Westminster Hall

Tuesday 23rd April 2024

(2 months, 3 weeks ago)

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Westminster Hall is an alternative Chamber for MPs to hold debates, named after the adjoining Westminster Hall.

Each debate is chaired by an MP from the Panel of Chairs, rather than the Speaker or Deputy Speaker. A Government Minister will give the final speech, and no votes may be called on the debate topic.

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Tuesday 23 April 2024
[Sir George Howarth in the Chair]

Partner and Spousal Visas: Minimum Income

Tuesday 23rd April 2024

(2 months, 3 weeks ago)

Westminster Hall
Read Full debate Read Hansard Text

Westminster Hall is an alternative Chamber for MPs to hold debates, named after the adjoining Westminster Hall.

Each debate is chaired by an MP from the Panel of Chairs, rather than the Speaker or Deputy Speaker. A Government Minister will give the final speech, and no votes may be called on the debate topic.

This information is provided by Parallel Parliament and does not comprise part of the offical record

[Relevant document: e-petition 652602, Don’t increase the income requirement for family visas to £38,700.]
16:30
Paul Blomfield Portrait Paul Blomfield (Sheffield Central) (Lab)
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I beg to move,

That this House has considered minimum income thresholds for partner and spousal visas.

I am pleased to speak with you in the Chair, Sir George. I want to express my gratitude to the Backbench Business Committee for providing me with this opportunity, as well as to Members across the House who supported the application. I am pleased to have the opportunity to raise the issue because insufficient attention has been given to the threshold changes in the wider debate on migration. Constituents whose lives have been turned upside down by December’s announcement have written to me; I know people have written to many colleagues, too. They are victims of the chaos in Government migration policy, which does not seem to extend beyond the mantra of stopping the boats.

Paul Blomfield Portrait Paul Blomfield
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I see the Minister shaking his head, so I will put my points to him. The Government have talked about migration as a problem, but have failed to come up with a solution that addresses the real challenges. When faced with the rising net migration figures in November, the Government seemed to hit out in all directions, looking to headlines but without regard to the consequences; removing the rights of care workers to bring dependants without regard for the impact on those needing care; increasing the salary threshold for the skilled worker visa without regard to the needs of critical sectors; reviewing the graduate visa without regard to the impact on universities whose funding model has been designed by the Government to be dependent on international students; and, in relation to this debate, introducing new thresholds for family visas without regard to the consequences for families.

Let me be absolutely clear: nobody wants uncontrolled migration. What people want is a comprehensive plan that is fair and works in the interests of our country. The announcement of family visas fails that benchmark. It had all the feel of a policy developed on the back of a fag packet, as we used to say. First, the Government announced that they were more than doubling the threshold to £38,700 by spring 2024. Within days they changed course and said there would be a phased approach starting at £29,000 in spring ’24, rising to £34,500 at an unspecified date later in ’24, and then £38,700. Only later, in response to a petition, did they confirm that the £38,700 would be delayed until early 2025.

Originally a spokesperson said the threshold would apply to visa extensions, but, thankfully, later contradicted that and confirmed that that would not be the case. What is left from the original announcement remains a big change so, as required, the Home Office carried out an impact assessment. However, it has refused to publish it, which was highlighted by the recent House of Lords Scrutiny Committee report, presumably, as with previous Home Office impact assessments, because the results were not favourable to its arguments.

I will share the impact that my constituents have told me the policy would have on their marriages, family life and future. The first constituent to write to me was a charity worker and, as such, was willing to accept a low income, but his willingness to make that salary sacrifice would prevent him having the opportunity to settle here with his fiancée from Argentina. Another told me that he had met his Chinese girlfriend while studying at university. They had planned to start their graduate life together in the United Kingdom, but will now not be able to do so. A midwife told me that she cannot bring her husband over so they could start their family here.

One man wrote to me to say that he had recently got engaged to his partner in Qatar and planned to have a civil partnership here in the UK, but those plans were off. Others told me that they were considering dropping out of degrees to fund full-time employment to meet income requirements, and one told me of the devastating choice between leaving the UK or leaving the person they love.

Afzal Khan Portrait Afzal Khan (Manchester, Gorton) (Lab)
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I thank my hon. Friend for holding this important debate. The most common origin countries for which family-related visas were granted last year were Pakistan and India, yet workers of Pakistani heritage have the lowest median hourly pay of any ethnic group, meaning they are less likely to meet the minimum income threshold. Does my hon. Friend share my concern that the policy only entrenches the UK’s hostile immigration environment, as it is likely to be overwhelmingly discriminatory against ethnic minorities, particularly British Asians?

Paul Blomfield Portrait Paul Blomfield
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My hon. Friend makes an important point and I will come on to it. Across communities, ordinary people doing valuable jobs are having to rethink their lives. Let us reflect for a moment on the sorts of jobs that would not reach the minimum income.

Margaret Greenwood Portrait Margaret Greenwood (Wirral West) (Lab)
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I congratulate my hon. Friend on his important speech. I, too, have had a number of constituents get in touch. People are upset and they cannot quite believe this is happening. One constituent wrote of how the legislation will affect a close friend and described the changes as having “discriminatory, classist overtones”. They went on to say:

“No other respectable free country financially penalises its citizens for marrying immigrants.”

It is moving when we think of the matter in those terms, is it not? As my hon. Friend says, this is just people trying to go about their lives. They meet someone, they fall in love and then they have to make a dreadful decision.

Paul Blomfield Portrait Paul Blomfield
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My hon. Friend is right. This is discriminatory not simply in the way my hon. Friend the Member for Manchester, Gorton (Afzal Khan) mentioned, but in terms of wealth.

Let us reflect on the sorts of jobs that would not reach the minimum income. A newly qualified nurse is below the starting threshold on a salary of £28,407; a newly qualified teacher is well below the higher threshold at £30,000; and a starting police officer on £36,775 is again below the threshold. Entry-level positions in business start-ups are also below the threshold at £37,500. The University of Sheffield told me that 557 of its researchers—people doing vital work in the life sciences and in research for our economy—are on a salary below the threshold.

According to the Migration Observatory, around 50% of UK employees earn less than the £29,000 threshold and 70% earn less than £38,700. That means that 50% to 70% are unable to marry a non-British citizen of their choice and live together in the UK. There are significant regional variations too, with average earnings in London around 30% higher than in the north-east, for example, and in my area of South Yorkshire average earnings are around £27,000. People in Yorkshire and the Humber, the north-east, the north-west, the east midlands, Wales and Northern Ireland will be worst affected.

The new rules will discriminate in other ways too. They will particularly affect women who, on average, earn less and are more likely to have caring responsibilities and therefore do not work full time. They discriminate against minorities, as my hon. Friend the Member for Manchester, Gorton pointed out. They have a disproportionate impact on the self-employed, on younger people and those at the early stage of their career. Why, therefore, are the Government doing it? They argue that it is to stop people being a burden on the state. I look forward to the Minister trying to advance that argument.

Alistair Carmichael Portrait Mr Alistair Carmichael (Orkney and Shetland) (LD)
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The hon. Member makes a compelling case. On the question of regional and local variations, in my community, we expect young people to go away for further and higher education due to the limited provision within the community. I encourage that, because I always say to young people, “Orkney and Shetland will still be here when you are ready to come back.” They go away, they meet people from other parts of the world, they fall in love and they want to bring them back. That enriches our communities in so many different ways, quite apart from the economic and social contribution. Does that aspect—the human aspect—for communities such as ours not really deserve be given better consideration by the Government?

Paul Blomfield Portrait Paul Blomfield
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The right hon. Member is right; the failure to consider the human aspect of the decision runs right through the policy. As I say, the Government are arguing that it is to stop people being a burden on the state, yet those who come to the UK on a spousal visa do not have access to public funds. They are also required to contribute to NHS costs with the immigration health surcharge, which has been rising significantly. Indeed, many are younger and do not use the NHS very much at that point.

Margaret Greenwood Portrait Margaret Greenwood
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It is argued that immigrants are a burden on the state, but study after study shows absolutely the reverse: young, fit and healthy people come to work here. They are not a burden on the state and they contribute to society, so we really need to debunk the myth that the Tories are peddling.

Paul Blomfield Portrait Paul Blomfield
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I was not suggesting they are a burden; I was simply reflecting the Government’s argument. My hon. Friend demonstrates, in addition to my argument, that those people are clearly not a burden.

It is not as if family migration is a big problem. Although the absolute number of family visas issued nearly doubled between 2020 and the end of September ’23—I am sure the Minister will make that point—their proportion in relation to entry visas has remained consistently low, at 5%. The policy will not have a significant impact on the UK’s net migration, but for the families affected, the effect is enormous. They will be separated and forced to live apart if they cannot meet the threshold. As my hon. Friend said, some who could make a valuable contribution to this country in all sorts of careers will be forced to leave the UK altogether—many have told me that that is their plan. It is fundamentally unfair that partners and families are being priced out of the right to live in the UK with a foreign partner—priced out of their right to a family life on the basis of how much they earn. It is a two-tier system based on wealth.

Our approach compares badly with those of other countries. All developed countries face the challenge of migration policy. Although the Government sometimes suggest that it is a unique challenge for us, it affects every country in Europe, the States and the whole of the developed world, but those countries do not all adopt the same approach. Over the past few weeks, the Government have cited Australia admiringly as a model for migration policy, but it has no earnings threshold for family visas. In many other countries, such as Germany, the right to reunite with spouses is almost automatic, with no income requirement. Some countries do require proof of sufficient resources, but for those that express that as a minimum income, including Belgium and Norway, the threshold is nowhere near the one proposed by the Government. Countries such as Spain and the Netherlands link it to social security levels. In the US, it is 125% of federal poverty guidelines, which means in real terms that it is pretty similar to the current threshold in the UK, before the Government’s proposed change.

It is no wonder that the Migrant Integration Policy Index, which compares countries across Europe, the US, Canada, Australia and others, ranks the UK as next to the bottom of 56 countries for its policies on family reunification and integration, so there is a strong case for the Government to think again. If we are to have a threshold, there are fairer approaches. Currently, the threshold is close to the national minimum wage—that is one benchmark. It could be set against the national living wage—just over £22,000 for somebody working 37.5 hours a week. That would be well below the proposed threshold, and it would take out the wealth barrier to family life that the Government are imposing. We could take account of spouses’ anticipated earnings on arrival, as we do after they are in the UK.

The point is that there are options. We need a root-and-branch review of the spousal migration rules that considers the unfairness at their heart and the disproportionate impact of the Government’s proposals on so many. In the meantime, the planned increased this year and in 2025 should be suspended, and the Government should listen to those whose lives are being affected.

George Howarth Portrait Sir George Howarth (in the Chair)
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Order. I remind Members that those who want to be called to speak should bob.

09:44
Stuart C McDonald Portrait Stuart C. McDonald (Cumbernauld, Kilsyth and Kirkintilloch East) (SNP)
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It is a pleasure to be called so early in this debate on what is effectively a Tory means test on marriage. I congratulate the hon. Member for Sheffield Central (Paul Blomfield) on securing it. I almost never disagree with anything he says in a debate, and today is no exception. I thank him for his work in ensuring that we have this opportunity.

It is about seven years since I led a debate on the same subject in this room, but the thresholds are now even more arbitrarily brutal and the number of people whose lives will be destroyed is even greater. With more people than ever falling in love with someone from another country, the Government are making it more difficult than ever for those couples to enjoy their family life here. Let us not forget that Brexit, too, means that more people are impacted because our EU friends can no longer benefit from free movement but must seek to satisfy what are already the most draconian family visa rules in the world before the Government implement these changes.

The Government are basically saying to many of our children and to future generations, “You can fall in love with whoever you wish, but if you want to marry a non-UK national and you are not earning whatever arbitrary sum we decide, you will need to go and live somewhere else. You can have the love of your life. You can have your country and the right to live here. But you can’t have both.” That is just not normal. No other countries are so cruelly anti-family, and it particularly sticks in the craw given that so many members of the Government have enjoyed international marriages here in the UK. It is one rule for the Government and one rule for everybody else—so much for the Conservative party claiming to be the party of the family. This is not a small c conservative policy or a pro-family policy at all. It is a desperate and reactionary policy, playing politics with the family lives of our children and future generations.

At least when we had this debate seven years ago, the Government could point to the advice of the Migration Advisory Committee to justify the figure that they had alighted on as the appropriate threshold. They now seem to have picked some random numbers, ultimately matching it up with a tier 2 work visa threshold that some people need to satisfy. The utterly critical question for the Minister today is: why have the Government decided that that particular number is appropriate? To my mind, they might as well match it up with the Prime Minister’s salary. If the Minister cannot explain the logic behind it, not only is the policy utterly immoral, but it may be irrational and illegal.

Neither have the Government bothered to assess the impact that it has had on couples or their children—or, perhaps more accurately, they have assessed the impact; they are just not going to publish that. Back in 2015, the then Children’s Commissioner for England did the Government’s job for them with her report entitled “Skype families”, which showed tens of thousands of children having been negatively impacted by the rules. It states:

“They are living separated from a parent with reported stress, anxiety and difficulties for the children and their families…Children and families surveyed reported a number of emotional and behavioural problems for children who were living with parents who were separated inside and outside the UK. Many parents reported that their children had become clingy and dependent on one parent; children often suffered from separation anxiety and became socially withdrawn, and some described children having difficulty socialising and experiencing problems at school.

Parents described how children displayed eating and sleeping problems; slow or poor language development, and can display anger and violence toward peers and family.

Some children said that they feel guilty and blame themselves for the absence of a parent.”

What a horrific policy to impose on children. The tweaks made in recent years have not fixed that damage at all.

The Government have previously justified these moves and policies on the grounds of families having to show that they can support themselves and of a strange integration argument, but those arguments have always been fig leaves and they are particularly so now. Ensuring self-sufficiency has never really been what this is about, because, as the hon. Member for Sheffield Central pointed out, the Government do not actually bother to properly consider whether the person coming to the UK will be able to earn towards the financial target. It does not matter that the spouse coming to the country is well qualified, has good prospects of finding work or has other forms of support available. That is all disregarded. As has been pointed out, the Home Office will automatically ensure that their visa is subject to a no recourse to public funds condition anyway.

This is even less about self-sufficiency now, because there is absolutely no link between the thresholds that the Government have picked and the notion of self-sufficiency. The numbers are totally irrational, unless the Minister is saying that nobody earning less per year than £29,000, or £39,000 from next year, is capable of supporting their spouse. That is an extraordinary proposition. It would also have lots of implications for the Government’s policies on public sector pay, the minimum wage, social security and lots more. Indeed, as the Children’s Commissioner report highlighted, these rules mean that people unable to bring their spouses in have needed to have greater reliance on social security than they otherwise would, as they struggled to juggle work and caring responsibilities without their life partner by their side.

To me, the integration argument makes even less sense. Why will someone earning £40,000 or their spouse integrate better than a person earning £30,000 or their spouse? Again, as per the Children’s Commissioner:

“There is no evidence to suggest that integration has been enhanced but there is evidence that it has been reduced.”

What this is really about is politics: shaving a couple of percentage points off net migration, sending a signal—a dog whistle, really—and doing untold damage to people’s lives.

Alongside these rules, couples are also hit by the extraordinary fees and up-front health charges, which provide yet another brutal barrier. My constituent, Stephen, previously served in the forces, but has since worked in oil and gas. For the moment, he does meet the rules and requirements, but his entire income is now spent on paying for the medicines required to keep his wife, who he met in 2011, alive. He meets the rules but he cannot pay these fees and charges up-front. At this rate, he may never get to bring his wife and her daughter to the UK. Can the Minister provide any hope to my constituent that an application would be accepted, even though these fees cannot be met up front? These are rotten rules from a rotten Government, and I very much hope that the next one does better.

09:50
Siobhan Baillie Portrait Siobhan Baillie (Stroud) (Con)
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It is a pleasure to serve under your chairmanship, Sir George. I am about to give the Government a bit of a hard time on behalf of some of my constituents, but I do want to praise the Minister. He is a very thoughtful and caring Minister who has been tackling one of the biggest briefs in Government, and I do not think anybody else would do as good a job, to be honest. There is a genuine paucity of ideas, particularly from the Opposition, in the rhetoric. There is also a genuine concern in all our mailboxes about the pressure of illegal and legal migration numbers on services and the country. The Government have tried to fix that, but it is right that all of us today bring out our individual stories of constituents, because it is in stories that we sometimes find the unintended consequences of well-meaning policy at the top, which is trying to solve a very real problem.

I want to talk about two women. The first is Rebecca Gray. Sir George, you will know that every day is a school day in this place. Rebecca has taught me never to underestimate the power of a feisty woman trying to protect and fight for her family, while also armed with TikTok. She has made a very compelling case across her social media, which has led to a number of other people getting in touch with her to tell their stories.

Rebecca contacted me in December 2023 after the announcements about the visa salary requirement increases. She has lived in Turkey with her Turkish husband for the last three years—she is my constituent and I know her family; one of her siblings is a local councillor—because they have been caring for her terminally sick mother-in-law, who has sadly passed away. She has also been running a UK online business, and the couple have worked hard to save £62,000 for the savings threshold. She has been in a relationship with her husband for more than 10 years—this is a love relationship. They have been looking forward to returning to the UK, not least because they were at the epicentre of the earthquakes in February 2023. Those changed their lives forever, with 250 local people they know—family members as well—losing their lives. They do not want to live in Turkey any more for safety reasons, as well as because of familial connections back in the Stroud and Gloucestershire area.

The new figure of £38,000 is basically unachievable for my constituent, and she questions whether it is achievable for many people working outside London. She has a trade in the UK as a beauty therapist with her online business, and she has considered coming home and leaving her husband behind to work for six months to apply for the visa. In her trade, however, she will not get to that earnings threshold very easily. The hair and beauty industry has very skilled people, and I defy anybody in Government to take them out of our constituencies. There would be a lot of angry women in particular, including me, with big eyebrows. The reality is that these are people we know and love, and that many of us rely on these jobs.

We have a second issue with Rebecca’s case. She is on a self-employed income, which is not treated the same as a pay-as-you-earn income. She says:

“My husband is not a dependant and has the right to work upon arrival. The £62,500 we currently have for the savings route held for 6 months proves I can support us during this period. The potential new figure of £88,700—who on earth would spend that amount of money in the period we have to provide proof for…why is the assumption my husband wouldn’t work, as the focus is on me as a sponsor”

rather than on them as a couple?

Alistair Carmichael Portrait Mr Carmichael
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The hon. Lady is making a very important point. Whether or not there is the case for a spousal visa—income connection—in principle is one matter, but does she not highlight the difficulty that we now have? This area of policy has become so complex, and there are so many exceptions and different rules applying to different people, that if we are going to have a scheme of this sort we need to pare it right back to the start and design it to meet people’s needs rather than some political purpose, which I fear is where we have got to here.

Siobhan Baillie Portrait Siobhan Baillie
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I respect that meaningful intervention, but I disagree that this is just about political point scoring. This is a genuine attempt to simplify the rules, which is genuinely important, particularly for families who are stressed, separated or face issues such as safety with regard to earthquakes. People need to understand their options. However, the Government should look very carefully at the treatment of the self-employed and that disparity.

Rebecca’s asks are threefold, Minister—before I come to the second lady I will mention. The first is to have the ability to combine self-employed income and savings to meet the financial threshold requirements, because those who are not self-employed can do that. That is unfair; she says it is discrimination. Secondly, if we cannot go back to the old threshold, she asks whether the new threshold of £29,000—about median earnings for this country—can be held in place for longer, with the Government having taken on board some of the evidence that we are citing today. The third is to potentially look at exemptions and special appeal routes so that families can put together their cases and make applications to the Home Office to be looked at very carefully, particularly when there are safety issues and real evidence of long-standing savings and income thresholds that will never be met in someone’s particular profession.

