented in this place. However, here we are again, and in nearly three hours of debate, we have heard nothing but doom and gloom from the Opposition. How disappointed they must have been this morning to hear that the economy has grown. While I am not pretending for one minute that everything is perfect—as I have said, our constituents and the country have been through a very challenging time—it is important to recognise, welcome and applaud success, especially if a party wants to lead a country, champion trade abroad and attract investment. What a terrible advert for the UK we have heard from the Opposition today, who are completely lacking in confidence and ambition for our economy and our workers.
The national insurance cuts we are debating reward work and will provide a further boost to the economy. We are turning a corner, and the plan is working. While we want to put more money back into people’s pockets, the Opposition want to take more out, and while we take every opportunity to talk the country up, they take every opportunity to talk Britain down. The choice is very clear: a plan for growth and a brighter future with the Conservatives, or no hope, no clue and no plan with the Opposition. I commend the Bill to the House.
Mr Deputy Speaker (Mr Nigel Evans)
Should there be a vote on the amendment, 10 minutes will be allowed, and if there is then a vote on Second Reading, eight minutes will be allowed.
Question put, That the amendment be made.
National Insurance Contributions (Reduction in Rates) (No. 2) Bill
Wednesday 13th March 2024
(1 month, 3 weeks ago)
Commons ChamberRead Full debate National Insurance Contributions (Reduction in Rates) Act 2024 View all National Insurance Contributions (Reduction in Rates) Act 2024 Debates Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: Committee of the whole House Amendments as at 13 March 2024 - (13 Mar 2024)
17:27 - divided: - Ayes: 170 / Noes: 292 - Question accordingly negatived.
17:43 - The Committee divided: - Ayes: 169 / Noes: 293 - Question accordingly negatived.
18:01 - The House divided: - Ayes: 293 / Noes: 41 - Question accordingly agreed to.
The Second Deputy Chairman of Ways and Means (Mr Nigel Evans)
I remind Members that in Committee of the whole House they should not address the Chair as Deputy Speaker. They should please use our names when addressing the Chair. Madam Chair, Chair, Madam Chairman or Mr Chairman are also acceptable—I think I have been called all of those at some stage.
Clause 1
Reduction in rates
Question proposed, That the clause stand part of the Bill.
The Second Deputy Chairman
With this it will be convenient to consider clauses 2 and 3 stand part. I will take the selected new clauses as a separate debate after the clause stand debates.
Nigel Huddleston
I outlined the purpose of the Bill in my earlier speech. It is a short and clear Bill with a very clear purpose. It is our desire to move quickly in order for the changes to take effect from 6 April 2024. I sense Members’ desire to move quickly in cutting people’s taxes, and I will detain the Committee no longer.
James Murray
I fear that my speech may be marginally longer than the Minister’s, but I can assure you, Mr Chair, that it will not be too lengthy, because, as I made clear on Second Reading, we will support the national insurance reductions that the clauses in the Bill seek to deliver.
Clause 1 seeks to reduce national insurance contributions by reducing the main rates of employee class 1 and self-employed class 4 contributions, as well as the reduced rate that applies to a historic group of married women and widows. Clause 2 seeks to amend the calculation of annual maximum contributions and is effectively consequential on clause 1. Clause 3 sets out that the Bill will come into force on 6 April.
I would like the Minister to answer a couple of questions when he responds. Will he set out what conversations he has had with employers and payroll software developers about whether they will be ready to implement the provisions in this Bill from the start of the next financial year? I think I heard the Exchequer Secretary, the hon. Member for Grantham and Stamford (Gareth Davies), say on Second Reading that he was confident that a majority of employees would receive this tax cut at the beginning of the financial year, but is the Minister confident that every relevant employee will indeed receive the cut to national insurance in their first pay cheque of financial year 2024-25?
More widely, we support what this simple Bill seeks to achieve, so we will support all three clauses being approved by this Committee of the whole House.
The Second Deputy Chairman
That was marginally longer, as the hon. Gentleman said. I call Kirsty Blackman.
Kirsty Blackman
Thank you very much, Mr Chair—hopefully that is an acceptable form of address to use. I want to speak about the Bill in general and some of our concerns about it. The reality is that this is the wrong measure at the wrong time, as I said on Second Reading.
Earlier, the hon. Member for Hampstead and Kilburn (Tulip Siddiq) spoke about her concerns about the SNP’s policies on oil and gas. She says that we are not putting workers first. Unfortunately, the Labour party’s plans for green investment in energy mean that 100,000 jobs will be lost in Scotland, which is very clearly not putting workers first—unless it is only workers in England who count—given that the money will go on nuclear power.
On the details of this Bill, the reality is that public services are creaking and really struggling. I have spoken to the Electoral Commission, which is concerned about whether it will even be able to deliver elections properly, given that mandatory voter ID has been introduced. The commission was able to co-opt people from other areas in order to ensure that all the recent by-elections were run properly. Will the Minister make it absolutely clear that if there is a general election this year—which there almost has to be; there certainly has to be one in the coming financial year—local authorities will have enough money and people to be able to deliver and service those elections? Will they have enough resources to be able to do that?