I met the second lady on the doorstep at the weekend— I canvass every weekend—and she could not believe her luck that she had her MP on her doorstep, because this issue has been concerning her for years. She is South African and is over on a spousal visa, and she wanted to raise the eye-watering cost of that visa with me. In total, it will cost £14,000; the citizenship costs have also just gone up. This hard-working family are taxpaying UK citizens. They have done everything right and dealt with the system’s complexity, but she says that it is penalising her family for trying to do the right thing. She said that this point is not about racism, but she sees other people being treated differently. She is doing all that she is asked, and there are people coming across on small boats and getting accommodation. She was very concerned about this issue, and the point about fairness is running through many of our constituents’ concerns.

My constituent asked whether a system can be put in place whereby, if someone has the outlay of costs to meet the visa requirements, those could be recouped in some sort of tax treatment later as they continue to work and pay taxes in the country. She wants to see her efforts and payments out recognised by the Government in terms of her overall contribution to the country. It will be interesting to hear from the Minister on all of those points.

09:58
Stephen Timms Portrait Sir Stephen Timms (East Ham) (Lab)
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It is a pleasure to serve under your chairmanship, Sir George. I congratulate my hon. Friend the Member for Sheffield Central (Paul Blomfield) on securing this debate and on the very compelling case he made in opening it. I am pleased to follow the hon. Member for Stroud (Siobhan Baillie), and I agree with a great deal of what she said.

My hon. Friend the Member for Sheffield Central set out the changes that are proposed. When we started talking about all of this, the Prime Minister argued that anyone bringing dependants to the UK must be able to support them financially. We understand that point, but the changes that have been announced will take the minimum income requirement far beyond the income of most UK employees. It appears to be an arbitrary set of numbers, and it is a disproportionate increase with very unfair and harmful effects.

When the Home Secretary set out his plan, of which the increased minimum income threshold requirement was part, he said this was going to deliver

“the biggest ever reduction in net migration.”—[Official Report, 4 December 2023; Vol. 742, c. 41.]

He said that 300,000 people who came to the UK last year would not be able to do so. However, as we have been reminded, family visas accounted for only 5% of total entry visas between January and September last year. Family visas have not made up more than 10% of total entry visas for over a decade. The Government’s own analysis suggests that the increased minimum income requirement will cut migration by between 3% and 10% of the promised 300,000 reduction, and that is almost certainly an overestimate.

The truth is that increasing income thresholds on spousal visas will barely dent migration figures. It is extraordinary that the Government did not even consult the Migration Advisory Committee before announcing the change. It will not have much of an impact on migration—the Government’s own analysis confirms that—but it will cause great hardship for those affected. Thousands of people will have to live without their partners and thousands of children will have to live without a parent.

My hon. Friend the Member for Sheffield Central pointed out that the Migrant Integration Policy Index places us second from bottom out of 56 for ease of family reunion. The Justice and Home Affairs Committee in the other place pointed out in its 2023 report “All families matter” the wider harm of reducing cohesion across society. Parents forced into single parenthood must reduce involvement in the wider community, and children separated from their parents by arbitrary rules that they cannot understand trust society less as a result. This is a spiteful change that will undermine cohesion in our society in the long term. Conservative politicians very often recognise the damage caused by breaking up families, but here they choose to break them up quite deliberately. We will all suffer the downsides for society that Conservative Members will readily enumerate in other contexts, but they are forcing those break-ups through these changes.

My hon. Friend the Member for Sheffield Central pointed out that the Migration Observatory at Oxford University has shown that 70% to 74% of employees in the UK would not meet the £38,700 requirement. Surely the Government are not suggesting that only about a quarter of UK employees can support their dependants financially, but that appears to be the implication of their claims. Various other standards have been suggested in the debate, but, as my hon. Friend suggested, surely a better standard would be to ensure that anybody bringing dependants into the UK would have an income above the level at which they are ineligible for universal credit. That is a possible yardstick. As we have heard, Spain and the Netherlands apply a standard along those lines, and it is certainly well below £38,700.

The increase in the minimum income requirement goes far beyond the level to deliver the Government’s stated aims for the threshold. It will reduce migration only minimally, but it will cause great hardship to thousands and damage the fabric of our society. It will be ineffective, unfair and harmful, and it should be scrapped.

10:03
Tim Farron Portrait Tim Farron (Westmorland and Lonsdale) (LD)
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It is an honour to serve under your guidance this morning, Sir George. I congratulate and thank all those who have contributed to the debate so far, especially the hon. Member for Sheffield Central (Paul Blomfield), who secured it and made an excellent introductory speech. The introduction of the increased minimum income requirement—going from £29,000 a year last month to £38,700 a year by some point next year—is both cruel and foolish. Not that the Conservative party really needs me to advise it, but it is fundamentally unconservative, if we take conservatism to be about the family and pragmatic economics. I will say more on that in a moment or two.

I will start with a question for the Minister that I think gets to the heart of it all. The Home Office has said that the policy is all about ensuring that families that include a migrant are not a burden to the state. Can he define what constitutes a burden to the state, given that an individual on a spousal visa has no recourse to public funds? That is the first question I would like him to consider. Then, as others have pointed out, what on earth led him to make that decision on the basis of no meaningful evidence or research? His own Migration Advisory Committee advised against it. Only three years ago, it stated that it was

“concerned that previous analysis may have given too much weight to the fiscal contribution of such migrants and insufficient attention to the benefits that accrue, to both the family and society, from the route.”

Why did the Government not take note of that? When we think about the benefits to family and society, we could talk about the economic impact in an area such as mine, which desperately depends on a large proportion of migrants to make our economy, our social care and healthcare, and our hospitality and tourism industry work.

The families themselves are surely the most important aspect, and that is what I will focus on next. A number of people, including the right hon. Member for East Ham (Sir Stephen Timms) who has just spoken, have mentioned the significant impact on families. We will see an increase in the length of separation before visas are obtained, if they are at all, for different parts of the family. Often, this will involve British children—not that it is any better if they are not born in the UK or are not British.

The impact on women will evidentially be far greater than the impact on men. As things stand, as of last month’s increase, 36% of employed women and 58% of men earn enough to meet the £29,000 threshold, but, from next year, only 21% of women and 39% of men will be able to meet the threshold. As suggested by my right hon. Friend the Member for Orkney and Shetland (Mr Carmichael), there will be regional disparities as well. I assume that £38,700 is around an average salary within London, maybe even below thst, but in the north-west of England it most definitely is not. If we are concerned about levelling up, the policy will do damage to businesses and families in Cumbria and other parts of the north of England.

The reality is that the new change will force British and settled mothers into solo parenting. It will force them into a position where they will not be able to work because of childcare requirements. There will be additional costs for the state, and it will cause heartache, pain, sadness and separation for families up and down our country. It will make it much harder, rather than easier, for mixed nationality families to integrate into society, so the social disbenefits are huge as well. British citizens and settled residents are very badly affected by these rules.

Again, if we are putting a positive spin on what Conservative party ethics are about, so often we hear about family values—I believe very much in the importance of the family—yet this policy takes an absolute torpedo to family life. It causes sadness, mental health problems, distress and lack of educational attainment. It forces people into solo parenting completely against the will of both those involved in the relationship. Frankly, it is wicked, deeply cruel and utterly counterproductive. Either it will fail—there has been a lot of evidence from Members who have spoken so far that it will fail to drive down net migration, which is bad from a competence point of view—or it will work, which will be even worse. The foolishness of it is enormous.

We know that the minimum income requirement does not directly affect people working in care, but the refusal to allow care workers to bring a spouse with them absolutely will have an impact on social care. To look at the impact in Cumbria, one in five social care jobs within our county is currently vacant. Those vacancies happen for a number of reasons, but fundamentally our workforce is far too small. That is partly caused by the Government’s failure to help us tackle the affordable housing crisis in our communities. We see second homes and holiday lets gobbling up the homes that local people—or people who might become local—could live in, so where is our workforce to contribute to every part of our economy?

We are also, of course, damaged by silly visa rules that make it impossible for us to recruit people from overseas to supplement our workforce. People will often say that, we should be making sure that we tackle the care crisis by paying people better. Abso-blooming-lutely, so why are the Government not doing that? The Liberal Democrats have a policy—which I am not saying is the answer to everything—saying that we should increase the minimum wage in social care by £2, to £13.44. That would at least mean that care providers would be paying their workers more than they would be paid if they worked in the supermarket, or in other roles, when the current situation leads to many people leaving social care. But there is no sign of that happening whatsoever, and what little those care providers can do to bring in workers from overseas is being damaged by this Government.

All this has a consequence, of course, and that is not just the misery from those people who cannot get care, or the hard work for those people who work in social care and have to work extra hours under enormous pressure, doing shorter and shorter visits because there are not enough colleagues to do the job. Twenty four per cent of the beds in the Morecambe Bay hospitals are occupied by people who are medically fit to leave but cannot get out with a care package because we do not have the carers. These policies make that situation even worse, and the people who are hurt by it are my constituents who cannot get care, and indeed my constituents who are not able to bring their families with them, which is just cruel and miserable.

The minimum income requirement affects those people working in hospitality and tourism. I tell the Minister that 63% of the hospitality and tourism businesses in the Lake district and wider Cumbria are working below capacity—unable to meet a demand that is there—because they cannot find the staff. In the Lake district, 80% of the working age population is already working in hospitality and tourism. There is no reservoir of unused labour that could be turned into workers in hospitality and tourism.

Therefore the Government’s policies—and this makes it even worse—mean that our economy is not able to punch at its weight. We could be contributing so much more to growth in our country. Some 20 million people visit the lakes every single year, and there are 60,000 jobs in hospitality and tourism in Cumbria, but we cannot punch at the weight we should be able to because the Government are tying the hands of hospitality and tourism businesses. It is economically stupid, and it is deeply damaging to individuals.

Let us go back to what we now know: 79% of women and 61% of men will not meet the minimum income requirement, so Cumbria can perhaps expect up to two thirds of its overseas staff to leave. What a miserable and stupid thing this is to do. As others have alluded to, the Government are choosing this policy because they believe that there is a very anti-immigrant view out there, and they are want to do things—last night’s votes, and all the rest of it, are all part and parcel of this dog-whistle, or indeed foghorn, politics—to try to demonstrate that they are as beastly about immigrants as parties to the right of them. That is incredibly stupid. There are two forms of leadership. One is where you spy where you think that the crowd is going, and you run around the front of it and pretend that it was all your idea in the first place. That is pathetic, and it is not leadership. The second is that you know what is right and you make the case for it.

I think that all of us in this room believe, to one degree or another, in our having secure borders and controlling migration. Given that we have taken back control—not that being in the EU stopped us controlling our borders, but given that we are in a situation where we control migration policy, I have a radical suggestion for the Minister: how about controlling migration in Britain’s interests, rather than doing us harm in the process? This policy harms my constituents. It harms people from Appleby through Ambleside, Arnside, Kendal and Kirkby Stephen to Kirkby Lonsdale. People who rely on care, and who have hospitality and tourism businesses, are damaged by it. But the worst-off are those people who are at the heart of it.

I will not mention names, but there is a constituent of mine from Windermere whose husband is from overseas, and they spent more than a year separated, after being married for some time, because of the policy we already have, which is about to get worse. She refers to the situation as “a hard, cruel process”. It is hard and cruel for her and her family.

I will not quote too many details, but here is a message from someone I will call a former constituent. As far as I am concerned, he is absolutely somebody I am proud to represent. He currently lives here with his non-British wife and two children. He says:

“I grew up and lived most of my life in Kendal, but will probably never be able to return now—at least not with my wife. There’s very little chance I could earn the proposed £38,700 needed for a spouse visa. It’s way too high, and will only serve to break up genuine families who only want to live an honest life back in the UK.”

My town and my community have been robbed of that family. For them to come back, they would have to be divided. This policy is stupid and cruel, and it should be cancelled.

George Howarth Portrait Sir George Howarth (in the Chair)
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Before I call the next speaker, there are two more Back Benchers seeking to make a speech. I remind them that, at 10.30 am, I will be calling the Front Bench spokespersons from the three parties, so if they both co-operate, we can get them both in.

10:15
Olivia Blake Portrait Olivia Blake (Sheffield, Hallam) (Lab)
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It is a pleasure to serve under your chairship, Sir George. I am grateful to my hon. Friend the Member for Sheffield Central (Paul Blomfield), a fellow Sheffield MP, for calling this important debate. I am glad that Sheffield is a city of sanctuary. It is a diverse city that has a proud tradition of welcoming people who come here to work or create a new life away from conflict and persecution. Before I begin, I would like to point hon. Members to my entry in the Register of Members’ Financial Interests for the help I receive in this area from the Refugee, Asylum and Migration Policy project. I am also the co-chair of the all-party parliamentary group on migration.

Although I will not dwell too much on the context behind the debate, it seems that Ministers are intent on blaming every kind of migrant for the chaos they themselves have created in the asylum and migration system and beyond, whether that is asylum seekers, social care workers, overseas graduates or now families. The approach of Ministers seems to be to disregard completely the benefits that a culturally diverse global workforce brings to the UK. If any public opinion is against families being able to be together, when it explained that there is no recourse to public funds, I bet that any objection to spousal visas would fall away. This is a cruel policy and it has unintended consequences.

Today I want to highlight the human cost by raising the experience of my constituent, Jim, and his daughter Elena. She currently lives in Japan with her husband and her son, and she wants to return to the UK with her family. Her husband is not a British citizen, but her son is a British national. They contacted me after they heard the minimum income threshold would increase to £29,000, and were worried about what this would mean for the savings they would need to come to the UK.

Before the increases to the minimum income threshold, it would have cost Elena £66,000 to come home with her family. To meet this requirement, she and her family did everything they could to save. If this figure is not shocking enough, with the new, shifted goalposts it will require £88,500 in savings. That is on top of the money for visa fees, the immigration health surcharge, an English language test, a Life in the UK test, a tuberculosis test and certified translations. The cost to Elena to live with her family in her country of birth is potentially around £100,000. Of course, that number will increase dramatically once the new threshold of £38,700 is implemented.

Elena could come back to the UK now, without her family, and find a job above the minimum threshold, but that would mean leaving them behind in Japan for who knows how long. There is no guarantee, given the statistics we have heard, that she would be able to get a job with the required salary. According to a survey conducted by Reunite Families UK, in situations where families are divided because of the immigration rules, 88% of respondents were separated for more than a year, 53% for more than three years, and 23% for more than seven years. That is far too much of a gamble for Elena and her family.

On 8 February, I wrote to the Minister requesting that he clarify the savings requirement for the entire family to move here, and I asked for the impact assessment that had been made on how this policy would affect people like Elena. I do not believe I have yet received a response. I would like to ask the Minister directly: does he think it is right that a British national and her British national son should need around £100,000 in the bank to live as a family in the UK? What does he think is an appropriate price tag to attach to family life?

Those are hard questions to answer because a price cannot be placed on the right to family, and yet this policy aims to do just that. It is time Ministers thought again about this rule, which seeks the price of everything while realising the value of nothing.

10:20
Hywel Williams Portrait Hywel Williams (Arfon) (PC)
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It is a pleasure to serve under your chairmanship, Sir George. I congratulate the hon. Member for Sheffield Central (Paul Blomfield) on securing an important debate once again. I was very glad to listen to his speech.

I am not presenting any cases from my Arfon constituency, but not because there are none. White, Welsh-speaking, north-west Wales is susceptible to this particular rule, as is everywhere else in the UK. I want to concentrate on one particular point: the discriminatory nature of the rule.

As we know, the Government’s intention is to increase the minimum income threshold to £29,000, then to £38,700 at the end of the year. Those thresholds are notionally based on the cost of supporting families irrespective of public funds. That has been raised from a threshold of £18,600. That figure was recommended by the Migration Advisory Committee and, even at that point, it said that 45% of people would fall short of that criterion. I was interested to hear that the Government did not take advice from the Migration Advisory Committee before introducing the change.

Briefly, the measure is fair in form but unfair in application. It is what is sometimes called the freedom to dine at the Ritz: the door of the Ritz is open to all, but only some people can enter and enjoy its wonderful facilities. I am sure that it is wonderful, although I have never been there myself. The measure is discriminatory against some groups, not directly but indirectly, because the nature of their membership means that they are more likely to fail to meet the criterion, which is based on income, which certain groups are less able to meet—most obviously, and most egregiously, those with the protected characteristic of being a woman or of being black. As we know, people in those groups earn less than the population in general. On the face of it, that is indirect discrimination. My question to the Minister is: how can he justify that?

I will briefly consider the pay gap for Wales, which applies to other parts of the UK, including Scotland, Northern Ireland and most of England outside London and the south-east. The median income in Wales is £32,371: that is not the average, which is a lower figure. In Gwynedd, parts of which I represent, the median income is £30,500—again, that is the median, not the average. That is above the new £29,000 level, but below the intended £38,700. In that latter case, the vast majority of earners in Wales will very soon be unable to meet the new criterion through no fault of their own, given that their income, to some extent, is based on where they live. As we know, incomes in Wales are lower than elsewhere.

There is another group that is affected, and to which other hon. Members have referred. Young people are more likely to move abroad for education and for work, more likely to fall in love, more likely to start a family, and more likely, therefore, to be unable to return to the UK because of this indirectly discriminatory rule.

As I have said, my question to the Minister—I certainly do not envy him his job, as the hon. Member for Stroud (Siobhan Baillie) said—is: how does he justify using a criterion that will structurally discriminate against specific groups and which will shortly discriminate more broadly against the majority of the people of Wales, which is my concern? How can he justify the freedom to dine at the Ritz in respect of a basic human right, which is to marry, have a family and live with that family? I think that freedom is open to the Minister and possibly to most Members in this Chamber, but it is not open to the majority of people in Wales and many, many more people across the UK.

10:25
Alison Thewliss Portrait Alison Thewliss (Glasgow Central) (SNP)
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It is a pleasure to see you in the Chair, Sir George.

I speak very much in opposition to the higher threshold, which is discriminatory. Over the years since I was elected, many of my constituents have come to me because they have struggled to make the £18,600 threshold and have been separated from their family and loved ones as a result, despite working multiple jobs to try to reach that target. There have been people who have missed out on the target by the equivalent of an hour’s overtime and consequently have been unable to bring their loved ones to live with them.

The announcement of an increase in the threshold to £29,000, to £34,000 and eventually, it is believed, to £38,700 just before Christmas has caused great distress among my constituents, which has been echoed in the many contributions by Members this morning. People were extremely distressed because they did not know what that would mean for them, their families and their ability to have a family life. I want to put it on the record that the people affected by this change are our friends, our families, our neighbours and our constituents. I thank them all for the honour they have paid to Scotland by choosing it as their home. They deserve much better than having a price put on love and family life by the Conservative Government.

Many of these people do valuable jobs; they are not necessarily well-paid jobs, but they are indeed valuable to our economy and our society. As hon. Members have already highlighted, these jobs are in a wide range of sectors. The hon. Member for Westmorland and Lonsdale (Tim Farron) talked about people in the hospitality sector and other Members have talked about the impact on universities. The £38,700 threshold that has been talked about is well above the salaries of most post-doctoral researchers, so it will undermine Scotland’s ability to compete and attract people to work in science and technology, which are the great sectors where we want people to come and innovate. Such people are already hampered by the impact of Brexit, but they will be further hindered by the inability to attract people to come here.

Such a researcher visited my surgery quite recently. He had two teenaged children and sought to bring them here; eventually he hoped that his children would attain British citizenship. He had that all planned in his head as to how it would work. He knew it would be phenomenally expensive for a family of four to come here and do that, especially when we take into account the fact that they would have to renew their visas every two and a half years and the immigration health surcharge. Nevertheless, he was prepared to do that. However, the difficulties put in his way by the Home Office have led him to think, “Why am I doing this? Why would I incur so much expense when the Government make me feel as if it is not worth it and that I am not welcome?” That is an awful message for this Government to send out. As other Members have said, the system is already extremely expensive and people see little reward in it.

I was also contacted by an Australian-born British citizen who, over the years, has lived in both Scotland and Australia. He says that he wants to come here and bring his family with him, to bring up his children in Scotland. However, he has found the system prohibitively expensive and, once again, he wonders why he should engage with it. How many skills will we lose because this Government cannot see the value in what those people bring to our society?

Members have also pointed out that there is a disproportionate impact of the discriminatory and expensive proposal from the Government on women, people from ethnic minority backgrounds, young people and people who live in places where average earnings are not very high, particularly in Scotland. The Government have produced no equality impact assessment—I have not seen one—to say what the impact of this policy will be on people in different geographies, on women, ethnic minorities, self-employed people and young people. It seems absolutely ludicrous that they have gone ahead with this policy without publishing an equality impact assessment.



I had an email from somebody whose family had moved abroad, who is worried that the door is now being closed on such families to prevent them from ever returning. He writes:

“My British-born nephew living in Canada and married to a Canadian citizen would never be able to return to the UK with his family”.

This measure is not about a group of foreigners who want to come here. This affects people who are already here and people who moved abroad for work, love or study. They have had the door closed upon them by this Government. It is absolutely appalling.

Jim Shannon Portrait Jim Shannon (Strangford) (DUP)
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I commend the hon. Member for Sheffield Central (Paul Blomfield) for bringing this debate to the House. I apologise to him for not being able to come down immediately; this is my day on the Northern Ireland Affairs Committee. I want to put on the record my support for those across the United Kingdom who have the same problem as we do in Northern Ireland. I have fought a number of spousal and partner cases over the years, involving countries such as South Africa and the United States, where the issue of money has been critical. What the hon. Member for Glasgow Central (Alison Thewliss) and others have outlined is replicated in Northern Ireland, unfortunately, with greater severity, primarily because people in Northern Ireland have a smaller income than people in the rest of the United Kingdom, so for us it is critical. I commend both hon. Members for what they have said.

Alison Thewliss Portrait Alison Thewliss
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As ever, the hon. Gentleman makes a very pertinent point. I would like to hear from the Minister what consideration he has taken of the effect on the nations of the United Kingdom. There does not seem to me to be any objective assessment of what this will mean and the impact it will have. The Scottish Government have expressed concerns. We in Scotland have presented an alternative to the UK’s hostile environment and awful, expensive immigration system, which damage Scotland’s economy and society. We would like to see devolution in the short term, and full control over the immigration system in the long term. At the moment, it certainly does not benefit the people of Scotland or work in our interests.

The impact on hospitality, retail and tourism of ending freedom of movement has been huge. The Labour party wants to continue that economically and socially devastating policy. A recent newspaper report about an Italian restaurant in London, where there is a better level of pay, said that the end of freedom of movement and visa thresholds were catastrophic for the industry. I have heard the same for many years from people working in Indian restaurants who want to bring particularly skilled chefs over from India, Pakistan or Bangladesh. This barrier in their path has an impact on the sustainability of those businesses. They cannot pay wages at the higher £38,700 level.

Will the Minister say why the salary threshold is £38,700? That figure has not yet been justified. Was it plucked out of air? We know that it did not come from the Migration Advisory Committee. I would like to know the evidence it is based on. If that is the minimum that anybody needs to live, why are wages in this country not £38,700 per person? Why has that been selected and plucked out of the air?

It is not that these people are a burden on the state, as the hon. Member for Sheffield Central (Paul Blomfield) mentioned. They cannot be, because they have no recourse to public funds; they cannot claim benefits. They pay into the NHS through the immigration health surcharge, which the Government have recently increased. They are not any kind of burden on the state; it is a complete untruth and deeply unfair to say they are. I would like the Government to tell us on what basis they consider that might be the case, because they have been deeply unclear about that.

In an excellent contribution, my hon. Friend the Member for Cumbernauld, Kilsyth and Kirkintilloch East (Stuart C. McDonald) talked about this policy being a means test on marriage. It is absolutely true that it is a tax on love. He talked of the impact on children, which I see regularly at my constituency surgeries in children who have been separated from their parents for a very long time. He spoke powerfully about the impact on children’s mental and physical health.

The Government claim that theirs is a family party, but it is not a family party if the only people picked are born in Britain and happen to be white. It is not a family party if it discriminates against people who happen to have been born somewhere else, or who fall in love with someone from somewhere else and have a family with them. The Government should think about the discriminatory impact of their policy and the message that that sends out about the status of Britain in the world. It does not happen in Scotland’s name. We seek an alternative—an independent Scotland where we can value everybody who comes, contributes, works, settles and lives in Scotland. We thank them for doing that. We do not close the door and make them feel unwelcome.

10:35
Stephen Kinnock Portrait Stephen Kinnock (Aberavon) (Lab)
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It is a pleasure to serve under your chairship, Sir George.

I thank and pay tribute to my hon. Friend the Member for Sheffield Central (Paul Blomfield) for securing this important debate. He delivered an incredibly powerful speech that included examples of people who have had their lives turned upside down by the policy shift. Many individuals and families across the country have been profoundly impacted and there is real concern about the Government’s policy changes and handling of them. I will come to those points shortly. First, I want to thank my hon. Friends the Members for Wirral West (Margaret Greenwood) and for Sheffield, Hallam (Olivia Blake), and my right hon. Friend the Member for East Ham (Sir Stephen Timms), for their important contributions to this debate.

The policy change to raise the minimum income threshold to secure a visa for a spouse from £18,600 to £29,000 and then later £38,700 is the direct result of the Conservative Government wanting to bring down immigration, after having allowed net migration to spiral to record levels of 745,000 in 2022, despite their repeated promise to the electorate that they would bring numbers down to the tens of thousands. In 2019 the incoming Conservative Government promised to reduce net migration, which at that time was 245,000, but since then that figure has trebled.

Labour is aware of that trend. We have set out plans to reduce our economy’s reliance on migrant workers by reforming the skills system, getting people off long-term sick leave and back into work, ending the 20% discount for businesses recruiting from abroad in shortage sectors and expecting businesses to draw up workforce plans to ensure they are able to recruit more local resident talent.

On the specifics of this debate, the historical stated aim of the spousal visa threshold was to make sure that couples and families have the income that enables them to be self-reliant, so that they do not need to rely on our social security system. That is why the income threshold was set at around £18,600 previously, with additional requirements per dependant. We agree with that basic aim, which is why the level set must genuinely reflect the income needed and required to support family in the UK. It must not be a number plucked out of thin air arbitrarily. That is why we have consistently raised concerns about the lack of an evidence base behind the initial increase to £29,000.

Extraordinarily, the Government have failed to provide any impact assessment of the number of people who will be affected by the shift or who will be prevented from coming to Britain to join their loved ones. Although we support attempts to deliver more sustainable levels of net migration to get the balance right in our economy and society, the Government must be honest and clear in providing a full impact assessment, so that Members are able to fully understand the impact of the proposed changes on their constituents and make informed choices based on an informed analysis.

The Opposition are strong believers in evidence-based policymaking, in stark contrast to the Government, who appear to be addicted to headline chasing, performative posturing and making policy on the hoof. We find it deeply disappointing that Ministers have chosen to shoot from the hip on policies across the spectrum of Government. To have done so on the matter that we are debating today is particularly reprehensible, given how directly it impacts on the deeply personal life choices that people have made and are making. Indeed, by appearing to pull these £29,000 and £39,000 thresholds out of thin air, Ministers have quite frankly behaved in a glib and flippant manner that is both contemptuous of Parliament and shockingly disrespectful towards the couples and families whose lives have been turned upside down by these changes.

The failure, or refusal, of Ministers to publish the impact assessment is particularly baffling because we know that both financial and equalities impact assessments have been completed, as my hon. Friend the Member for Sheffield Central pointed out in his speech. A report by the Secondary Legislation Scrutiny Committee makes clear its utter exasperation with repeated failures by the Home Office to publish the information that Members of both Houses need to properly scrutinise the proposed changes and consider their implications. In the Committee’s words:

“A failure to provide impact information and on a timely basis, makes it impossible for Parliament to scrutinise the legislation properly. Moreover, impact information should be a useful tool in the policymaking process, helping departments to refine and improve their proposals. It appears to us that, instead, the Home Office too often tacks on impact analysis as an afterthought.”

Jim Shannon Portrait Jim Shannon
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I apologise for intervening again, but I am very conscious that in Northern Ireland the average wage is £28,939. Many people are on a lesser wage than that. Does the shadow Minister believe that the Minister should ask, in my case, the Northern Ireland Assembly for their opinion on this? That would give him some realism about these facts and figures. The same thing should apply to the Scottish Parliament and indeed the Welsh Assembly, because connecting those three regions will produce with different figures.

Stephen Kinnock Portrait Stephen Kinnock
- Hansard - - - Excerpts

I thank the hon. Member for that excellent intervention. He is absolutely right, because the point he is making is that we need to get an aggregate picture of the overall impact of this policy across the United Kingdom. Of course, that aggregate picture needs to be built up through the building blocks of key stakeholders and inputs, including the part of the United Kingdom from which he comes; I am sure that colleagues in Scotland and Wales would concur. He is absolutely right.

For good measure, the Secondary Legislation Scrutiny Committee’s report added that,

“We have criticised the Home Office’s explanatory material with such frequency that we are concerned there may be a systemic or cultural issue that is preventing the Home Office from getting it right.”

Will the Minister please explain the actual aim of this policy change? Is it to make sure that migrants are self-reliant and do not need to rely on our social security system, or has the aim changed? How was the £29,000 figure decided? Please could we see some workings around that? Why are the Government introducing a huge jump to almost £39,000? Again, why that particular number? Will he promise to consult fully on the impact of the £29,000 change and the need for any subsequent increase before moving any further? Why has he not provided an impact assessment for this policy, both for the £29,000 and the £39,000? Also, why has he not asked the Migration Advisory Committee to undertake a review into this policy change, or even asked for the committee’s view on it?

The first thing Labour would do, if we are privileged enough to form the next Government, would be to ask the MAC to review this policy and to make recommendations about the level at which the threshold for spousal visas should be set in future. The MAC review that we would commission would consider a range of factors, including the historical aim of ensuring that migrants are able to be self-sufficient, and how the benefits system connects with that aim. My hon. Friend the Member for Sheffield Central suggested exploring the way in which the threshold might interact with the minimum wage. The review would also consider the number of people affected, how they will be impacted, and the overall impact on net migration.

The MAC has not commissioned a report specifically on the family visa issue since 2011-12, but in its 2020 annual report it said that, given the amount of time since the 2012 changes came into effect, a fresh review could be worth while:

“We…think now would be an opportune time to reconsider the minimum income requirements associated with this route. The MAC are concerned that previous analysis may have given too much weight to the fiscal contribution of such migrants and insufficient attention to the benefits that accrue, to both the family and society, from the route. In addition, it is a considerable time since the current income requirements were introduced, so more evidence should now be available to review the impact of these requirements”.

Will the Minister please explain why the Government have failed to act on the MAC’s 2020 suggestion? Will he now commit to requesting that review?

Hard-working, good people, their partners and their families are at the very heart of the policy, so why did it take so long for the Government to confirm that people who are already here and are reapplying will be exempt from the threshold rise? It caused a huge amount of undue hurt and anxiety, and I am afraid it confirmed the view, held by many, that the Government are motivated by performative cruelty. On a related point, will the Government make it clear to all those who started a new application before the changes were introduced that it will be processed under the old thresholds?

Finally, will the Minister at the very least commit to make a statement to the House setting out the results of the impact assessment, rather than bulldozing through secondary legislation that could have a far-reaching and profoundly damaging impact on the lives of couples and families all over Britain?

10:46
Tom Pursglove Portrait The Minister for Legal Migration and the Border (Tom Pursglove)
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It is a pleasure to serve under your chairmanship, Sir George. I congratulate the hon. Member for Sheffield Central (Paul Blomfield) on securing this debate. This is an important issue, and we have heard a variety of opinions. Members raised many points of clarification and asked many questions, and I will try to deal with as many as possible.

It might first be helpful if I set out the background to the decision to raise the minimum income requirement, which in the interest of brevity I will refer to as the MIR. Net migration is too high, and we must get it to a more sustainable place with better balance. In the year to June 2023, it was estimated to be 672,000. Last year, we set out measures to bring the number down by tightening the rules on care workers and skilled workers and ensuring that people can support the family members they bring over.

The British people want decisive action, and we are delivering the change that we promised. We are lifting the pressure on public services and protecting British workers with the utmost urgency, and we have set out and implemented a comprehensive plan to do so.

Stuart C McDonald Portrait Stuart C. McDonald
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Will the Minister give way?

Tom Pursglove Portrait Tom Pursglove
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I will take a couple of interventions early. I am conscious that there is a lot that I need to respond to, but I will gladly take the hon. Gentleman’s intervention.

Stuart C McDonald Portrait Stuart C. McDonald
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The Minister mentioned public opinion, but I rather suspect that if the Government canvassed public opinion, they would find that people are shocked and appalled that their friends and colleagues are being split apart from their spouses. He prays in aid public opinion, but what research have the Government done on the proposals?

Tom Pursglove Portrait Tom Pursglove
- Hansard - - - Excerpts

There are materially relevant elements of the policy that have not been reflected in any Members’ comments. Later, I will come to the safeguards, which I think most people would think are fair and reasonable.

We are taking a fair approach to tackle net migration. It will not only bring down the numbers substantially but address the injustice of a system that, if left untouched, would enable employers to recruit cheap labour from overseas at the expense of the British worker, and put unsustainable pressure on our most vital public services.

Siobhan Baillie Portrait Siobhan Baillie
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The Minister said he would take early interventions, so I will come in now. It was my understanding from the hon. Member for Aberavon (Stephen Kinnock) that Labour wants to bring the numbers down and shares the Government’s ambition. I listened really carefully—I got my pen out to write things down—but I did not hear any specifics or ideas. Is it the Minister’s understanding that Labour plans to scrap the net migration package? I am slightly unclear about that, and it is relevant to my constituents, who are thinking through their options.

Tom Pursglove Portrait Tom Pursglove
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I am afraid that it is an opaque situation. It is very unclear—

Stephen Kinnock Portrait Stephen Kinnock
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The Government are terrified of scrutiny.

Tom Pursglove Portrait Tom Pursglove
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I am afraid the hon. Gentleman and his party consistently refuse to say what they will do on borders and migration, both legal and illegal. Yet again—[Interruption.]

George Howarth Portrait Sir George Howarth (in the Chair)
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Order. Cease this banter and get on with the debate, please.

Tom Pursglove Portrait Tom Pursglove
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The truth is that in the remarks from the shadow Front Bencher there was no clarification of the Opposition’s stance on whether they would seek to cancel the package of net migration measures that are already in train. People can draw their own conclusions on that.

The hon. Member for Westmorland and Lonsdale (Tim Farron) raised a whole host of different issues in relation to borders and migration policy, including the issue of care workers. I would argue that seeing 120,000 dependants coming with 100,000 care workers is just not sustainable. He also raised the issue of illegal migration and conflated the legal migration piece with the illegal migration piece. Again, I make no apology for the steps the Government are taking, including through the legislation we passed yesterday, to try to put out of business the evil criminal gangs who put people in small boats, take their money, send them to sea, and have no regard as to whether they get here safely or not. We saw the consequences of that yet again this morning, in the most terrible and tragic of ways.

We are making strong headway in delivering our package of measures on net migration, with further improvements to modernise and enhance the security of the UK border continuing throughout 2024. The decision to raise the MIR is a key part of our plan to reduce overall migration levels. Taken together, the changes we are implementing will mean that the 300,000 people who came to the UK last year would not now be able to come. The right to family life is a qualified right, and in making our decision we carefully balanced that right against the legitimate aim to protect the UK’s economic wellbeing.

Stuart C McDonald Portrait Stuart C. McDonald
- Hansard - - - Excerpts

Will the Minister give way?

Tom Pursglove Portrait Tom Pursglove
- Hansard - - - Excerpts

I have already given way to the hon. Gentleman. I am conscious that I want to allow the hon. Member for Sheffield Central the time to say a few words at the end.

The MIR was introduced in July 2012 to ensure that family migrants could be supported at a reasonable level, so that they do not unreasonably become a burden on the British taxpayer, and to help to ensure that they can participate sufficiently in everyday life to facilitate their integration into British society.

Paul Blomfield Portrait Paul Blomfield
- Hansard - - - Excerpts

Given that the Minister has heard from many Members that spouses coming to the UK have no recourse to public funds and pay the health surcharge, in what specific way are they a burden?

Tom Pursglove Portrait Tom Pursglove
- Hansard - - - Excerpts

I wanted to come to that point in the course of my response. On access to public funds, our position is that the MIR will prevent migrant partners from accessing public funds until they achieve settlement, when they would be entitled to access public funds should they be needed. They are not entitled to public funds on arrival, as has been said and acknowledged, but if they are destitute or at risk of destitution, if there are reasons relating to the welfare of a child, or if there are exceptional circumstances, that dynamic changes. Where we allow access, the applicant is likely to move to the 10-year route to settlement. That is where access to public funds is relevant.

The minimum income requirement has not been increased in line with inflation or real wages since its introduction, nor has it been adjusted in the light of rising numbers of migrants using the route. In that context, we have reviewed the threshold and taken the decision to raise it to match the level of income needed for someone to come here as a skilled worker—as Members will be aware, that is £38,700 per year—which ensures that migration policy is supportive of our wider ambition for the UK to be a high-wage, high-productivity, high-skill economy. That is the basis on which the level has been determined.

On the issue of consultation with the Migration Advisory Committee, we considered previous advice and evidence provided by the MAC regarding net fiscal contributions and access to benefits when we made the decision. We did not seek further advice from the MAC before making the decision to increase the MIR.

Stephen Timms Portrait Sir Stephen Timms
- Hansard - - - Excerpts

Will the Minister give way?

Tom Pursglove Portrait Tom Pursglove
- Hansard - - - Excerpts

I will give way briefly; I am conscious that there are a few more points to respond to.

Stephen Timms Portrait Sir Stephen Timms
- Hansard - - - Excerpts

Why did the Minister not ask the Migration Advisory Committee for its views?

Tom Pursglove Portrait Tom Pursglove
- Hansard - - - Excerpts

Over recent months we have commissioned work from the Migration Advisory Committee on several fronts, including currently on the undergraduate route and to carry out a fuller review of the immigration salary list. There are, then, ongoing workstreams with the MAC. To make requests of it to consider areas of migration policy is within the gift of Ministers. We will keep that position under review, as we do with the entirety of our immigration system and the policy levers available to Government.

One key element that has not been reflected in the debate is the fact that we have recognised the need to allow families the time to plan effectively and to make arrangements to meet the relevant income requirement. That is why we are implementing the increase incrementally, and why it has not been applied retrospectively. The first increase, to £29,000, came into force on 11 April. A second planned increase will take the threshold to £34,500, with a third rise to at least £38,700 taking place by early 2025. That is one of two key areas of the policy that have not been given an airing today, along with consideration of the fact that the changes have not been applied retrospectively.

The other policy area to mention is the fact that we will continue to grant permission when to do otherwise would breach an applicant’s article 8 right—the right to family life under the European convention on human rights. Such an assessment involves considering whether there are insurmountable obstacles to family life between the applicant, their partner and their children continuing outside the UK. Caseworkers consider those factors as part of the decision-making process, to ensure that we get the right decisions in individual cases and that due and proper regard is given to all relevant circumstances.