The 2022 autumn statement allocated more money to the NHS for 2024-25 than this Budget allocates, so it is a bit of a cheek for any Conservative Member to stand up and say that the Government are putting more money into the NHS. They are putting less money into the NHS than they proposed in autumn 2022. The consequentials that arise from the increase this year are actually less than the in-year consequentials that the Scottish Government had for the NHS in this current year, so it is a very minor increase, because it only works out to in-year terms—[Interruption.] Does the Chief Secretary to the Treasury, the right hon. Member for Sevenoaks (Laura Trott) want to intervene? It is ridiculous for the Government to say, “This extra money is going into the NHS” when it is demonstrably less than they intended to spend on the NHS back in autumn 2022.
The Bill is going to make changes to the national insurance rates, and those changes will disproportionately impact higher earners. The Minister was slightly disingenuous when he said that the changes represent a higher percentage for people on lower incomes. Yes, but that is significantly less money. A band 2 worker in the NHS will be getting a £341 reduction in their national insurance rate. An MP in this House will get four times that. How is it fair that somebody in this House who is, in the main, not struggling to make ends meet will get £1,300 when someone working in the NHS will get only £300?
NHS workers have seen exactly the same increase in their energy bills as we have. They have seen exactly the same increase in council tax—actually, no, they have seen a much higher increase in their council tax bills if they live in England compared with those who live in Scotland. They have seen the same 25% hike in food prices. Given that those on lower incomes spend more money on food proportionately than those on higher incomes, that 25% inflation in food prices disproportionately hits families who are earning less. Therefore, we need to give even more to those families, rather than saying, “Well, it’s a higher percentage of your income so you’re okay. You’ll be fine with £340, but those people who are earning 85 grand a year standing in the House of Commons deserve £1,300.”
The hon. Member for Norwich South (Clive Lewis) made a very good speech on this change, and as he said, it is the essence of trickle-down economics in action. The Government are hoping that if rich people get richer and inequality increases, those people at the bottom of the pile will somehow magically get richer as well. There are much better ways to do this. One of the worst things about this whole situation—apart from the fact that Labour Members are unwilling to oppose it—is the decimation of public services that will result from it. The fact is that we have had 14 years of austerity and that is set to continue. People are going to lose out on vital services. The NHS is absolutely vital. Every one of us has had some sort of interaction with the NHS, yet the Government are setting themselves up for decades of pay battles with staff members because they will be unable to give the pay uplift that people deserve. They are setting us up for the decimation of those services.
I mentioned in my Budget speech last week that £1 billion-worth of cuts have been made by local councils to arts funding. That means children cannot access arts education, cannot go to a local theatre with reduced-price tickets from their local council, and cannot access all these extra things. People are struggling to access the most basic services because local authorities are creaking at the seams, yet the UK Government’s priorities are to allow a 4.99% increase in council tax and to ensure that higher earners get £1,300 whereas those on the minimum wage of £11.44 an hour who work 20 hours a week see absolutely no benefit.
Nigel Huddleston
I probably will not respond to everything we have heard today, as we thoroughly addressed many of the issues in the Budget debate.
In response to the new comments, I assure the hon. Member for Aberdeen North (Kirsty Blackman) that we always ensure that the democratic process is adequately funded. She is dismissive of the £2.45 billion increase in NHS spending that was outlined in the Budget, but it is a significant amount and, as she is aware, it is a real-terms increase. I agree with the hon. Lady on the importance of arts, culture and the other areas she mentioned, which is precisely why the Budget had measures to extend tax reliefs.
My opposite number, the hon. Member for Ealing North (James Murray), asked about the logistics of implementing and executing the tax change. We understand the impact of policy changes, and I put on record how grateful we are for all those who have implemented and executed the recent changes so speedily and effectively. Employees whose employer is unable to make changes in time, and who have left their employment, may request a refund from HMRC. The Government are confident that the majority of software developers will be able to make changes to their payroll software in time for 6 April.
On the new clauses, we have outlined the policy today. The impact of any changes to policy would, of course, be subject to the usual public scrutiny of costs, including from the OBR. It is therefore not necessary to produce a report at this stage. The OBR’s “Economic and fiscal outlook” publication for the spring 2024 Budget includes an analysis of the impacts of threshold freezes, including on the number of people brought into paying tax. It is therefore not necessary to produce an additional report at this stage, so we do not believe new clause 1 is necessary.
Question put and agreed to.
Clause 1 accordingly ordered to stand part of the Bill.
Clauses 2 and 3 ordered to stand part of the Bill.
New Clause 1
Review of the effects of reducing employee and self-employed NIC contributions to zero
“(1) The Treasury must publish before the end of the parliamentary session in which this Act is passed an analysis of the effect of —
(a) replacing “8%” with “0%” in section 1(1) of this Act,
(b) replacing “1.85%” with “0%” in section 1(2) of this Act, and
(c) replacing “6%” with “0%” in section 1(3) of this Act.
(2) The analysis in subsection (1) must set out the expected impact of the changes in subsection (1)(a) to (c) on total receipts to the National Insurance Fund in each of the financial years from 2024/25 to 2028/29.
(3) The Treasury must request the Government Actuary to make an assessment of the consequences for the Consolidated Fund in each of the financial years from 2024/25 to 2028/29 of shortfalls in the National Insurance Fund that would result from a zero rate for employee and self-employed national insurance contributions.”—(James Murray.)