I am always happy to debate the intricacies of our policies, but the reality is that net migration is too high. This Government have a policy to bring the numbers down by 300,000 in the way that I have described. A number of changes are now in motion, having been developed and announced, but after giving people time to adjust to them in advance of their coming into force. I believe we have a responsibility to reduce the numbers, and that is what our plan is designed to achieve, but the change is not retrospective and is being introduced incrementally, while the article 8 opportunity remains in the application process for people to be able to set out their circumstances so that the right decisions can be made in individual cases.

10:57
Paul Blomfield Portrait Paul Blomfield
- Hansard - - - Excerpts

I thank all colleagues for their contributions, and particularly the hon. Member for Stroud (Siobhan Baillie). I reassure her that I know she is not alone on the Conservative Benches in the concerns she expressed.

Contributions to the debate came from all parts of the UK and from six political parties represented in the House. We might present our arguments through the prism of our particular party perspective, but I think the same case has shone through all contributions: that this policy is not fair and not in our country’s interests. There are different approaches that should be explored. We need to drop this policy now and to develop a better alternative, and referring it to the MAC would be a useful first step.

Question put and agreed to.

Resolved,

That this House has considered minimum income thresholds for partner and spousal visas.

Household Energy Debt

Tuesday 23rd April 2024

(2 months, 3 weeks ago)

Westminster Hall
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11:00
Kenny MacAskill Portrait Kenny MacAskill (East Lothian) (Alba)
- Hansard - - - Excerpts

I beg to move,

That this House has considered levels of household energy debt.

It is a pleasure to serve under your chairmanship, Sir George. It may seem strange to be debating energy debt with summer fast approaching. However, although the weather has largely improved, the energy debt situation most certainly has not. Millions have not bright sunshine, but black clouds hanging over them. Growing numbers in Scotland and across the UK are struggling, and many are drowning, as debts mount but energy needs remain constant. Ofgem has found that energy debt levels now stand at a staggering £3.1 billion—billion, not million—and that the average debt has increased by about 50% over the last 12 months, with the number of households in debt increasing by about 20%.

The situation is worsening. National Energy Action, a fuel poverty charity, estimates that even with new price cap levels, about 6 million households in the UK will be in fuel poverty. The situation in Scotland, with its more northerly latitude and harsher climate, is even more bleak. Energy Action Scotland suggests, based on the Scottish Government’s house condition survey, that fuel poverty afflicted 31% of households in 2022. That is almost one third of people in an energy-rich land that powers the UK economy living in fuel poverty—and that was two years ago. In northern areas and the islands, the figure was almost, or even over, 50%. Those are the parts closest to the oil and gas fields, yet they are denied access to affordable fuel.

The new bounty of renewable energy adds to the perversity. Scotland is providing 124 billion kWh to be cabled south. That is enough to power Scotland’s homes 12 and a half times over, yet many Scots cannot afford to heat their own home. What an absurdity for a country to be energy rich, yet its people fuel poor.

Jim Shannon Portrait Jim Shannon (Strangford) (DUP)
- Hansard - - - Excerpts

I thank the hon. Gentleman for bringing this issue forward. He is right to highlight fuel poverty. In England, the fuel poverty figure—the proportion of households where more than 10% of wages go to pay for fuel—is about 13%, and he mentioned that in Scotland it is 31%. In Northern Ireland, it stands at 22%. Does he agree that people need help? As he rightly said, just because the summer months are coming and it will get better does not mean that the problem is disappearing. We must take more effective steps right now, and we look to the Minister for the answers.

Kenny MacAskill Portrait Kenny MacAskill
- Hansard - - - Excerpts

I fully accept the hon. Member’s intervention. This is an issue across the United Kingdom, including Northern Ireland. Climatic matters are worsening the situation in Scotland, but other factors affect other areas. As I will go on to say, the days of the summer months being some protection are long passing.

What does this mean for those in debt? They are real people, not statistics. Citizens Advice Scotland states that the average fuel debt for someone seeking its help is about £2,300. That is just the average—for some, it will be worse—and it is only for fuel; people may have other debts as they juggle their finances trying to manage. During 2023, the disability charity Scope received 7,422 referrals to its disability energy support service. Of those referred, 364 were in debt. Disabled households require an additional £975 per month simply to have the standard of living of a non-disabled household, yet their average debt is more than £1,100.

According to Age Scotland, older people have been massively impacted. Its research highlights that the majority of over-50s in Scotland feel financially squeezed and are cutting back on essentials, yet pensioners in Scotland have the highest rates of fuel poverty, with 36% in fuel poverty according to the most recent data. Worryingly, 24%—more than any other household group—are classified as living in extreme fuel poverty. All those statistics will have worsened as energy prices have risen and the general cost of living increased. The perversity of having to choose between heating and eating is growing, not diminishing. These are not just numbers or statistics; they are human beings, some of them even children.

While spring is usually a season for looking forward with anticipation, this spring has seen the heaviest rainfall ever recorded in many parts of Scotland, and with that rain come damp and cold. The days may be getting longer, but the need to heat homes remains as vital as when the nights were longer. Climate change is making our climate more changeable, but that simply makes it more challenging. As inclement weather straddles even supposedly moderate months, heating is often a year-round requirement, and not just for those who are unwell or housebound. The seasons turn and summer will be followed by autumn and then winter, exacerbating an already difficult situation. The thought of the colder months to come will send a shiver through many—from fear, not cold.

Energy is about access to not just heat but power. It allows the mother to power the washing machine to keep her kids clean and tidy; the parent to power the school laptop, ensuring that those children can achieve their educational potential; and individuals to charge their phones in order to access employment opportunities, benefiting not just themselves but society collectively. Rather than berating and punishing people for not being in work, maybe the Prime Minister would be better advised to assist them in achieving it.

The need for power even applies to those who need life-saving equipment. Ill health not only often keeps people housebound but makes them more susceptible to the cold. Being able to keep warm is essential for recovery. Similarly, dialysis and oxygen are not luxuries to prettify someone’s home; they are essential for their very existence. That is why the debate is urgent. The time to act is now, not when winter is upon us. By then the situation will be even worse for many, and tragically it may even be too late for some.

National Energy Action advised that not only are more people falling into debt but those already in debt are seeing their situation worsen. Only about one third of the overall debt figure of £3.1 billion consists of debt where there is an arrangement to pay. That arrangement may be manageable for many, but for some it might prove too much, as energy and other costs increase. What happens then? Two thirds of that debt—over £2 billion—consists of “arrears”, which is defined as debt without a repayment arrangement. If someone has no plan for how to repay, and is struggling to meet their current bills without even considering meeting arrears that have accrued, how will they get through spring, let alone winter? Many people see no way out of the morass facing them.

Action is needed to address energy debt every bit as much as the continuing crisis of energy costs. Ofgem has called for inputs on debt and affordability, with submissions closing on 13 May. However, Ofgem is a creature of statute; it can only do what it is authorised to do, and the parameters and the final decision remain with Government. That is another reason why this debate is apposite: it is not just that the situation is worsening, but that the decisions must be made now.

Those facing this crisis with the burden weighing them down are not the feckless or ne’er-do-wells who never seek to pay their way, but the poorest and most vulnerable in our society. It is not a “won’t pay” campaign, as I once ran in Scotland against Thatcher’s poll tax, but simply a “can’t pay” situation for those who just do not have the cash or wherewithal.

Another cruelty of our energy market is that those with the least pay the most, hence they face the highest risk of debt, not just difficulty in paying their bills. Energy costs have increased for all, but the proportion paid by the poorest and most vulnerable is greatest. As National Energy Action pointed out, standing charges have almost doubled over the past five years, with households now paying over £300 regardless of payment method. It is an energy poll tax that hits the poorest hardest. The billionaire with his swimming pool pays the same as the widow with her kids in a council flat. Charges vary across the country, with those in colder Scotland paying a higher rate than those here in London.

Tariff prices are also highest for those least able to pay. Standard credit is far more expensive than direct debit, but for some no other method is available. They are left paying more from a smaller budget. Prepayment has seen tariff costs belatedly reduced and is now the cheapest tariff, but it can have other issues for those forced to pay by that means. Let us recall that the moratorium on forced installation of prepayment meters has ended. Warrants are now being obtained to force them on even those who do not want them, for they obviously suit suppliers, who can monitor and even restrict consumption, even if more people will be afflicted by that perverse euphemism, “self-disconnection”—a benign phrase, but a wicked outcome. It is not a voluntary choice, but imposed by financial circumstances. Lacking the funds to buy the card or pay for more credit, people simply go without.

Let us also remember that putting people on to prepayment meters has other significant consequences. As Citizens Advice Scotland points out, it results in debt repayments being added to consumption charges—folk pay more but get less, with debt, not just standing charges, to be met before they even get a flicker—and people may not be able to switch supplier even if lower tariffs are available.

The Government will claim that energy prices have fallen and, of course, over the recent period that is most certainly true; however, the baseline is not last year, but when the energy crisis arose. Prices are far higher than they were then, and the supposed global issue of energy costs, whether due to the war in Ukraine or other international pressures, has seen prices in the UK rise far higher than in other lands. Everyone is suffering as a result—business and domestic customers—but it is the poorest and most vulnerable feeling the most pain.

Moreover, while the energy price guarantee has dropped, let us not forget that there has been sleight of hand. Not only is the guarantee predicated on average costs, hence it takes no account of differing circumstances—climatic issues in northern parts, personal needs such as ill health, and so on—but the average energy consumption used in formulating it was reduced, as it was stated that household insulation had improved. Of course, that is the case for many well-insulated new homes, but in all likelihood it will not apply to someone in an older property, whether they own it or live in a council house, are a housing association tenant or have a private landlord, yet their needs remain the same.

National Energy Action states that if it was calculated on the former assessment, the price cap would be £1,769, not £1,690, for the typical dual fuel household. That is almost an additional £100 for those in the poorest housing stock to find. Prior to the crisis, the price cap for the typical dual fuel household paying by direct debit was £1,138. It is now 56% higher, but costs have risen even more for those in harder-to-heat households or on higher tariff payment methods.

Ofgem acknowledges that there is £3 billion of debt in the energy market. The End Fuel Poverty Coalition calculates that there are allowances in the energy price cap to service that debt amounting to £1.5 billion per annum. That just pays for servicing the debt, not for reducing it. Can the Minister confirm whether that is the case? If that is happening, how is it being calculated, collected and distributed? Where is the transparency? Are consumers paying for their suppliers’ accrued debt? Surely we are entitled to know what we are paying for and what the big corporates are getting from us.

We know that there is a crisis at the moment and that the winter to come could be harsh and cruel, so what is to be done? First, a social tariff, once alluded to by Ministers and standard in many lands—even those without the exorbitant prices we face—should be introduced. That would provide solace for the poorest and most vulnerable. Secondly, we should restore the moratorium on the forced installation of prepayment meters, which is iniquitous and cruel.

Thirdly, the warm home discount scheme needs to be reviewed and enhanced. Rather than being issued arbitrarily to second home owners—never mind to those not requiring them, as was once done—payments should be centred on those most in need, addressing hardship and mitigating existing and even increasing debt. The current support of £150 is simply inadequate and too many are missing out entirely, even though they are entitled and in need. The payment was £140 before the energy crisis arose and prices rocketed; it badly needs to be increased to reflect that. The Social Market Foundation has made proposals that the Government would do well to adopt.

Finally, we need a debt write-off scheme, as suggested by National Energy Action. The amount owed and the number in debt are such that many can never make full repayment. The only way to achieve much reduction is to provide support through matching payments. The details of the scheme can be discussed, but the principle should be non-negotiable. It need not be a blank cheque for others simply to cease paying; it could be time limited to debt incurred during the fuel crisis, and other criteria could be applied. Banks were bailed out. Wastage of personal protective equipment, if not fraud, has been written off. It seems that there are unlimited funds for weapons of war, but not for a war on poverty. If assistance can be given to the few, similar support should be provided for the many.

Energy debt levels are rising and, with winter looming, fears for access to warmth and power, as well as for people’s ability simply to keep body and soul together, are increasing. Those are basic human needs and should be human rights. Action needs to be taken to ease the cost of energy and reduce the burden of debt for the poorest and most vulnerable. Will the Minister meet me and representatives of National Energy Action to discuss the crisis? Even more importantly, will she address the perversity of fuel poverty in an energy-rich land?

11:16
Amanda Solloway Portrait The Parliamentary Under-Secretary of State for Energy Security and Net Zero (Amanda Solloway)
- Hansard - - - Excerpts

It is a great pleasure to serve under your chairmanship, Sir George.

I thank the hon. Member for East Lothian (Kenny MacAskill) for securing this debate on such an important issue, which I care deeply about. He mentioned what it is like to live in fuel poverty. I assure him that I personally understand exactly what that is like, having known the difficulty as a child of using something as simple as a washing machine, and latterly having a mother with chronic obstructive pulmonary disease and having to make decisions about using oxygen. I reiterate that I fully understand the situation that we are talking about, which is why I take this matter incredibly seriously as the Minister for Affordability.

As the hon. Member for East Lothian pointed out, levels of consumer energy debt have risen in recent years, which the Government recognise as an important and growing problem. Energy debt can harm consumers in several ways. It can encourage them to self-ration energy, leading to cold or damp homes, or cause households to cut back in other ways. The Government expect suppliers to do all they can to support customers in debt, particularly vulnerable customers. I encourage anyone who is concerned about keeping up with bills to contact their supplier. They should also contact organisations such as Citizens Advice, which may be able to provide support.

Last year, I met energy suppliers to outline our expectation that they do all they can to support those in debt and to help other consumers avoid falling into debt. I also meet regularly with stakeholders such as Citizens Advice to discuss how we can work together to best support consumers. I welcome Ofgem’s ongoing call for input on affordability and debt. For the reasons that the hon. Member for East Lothian set out, it is right that Ofgem takes a detailed look at the issue. I look forward to understanding its next steps to ensure that consumers can be better protected and that the debt burden does not leave us in an unsustainable position.

Despite high levels of consumer debt, energy prices have fallen significantly since last year. The price cap has fallen by nearly 60% since it peaked last year, including by £238 in April. Over the last two years, the Government have demonstrated a commitment to supporting vulnerable people with one of the largest support packages in Europe. Taken together, the total support provided between 2022 and 2025 to help house- holds with the cost of living will be worth more than £108 billion—an average of £3,800 per UK household.

Millions of vulnerable households have received up to £900 in further cost of living payments, with an extra £150 to those eligible for disability benefits. These payments are in addition to the established financial support available to low-income and vulnerable households through the winter fuel payment and the cold weather payment, which provides £25 during very cold weather. An extra cost of living payment of up to £300 was paid to pensioners’ households through the winter fuel payment, while the Government continue to provide support through the warm home discount, which provides low-income households with a £150 rebate off their energy bill every winter.

Although the Government are doing a lot to help households, I am concerned that some customers remain in energy debt. Suppliers should do all they can to support these households and ensure that consumers do not fall into debt. Last year, Energy UK announced a voluntary debt commitment with 14 energy suppliers, which collectively committed to go above and beyond current licensing conditions to help households with energy bill debt over winter. Those energy suppliers committed to providing immediate assistance to those in debt, as well as arming people with knowledge and resources to empower them to manage bills more efficiently. However, this is an ongoing issue, and it is also important that suppliers provide quality customer service to support consumers before they fall into debt, and quickly help those who are already in debt.

The hon. Member for East Lothian raised the issue of prepayment meters, which, of course, can be a useful tool for some consumers and their energy suppliers to manage their debt. It is important, however, that the rules around their use are sufficient to protect consumers and are enforced properly. Involuntary installations should be used only as a very last resort. Ofgem has strengthened its licensing conditions for suppliers to conduct involuntary prepayment meter installations, with exemptions in place for households with vulnerable individuals, such as people who are 75 or older.

The hon. Gentleman’s constituents will also have been in contact about standing charges, which, as he will know, remain a matter for Ofgem. Ofgem launched a call for input on standing charges, which ended in January and received just over 30,000 individual responses. It looks at how standing charges are applied to energy bills, and at the alternatives that can be considered. Ofgem is currently analysing those responses and will publish its response in due course. In March, the Secretary of State and I wrote to Ofgem to outline the Government’s expectation that standing charges should be kept as low as possible, or reformed if necessary, to make them fairer for consumers.

The Government have already committed to further support for households. In the autumn statement, we announced the biggest increase in the national living wage, which is worth around £1,800 for a full-time worker and will benefit around 2.7 million workers. We also announced the next generation of welfare reforms, with benefit payments increasing by 6.7% and pensions by 8.5%. In the spring Budget, we also cut national insurance by a further 2%, meaning that someone on an average wage has the lowest personal effective tax rate since 1975. We have also extended the household support fund until September 2024, with an additional £500 million in funding, and we have been working across Government and with Ofgem and suppliers to better identify customers who are getting into problem debt and to ensure that households are properly supported. I understand that this is a complex matter, and one that is very important to the hon. Gentleman.

Kenny MacAskill Portrait Kenny MacAskill
- Hansard - - - Excerpts

Would the Minister clarify whether there is an element in an individual’s bill that is factored in by Ofgem that relates to the debt servicing of suppliers?

Amanda Solloway Portrait Amanda Solloway
- Hansard - - - Excerpts

The hon. Gentleman makes a good point. He will know that there was an announcement of a one-off price cap adjustment of £28 per household for direct debit and standard credit customers. As I mentioned earlier, we are looking at the standard charges system as a whole and whether it should be reformed.

I am happy to meet the hon. Gentleman. I am always very keen to meet hon. Members across parties, to work across Departments—for example, with the Department for Work and Pensions—and to meet stakeholders, because we can only really tackle this issue together. To reiterate, we must remember that we are talking about individual people and their individual lives, so I am incredibly happy to meet and discuss it further.

This is a complex matter, which is important to the hon. Member for East Lothian and other hon. Members. I hope that I have provided some reassurance about the action that is being taken by the Government, Ofgem and suppliers to help all consumers. I give my assurance that, as the Minister for Energy Consumers and Affordability, it is uppermost in my mind that we should never be making vulnerable people more vulnerable. I thank the hon. Member for East Lothian again for bringing forward this debate.

Question put and agreed to.

11:26
Sitting suspended.

Lithium: Critical Minerals Supply

Tuesday 23rd April 2024

(2 months, 3 weeks ago)

Westminster Hall
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[Sir Gary Streeter in the Chair]
14:30
Steve Double Portrait Steve Double (St Austell and Newquay) (Con)
- Hansard - - - Excerpts

I beg to move,

That this House has considered the supply of lithium and other critical minerals.

It is a great pleasure to be able to lead this debate today, especially with you in the Chair, Sir Gary—I know you will enjoy me talking extensively about Cornwall once again. This debate is very important to me because this particular subject is relevant to my constituents in St Austell and Newquay, and indeed Cornwall as a whole. The main content of my remarks will be focused on lithium extraction and production because we have an opportunity in Cornwall to extract and provide substantial amounts of lithium in the coming years. I recognise that lithium is by no means the only critical mineral and that, beyond the application of lithium-ion batteries, there will be many other industries that are reliant on so many other kinds of critical minerals.

Critical minerals are defined as commodities other than fuel that are crucial to a state’s economy or national security, with a supply chain that is particularly vulnerable for a number of reasons, such as geopolitical tensions. Following a comprehensive assessment by the British Geological Survey, which evaluated minerals according to their economic vulnerability and supply risks, the UK Government now identify 18 minerals as critical. That list is kept under review and is not meant to be definitive, but it will be informed by the science as it evolves and new discoveries as well.