This new clause would require the Government, before the end of the current parliamentary session, to set out what the impact would be on total receipts from national insurance and overall public finances of reducing national insurance contributions for employees and self-employed people to zero.
Brought up, and read the First time.
James Murray
I beg to move, That the clause be read a Second time.
The Second Deputy Chairman of Ways and Means (Mr Nigel Evans)
With this it will be convenient to consider new clause 2—Review of effects of frozen thresholds—
“The Treasury must lay before the House of Commons within three months of the passing of this Act a report which sets out its forecasts of the change to the number of people paying national insurance contributions as a result of the thresholds for payment of national insurance remaining frozen over the period 2023/24 to 2027/28, rather than rising in line with CPI.”
James Murray
As I made clear in the previous debate, we support the national insurance reductions that the Bill seeks to deliver. However, the Chancellor followed the announcement of these reductions in last week’s Budget speech by pulling a rabbit out of his hat that, frankly, left us shocked and deeply concerned.
The Chancellor closed his Budget statement by committing the Conservative party to an unfunded £46 billion tax plan. It is quite incredible, and it tells us everything we need to know about the state of the Conservative party that he would use his last Budget before the general election to promise a plan that leaves a £46 billion hole in the public finances, that puts family finances at risk, and that raises the prospect of higher tax bills for pensioners across the country.
People across Britain are still paying the price for the reckless and unfunded tax plans in the disastrous mini-Budget, so it beggars belief that the very top of the Conservative party—the Prime Minister and the Chancellor —now want to go into the general election with an unfunded tax plan even greater than we saw in the autumn of 2022. We know just how damaging and irresponsible the Conservatives’ unfunded tax plans are for the British economy and for families across the country. Yet for a week now, and in Parliament today, Ministers from the Prime Minister down have been unable to say how this £46 billion tax plan will be funded.
People deserve answers. Are the Conservatives planning to increase taxes, including on Britain’s 8 million taxpaying pensioners? Are they planning to increase borrowing? Are they planning to cut our vital public services to pay for their £46 billion black hole? Ministers are refusing to answer, so our new clause 1 will force them to do so.
James Murray
No, I am going to make some progress.
The public deserve to know whether the Prime Minister’s commitment to abolish national insurance means tax hikes for pensioners, even higher borrowing, cuts to important public services, or all of the above.
Richard Fuller
I hate reading and I probably will not be able to read this out either, because my eyes are not good. The shadow Minister talked about what the Chancellor said at the end of the Budget, so let me tell him that he said the following about any further cut:
“When it is responsible, when it can be achieved without increasing borrowing and when it can be delivered without compromising high-quality public services”. —[Official Report, 6 March 2024; Vol. 746, c. 851-52.]
So what problem does the shadow Minister have with cutting taxes on working people?
James Murray
The problem we have with the Chancellor’s announcement is that he has said that in the next Parliament he wants to abolish NI contributions. [Interruption.] The Prime Minister said that on the Saturday following the Budget. The Prime Minister and the Chancellor have again and again, in emails to party members and in interviews with media outlets, made it clear that that is what they want to do. I appreciate that some Treasury Ministers have been flip-flopping a bit when they have been out on their media rounds and have not entirely been able to toe the party line. But going into the general election, I would listen to what the Prime Minister and the Chancellor are saying, and if they are saying that they want to abolish NI and create a £46 billion black hole in the public finances, they should stand up here and defend that to the people of Great Britain today.
The reckless way in which the Conservatives announced their unfunded tax plan and then refused to give any more details exposes the risk of five more years of them in power. It is clear the Conservatives will happily gamble with the public finances and yet again leave working people being forced to pay the price. As they have been unwilling to explain how their plan will be funded, we will today vote to force the Government to come clean on the impact of their £46 billion tax plan on the state of public finances.
Owen Thompson
I am very interested in this and am listening carefully to what the hon. Gentleman is saying, but I am struggling to understand whether he is for or against the proposed cut in NI. It would be helpful if he would be clear on that. It sounds as though he is saying that the Opposition do not support it, but if that is the case, why would they not have come through the Lobby with us in opposing it?
James Murray
I am happy to provide clarification for the hon. Gentleman. We have had an extended debate about this today, where we have made it clear on several occasions that we support the Government’s cut in NI, because we believe that the tax burden on working people is too high and we want to see it come down. What we do not support is an unfunded £46 billion tax plan that the Chancellor has committed the Conservative party to. That is the subject of our new clause that we are debating now, and I look forward to his joining us in voting for it in a few moments.
Andrew Gwynne (Denton and Reddish) (Lab)
My hon. Friend is making an important point, not least because, to all intents and purposes, the Chancellor’s ambition is to abolish NI altogether. That unfunded tax cut requires a 6% increase in income tax just for us to stand still, unless something is going to give. Do national insurance qualifying years not count towards how much state pension someone is entitled to get? So how do we recalculate one’s entitlement to state pension if the qualifying years do not exist because NI does not exist?
James Murray
I thank my hon. Friend for that important intervention, setting out just some of the problems created by this reckless plan that the Conservatives have put out into the public domain and are refusing to explain or withdraw.