Those minerals are deemed critical because they underpin the supply chains of modern-day technologies that are critical to day-to-day life—from electronic communications, our smartphones and our watches to the automotive industry, particularly electric vehicles, as well as defence and cyber-security. They can also have critical applications in other fields, including the pharmaceutical industry. They are more relevant than ever before, particularly as we transition to a green economy, and the technologies that will help us to achieve that depend on those minerals. Lithium, graphite, cobalt and nickel are needed in large quantities to make electric vehicle batteries and they will form the future backbone of the global automotive industry, while wind turbines depend on permanent magnets built with rare earth elements and copper. Without a sustainable and secure supply of critical minerals for the coming decades, we will simply not be able to meet our net zero target, maintain our critical defence and security capabilities, or support the creation of thousands of highly skilled, highly paid jobs in the tech, defence and automotive industries.

It is therefore no surprise that the global demand for critical minerals has shot up in recent times. In particular, there are concerns about the supply of lithium, which is going to come under huge pressures globally in the race to create more lithium-ion-based products. Securing a reliable supply of lithium is going to be crucial to our future economic prosperity. High-grade deposits of lithium can currently be found in four countries around the world—Argentina, Australia, Chile and China—with those countries dominating the global market at present.

Looking a bit further up the supply chain, China hosts 60% of the world’s lithium refining capacity. A report published at the end of last year by the Foreign Affairs Committee found that China looks ready to exploit the economic advantages arising from its global dominance of the lithium refinery market, and there are concerns that the UK has not yet taken steps to embrace the opportunities provided by lithium and other critical minerals. With technological advances constantly shifting towards a reliance on more lithium-heavy batteries, lithium extraction will need to increase significantly across the world to meet that demand. Analysis has shown that by 2030, even with global supply ramping up significantly, there will still be a 55% gap between supply and demand, because of a sharp increase in the demand.

Other critical minerals used in the production of batteries also appear to be in short supply, but analysts agree that of all the minerals involved, the supply of lithium presents the greatest challenge. But there is good news. The UK has a significant deposit of this most critical of minerals in Cornwall. We have known about its presence since the 1850s; I have seen mining maps from the 1850s that point to the fact that lithium is present. There was even a small mine in my constituency just outside St Dennis that in world war two supplied small amounts of lithium for the war effort. With demand and prices now rising, these deposits have become viable for extraction.

The Government have recognised this issue. In July 2022, they published the UK’s first-ever critical minerals strategy, which was a key landmark in the recognition of the importance of securing a sustainable supply of these minerals. In March 2023, it was reviewed and renewed with the “Critical Minerals Refresh”. It was disappointing, however, that this latest policy paper made no mention of the significant increase in the supply of critical minerals needed to meet our net-zero targets and energy security requirements. I am concerned that there seems to be a silo mentality in some parts of Government, with different Departments looking at different aspects of what is needed to reach net zero and secure our future. We need a cross-Government, joined-up approach to link up our priorities. Critical minerals challenges and opportunities cannot be addressed in an isolated manner.

Some people have asked, “Well, why can’t we just rely on imports of these minerals?” As I have mentioned, China is looking to dominate and control supply, and concerns have been expressed about the ethical and environmental reputation of lithium extraction around the world. People are becoming more aware of the need to understand the supply chain of products they purchase and the standards of supply and production. There is little point in buying an electric vehicle if substantial environmental harm is caused in the supply chain process.

Lithium and cobalt have attracted the most international attention, with reports of the use of child labour in cobalt mines in the Democratic Republic of Congo and abuses of indigenous rights in lithium mining projects in South America making global headlines. This proves there is a good reason why the UK must shift its focus from getting its supply of critical minerals abroad to securing them domestically wherever possible. Having a domestic supply of critical minerals will mean that we can control the standards of supply, maintaining the highest environmental and ethical standards as well as reducing our carbon footprint by not having to important these materials. It will also keep value in the UK economy.

Reaching our net-zero target by 2050 presents a challenge and an opportunity. Clean growth has been at the heart of the UK Government’s plan to level up our industry and economy. This country aspires to be a world leader in electric vehicle and battery technologies, but that will only be achieved by growing our battery manufacturing. Importing will not be the answer. The more we can source the materials we need domestically, the more it will help us to achieve this goal. Doing so will mean that we can create green jobs of the future within the UK, attracting investment and growing our economy while reducing our carbon emissions.

Cornwall has produced virtually every battery metal in the past. It is imperative that we fully exploit the geological potential the duchy offers once again to lay a path to our transition to net zero. Cornwall powered the industrial revolution with copper and tin, and we are ready to power the green revolution and be at the heart of our nation’s prosperity once again. We are fortunate in Cornwall to have two excellent companies, both operating out of my constituency of St Austell and Newquay, developing lithium production in different ways: Cornish Lithium and Imerys British Lithium. Without going into the technical detail, they are both pioneering new methods of extracting and processing lithium from hard rock and brines beneath Cornwall. Both are working to ensure the highest environmental standards.

One of the questions I am most frequently asked is about how much local opposition there is to the lithium extraction, largely because of the industry’s reputation around the world. The answer is virtually none. That is, first, because mineral extraction is what we do in Cornwall; it is in our DNA. We have been continuously mining tin and copper for thousands of years and china clay for the past 280, and the vast majority of people locally are delighted to see the opportunity to revive our mining heritage for a new era. Secondly, the lithium is located in formerly mined land, so we are not digging up new countryside to extract lithium. Just as importantly, both Imerys British Lithium and Cornish Lithium are committed to working with local communities. They have both recently held public engagement sessions. At those events, they made clear their commitment to the highest standards and the lowest possible impact on the environment.

Between them, the Cornish Lithium and Imerys British Lithium projects expect to be able to supply 40,000 tonnes a year of the 80,000 tonnes that UK car manufacturers will need for batteries. That is half of the supply from a domestic source. That will put the UK at a competitive advantage, as well as being good news for the Cornish economy. Some people predict that lithium extraction could be like tin all over again for Cornwall.

It is not just lithium; we still have tin and copper deposits in Cornwall, where copper is potentially making a comeback, having been the focal point of our first mining revolution. High-grade qualities that are 16 times higher than the global average have been discovered during the underground exploration of lithium at the United Downs site, in the constituency of my right hon. Friend the Member for Camborne and Redruth (George Eustice). Also in his constituency is South Crofty mine, an ancient tin mine with records of mining in the area as early as the 16th century. Nowadays, the site presents the fourth-highest-grade tin resource in the world. It is under the ownership of Cornish Metals, which is working to ensure that Cornwall can begin supplying our growing demand for tin in the near future, and is expected to employ more than 200 people.

I was pleased to receive an update from the Minister that went out to all MPs in a “Dear colleague” letter last week, informing us of the establishment of the new Critical Imports Council and its first quarterly meeting, which the Minister chaired. That is welcome news. The council brings senior Government officials together with stakeholders from industry and academia to discuss the challenges and opportunities presented by the global supply chain landscape. In an ever more uncertain and rapidly evolving world economy, it is vital we work closely with strategic and academic partners to help the UK adapt and respond to risks and opportunities. I was pleased to learn that key sectors, including manufacturing, technology, health and life sciences industries were represented at the meeting. From medicines to smart watches, critical minerals are needed now more than ever, so it is welcome that the Critical Minerals Association, which provides the secretariat to the all-party parliamentary group for critical minerals, and the Institute for Minerals, Materials and Mining are both members of the council.

I look forward to receiving further updates on the council’s work in the light of the discussions we will have on lithium and other critical minerals today. I hope the Minister will pay close attention to the work of businesses such as Imerys British Lithium and Cornish Lithium in my mid-Cornwall constituency. Indeed, I invite him to come to Cornwall to see for himself to see the fantastic opportunities that lie underneath our rocks.

I have engaged with both businesses over a number of years and they have a few requests of Government to help and support them as they develop to provide the lithium we will need. The first is on regulation, which needs to be more coherent and understandable. There is too much of a patchwork of regulations at present, which is making it hard for the industry to navigate. Between getting permits and planning, there are plenty of bureaucratic hoops that they have to jump through. It is not beyond the realms of imagination to have a body like the Coal Authority for lithium and other critical minerals, to help harmonise and make regulations clearer. The future for lithium, with the right regulation, is extremely bright and offers an opportunity for the UK economy.

Secondly, a range of standards on carbon intensity and ethical traceability of supply chains is coming down the track. The UK needs to prepare itself to take advantage of the opportunities that presents. Lithium from Cornwall presents a huge opportunity to meet those standards. It is in our interests to support responsible, transparent and traceable supply chains. We should consider developing a required traceability standard for all lithium used in UK manufacturing. We should also consider including lithium extraction within the carbon border adjustment mechanism, which is currently being consulted on.

Post Brexit, we now have our own system of chemical classification distinct from EU regulations, which allows us to review whether those classifications are right in the light of the best and most up-to-date scientific research. Crucially, it also allows us to take a stand against proposals that are not supported by the available science, such as the European Chemicals Agency’s proposal to classify lithium carbonate, lithium hydroxide and lithium chloride as category 1A reproductive toxicants in 2021.

Although that might be justified for some other toxic substances, for lithium it is simply not backed up by the evidence. It is, therefore, welcome news that the Health and Safety Executive published its own opinion in August 2023, outlining concerns with the evidence and methods used by its European counterpart. It triggered a full assessment and called for further evidence. It is important we examine all the evidence, but the process could take several years, and no end date is currently in sight. That could leave a highly capital intensive and critical industry facing regulatory uncertainty. This could be a key Brexit benefit, and I ask the Minister to give an update on what is being done to accelerate this process to a conclusion as soon as possible.

In summary, we hear a great deal about the need to strengthen our military defence, and rightly so in an increasingly uncertain and hostile world, but in my opinion not enough is said and not enough attention is given to strengthening our supply of critical minerals. We face a risk of a global supply chain of minerals such as lithium being controlled by states that are not our friends and allies. I urge the Government to do more in this field. Cornwall stands ready to step up and play a significant role in providing the secure, clean and ethical supply of some of the critical minerals we are going to rely on the most in the decades to come.

14:48
Jim Shannon Portrait Jim Shannon (Strangford) (DUP)
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It is a pleasure to serve under your chairship, Sir Gary. I thank the hon. Member for St Austell and Newquay (Steve Double) for leading today’s debate. His speech was a tour de force, setting the scene so well. The opportunities in his constituency are apparent and achievable, and I support him. Northern Ireland may not have the access to lithium that the hon. Gentleman mentioned, but we want to be part of this advanced technological progress. That is the thrust of where I am coming from.

It is great to be here because there is no doubt that in the not so distant future we will be having more conversations about the sustainability of and demand for lithium to meet our commitments to net zero targets. We are here to have an in-depth discussion on how we can plan for that.

In December 2023 a major milestone was reached: to deliver a domestic supply of lithium in the UK with home-grown technology and engineering. We have a very clear role to play in the world and a clear role to play for ourselves in this great United Kingdom of Great Britain and Northern Ireland. We can all contribute to and gain advantages from what is being brought forward. Three companies from the north of England signed an agreement aimed at delivering the UK’s first commercial-scale direct lithium extraction plant that combines UK-developed technology, UK-sourced lithium-bearing saline brine and UK process engineering expertise. Those are things that we can do and I am pleased that the Minister and his Department are doing just that.

It is always important to me that Northern Ireland can play a role in modernising technology. It may not be possible for Northern Ireland to have the extraction process to which the hon. Member for St Austell and Newquay has referred but, none the less, I think we can play our role. There is currently no supply of lithium in Northern Ireland and, to date, sectors relating to net zero, such as energy and transport, have represented a small proportion of total mineral demand. But it has been projected that the transition to net zero will result in a significant increase in demand in the future. If that is where we are going, and that is the target we are aiming for, I would like to see my constituents, and people from across all constituencies of Northern Ireland, being part of that. There is also a role for Scotland, though it seems that there may not be the same possibilities in Wales, unfortunately.

Some smaller businesses specialise in lithium batteries. For example, in my neighbouring constituency of North Down, a company called Lithium Go specialises in providing stable battery power to the golf trolley industry. I believe there is scope for Northern Ireland to contribute on a wider scale. What discussions has the Minister had with the Department for the Economy to see how we can advance the technology and the opportunity to businesses in Northern Ireland? We have the skilled workforce, we have the opportunities, we have the interest and I believe that we can do our part in Northern Ireland.

While I understand that mineral planning policy is a devolved matter, areas of potential geological prospectivity for critical minerals in Northern Ireland, Scotland and Wales must be recognised by the UK Government centrally. In an answer to a parliamentary question, the Minister stated that two areas of geological prospectivity for lithium had been identified in Scotland and no areas in Wales. When the SNP shadow Minister, the hon. Member for Gordon (Richard Thomson), speaks, he will no doubt mention that. That shows that Scotland has a head start, in conjunction with the opportunities in England on the mainland. Northern Ireland was not mentioned, so could the Minister provide clarity on what discussions he has held with his relevant counterparts in Northern Ireland on their role in the supply of lithium and other minerals?

We all in this House, in all political parties and on both sides of the Chamber, have a commitment to making the world a better place. That is a goal that all of us try to achieve, and sustainability is part of that. Yet we must all ensure that these are not unachievable goals, but that they have a solid foundation and practicality. We must sort out how we can supply lithium safely and in an environmentally friendly way. That has to be a priority for us all.

I often say—and I say it with great honesty and truthfulness—that I want this great United Kingdom of Great Britain and Northern Ireland to succeed, to prosper, to do well. I believe one of the great advantages we have is being able to do that together. My request to the Minister, and to others who will speak, is to ensure that we can all gain. In Northern Ireland, we deserve the same opportunity. We can contribute greatly to this debate and what we are trying to achieve.

14:54
Cherilyn Mackrory Portrait Cherilyn Mackrory (Truro and Falmouth) (Con)
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It is a pleasure to follow the hon. Member for Strangford (Jim Shannon). I thank my constituency neighbour, my hon. Friend the Member for St Austell and Newquay (Steve Double), for securing this really important debate. As his successor as chair of the all-party group for critical minerals, it has been my privilege to champion this industry in Parliament in recent years. I am told that the phrase “critical minerals” has been used more in Hansard in the past couple of years than in the whole of Parliament’s history. That shows that critical minerals are firmly on the agenda and that everybody is starting to talk about them.

My hon. Friend knows that every opportunity to discuss lithium and other critical minerals is a chance to raise the profile of this vital sector and outline its importance to our energy security as a nation and a global economy. It should also give our constituents in Cornwall a sense of pride. The sector is absolutely essential, given that demand for critical minerals is due to quadruple by 2040 to meet the requirements for clean energy technologies on our way towards net zero.

As my hon. Friend outlined, mining has always been closely interwoven with Cornish communities. It has been fantastic to witness the revival of Cornwall’s mining industries, which has restored Cornwall to its rightful place at the heart of the UK’s critical minerals strategy. He spoke at length about how Cornish Lithium and Imerys British Lithium are going from strength to strength. I associate myself with his comments, and I thank the companies for their endeavours.

In addition to lithium, Cornwall is also extracting tin. I had yet another opportunity to visit Cornish Metals at South Crofty in the constituency of my right hon. Friend the Member for Camborne and Redruth (George Eustice). I took great pleasure in showing the then Minister for Industry and Economic Security—my hon. Friend the Member for Wealden (Ms Ghani), who has now picked up a brief in the Foreign, Commonwealth and Development Office—around the site. We met the company directors, who took her underground to update her on the progress that Cornish Metals has been making to restore that historic mine.

Cornwall is home to one of the top three tin sites in the world, and it is expected that South Crofty will be back online in 2026. I want to highlight a couple of the challenges facing our new and re-emerging mining companies that were raised when I visited South Crofty. The first relates to planning. South Crofty is on an existing site and, as my hon. Friend the Member for St Austell and Newquay said, although we had local buy-in, the planning process took about 12 years and cost more than £10 million; that is now completed. Given that Cornwall is an area sympathetic to mining infrastructure, surely we can simplify the process if we mean what we say about the minerals being critical.

The second challenge is the processing. My hon. Friend has spoken about lithium processing, but currently any tin extracted from Cornwall will need to be exported to the far east to be processed. In Europe, the energy costs are simply too high, and we must use carbon to melt the metal. The sites in Belgium and Poland are used only to recycle, so should we stand up our own processing in the UK, perhaps in south Wales or Humberside, next door to our existing steelworks?

Despite that, mining is not the dirty industry it once was. As champions of the industry, we have a duty to remind communities of the environmental benefits that a restoration of Cornwall’s mining industry will bring to our natural surroundings, our towns and our villages. It is not simply about high-skilled jobs for the future and opportunities for work. The Cornwall Lithium site at United Downs is producing geothermal energy, which is ready to power local houses and businesses. The water treatment plant at South Crofty is providing resources for the reopening of the mine that can also be used to clean the nearby Red River—no longer as red as it was—and protect local wildlife. That is a great example of the fact that when the Government give industry the breathing space to start in an emerging sector, the benefits to the economy, security and the environment are bountiful.

It is important that we place our discussions about the supply of critical minerals in a broader international context. I have worked closely with the Critical Minerals Association and its partners to get world leaders in the industry, and representatives of international bodies and Governments across the word, in the same room to have conversations and build the relationships that are needed now if we are ever to be in a position to grow the supply chain at pace to meet the growing global demand.

Last November, I hosted the first ever roundtable of producer nations, right here in Parliament. We brought together Ministers from Kyrgyzstan, Saudi Arabia, South Sudan, Nigeria and Armenia for a discussion with Foreign Office Ministers about the future of our respective critical mineral supply chains. The event complemented the UK’s Extractive Industries Transparency Initiative roundtable, which I had hosted earlier in the year, where we discussed the corporate risk and the need to set out international expectations for the industry early on, to ensure transparency and ethical mining in the rush to meet demand.

I also attended another roundtable at the US ambassador’s residence. If I am totally honest, I was quite surprised to be invited, because it included representatives from the US Government as well as global industry CEOs. We were able to brainstorm on the cross-governmental challenges that like-minded nations face, in order to build resilience in the supply chain and meet global demand, thereby ensuring not just security but sustainability.

Graham Stringer Portrait Graham Stringer (Blackley and Broughton) (Lab)
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The hon. Lady has made two significant points in a coherent speech. First, we will not be able to make use of natural resources in this country while our energy costs remain so high, and secondly, the planning regime that we operate in makes getting permission for the extraction of any minerals very difficult. Does she agree that deep in the Government, as the hon. Member for St Austell and Newquay (Steve Double) said, there is still a belief that we can rely on international trade to import critical minerals, whereas in actual fact China is behaving malevolently and trying to monopolise the trade?

Cherilyn Mackrory Portrait Cherilyn Mackrory
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The hon. Gentleman is not wrong, in that global events are catching up with us. I think everybody in this Chamber knows that Whitehall moves at a glacial pace at the best of times, and current geopolitics has taught us that the Government need to be more agile. I think they are getting better at that and at getting Government Departments to work together. I mentioned that the Minister’s predecessor now has the equivalent brief in the Foreign Office and will therefore take her understanding with her. Government Departments are getting better at working together, but the hon. Gentleman made an incredibly important point.

Throughout all the events we have hosted this year I have been reassured by the Government’s determination and willingness to pitch in. The critical minerals strategy grapples with many of the industry’s original concerns, yet I also think most of us see it as an evolving document, as both our ambitions for the sector and the realities on the ground shift. What is true is that the strategy will ensure that the UK remains competitive as different nations grow their supply chains at varying rates, and it will also ensure that regions such as Cornwall, which have so much to offer, get the sustainable investment and job opportunities that we need.

Before I draw my speech to a close, I will discuss the local impact of improving the supply of critical minerals to my constituents in Truro and Falmouth, outlining the successes of the activity by the Government and the all-party parliamentary group on critical minerals on the international stage, as well as the reassuring framework offered by the critical minerals strategy. I will also use this opportunity to mention alternative ways of boosting the supply of lithium, tin and other minerals through recycling.

The world-renowned Camborne School of Mines is now based at the University of Exeter in Penryn. It is highly respected around the world and I have met many of its graduates during my time as chair of the APPG. In February 2023, an additional £15 million was invested into research on strengthening the resilience of our critical minerals supply chain by recovering rare earth metals from products that had already been used. This work has huge potential. For example, it is estimated that by 2040 some 10% of copper, nickel, lithium and cobalt could be generated by recycling used batteries. When we are in a position of urgency, it makes perfect sense for us to maximise the minerals we have in products with limited lifespans, in order to alleviate the pressure on our mining industries and shore up our national security in the process.

Earlier this year, the Minister responsible for resources, my hon. Friend the Member for Keighley (Robbie Moore), announced that the University of Exeter, where the Camborne School of Mines is now based, would be a partner in the new United Nations-backed centre that will propel the transition to a future circular economy. The International Centre of Excellence on Sustainable Resource Management in the Circular Economy is the first such centre in the world. It will develop new approaches to the circular economy in areas such as metals, construction and critical minerals. I thank Ministers for taking the initiative on this front and putting investment into research early on, and I pay tribute to Professor Frances Wall at the Camborne School of Mines for leading the work.

Across the board, we have had big wins for the critical minerals industry in the UK, particularly in Cornwall. Our future security and economic growth rely on getting the next phase of increasing supply chain capability right for international demand, with balance to benefit our mining communities. However, it is quite easy for attention to shift to the next domestic policy interest of the moment, which is why I will continue to use every possible forum in this place to raise the topic. I am incredibly grateful to my constituency neighbour, my hon. Friend the Member for St Austell and Newquay, for giving me the opportunity to do so today.

Gary Streeter Portrait Sir Gary Streeter (in the Chair)
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We now come to the speeches from the Front-Bench spokespeople. I call Mr Richard Thomson.

15:05
Richard Thomson Portrait Richard Thomson (Gordon) (SNP)
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It is a pleasure to serve under your chairship this afternoon, Sir Gary. I add my congratulations to the hon. Member for St Austell and Newquay (Steve Double) on securing a debate on this important topic.

Although the concentration on lithium is entirely understandable, given the significance not just to Cornwall but to the broader economy of having a secure supply, critical raw materials go much wider. The minerals are economically important because they are needed to make batteries and semiconductors, which are vital for the transition to clean energy, as we have heard, but they are also at the greatest risk of supply chain disruption. The UK has 18 metals and minerals on its CRM list, and another six minerals are classed as having an elevated criticality because of where they come from. As is sometimes said in relation to the economy, if we cannot grow it, we have to mine it. That is very much where we are.

I offer some assurances to the hon. Member for Strangford (Jim Shannon), who felt that Northern Ireland was somewhat left behind in this policy area. The British Geological Survey has compiled a report on where many of the critical minerals can be found, and there appear to be significant deposits of very many spread across the counties of Fermanagh and Tyrone, so Northern Ireland can potentially play a role in meeting the demand for them.

Apart from Cornwall, about which we have heard, west Wales, Cumbria and the highlands of Scotland, as well as my own patch of Aberdeenshire, are also thought to be home to significant deposits. I can certainly testify to the interest in the issue: in September 2022, a helicopter that was seeking to detect critical minerals in Aberdeenshire managed to hit a pylon and black out 1,000 of my constituents’ electricity supplies for some time. That had some ramifications, but it brought it home to people that something out there was worth looking for, even if we hope that more care is taken in future.

Outside the UK, the 18 critical minerals are concentrated in particular geographical areas. For example, Brazil produces 98% of the global niobium reserve, the majority of cobalt comes from the Democratic Republic of the Congo, and Russia has significant deposits of palladium. For the vast majority of critical minerals, many of the countries in which they are concentrated are autocratic, many are non-aligned, which is a matter for them, and with many we do not enjoy the best of diplomatic relations. Ensuring continuity of supply is therefore in many respects as much a geopolitical issue as a geological one.

The world in 2040 is expected to need four times as many critical minerals as are being used today. The demand for lithium, particularly, is expected to surge by about 90% over the next two decades. Demand for nickel and cobalt is expected to rise by between 60% and 70%, and demand for copper and rare earth metals is expected to increase by 40%. To take one example that is most closely associated with the increased demand for CRMs, electric vehicles use 10 times more of those materials than conventional cars. Reaching net zero transport emissions by 2050 would require the sixfold increase of critical mineral extraction over the next 15 years.

It is estimated that stripping the earth’s natural resources in this way is causing about 60% of global heating impact, including land-use change, 40% of air pollution impact, and more than 90% of global water stress and land-related biodiversity loss. It is important that we go about extraction, whether domestically or internationally, with care. There are some important principles to keep in mind. We cannot afford for our approach to achieving domestic resilience and net zero to come at a similar or greater environmental cost than that which we are hoping to forestall. That is why we must ensure that the extraction of CRMs is done as sustainably as possible, wherever they happen to be extracted. That means transforming the extractive industries to minimise the social and environmental impact, which has to be part of the solution to moving towards net zero. A failure to do that will simply lead to stranded assets, perpetuating existing vulnerabilities and inequalities around the world. It will jeopardise the fight against climate change and threaten human wellbeing, ecosystems and economies for decades, if not centuries.

Successive UK Governments have perhaps to a certain extent sleepwalked to the position we are in now, which leaves the economy vulnerable to the sensitivities in supply. That was recognised in last December’s report by the Foreign Affairs Committee, which found that successive UK Governments had

“failed to recognise the importance of critical minerals”

in their strategies, and had

“failed to respond…to the aggressive capture of large parts”

of the global market over the last three decades—particularly by China—which has allowed a single country to dominate the UK’s critical minerals supply, leaving us with the consequent vulnerabilities in terms of economic resilience and security. China is the dominant player in the market—we should not ignore or be blind to that. Nor should we be blind to the fact that the Chinese state has not been slow to use that dominance against other states that it has found itself in dispute with.

What is to be done? Domestic CRM is largely unproven as yet. It could in many cases be years away from happening, even with a fair political wind and a benign planning approach. The USA and others are acting in this space. The USA is beginning to re-shore supply chains through the Inflation Reduction Act, and in 2020 the EU published its own action plan on critical raw materials, which is influencing its policy responses.

As well as extraction we need to look at how we can create a genuinely circular economy that can repurpose materials that have already been extracted. For example, the Scottish Government want to ban the sale and supply of single-use vapes in Scotland from April 2025. A single-use vape contains plastic, copper, cobalt and a lithium battery. The total amount of single-use vapes purchased every year contains enough lithium to provide the batteries for 5,000 electric vehicles. We should not allow the fact that they are very small products to disguise the adverse impact they can have not only on the environment after they are disposed of, but in terms of how their ingredients could be put to better use and secondary and tertiary use in future.

In conclusion, the UK has to urgently address dependency on China for its critical minerals. It must make itself more resilient to disruption in the CRM supply to avoid a situation in which the Government find themselves exposed economically or in terms of security. The UK needs to play catch-up with what our American and European partners have done to minimise their own exposure. We also need to work relentlessly to create circularity in our economy to make sure that the critical materials that we have already do not end up in landfill or not being used, so that they can be repurposed to minimise exposure and preserve the planet’s resources. There is only one planet. We need to do all we can to protect it and make the best use of its resources.

15:10
Sarah Jones Portrait Sarah Jones (Croydon Central) (Lab)
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It is a pleasure to serve under your chairmanship, Sir Gary, and a pleasure to follow all the contributors to what has been a thoughtful debate. I am grateful to the hon. Member for St Austell and Newquay (Steve Double) for securing the debate. I completely understand why he wanted to do so, and think I agree with everything he said in his speech. Although we have made some small progress, I agree that there is a silo mentality and it is disappointing that the Government are not as joined up as they should be on these issues. I also agree with the hon. Gentleman’s points about the need for more focus on the midstream. I have heard that several times from people I have engaged with while I have been in this role.

The hon. Member for Strangford (Jim Shannon) highlighted the potential role, as we learned, of Northern Ireland. When I was in Northern Ireland a couple of weeks ago, I met representatives of the chamber of commerce and visited businesses including Harland & Wolff, and their ambitions were very high. It was reassuring and encouraging to hear that everybody is pushing forward now that the Assembly is back up and running; it feels as though real progress is being made.

I listened with interest to the hon. Member for Truro and Falmouth (Cherilyn Mackrory) about her role on the all-party parliamentary group for critical minerals. I have met the Critical Minerals Association and others and I understand what she is saying. I agree that mining is not always the dirty industry that it once was, but in some places, it is. Our role is to try to make sure that it is not a dirty industry and that, where we do it and where we supply and rely on others, it is being done properly. I agree that the Government need to be more agile in responding to some of the challenges that we face. The role of the extractive industries and how that works is an important part of the debate, as the hon. Member for Gordon (Richard Thomson) said.

I will add to some of the key arguments that have been made. If people are not familiar with the term “critical minerals”, it has an air of mystery about it, but there is nothing clandestine about the importance of critical minerals and how key they are to our modern society. I welcome the Minister to his new role. If he has not already read “Material World” by Ed Conway, I encourage him to do so, because it brings to life how important critical minerals are for us all.

The first thing that many of us do when we wake up in the morning is check our phone, which is powered by a lithium battery. We might spend the day working on a laptop; its chip is laced with tin. In the coming years, we will get more and more of our electricity from turbines that are powered as much by metals like cobalt as by the wind that turns their blades. If the Minister has not already been to the UK Battery Industrialisation Centre, I encourage him to go, so he can see how important critical minerals are in the production of batteries, which will be important for electric vehicle manufacturing in this country.

As has been said, the move to net zero is key. The International Energy Agency has predicted that demand for critical minerals could more than double by 2030. There are different figures—the hon. Member for Truro and Falmouth said that it would quadruple—but we know that the need for critical minerals will increase significantly. It is therefore vital that we secure the supply of lithium and other critical minerals to this country.

Labour is clear that the green transition is our biggest economic opportunity. It is our chance to bring economic growth back to this country—the driving mission of a future Labour Government—along with hundreds of thousands of jobs everywhere, from Cornwall to Carlisle. As the shadow Chancellor has set out, we are living in an age of insecurity. The vulnerabilities exposed by the pandemic, by rising geopolitical tensions, which have been mentioned, and by the changing climate have made it clear that a joined-up approach to the economy is vital for our nation’s security.

Many of the 18 minerals that the UK defines as “critical” are concentrated in specific geographic areas, the majority of which, as has been said, are not dependable allies of the UK. China is the biggest producer of 12 of the 18 minerals. That makes it clear that strategic, co-ordinated and effective steps to secure our supply of those minerals are vital. Critical action is needed, on which we believe that the Government have critically underdelivered.

Other countries are racing ahead, but the Conservatives still refuse on ideological grounds to have an industrial strategy, which leaves our approach to critical minerals disjointed and scattergun. Instead of showing decisive leadership, we risk seeing the UK sidelined in the global race for the industries of the future. The EU Critical Raw Materials Act has introduced benchmarks for domestic capabilities along critical mineral supply chains. The US Inflation Reduction Act, which has accelerated the race for critical mineral production there, is a powerful intervention that the Chancellor dismissed as a “distortive …subsidy race”.

We welcomed the Government’s critical minerals strategy when it was finally published, but some parts of their approach were frankly baffling. For example, why did they choose not to assess the vulnerabilities of the UK’s industrial supply chains while drawing it up? Why did the strategy contain no specific targets for priority sectors? Why was there no plan to expand midstream capacity for processing and refining in the UK, including in the critical minerals refresh published last year? As the Critical Minerals Association said, without developing the UK midstream, there is a risk that the UK Government will not be recognised as integral to global critical mineral supply chains.

The strategy should have been a vital document, but as others have mentioned, the Foreign Affairs Committee concluded in a report that it is simply too broad to have real impact. That failure is deeply concerning, and it means that crucial investors in the critical minerals supply chain will look elsewhere. They will look to Europe, to countries such as Germany who are expected to have the largest battery manufacturing capacity on the continent by 2030. In comparison, the UK still has just one gigafactory that is actually operational.

The Government’s ad hoc approach has failed; the Conservatives have left Britain vulnerable, and Labour will take a new approach. Where this Government have proved themselves ideologically allergic to joined-up thinking, Labour knows that a real industrial strategy is the only adequate response to our age of insecurity. Building a resilient economy will be a core principle of our approach, which is why our industrial strategy provides for a new supply chains taskforce to analyse the potential supply chain needs across critical sectors, to review the vulnerability of critical supply chains to extreme risks and to assess the potential requirements of responding to those shocks.

That industrial strategy will work hand in glove with Labour’s green prosperity plan, built on the principle of using catalytic public investment to secure investment from the private sector—a principle that the hon. Member for St Austell and Newquay may be able to attest to the power of. Labour will make strategic public investments to develop and support critical supply chains here in Britain. Our national wealth fund will invest £1.5 billion in new gigafactories and aim to draw in three times as much from the private sector. Boosting Britain’s automotive industry at the one end and the critical minerals supply chain at the other, the new gigafactories will help to put Britain back on a competitive international footing and to secure Britain’s place in the international supply of those key materials.

When it comes to critical minerals, it is vital to look way beyond our borders, which is why a Labour Government would ensure that our trade policy works in step with our domestic plans. That is why we need to work with our friends and allies on secure and resilient supply chains, aligning capacities in key sectors with our wider security relationships. I was at a roundtable recently with the Critical Minerals Association and many others, including representatives from Australia and Canada, and we were talking about how the Foreign Office works in terms of its relationships and priorities. It is clear that the need for critical minerals needs to be stamped on what is done by the Foreign Office, as well as by other Departments. We need to make sure that we are building relationships with our allies from whom we will need to source materials in the future. We should also use our international position to boost standards, which, when it comes to critical minerals, have too often been sorely lacking.

Securing the supply of new critical minerals is crucial, but it is also vital to consider how we make the most of the materials that already surround us. I did not know that there is an estimated average of 20 unused electronic items in every household across the UK. We have to not make a mockery of recycling, as our Prime Minister has, but see it in its rightful place in helping to secure the circular economy, with buy-in from devolved Administrations across the UK. That is a real priority in moving towards a sustainable future.

Getting this right is vital, so I hope that the Minister can answer a few questions before the end of the debate. What is the Government’s plan to support the development of midstream critical mineral capacity in the UK? How do the Government plan to support the move to a circular economy to reduce our demand for new minerals? How is his Department working with the Foreign Office to engage with our allies so that we can secure our critical mineral supply and boost international standards? In the Government’s response to the task and finish group, they said that they would consider new supportive proposals. Have the Government done that yet? Securing our supply of lithium and other critical minerals needs leadership—leadership that the Government have so far failed to deliver. We risk letting the UK fall behind in securing our supply of critical minerals. Labour will put the UK back in the race.

15:24
Alan Mak Portrait The Parliamentary Under-Secretary of State for Business and Trade (Alan Mak)
- Hansard - - - Excerpts

It is a pleasure to serve under your chairmanship, Sir Gary. I congratulate my hon. Friend the Member for St Austell and Newquay (Steve Double) on securing this debate. He is a long-standing advocate for his home county of Cornwall and for the UK’s minerals industry. He has spoken powerfully about the importance of critical minerals to our economy and the role that Imerys, British Lithium and Cornish Lithium play in his community. He told us that he established the all-party parliamentary group for critical minerals. He is too modest to say this, but he is the driving force behind all those Hansard mentions of critical minerals, and I congratulate him on that. He speaks with great authority on the subject and I am grateful to him for giving us the opportunity to discuss it today.

I thank the hon. Member for Strangford (Jim Shannon), my hon. Friend the Member for Truro and Falmouth (Cherilyn Mackrory) and the hon. Member for Gordon (Richard Thomson) for their contributions to this debate, and I thank the Opposition spokesperson, the hon. Member for Croydon Central (Sarah Jones), for her kind words of welcome as I take up this post. I also wish to recognise the work of my predecessor in this role, my hon. Friend the Member for Wealden (Ms Ghani). As we have heard, she worked extensively on this issue, and I know that she will continue to support it in her new role in the Foreign, Commonwealth and Development Office.

My predecessor recently visited three key mining projects in Cornwall, including two lithium mines in the constituency of my hon. Friend the Member for St Austell and Newquay. Since I started this role four weeks ago, I have spoken to several UK mining companies, including Cornish Lithium and Johnson Matthey, with Pensana to come. I look forward to seeing for myself more growth-spurring, job-creating projects in the future, and I look forward to visiting Cornwall as soon as I can.

As my hon. Friend rightly notes, we are moving to a world powered by critical minerals. As we heard, we need lithium, cobalt, nickel and graphite to make batteries for electric cars; silicon and tin for our electronics; and rare earth elements for electric cars and wind turbines. These critical minerals are characterised by having the highest levels of economic importance and the highest levels of supply risk. We know that they will become even more important over time as we seek to bolster our energy security and domestic industrial resilience, while pursuing cleaner, green forms of energy production. As my hon. Friend the Member for Truro and Falmouth indicated, the world in 2040 is expected to need four times as many critical minerals for clean energy technologies as it did in 2020. However, we know that critical mineral supply chains are complex and vulnerable to disruption.

Traditionally, production is highly concentrated in certain countries. For example, China refines close to three quarters of the world’s lithium carbonate for batteries and around 90% of the world’s rare earth metals. State intervention in these markets is high. Supply chains are often fraught with environmental, social and governance issues and the market does not fully differentiate products on their ESG credentials.

All these issues present challenges to the UK’s security of supply, because UK industries and jobs, our energy infrastructure and our defence capabilities all rely on minerals that are vulnerable to market shocks, geopolitical events and logistical disruptions, at a time when global demand for these minerals is rising faster than ever. The Government’s view is that it is imperative for us to make our supply chains more resilient and more diverse. We need to support British industry now and in the future. That work is inextricably linked to both our energy security and our national security. For all these reasons, this Government have acted decisively to ensure that we have resilient domestic supply chains that give our businesses the long-term certainty they need.

As my hon. Friend said today, back in July 2022, we published our first ever critical minerals strategy, setting out our approach to improving the resilience of critical mineral supply chains. Above anything, it is a strategy that recognises that critical minerals are a multifaceted issue. It provides an overarching framework for accelerating our domestic capabilities, promotes closer collaboration with international partners and seeks to enhance international markets.

We always said that we would need to monitor global events and recalibrate our approach as necessary. That is one of the reasons we published the critical minerals refresh in March last year, reflecting the changing global landscape, highlighting progress to date and setting out our approach to delivering the strategy for UK businesses. Working closely with industry, we are already making good progress with the strategy, which I will say more about later, but we recognise that there is more to do.

I reassure my hon. Friend and all Members that we take a comprehensive and strategic cross-Government approach to critical minerals. While the Department for Business and Trade leads on critical minerals strategy, the delivery and evolution of the strategy and many of the policy levers lie outside my Department, and therefore we co-operate with Departments across Whitehall. I also reassure him that officials from my Department engage closely and regularly with officials in the Department for Energy Security and Net Zero where necessary.

It is also important to note that we support UK industries, especially those that depend on a steady flow of critical minerals, to seek resilience and diversity in their own supply chains. That is why last year we launched the independent task and finish group on industry resilience for critical minerals—a first-of-its-kind initiative for industry-Government engagement on critical minerals supply risks. The task and finish group has raised the importance of critical minerals with key industrial sectors, helping them to manage the risks in their supply chains. It has also given us insights about the UK’s dependencies and vulnerabilities, and published a report containing a series of recommendations on how to best guide the delivery of our strategy. The Government warmly welcome the group’s report and our full response to those recommendations was published last month. I encourage Members to read that report if they have not already.

As my hon. Friend the Member for St Austell and Newquay will be aware, the Government launched the Critical Minerals Intelligence Centre in 2022, in partnership with the British Geological Survey, to monitor risks in supply chains and assess just how critical different minerals will be over time. Their first assessment identified 18 critical minerals, including lithium, rare earths, tungsten and tin, and an update is due by the end of this year.