We know that if the Chancellor’s proposal to merge national insurance and income tax were to be followed, it would push up income tax by 6.5%, meaning pensioners would pay, on average, £800 more a year. My hon. Friend also makes important points about the impact of the plan on eligibility to the basic state pension. Again, Members on the Government Front Bench have not answered those questions. They had nothing to say on any of those points, which are concerning people across the country, when they responded earlier.
We have tabled new clause 1 because it will force the Government to come clean about these issues. Ministers are refusing to stand at the Dispatch Box to explain how they will fund their £46 billion black hole or to withdraw their policy entirely. New clause 1 will force them to set that out. Because they have been unwilling to explain how they will fund their plan, we will force them to come clean on its impact on public finances.
Keir Mather (Selby and Ainsty) (Lab)
Not only is there concern about where the funding would come from, but in the Treasury Committee just now the Chancellor refused to rule out increasing income tax in order to fund the abolition of NI contributions. The House of Commons Library has said that merging NICs and income tax would require an 8% increase in the basic and higher rates of income tax. What will that do for the long-term future of the UK economy?
James Murray
I thank my hon. Friend for bringing us that update from the Treasury Committee about what the Chancellor has been saying. Again, we can see the Chancellor being reckless by talking about merging national insurance with income tax without having a second thought for what impact that would have on hard-pressed taxpayers, particularly pensioners. Pensioners do not currently pay national insurance on their earnings and would be hit by a tax increase as a result of national insurance and income tax being merged. That is another example of how reckless these plans are, and how reckless it is for Treasury Ministers to refuse to stand up and explain how their plans would be funded.
The public deserves to know. If Ministers vote against our new clause or they refuse to come clean, then the British people will have it confirmed, yet again, that the Conservatives cannot be trusted with the economy, public finances or the finances of households across our country.
Mr Alistair Carmichael (Orkney and Shetland) (LD)
Thank you for calling me, Mr Evans—surely it is long overdue that it should be Sir Nigel, but we will go with Mr Evans for today.
I stand to move new clause 2 in the name of my hon. Friend the Member for Richmond Park (Sarah Olney). Hon. Members will see that the effect of new clause 2 would be fairly short in its compass. It would compel the Treasury to report to this House its forecasts of the change to the number of people who are set to pay national insurance contributions as a result of the thresholds for payment remaining frozen until 2028, instead of increasing in line with the consumer prices index, which would be the case otherwise. The Chancellor and other Ministers have spoken today about the pride the Government take in what they are doing. In the interests of transparency, the Government should have no difficulty accepting new clause 2. I am sure it is merely an inadvertent omission that those measures are not part of the Bill already.
It is apparent that comments made by the Chancellor, the Prime Minister and others about the idea of abolishing national insurance altogether have started a debate, as we have seen this afternoon. It is a substantial commitment to make—£46 billion—and we do not yet know where that money would come from. That is maybe not the novelty that it used to be, certainly before the mini-Budget. However, it offers us an opportunity to think a little bit about the nature of national insurance as a tax, because it is quite distinct in its composition and operation.
In practical terms, functionally, national insurance is more or less like any other tax, in as much as money is paid into the Exchequer and fills the coffers, and then is spent as the Government or Governments see fit—in relation to health, policing, transport, Ministers’ legal fees or whatever else it is going to be.
As a matter of intent and purpose, however, national insurance is identifiably different from the other taxes we pay. More than any other levy, it is the symbol of our shared obligations—what we owe each other as a society and as communities in support throughout our lives. The point of national insurance is that we pool and share resources geographically and generationally. We pay our stamp on each payslip, trusting that, when the time comes for us to retire, someone else will continue to pay taxes that will fund our pensions.
Let us remember that the roots of this tax are in Lloyd George’s Budget, and that the introduction of national insurance came with the introduction of the pension. That is why we have the legacy of the link between national insurance and pensions, which was pointed out by the hon. Member for Denton and Reddish (Andrew Gwynne) in an intervention. That is significant. These are matters that must be clarified before we undertake a change of this sort.
At the heart of any healthy liberal democratic society, there is the idea that we have lasting obligations to one another. We have obligations to those we know, to those we do not know, to generations that are older than us, and to those who are yet to be born. We can be bound by policies with which we disagree, and sometimes we must pay taxes for things that we dislike or that we feel we do not need. That is the system in which the national insurance contribution has a demonstrably significant and different impact than other taxes. It is part of the tapestry of government and public life in this country.
This is perhaps just pulling at a thread, but the Minister and, indeed, people in all parts of the House would be well advised to consider exactly what they may be unravelling by pulling at this thread. Full transparency from the Government on the effect of freezing national insurance contributions in the way that has been proposed should be an important part of this debate as it proceeds.
The Second Deputy Chairman of Ways and Means (Mr Nigel Evans)
Thank you very much. Can someone from the Liberal Democrats inform the Chair who their tellers will be, as their amendment has been selected for a separate Division?
Nigel Huddleston
As I mentioned earlier, the impact of policy and any changes to policy will be subject to the usual public scrutiny, including from the OBR on costs. It is therefore not necessary to produce additional reports. I will not play into the hands of the Opposition today by commenting further on their scaremongering. I refer the shadow Minister to the answer that I gave earlier, which I thought was quite clear. I am sorry that he is incapable of understanding the difference between an ambition and a policy, but the rest of the House seems to understand it. Hopefully, he will catch up at some point.
Question put, That the clause be read a Second time.
Nigel Huddleston
I beg to move, That the Bill be now read the Third time.
I am grateful to all right hon. and hon. Members who have participated throughout the Bill’s passage today, and to you, Madam Deputy Speaker, and the other Deputy Speakers for skilfully guiding us through the process. I also thank all the Clerks, all stakeholders and all the officials for their work on bringing the Bill to the Floor and delivering tax cuts to the people of the United Kingdom. I commend the Bill to the House.
James Murray
As I have made clear throughout the Bill’s consideration, Labour supports the national insurance reductions that it seeks to deliver. I am disappointed, however, that Conservative MPs voted to block our new clause. Since the Chancellor announced the Conservatives’ plan to abolish national insurance contributions last week, Ministers have refused again and again—including today—to say how that will be funded or what impact it will have. We believe people deserve to know what impact the Conservatives’ £46 billion unfunded tax plan will have on pensioners and their pensions, on public services and on the health of our economy. Our new clause would have required the Government to come clean and be honest with the British public. Instead, Ministers have decided to vote against us and stick to their reckless and irresponsible unfunded tax plan.
It is still not clear how this reckless commitment to abolishing national insurance will be funded or what impact it will have on pensioners, pensions, public services, borrowing or the state of our economy. But what is clearer than ever is that the Conservatives are the party of reckless, irresponsible, unfunded tax plans that threaten our economy, our public services and the finances of households across the country. Only Labour will bring stability and the responsible approach our economy needs and only a general election will give the British people the chance to vote for change.
Madam Deputy Speaker (Dame Rosie Winterton)
I call Scottish National party spokesperson Kirsty Blackman.
Kirsty Blackman
We do not support this change. This cut disproportionately benefits those earning the most. We in the SNP recognise the value that the public sector provides. We believe it should be properly funded to deliver our vital public services, and we do not believe that they can cope with more cuts on the back of 14 years of austerity and the trials of Brexit and the pandemic. We want excellent public services for all, and we are not scared to make that absolutely clear.
Question put, That the Bill be now read the Third time.
Business without Debate
18:14 - The House divided: - Ayes: 291 / Noes: 147 - Question accordingly agreed to.
Presumption of Parental Involvement in Child Arrangements
(1 month, 3 weeks ago)
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Kate Kniveton (Burton) (Con)
I am grateful to have the chance to speak in the Chamber on the presumption of parental involvement in child arrangements. When I was elected, I made a promise to be an advocate for victims of domestic abuse. At that time, I had no idea that the court proceedings between my ex-husband and me would continue for another four years, restricting my ability to raise publicly the horrors of the family court system for those who have been a victim of rape, abuse and coercive control, as I have. In a landmark ruling in 2021, I waived my right to anonymity and the Court of Appeal ruled that the findings of fact against my ex-husband, confirming the allegations I had made against him of repeated rape and abuse, should be made public. The Court, in its judgment, found that I had been subjected to the vilest abuse, and that Andrew Griffiths had used his position of power to cause the utmost physical and emotional distress against me.
Those who know me well will know that I am usually a very private person. The thought of allowing reporters to write about what had happened to me—very private details, many of which I had covered up for years—was a terrifying one, but after years of being bullied and controlled by a seemingly powerful man, I knew that I had to stand up and use my platform to help others.
Dame Maria Miller (Basingstoke) (Con)
I commend my hon. Friend for her strength, courage and tenacity in speaking up on this important issue, drawing on her personal experience. She is a great role model for us all.
Kate Kniveton
I thank my right hon. Friend.
Despite the landmark ruling that I achieved, my time within the family court system was far from over. Despite the Court confirming that my child’s father was abusive and a rapist, it was decided that contact should continue through a contact centre and that I should pay for 50% of the cost of that contact. I could not believe that anyone felt my child, whom I had been fighting to protect, would benefit from further contact with such an abusive and violent man, and that I—someone who had been subjected to that violent behaviour—should not only facilitate that contact but pay towards it.
Thankfully, after further costly and lengthy legal proceedings, a ruling was made to overturn that decision. Hopefully that has set a precedent that a victim of rape should not have to subsidise the rapist’s costs of contact.
Despite the public reporting of my case, I was not able to speak freely of my experiences until the final decision was made. However, after a gruelling five years, a ruling was delivered last month that confirmed that Andrew Griffiths, the former MP and Minister, should no longer be allowed contact with his child—my child. I had finally achieved a ruling after making the case that the man who had abused me over a 10-year period was not safe to have contact with our child.
I am really thankful that those proceedings have now concluded and, although I am traumatised not just by the 10 years of abuse I experienced at the hands of my ex-husband but by the following five years in which he continued to use the legal system to abuse me, I will not hesitate to tell my story and to try to make the changes that will help other women protect their children.
These were landmark rulings because, until now, other victims of domestic abuse, violence and rape have not been able to offer protection to their children in the same way or to talk about their family court experiences. Having lived with the thought of the prospect for many years, I can only imagine what it feels like to hand your child over to someone who has caused you, and continues to cause you, so much harm.
I stand in the Chamber today as a supposed winner, congratulated on succeeding against my ex-husband, but quite frankly I stand here drained financially and emotionally. I am not sure this is what people believe winning feels like, but I know what the alternative must feel like and I will do all I can to stand beside those fighting for their children’s safety. I want to give them hope that this Government recognise the problems in the family court and are determined to help.