These are vital efforts but we know that our work is not yet done. That is why we continue to work with industries across the board to support resilience and diversification in their supply chains. We re-emphasised that commitment in our critical imports and supply chains strategy, published by my Department at the beginning of this year. As my hon. Friend mentioned, the Critical Imports Council is a key part of that work. I was proud to chair its inaugural meeting earlier this month and I welcome that the Critical Minerals Association and the Institute of Materials, Minerals and Mining are key parts of it. I look forward to working with them, as I know my hon. Friend does.

Here at home, we are supporting UK critical minerals producers to take advantage of the opportunities right along the value chain, including in Cornwall. While we will always rely on international supply chains, we have to maximise what the UK can produce domestically; my hon. Friend made the case for that powerfully. We need to make sure this is done where it is viable for businesses, and where it works for communities and our natural environment, as my hon. Friend the Member for Truro and Falmouth rightly mentioned. I agree with her that the UK is perfectly placed to lead on midstream processing, including refining and materials manufacturing, building on its globally competitive chemicals and metals sector.

My hon. Friend the Member for St Austell and Newquay is absolutely right that we have the capabilities to mine or refine enough lithium in the UK to satisfy more than our demands by 2030, but that is not true of all critical minerals. We have more than 50 projects at various stages of development to mine, process and recycle critical minerals domestically, and we want every one of those to be set up for success. That is why, to accelerate the growth of our domestic capabilities, the Government are investing big in critical minerals programmes. Our automated transformation fund, for example, is supporting projects in automotive supply chains, such as British Lithium, Green Lithium and Pensana. Meanwhile, as my hon. Friend will know, the UK Infrastructure Bank has invested over £24 million in Cornish Lithium. I was pleased to meet both the chief executive and the chief financial officer of that company in my second week in this role, which I hope underlines the importance of that company and his county to me and the strategy. They are part of a growing ecosystem, which includes gigafactory footprints that are getting bigger by the week.

At the same time, the Government are taking decisive steps to reduce the price of energy, as my hon. Friend the Member for Truro and Falmouth mentioned, to ensure competitiveness with other major economies across Europe, including through the British industry supercharger, which she will know comprises a series of targeted measures to bring energy costs for key industries into line with our major competitors.

As my hon. Friend the Member for St Austell and Newquay knows, the UK is also a pioneer in recovering critical minerals from waste, and we are ensuring that we stay ahead of the pack through Innovate UK’s circular critical materials supply chains programme to build and develop resilient supply chains. We are also exploring regulatory mechanisms to promote battery, waste-electricals and equipment recycling, which is an opportunity for this country.

The Government have a clear vision for the role the UK can play in critical minerals supply chains and we are throwing our full support behind business to harness and grow our competitive advantage, but we know that Britain cannot go it alone on critical minerals. International collaboration is key to building more resilient, diversified and responsible supply chains both here and around the world. The UK therefore has a role to play as an international deal maker, leveraging our extensive multilateral engagement and our strong relationships with mineral-rich producer countries and consumer markets.

Jim Shannon Portrait Jim Shannon
- Hansard - - - Excerpts

In my contribution, I asked what could be done to increase technological advances in Northern Ireland, so that we can be a part of the great progress as we move forward. The hon. Member for Gordon (Richard Thomson), the spokesperson for the SNP, referred to some lithium deposits in Fermanagh and Tyrone, so there are possibilities—although that was not originally known, so I am very interested to find out about that. Will the Minister have discussions with the Department of Enterprise, Trade and Investment in Northern Ireland to ensure that we can be part of this great vision for the future of the United Kingdom?

Alan Mak Portrait Alan Mak
- Hansard - - - Excerpts

I thank the hon. Gentleman for his intervention. I will come shortly to the possibilities for Northern Ireland, and I will certainly cover the point that he makes. As ever, he is a great champion for Strangford and for Northern Ireland’s place in the United Kingdom, and I very much welcome his contribution to this debate on the topic of how we can co-operate, both among the home nations of the United Kingdom and with our international partners.

I want to reassure the hon. Gentleman that we are making real progress when it comes to co-operation with our international partners. For example, we have agreed bilateral partnerships on critical minerals with Australia, Canada, South Africa, Saudi Arabia, Kazakhstan, Zambia and Japan, with more to follow. The UK has also been represented at major multilateral forums, including the Minerals Security Partnership, which I attended in my second week in this role, and we are involved in the International Energy Agency, the G7 and other such forums. All this work means that we are collaborating closely with our partners to improve the resilience and security of the critical minerals supply chain.

My hon. Friend the Member for St Austell and Newquay asked about the EU dimension, and I want to reassure him that the opinion on EU regulation is owned by the Health and Safety Executive, which is part of the Department for Work and Pensions. I will be very happy, if he would like me to, to assist him in following up with the HSE and the DWP to find answers to his queries, while respecting the scientific independence of those organisations.

That brings me to the question of Northern Ireland. I want to let the hon. Member for Strangford know that I will be visiting Northern Ireland before the summer recess—hopefully in the coming weeks—and I am looking forward to meeting my counterparts and exploring the opportunities for the UK Government to support businesses in Northern Ireland. I will certainly make lithium and minerals part of the agenda, and I look forward to any support he can give me in making sure that we cover those topics. Northern Ireland is a crucial part of the United Kingdom, its economy is thriving, and I want to ensure that we seize any opportunities we find there. I also say to the hon. Member for Gordon that, when I am next in Scotland, I will do the same there. I thank him for raising the possibilities north of the border.

A core element of our international engagement, beyond the multilateral partnerships I have mentioned, is helping like-minded resource-rich countries to develop critical minerals resources in a market-led way that aligns with our shared sustainability, transparency, human rights and environmental values—I am glad that they were mentioned in the debate. That is how the Government are ensuring that the UK is leading the way on critical minerals, driving up industry resilience, ramping up domestic production, and fostering closer international collaboration on the world stage.

I thank my hon. Friend the Member for St Austell and Newquay for securing the debate. I am grateful for the work that he and other hon. Members across the House do in supporting us in the mission to ensure that our critical minerals supply chains are strong, sustainable and resilient now and for many years to come.

Gary Streeter Portrait Sir Gary Streeter (in the Chair)
- Hansard - - - Excerpts

I call Steve Double to have the final say.

15:39
Steve Double Portrait Steve Double
- Hansard - - - Excerpts

Thank you, Sir Gary, and I thank all hon. Members who have participated in the debate. I think we are all pretty unanimous on the importance of this subject to the UK and our future. I understand that for some people it is not the most interesting subject in the world, but it is so important and I intend to keep raising it.

I acknowledge much of what the Minister said. I am delighted to see him in his place and to hear the commitments he made. I will take him up on his offer to work with the DWP to get an answer from the HSE on the matter I raised, and I am grateful to him for that.

It is clear that we will always need to rely on global supply chains to some extent for some of our critical minerals, but I think we are all agreed that we need to make the most of our domestic supply as much as we possibly can, for all the reasons that we have covered in the debate. That is why, in Cornwall, we are genuinely excited about the opportunity for lithium extraction and determined to work to make the absolute most of it, for the benefit of both the Cornish economy and the UK as a whole. I am delighted that the Minister has offered to come and visit, and I look forward to welcoming him so that he can see for himself all that is going on in Cornwall to revive our mining history and point the way to a prosperous future in that regard.

I will conclude by thanking again all the Members who participated in the debate. I hope that we have laid down some markers that we will continue to raise and work on.

Question put and agreed to.

Resolved,

That this House has considered the supply of lithium and other critical minerals.

15:41
Sitting suspended.

Transport Infrastructure: Devon and Somerset

Tuesday 23rd April 2024

(2 months, 3 weeks ago)

Westminster Hall
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16:00
Gary Streeter Portrait Sir Gary Streeter (in the Chair)
- Hansard - - - Excerpts

I will call Mr Ian Liddell-Grainger to move the motion, and then call the Minister to respond. There will not be an opportunity for the Member in charge to wind up, as is the convention for 30-minute debates.

Ian Liddell-Grainger Portrait Mr Ian Liddell-Grainger (Bridgwater and West Somerset) (Con)
- Hansard - - - Excerpts

I beg to move,

That this House has considered roads and other transport infrastructure in Devon and Somerset.

May I say how nice it is to serve under a Devon MP of great standing and long service, who knows his county better than most of us? I am delighted to be able to make this speech.

When talking about our constituents in Westminster Hall, it is rare that we are able to talk cross border. The Tiverton and Minehead seat, as you now know, Mr Streeter, is new and will cross the boundary of Devon and Somerset. This is a good chance for us to discuss my memories from my days as the Member for Torridge and West Devon before my right hon. and learned Friend the Member for Torridge and West Devon (Sir Geoffrey Cox)—we were talking about potholes then, and that was 1997.

When digging around on Google and many of these other things—which I confess not to completely understand —I discovered just how contentiously difficult potholes are. I did not know, but pothole sizes and potholes in the road have names. I know this sounds interesting, so I will read some of them out: The Canyon—I think we can work that one out; The Alligator, a little more tricky; The Sniper; The Slalom; and The Alcatraz. There are many more named on a website. On discovering a pothole, the Minister, my hon. Friend the Member for Hexham (Guy Opperman), when he is up in Hexham, can look it up and say, “Ah! There’s an Alligator,” or, “There is Alcatraz”—up in Northumberland, that is the wall.

It is intriguing: this has become a sort of national sport. In Devon, there is a Facebook page called “Devon Potholes”. It is fascinating how incensed people are by something that should really be simple to solve. Recently, in Watchet, which is in the Bridgwater and West Somerset constituency as it currently is, a little bit of private road had not been done up—because it was private—and the Daily Mail actually filled in the potholes to help a 101-year-old get in and out of their house. That is the national view of potholes.

I will give some of these ghastly statistics—which is what we all live by in this place—taking Devon first. In 2019, there were around 50,000 reported potholes, of which they claim to have repaired 50,000—I find that convenient, like all local government statistics. In 2022, there were 34,000—so there has been a reduction—of which they claim to have repaired 32,150. Okay, I hear what they say: given that we drive around the roads of Devon, I dare say this is possibly not as straightforward as it may seem.

Simon Jupp Portrait Simon Jupp (East Devon) (Con)
- Hansard - - - Excerpts

I get out and about speaking to people across my part of Devon every single week, and our roads are a constant concern and grumble on the doorstep. We all know that MPs across the region have consistently campaigned for more funding to resurface and repair our roads—this is not just about potholes; it is also about resurfacing. By redirecting funds from the spiralling—and, to be fair, deeply questionable —cost of HS2, the Government have delivered millions of pounds for our county to speed up pothole repairs, but thanks to the Government boosting its budget, Devon County Council will invest an extra £10 million this financial year into our roads, taking the highway maintenance budget to over £72 million. Does my hon. Friend agree that Devon County Council is right to spend whatever it takes to get our roads back to the standard we expect?

Ian Liddell-Grainger Portrait Mr Liddell-Grainger
- Hansard - - - Excerpts

My hon. Friend has championed Devon for longer than I have had the opportunity to do so, and I greatly welcome his gentle advice about the situation on the roads. I am very grateful for the work he has done. I know he has worked very hard with the leader of Devon to make sure we secured the money—I say “we”, and that is a very grand collective “we”. I know that you, Mr Streeter, were involved in that. It is a very good piece of news indeed, and I am grateful to Devon —£72 million is a huge amount.

That just shows, however, that it has become endemic that we never have enough money to do this. Although the claims are there, the reality, which I know from driving around Devon—I certainly know it from the constituency of my hon. Friend the Member for East Devon (Simon Jupp)—is that this is a never-ending battle, and one that we all must fight. Funnily enough, I do not blame either Somerset or Devon for the situation we are in. This has gone on for so long that it has become almost a self-fulfilling prophecy. We have aspirations all the time—

Sarah Dyke Portrait Sarah Dyke (Somerton and Frome) (LD)
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Will the hon. Gentleman give way?

Ian Liddell-Grainger Portrait Mr Liddell-Grainger
- Hansard - - - Excerpts

I give way, with worry.

Sarah Dyke Portrait Sarah Dyke
- Hansard - - - Excerpts

That is very generous of the hon. Member for—somewhere in Somerset.

Adverse weather has also massively contributed to the number of potholes in Somerset, which I am sure the hon. Gentleman will come on to. Does he agree that the Government must recognise and focus on improving the future resilience of our roads, and that local authorities may need specific funding allocations to improve the resilience of roads, rather than just pothole funding? I will leave him to the remainder of his prepared speech.

Ian Liddell-Grainger Portrait Mr Liddell-Grainger
- Hansard - - - Excerpts

I will just reiterate again what I have already said about the number of potholes in Somerset, because obviously the hon. Lady was not listening—but never mind; no change there. I just reiterate for the record that there were 60,000 potholes in 2022.

I have worked with the leader of Somerset county now for 25 years, who covers a major part of the Levels, where we know the roads move all the time because of the peat. It has been a never-ending battle in Somerset to try to stabilise roads that are unstable. The cost of rebuilding those roads after the ’14 floods was simply astronomical, but we cannot not do it. As peat is a natural resource, we cannot pile—we cannot get deep enough—so whatever we do is a problem. Somerset county has spent hugely on roads over many years. I am not complaining; that is the situation. I am saying that the money has to keep going. Unfortunately, as I said, it does not really work.

I was interested to note that on the Devon county website—my hon. Friend the Member for East Devon helped me on this—there is a quite incredible interactive map. I did not know this existed—I know that you will, Sir Gary—but people can actually look up the potholes on their street. If they go to fixmystreet.com, they can look at these maps, find out exactly where their pothole is, and anybody can report it. We can then zone in the counties. Somerset does not have that. I looked at the Somerset website—which has been there for years, by the look of it—which starts off with a highway safety inspection manual. It always worries me when I get that, on any website, because I just know that whatever is behind it will be a worry. I accept that there is a system behind it, but it is not as good as the one I have seen in Devon. I will be urging Somerset county to adopt that system.

I know that the Minister will reply, quite rightly: “We can give what we can give. There is no more.” One of the ways around this is to use technology. I was googling some quite remarkable machines that fill in potholes. They can do the middle, so they can deal with all the pothole types I named earlier—they basically gouge out and redo it. Last night, the Minister was very kindly telling me a little bit about some of these machines. On his recommendation, I actually went away and looked them up, and they are amazing. Maybe—just maybe—Devon, Somerset and Cornwall, for instance, could look at buying some machines together as a collective, and they could then work the three counties. It does not have to be three counties; it could be whatever we want—it could be a region if we so wish, although that would be a bit big. We could use that technology to deal with these holes.

Ian Liddell-Grainger Portrait Mr Liddell-Grainger
- Hansard - - - Excerpts

Of course—it will be a great privilege.

Guy Opperman Portrait Guy Opperman
- Hansard - - - Excerpts

I wanted to try to assist my hon. Friend, because he is referring to two key things. First, by reason of the HS2 funding, for the very first time, local authorities up and down the country—but particularly Devon and Somerset—are being given seven-year funding. They have a certainty of supply of funding, which allows them to purchase new equipment and machinery. He is referring, of course, to the Pothole Pro—there are other products out there. The key, transformational point is that, by reason of the Prime Minister’s decision on HS2 in October last year, not only is there an uplift in funding, but all local authorities are now able to plan properly and purchase equipment, so that road maintenance also means upgrade, rather just filling potholes.

Ian Liddell-Grainger Portrait Mr Liddell-Grainger
- Hansard - - - Excerpts

I am incredibly grateful to the Minister, as always. He is right, and I was going to come on to HS2. I know that he sympathises with this, because he has a huge rural constituency, bigger than any in Devon. The road system up there is challenging, as I know—I used to live in it—not least because he has got the military running all over a part of his constituency.

The Minister is right: we have got to embrace that money. If nothing else, the message I give today to all colleagues is that Devon, Somerset and other counties need to get together, to start buying very expensive but very clever machines. There are ways to do that, and the Minister is right that the Prime Minister has led the way with this windfall, thank the Lord. It is marvellous to have it, and we should use every penny we can.

There is no secret that in Somerset we have a financial crisis. It is very difficult at the moment. We have managed to get through this year—we are fine—but next year is not looking so good. We have a lot of work to do, and if we do not do the work on roads, they just get worse. Then more money is required, and it a self-fulfilling prophecy. We have to help places that do not have the money—the same goes for Buckinghamshire and other counties that have the same problem. Devon is not in the same position, as my hon. Friend has already said—the county has been extremely generous and has got extra money out of its own resources, as we are all aware, which is tremendous—but we do need a better system.

One thing that has always struck me is that it is up to us—not just MPs, but county councillors—to ensure we work to try to resolve this. All of us walk or drive round our areas. How many times have we been down potholes? I quite often end up in hedgerows with punctures—as you can well imagine, Mr Streeter, knowing that my driving does not bear much scrutiny. It is infuriating but, if we do not say where the potholes are, we cause a problem for ourselves.

One of the biggest problems we all face is the size of tractors, which has increased enormously since we were young, dare I say. Tractors are now lane-filling. Devon and Somerset roads were never designed for that size of tractors, big lorries or some big cars. The weight of tractors has gone through the roof. What they now haul is hugely heavier than it used to be. That is one of the biggest problems we face, because they cause more and more damage. As one drives around both counties, it is the structure of the sides of the roads that is causing the problems. We have to be much more aware that farming damages roads, but there is nothing we can do about it. The farmers have every right to be there and need to be, but we need to cover that up.

This is my last point before I sit down and give way to the Minister, who I know has a lot to say on this. I am really disappointed about certain parts of Devon, which I am beginning to learn about, and especially Mid Devon District Council, which I find iniquitous. It should be scrutinising this, as should everyone else. I know it happens in Somerset and Devon counties. We would not have got the money if it had not. That is the point: they should scrutinise. To learn that the head of scrutiny has now legged it because it all got a bit tough and hard is pathetic. We need proper scrutiny.

Richard Foord Portrait Richard Foord (Tiverton and Honiton) (LD)
- Hansard - - - Excerpts

Will the hon. Gentleman give way?

Ian Liddell-Grainger Portrait Mr Liddell-Grainger
- Hansard - - - Excerpts

In a minute.

I find it ridiculous that we cannot get this sorted. That is a ridiculous position for us to find ourselves in. Some people need to start thinking about what they are there for. MPs have a responsibility, which can be seen every day in newspapers, and we know what we suffer. I just wish a few of the councillors who are meant to represent their areas would do the same.

Richard Foord Portrait Richard Foord
- Hansard - - - Excerpts

I thank the hon. Member for giving way and commend him for securing this debate. Devon County Council is the local authority responsible for roads in Devon and the leader of Devon County Council, John Hart, said last year:

“They gave us £9.5 million and I hate to say it but £7 million of that went in inflation”.

He also said of that £9.5 million that it

“is a drop in the ocean.”

Does the hon. Member agree that the county council is responsible for roads and that the potholes we see are ultimately the responsibility of central Government?

Ian Liddell-Grainger Portrait Mr Liddell-Grainger
- Hansard - - - Excerpts

I can see why the hon. Member was in the education corps. Where does one start? I think I will start with a sigh. That is better; I now feel fresh to go on.

John Hart, who I knew nearly 30 years ago, has led a council and has made massive differences. He has just announced that he will stand down after a very long period and I respect that. He has made £10 million available. He has taken his responsibility for roads in Devon deadly seriously. His achievement is remarkable, given that Devon has more roads than Belgium—am I right, Mr Streeter? I think that is right. My hon. Friend the Member for East Devon has made it quite clear that Devon has stepped up to the mark.