Jim Shannon (Strangford) (DUP)
I spoke to the hon. Lady beforehand, and I thank her for using this platform to tell her personal story. It takes real bravery to stand up and speak about an issue that not only means something to her but that she has lived through. She has shown exceptional courage in doing so, and we all admire her for it.
I come to the crux of my intervention, which we discussed beforehand. In so many cases, victims of domestic abuse are absolutely terrified about speaking up. There must be more encouragement from our Ministers, our Government and our fellow MPs to ensure that the trauma is not prolonged and that women feel supported to speak up and, in doing so, tell others in similar situations that they are not alone. I say to the hon. Lady, you can be sure that you are not alone.
Kate Kniveton
I thank my hon. Friend, and I absolutely agree with his point. Domestic abuse is something that happens behind closed doors. If people do not speak out about it, perpetrators will know that it is going to stay behind closed doors. That is why I agreed to the publication of my judgment, in the hope that it will encourage more people to speak out and that it will help future victims and survivors.
I am proud of the work that the Government have done, and I am proud that my party introduced the Domestic Abuse Act 2021, which is an incredibly important piece of legislation. The Act provides much-needed clarity that domestic abuse comes in many forms and can be financial, verbal and emotional, as well as physical and sexual. It also recognises that abuse can be a result of patterns over time. The definition also explicitly recognises children as victims if they witness that abuse.
The Act allowed for a Domestic Abuse Commissioner to be appointed to stand up for victims and survivors. I pay tribute to the work of the commissioner, Nicole Jacobs, and her team, who work tirelessly to stand up for victims and survivors; to raise public awareness; and to monitor the response of local authorities, the justice system and other statutory agencies, and hold them to account in tackling domestic abuse. I am grateful for the chance I have had to work with the commissioner and contribute to her report on achieving cultural change in the family court.
Beyond the Domestic Abuse Act, the Government have continued to listen and learn from the experiences of domestic abuse victims. In May 2019, the Government announced an expert panel to look at how the family courts protect children and victims in child arrangement cases relating to domestic abuse and other serious offences. The panel’s final report, “Assessing Risk of Harm to Children and Parents in Private Law Children Cases”, was published in June 2020. It raised concerns about
“how the family court system recognises and responds to allegations of, and proven harm to children and victim parents in private law children proceedings.”
It stated:
“Submissions highlighted a feeling that abuse is systematically minimised, ranging from children’s voices not being heard, allegations being ignored, dismissed or disbelieved, to inadequate assessment of risk, traumatic court processes, perceived unsafe child arrangements, and abusers exercising continued control through repeat litigation and the threat of repeat litigation.”
The report said that these issues were underpinned by a number of themes, including a “pro-contact culture”.
That report was released almost four years ago. Let us ignore for a second the fact that at the heart of this, the report confirms that victims of domestic abuse are being further traumatised by the court process, and let us look instead at the potential harm to children. Their voices are not being heard, there is inadequate assessment of risk and there are unsafe child arrangements. Perhaps in his response, the Minister might consider how much harm to children has taken place in the four years since those findings were released.
The report echoes many of the experiences the women who have contacted me have shared. It said that
“respondents felt there was little difference in the orders made between cases that did and did not feature domestic abuse”
and that the courts
“almost always ordered some form of contact, frequently unrestricted, and usually without requiring an alleged abuser to address their behaviour”.
It also said:
“Respondents felt that orders made by the court had enabled the continued control of children and adult victims of domestic abuse by alleged abusers, as well as the continued abuse of victims and children.”
It went on to say that respondents “raised concerns” that PD12J, the practice direction that sets out what the court should do in any case in which domestic abuse is alleged or admitted,
“is not operating as intended and is being implemented inconsistently”.
Regarding the presumption of parental involvement specifically, many mothers felt that the presumption
“gave the abusive parent power over the non-abusive parent and the children, and a legal weapon the abuser could use at will”.
They also felt it put a misplaced emphasis on the child’s right to a relationship with both parents, and the father’s right to family life, above the child’s welfare and right to be safe from abuse and its effects. The report said:
“Overall, the evidence received by the panel suggests that the presumption is implemented inconsistently and is rarely disapplied. To the extent that the courts’ pro-contact culture operates as a barrier to addressing domestic abuse, it serves to reinforce that culture.”
It recommended that:
“A review of the presumption of parental involvement…is needed urgently in order to address its detrimental effects.”
An urgent review is needed. It is urgent because of the risk of harm to children, yet almost four years on we are still waiting to hear about that review. The Government had originally expected to complete the review by the summer of 2021. I met the then Justice Secretary in 2021 and offered my support to his team to help them make the positive changes needed. In early 2022, I was advised that the review had been delayed by covid-19, but I was reassured that good progress was being made in taking the work forward. When I raised the matter in this House in early 2023, I was advised that the response to the review would be published
“very soon—as soon as we can do so.”—[Official Report, 21 February 2023; Vol. 728, c. 121.]
In mid-2023, in a further update from the Justice Secretary, I was advised that it had taken longer than expected but that the report would be published later that year. In a response to a parliamentary question in November 2023, the Minister advised that it would be published in early 2024.
How many court hearings involving children at risk of abuse have taken place over the years while we have been waiting for the review? A horrifying example of two children, who were murdered by their father after it was ruled that it was in their interests to maintain contact with him, was raised previously in the House. In responding to a question about that case, the Justice Minister, my hon. Friend the Member for Finchley and Golders Green (Mike Freer), explained that:
“The review has to be carefully considered, because of the complexities of parental involvement”.—[Official Report, 16 May 2023; Vol. 732, c. 690.]
That feels like we are prioritising the needs of the abuser again.
While we await the review, why do we not prioritise the safety of the child and change the presumption? Where there has been a history of harm, the onus should be on the abusive parent to prove that they should have the contact, not the other way around. Imagine someone having the courage to escape a relationship, to keep themself and their children safe, and putting their trust in our legal system to continue those protections, only to find that they are locked in a further battle with a court that prioritises the right of an abuser to see their child over the safety of the child itself.
Despite everything I have been through, I know that I am lucky. Many would give anything to have received the judgment I did. I am grateful to have had a fantastic legal team: Melanie Bridgen, my solicitor, and Charlotte Proudman, my barrister. Dr Proudman is an incredible advocate on behalf of survivors of domestic abuse and founded the organisation Right to Equality, which is also campaigning for a change in this pro-contact culture.
Right to Equality states:
“Family law reinforces a cultural and legal norm of parental responsibility for both parents, even in cases involving rape and murder by parents, often fathers. This approach fails to adequately consider the safety and well-being of survivors and their children, perpetuating an environment that can place them at risk. Under statute, a married father can never have his parental responsibility removed even if he killed the child’s mother or violently assaulted the child.”
Many case law examples show how survivors’ pleas for protective measures are disregarded and highlight the need for the Government’s urgent attention to fix our statute book.
Research conducted by a team led by the University of Manchester spoke to 45 mothers of 77 children, all of whom reported experiencing abuse. Perhaps the most alarming finding of that study was that 75 out of 77 children were forced into contact with fathers they had reported for abuse, even in cases involving sex abuse convictions. This Government, which has done so much for victims of domestic abuse, need to fix the existing statutory and de facto presumption of child contact at all costs. I urge the Minister to bring forward the review without further delay, to bring about legislative change that creates a safer environment for children and to support a presumption of no child contact in cases where domestic abuse is a relevant factor.
The Minister’s review did not come quickly enough to help me, and I too was dangerously close to being let down by our legal system. Through using every penny I could get my hands on, and every ounce of resilience I could muster to stand in court and repeatedly tell my story, I was able to achieve a landmark ruling. It should not be the exception that only my child has protection from a man found by a court to have committed multiple accounts of rape and abuse against the mother. That should be the standard.
It should send a clear message to those who carry out acts of abuse that it does not matter whether they are an MP or have any other public profile: if they are found by a court to have raped or abused the parent of their child, they are no longer entitled to assume that that child will benefit from contact with them. I ask the Minister today to reform that presumption urgently. Contact should be earned; it should not be given to abusers.
The Parliamentary Under-Secretary of State for Justice (Mike Freer)
I congratulate my hon. Friend the Member for Burton (Kate Kniveton) on securing this important debate. I sincerely commend the bravery she has shown by sharing her story and using her experience to support others in similar circumstances. I often find that the House is at its best when colleagues from across the House use their own personal experience to help shape legislation and improve things for those who follow them.
I apologise if some of what I have to say will sound rather cold and clinical, but, sadly, the law is not always warm and friendly, as much as we would like it to be. I will come on to the presumption of parental involvement, but I wish to begin by saying that the acts of abuse perpetrated by the ex-partner of my hon. Friend were clearly and totally abhorrent.
Sadly, the frequency and intensity of violence, psychological abuse, sexual assault, and other types of domestic abuse within households is the horrific reality for too many people in this country, and particularly—although not exclusively—for women and girls. The Government, including myself and my noble Friend Lord Bellamy, are committed to taking every possible action to stop this, and to allowing victims of abuse and their children to live free of the fear and harm inflicted by their abusers.
When such cases come to the family court, the Government are dedicated to ensuring that the court can identify and safeguard both children and parents against such abuse. When the court makes a decision that affects a child, the involvement of parents is often a factor. However, it is the welfare of the child that is the court’s utmost priority in every case. That principle, of the paramountcy of the child’s welfare, is what underpins the Children Act 1989.
The court does seek to protect the adults in a child’s life from harm; for cases involving domestic abuse, the provisions of this are also enshrined in our laws and rules of court. For example, the landmark Domestic Abuse Act 2021 prevents cross-examination of victims by perpetrators and requires rules of court to be made about special measures for victims, such as screens to prevent them from seeing the perpetrator in court.
In family courts, practice direction 12J, as my hon. Friend mentioned, notes that the court must be satisfied that any order does not expose either the child or parent to a risk of further harm. Therefore, while the welfare of the child is absolutely paramount, the welfare of parent victims is an equally important consideration of the family court and of the Government.
Moving on to the presumption of parental involvement itself, the Government are very mindful of the need to ensure that, where it is safe, a child should benefit from the involvement of both parents in their lives, but I do stress that it is only where it is safe to do so.
The aim of the introduction of the statutory presumption in 2014 was to codify decades of existing case law and international commitments, and to place in law a process whereby the potential risk posed by a parent is fully considered, and only subsequently is their involvement in a child’s life considered.
The presumption is therefore designed to achieve two vitally important aims: to ensure that, when safe, children are able to maintain some form of relationship with both their parents, even after they separate; and to ensure that parents who may subject their child or ex-partner to the dangerous and despicable behaviours inherent in domestic abuse are prevented from involvement in their children’s lives. In the example given by my hon. Friend of the serious and horrific cases involving sexual abuse, let me tell her that when the parents in these cases present a risk of harm to their child, they should not be granted involvement in their life.
My hon. Friend has also raised the terrible circumstances in which one parent has murdered the other. We have amended the Victims and Prisoners Bill, so that parents who kill a partner or ex-partner with whom they have children will have their parental responsibility suspended upon sentencing. We are carefully considering options for strengthening the safeguards and procedures already in place to ensure that the family courts can properly protect children.
Ensuring that the survivors of domestic abuse are fully protected by the family court remains a priority for this Government. In 2019, the Ministry of Justice commissioned a review of how the risk of harm to children and parents was assessed in private family law—most commonly known as the harm panel report, to which my hon. Friend referred. Following the recommendations of the panel, we commissioned a further review of how the presumption of parental involvement was being applied in the family courts. I know that my hon. Friend, like several others in this House, has expressed concern over the time taken to complete the review. I can put on record that Ministers in the Department share that frustration of how long it has taken to bring forward our response.
As my hon. Friend said, the delay is, in part, due to covid making it difficult to conduct research, particularly in terms of accessing physical court files, and the challenges in accessing court documents that are in a useable format. However, I am delighted to be able to confirm that the review and the accompanying Government response into the presumption of parental involvement will in fact be published by late spring or early summer of this year. I hope that provides some reassurance that we at least have a slightly firmer date coming forward.
Again, I reassure my hon. Friend that Ministers are equally frustrated. We will bring the response forward. I assure her that the Ministry of Justice is giving full consideration to the literature review of the academic evidence, the sessions conducted with parents who have been through the family courts, the individual case file analysis, the contributions from stakeholders, and the feedback from the advisory board, which was established to ensure that we have drawn upon its expertise in working with victims and children.
The challenge of striking the right, careful balance between addressing the future risk to the child, and to the other parent, and the benefits of having two parents actively involved in the child’s life is one that has occupied Parliament, the judiciary and wider society for decades. It is crucial that, in setting out next steps from the review, we consider the full range of reforms at our disposal to manage the challenge. We must ensure that the understanding of the elements of risk and the best interests of the child in these cases is always clear, and that the balance of those elements is struck correctly.
Let me reiterate a few things that the Government have done to ensure that the child is at the centre, and that the family court system continues to reform and to be fit for purpose, ensuring that parents, and especially children, are protected. Last week, the Chancellor announced an additional £55 million for the family courts. A key element of that funding package is the commitment to funding the roll-out of the pathfinder court approach, which provides a more investigative approach to private law proceedings, with increased support for parties. The pilots engage domestic abuse agencies early on in proceedings to ensure that both parents and children are receiving the support and advice that they need. The approach also ensures that the needs and voice of the child are central to proceedings. That is achieved through detailed investigation into each individual child’s welfare and wishes early on in each case.
The pathfinder courts are currently operating in Dorset and north Wales, and expanding to Birmingham and south-east Wales in a matter of weeks. The additional funding will mean that many more families will benefit from the positive impacts of the model, with the roll-out of the pathfinder model across England and Wales happening as quickly as possible. The additional funding will also result in the creation of a new authoritative online support and advice service for separating parents, and the piloting of free early legal advice for those considering court to resolve their issues.
Over the past 13 years, we have also significantly increased the funding for independent domestic violence advisers, known as IDVAs, and independent sexual violence advisers, known as ISVAs, to support victims going through the family court. We have brought 43% more of those vital professionals into post from 2009-2010 to 2023, with the Ministry of Justice increasing IDVA and ISVA spending by over four times what it was in 2009-2010. Since November 2023, we have also increased our investment by £1.2 million over two years.
Rather than read out many more statistics, let me address one of the issues that my hon. Friend raised, which was the cost—the financial cost, let alone the mental cost. That is why we have been reforming the access to legal aid for victims of domestic abuse. Recently, we have changed the thresholds for income and capital; introduced a new lone parent allowance; created a mandatory disregard of inaccessible capital from the means assessment; removed the cap on the value of capital assets that are not considered in the means test assessment when they are disputed assets; and extended the equity disregard to apply to those who are forced to flee their homes. That will prevent victims who may be on a low income from having to sell their homes.
I share the frustration of my hon. Friend, and I have to say that her story and her campaigning have been incredibly moving. I hope that this Government will be able to address her concerns in the coming months, when we finally publish our response to the report.
Those who have perpetrated abuse against their partner or ex-partner should absolutely feel the consequences of that action. Our reforms of the family courts will continue to increase the support for survivors of domestic abuse and will aim to ensure that parents and children are protected against the abhorrent crime of domestic abuse.
Finally, I thank my hon. Friend once again for securing this debate to examine the issues. I hope that we have gone some way towards explaining how seriously the Government consider them and how seriously we are committed to bringing forward our response in the next few months.
Question put and agreed to.