As for the hon. Member for the education corps—God help us!—scrutiny should be scrutiny. You can scrutinise anything you want—that is the point. I have always found that the best way to scrutinise is to take scrutiny down to a local level, because we live with those potholes in our areas. We live with them, not just as MPs, but as constituents and members of district councils. I therefore find the hon. Gentleman’s question iniquitously ridiculous.

On that happy note, Mr Streeter, I sit down. Thank you.

16:16
Guy Opperman Portrait The Parliamentary Under-Secretary of State for Transport (Guy Opperman)
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What a pleasure it is to serve under your chairmanship, Mr Streeter. Obviously, I accept and acknowledge that, when you have served your constituents in the south-west for so long, you will be exceptionally interested in a debate such as this one, which has been secured by my hon. Friend the Member for Bridgwater and West Somerset (Mr Liddell-Grainger). I also genuinely acknowledge the passion and the fervour that my hon. Friend has brought, as always, to this particular issue. I commend him for the tone of his speech and for the fact that he is sticking up for his constituents, as he has done so very well for many a year.

This issue is clearly something that we all care about. There is no doubt whatsoever that all our constituents are passionately concerned about the state of the roads that they have to utilise, whether that is as a driver, as a farmer, as someone who does logistics and deliveries as part of a business, or as someone trying to engage regularly in active travel. All those activities are affected by the state of our roads and we are all conscious of that.

One must look at the consequential decisions that the Government have made over the last year in particular to address some of those problems, because if I look back at the situation approximately 16 or 18 months ago and compare it with the situation now, I see that it has been utterly transformed. That has happened in three ways. The core base budget that both local authorities had was substantial and had been going up periodically, but there is no doubt that it was a struggle; we all acknowledge that. To a lesser or greater degree, that is true of different local authorities up and down the country.

Clearly, the first thing that happened was the spring Budget of 2023, which saw a significant uplift to both local authorities: just under £5 million to Somerset and £9 million to Devon. Subsequently, the decision of the Prime Minister in October 2023 in relation to HS2 utterly transformed the funding increase, because there is a base increase of funding ultimately of 30% in the case of both local authorities. That is transformational funding—there is no question whatsoever about that.

Richard Foord Portrait Richard Foord
- Hansard - - - Excerpts

The Minister refers to “transformational funding”, but I think that expression would jar with the experience of constituents in Devon who I talk to. In total, 966 claims were made for compensation by Devon residents, amounting to £1.1 million, between April and December last year. Would he like to comment on this disjuncture between, on the one hand, the “transformational” change that he talks about and, on the other hand, the day-to-day experience of my constituents?

Guy Opperman Portrait Guy Opperman
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I have answered such questions repeatedly since the debate on 19 December and at other times. Simply put, the situation is this: if one has a business or statutory undertaking, and one increases the budget to address a problem by over 30%, there is no other part of the Government infrastructure that has been increased in that way. There is no local authority in the country that has had the benefit of that in other parts of its portfolio. The reality is that the transport budget for highways maintenance has been dramatically addressed. No one is diminishing the impact of what has happened in the past and the day-to-day vicissitudes that people have to face, whether those are on the Somerset levels or the Slapton line, which I debated in the House barely a month ago. There are clearly instances where those things need to be addressed, and frankly the Prime Minister has taken a very bold decision to address the problem specifically, which is massively to his credit.

Obviously, that is on top of record amounts of bus funding. There has been a significant increase in bus funding, such as the £2 bus fare, the bus service improvement plans money and the active travel budget, which has seen considerable enhancements to Devon of over £6 million and to Somerset of over £3 million since 2020. There is massively increased support for all forms of cycling and walking. Also, the rail station infrastructure has increased, whether that is in Cullompton—which the Prime Minister and the Secretary of State for Transport have visited—or elsewhere. A huge amount of investment is going on.

Sarah Dyke Portrait Sarah Dyke
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Will the Minister give way?

Guy Opperman Portrait Guy Opperman
- Hansard - - - Excerpts

No, I will not, with no disrespect. I am going to try to address some of the many points that have been made. Not for the first time, my hon. Friend the Member for Bridgwater and West Somerset went on for quite a while. Obviously, it was all worthwhile listening, but it was certainly well beyond the 15 minutes.

The reality is that Devon and Somerset received a further funding uplift of approximately £15 million in the spring Budget of 2023, and then £10 million of additional maintenance funding in 2023-24. The point I was trying to make to my hon. Friend is that anyone who has ever worked as a parish, district or county councillor, as a Member of Parliament, or who has run a Department knows that having a long-term, seven-year budget is transformational. Any local authority leader will ask, “Could I have some more money and could I know what I am going to get over the next two to seven years?” That is transformational, that is exactly what the PM has done, and that is why local authorities can do different types of investment.

I make the significant point that we hold local authorities to account. There are two ways to address the point about accountability that my hon. Friend raised. First, many local authorities—I cannot comment on individual specifics—subcontract a lot of work to particular providers. Some are better than others, and I cast no aspersions. We now require local authorities to publish a plan every year, in which they have to set out what they intend to do with that money and where they intend to spend it.

We encourage the local authorities to do two things. First, they should look at the quality of the work. There is clearly a necessity on some occasions to do patching. No one disputes that; it must happen from time to time. However, we want better quality work, because the better quality work does not need repeat work.

Secondly, local authorities need to look after the road maintenance system itself, which involves ensuring that they have a sufficiency of gully suckers clearing the road and ensuring there is no water, so that they can deal with the winter weather in the usual way. We want them to check the quality of subcontractors so that the work follows the local authority guidance on how it should be done and can be checked. Personally, I would strongly encourage them to get into arrangements with their subcontractors if the work fails within a three-month, six-month or nine-month period. In our constituencies up and down the country, we have all come across the odd occasion where a pothole is filled and has to be refilled very quickly thereafter. It is for local authorities to hold their contractors to account, or if they are doing the work in-house, they need to be held to account as well. This transformation clearly relates and dates back to the core funding and the highways maintenance funding.

I am happy to say that both Devon and Somerset councils have published their plans, which my hon. Friend will want to look at. They allow all hon. Members’ constituents to see for themselves which roads will be resurfaced. In Somerset, the A37 Whitstone Road in Shepton Mallet and the A39 Puriton Hill in Bawdrip have already benefitted from the additional funding, as have the A358 Cross Keys roundabout in Norton Fitzwarren and the B3090 Marston Road in Selwood. In Devon, roads from Axminster to Yarcombe and from Ashburton to Widworthy will be resurfaced. All of that is because of the new money coming in.

The funding formula recognises that and allocates funding to local authorities based on road length. We acknowledge the particular circumstances in Devon, and I have set out in this House how it receives effectively more money than virtually any other local authority because of road length and its nature. Although my constituency is bigger, Devon’s circumstances are well known and well understood.

I will briefly deal with road enhancement. The Department has worked with Western Gateway, Peninsula Transport and the sub-national transport bodies to identify priorities for investment from our major road network and large local majors programmes. That has seen over £330 million of investment, subject to the Government approving the individual business cases from local councils. Obviously there is an outlined business case and a final business case.

Included are improvements to the A361 North Devon link road, the A382 between Drumbridges and Newton Abbot, the A379 bridge road in Exeter and the A38 in North Somerset. As I understand it, good progress is being made in the construction of improvements to the North Devon link road, and I look forward to its completion later this year. I could go on at great length about the substantial infrastructure investment in rail in this part of the world—and I see that the Rail Minister, my hon. Friend the Member for Bexhill and Battle (Huw Merriman), has snuck into the room to laud and applaud the massive investment that has been made in rail.

Massive investment has also been made in the bus and public transport network, and we have made further investment in active travel. I look forward to developments in all those.

I welcome this debate, which my hon. Friend the Member for Bridgwater and West Somerset introduced, and I welcome his enthusiasm in holding local authorities to account and ensuring that the taxpayer, who we all serve, will get the best outcome. That outcome will be a massive increase in investment, much better roads, a long-term plan for local authorities and better outcomes for all. That is something we should all strive for.

Question put and agreed to.

Future of Rail Manufacturing

Tuesday 23rd April 2024

(2 months, 3 weeks ago)

Westminster Hall
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[Relevant document: Oral evidence taken before the Transport Committee on 6 December 2023, on rail services and infrastructure, HC 361.]
16:27
Grahame Morris Portrait Grahame Morris (Easington) (Lab)
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I beg to move,

That this House has considered the future of rail manufacturing.

It is a pleasure to serve under your chairmanship, Sir Gary. I must declare an interest as a member of Unite the Union and chair of the Unite parliamentary group. I am also a member of the RMT and ASLEF parliamentary groups and I am on the Transport Committee.

For several years, industry organisations such as the Railway Industry Association, trade unions and manufacturers have urged timely action to prevent significant job losses in rail manufacturing here in the UK. The industry employs over 30,000 people in the United Kingdom and contributes at least £1.8 billion annually in gross value added. It is currently facing a very dangerous—indeed, critical—situation. The Minister, a former Chair of the Transport Committee, is very familiar with the situation. I have engaged with him on a number of occasions recently and in the Select Committee, so I am fully aware that he understands the nature of the problem.

In December last year, I raised an urgent question following evidence given to the Transport Committee by Nick Crossfield, the managing director of Alstom—Alstom is based in Derby. He impressed on the Committee the need for urgent action from the Government to expedite the bidding process for new British-manufactured trains. Four months later, it is clear that the Government have been too slow to prevent potential job losses at the Derby train manufacturer.

Similarly, I met workers at the Hitachi train manufacturing facility in Newton Aycliffe, next door to my constituency, who are also members of Unite the Union. They warned that we could see redundancies as early as June this year if the Government continue to drag their heels on extending the contract to build further trains for the west coast main line.

British railways are rooted in the north-east of England. The Stockton and Darlington railway was inaugurated in 1825 and was the world’s first passenger railway. It also linked the coalmines near Shildon in County Durham to the River Tees at Stockton, facilitating coal exports from Teesport. The Stockton and Darlington railway’s success, alongside growing demand for transport, spurred the development of a national railway network. The railways transformed Britain, enabling all social classes to travel further, and the network was developed to move coal from thriving collieries in County Durham to global markets. However, County Durham continues to struggle with the legacy of the loss of its coal industry, with limited skilled employment due to insufficient investment in levelling-up efforts, alongside a lack of a coherent industrial strategy under successive Conservative Governments.

In 2015, Hitachi opened a plant in County Durham, bringing skilled jobs to the region and reviving the north-east’s rail manufacturing tradition after 90 years. The 750 skilled jobs at Hitachi, and about 1,500 jobs in the supply chain, are fundamental to the success of the local economy.

Today, the excellent Sheffield Hallam University has released its “State of the Coalfields 2024” report, which shows evidence of a lack of jobs and businesses in the former coalfields despite recent growth. Job density in former coalfields is only 57 employee jobs per 100 working-age residents; that compares with a national average of 73 jobs per 100 residents, and an average in major regional cities of 88 jobs per 100 residents. There is a disparity, and a long way to go.

The report from Sheffield Hallam illustrates, as clear as day, the ongoing struggle for prosperity in former coalfield communities.

Kevan Jones Portrait Mr Kevan Jones (North Durham) (Lab)
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Would my hon. Friend agree that the issue is not just the number of jobs that Hitachi has brought to the region but the improvement in the skill base? Hitachi is training apprentices and increasing the skill base locally through investments in higher education and other things. That helps not only Hitachi but the regional economy.

Grahame Morris Portrait Grahame Morris
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Absolutely. My right hon. Friend makes an excellent point about the broader benefits to the economy. Indeed, the loss of rail manufacturing in County Durham or Derbyshire would devastate their respective regional economies and threaten British rail manufacturing.

Alstom, Hitachi, Siemens and CAF—Construcciones y Auxiliar de Ferrocarriles—remain the only train manufacturers in the UK. A similar situation arose with the steel industry. To a reasonable person, it would seem illogical for the Government to permit the UK to lose its capacity to build trains, especially as our existing network is in need of modernisation.

The Minister and I have fenced about the age of the rolling stock and trains, but the UK still operates trains built before privatisation, with the average age of trains on the Chiltern line estimated to be 30 years; that was in March last year, from the Office of Rail and Road report. Additionally, nearly half all operators use trains over 22 years old. The Railway Industry Association has urged the Government to upgrade or replace approximately 2,600 vehicles by 2030, and to renew around 1,650 diesel trains that will be 35 years old after 2030.

The industry-wide consensus is that our rolling stock is outdated and inefficient. Therefore, my question to the Minister is: why are the Government not protecting British rail manufacturing, especially given the rising demand for new trains to enhance the passenger experience and to meet our net zero targets? In relation to our environmental targets, all 2,898 diesel and 912 bi-mode trains in the UK emit carbon dioxide and nitrogen oxides, with nitrous oxide—N2O—having various health impacts and being up to 280 times more potent than CO2 in warming the planet over a 20-year period. That is according to the latest Intergovernmental Panel on Climate Change report to the United Nations.

To achieve net zero by 2050, a solution must be found to replace diesel trains, which are currently used by 14 operators—especially since only 38% of the network is currently electrified. My constituents, who travel on unreliable, second-hand ScotRail Sprinter trains—no offence to my friend from Scotland, the hon. Member for Paisley and Renfrewshire North (Gavin Newlands)—built in the 1980s, find it inconceivable that the rolling stock companies’ profits are sky high while our UK-based rail manufacturers are crying out for orders. Taxpayers are forced to travel on substandard trains purchased with Government funds, while subsidies remain at twice pre-pandemic levels. The system is inefficient and does not serve the taxpayer or the travelling public.

There are needless links in the chain. The Government should streamline the system by directly purchasing trains and bypassing the ROSCOs or rolling stock companies. Indeed, RMT president Alex Gordon and general secretary Mick Lynch have been vociferous, voicing concerns about leasing costs, which have risen by over 30% over the past five years while rail industry staff costs have remained static.

A decade ago, leasing rolling stock accounted for about 13% of train operating companies’ costs; today, it accounts for 25% or a quarter. Does the Minister think that is fair or are the Government protecting profits when other areas of the network, including the staffing elements, are facing dramatic cuts?

Clearly, there is something wrong with how we procure rolling stock in Britain. Despite needing modern, carbon-neutral and sustainable trains, the Government have ignored warnings from both Alstom and Hitachi. The Rail Industry Association warned the Government that recent administrations have been a “canary in the coalmine” before the potential decimation of train manufacturing in the United Kingdom. Unite the Union warns that the industry’s performance relies heavily on Alstom Transport and Hitachi Rail, which hold 55.3% of market share.

The industry’s fate is dependent on key players like Hitachi and Alstom. However, recent forecasts indicate a bleak outlook, with revenues projected to decline at a rate of 8.1% annually over the next five years. Hitachi and Alstom face challenges, as their order books require clearing past orders before they can commence construction and setting up production lines for the HS2 trains, which are currently 18 to 24 months behind schedule.

Government intervention must go beyond rhetoric to provide tangible support to the industry. We are not asking for a bail-out—just a commitment to honouring existing contracts, and to establish a sensible industrial strategy for the industry. Beyond extending existing contracts, a focused industrial strategy is imperative. Research conducted by Make UK reveals that 99% of manufacturers support the need for an industrial strategy. Six in 10 cite the lack of an industrial strategy as a factor affecting growth in the manufacturing industry. Some 87% believe a strategy would provide their businesses with a better long-term vision on which to decide investment in future employment plans. To prevent another Alstom or Hitachi scenario, we must reassure the industry that the Government are prioritising its interests. I am hopeful that the Minister is going to give us some positive news, but the consequences of inaction are dire. Jobs and livelihoods are at risk, and it is time now for some decisive action.

The industry requires a steady stream of orders to sustain manufacturing and maintenance bases, alongside a proactive approach to replacing retiring engineers. We must abandon costly leasing, opting for direct purchases through Government procurement to bolster UK train manufacturing, which must be central to a long-term rail and industrial strategy, driving economic growth, innovation, and meeting our future transport needs.

None Portrait Several hon. Members rose—
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Gary Streeter Portrait Sir Gary Streeter (in the Chair)
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Order. Colleagues, we have just over 25 minutes remaining. If you aim for five minutes each, that should work.

16:41
Paul Howell Portrait Paul Howell (Sedgefield) (Con)
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Thank you, Sir Gary. Credit to the hon. Member for Easington (Grahame Morris) for securing this critically important debate. I will try to skip parts of this as I go through.

When talking about the future of rail manufacturing, it is worth reminding ourselves of what the hon. Member for Easington has already said: the home of railways is the Stockton and Darlington railway in the north-east. As I am sure the Minister is aware, the oldest platform is in Heighington, where the Aycliffe levels are; it is also where Locomotion No. 1 was first placed on the line, starting the passenger railway service. Rail is in our blood in the north-east, and the Minister is very welcome to come and see these places for himself. It is important that we understand our history there and look after our stations. But clearly, railways are an industry not just of the past but of the future.

We saw the growth of the railways, but that declined as the motor car grew. It is now coming back again. It is important that we have sustainable and environmentally acceptable modes of transport. Rail is the key connector for passengers and freight in a cleaner, greener world. Rail undeniably has an exciting and developing future. That future needs to include the Hitachi facility based in my constituency, which has already been mentioned. Hitachi brought investment and innovation to both the rail market and the local economy. It is a first class employer that lives up to its tag line—“Inspire the Future”.

I have spoken with many employees and union members, who all express how the business consistently seeks to develop them; its partnership with the local university technical college is crucial for the people educated there. The work done by the Hitachi team in Aycliffe, since it was opened in September 2015, has been nothing short of spectacular. From a standing start, the employees and management have built a team and facility that anyone would be proud to have in their constituency. I was delighted when the Prime Minister went there last year and I hope to see the Secretary of State there shortly, too.

The skills and commitment are the foundational base for an exceptional future, and we must not allow them to dissipate. They are a core opportunity to support levelling-up in action. Those high standards are not just for the employees of Hitachi; they permeate throughout the local supply chain and the wider industrial base. Hitachi contributes to many aspects of rail in the UK, whether that be signalling or rolling stock. It is at the leading edge of new technologies such as battery power. That comprehensive footprint is a core component of its current and potential contribution to the future of rail in the UK.

Our rail manufacturing businesses and their extended supply chains are illustrative of the many areas of resilience we need as a country that have been sorely tested since covid-19. What were once reliable sources and supply routes have been tested almost to destruction. We have a clear and present need to improve our resilience in everything from food to power generation, and the rail industry has many of the skills we need as a country, both for the sector itself and for our broader manufacturing base. It is imperative that we find a way to help it through to the incredible future it can have.

We are all aware that the future of rail is coming at us like the proverbial train down the track. There are £3.6 billion-worth of rolling stock orders, but they are just over the horizon. We are all aware of the investments, such as in the Northumberland line, as well as the potential for Ferryhill station and the need for the Leamside line in the north-east. All those things are critical, but if we cannot see past the horizon to where the orders actually are, that runaway train of hope will not get here in time. It needs to get across the valley of uncertainty. Everyone I speak to is ready to help construct the bridge, but first we need to understand the size of the valley. We need to ensure that we can get there.

I have met with management many times, spoken incessantly to the Secretary of State and to the Minister, and facilitated a meeting between the unions and the Secretary of State. Everyone understands the complexity of the challenge and wants to do their bit to build the bridge, so I encourage the Minister and his Department to do all they can to help us get clarity on the size of the bridge that needs to be built, and to do all they can to minimise its size. I encourage the companies to be as creative as they in finding work to fill the gap. From the immensely positive discussions that I have had with the unions, I know that they will be as flexible as possible and do their bit to help the companies get them and their members across the valley of uncertainty to the future beyond.

I strongly encourage the Opposition Members who are politicising these concerns and trivialising the ability to resolve this matter to take a step back and not play politics. The political imperative could not be greater. If the Government wanted to be political, they would just use the pen as suggested, but it is clear that, for this particular order, they cannot. We need a real solution, not one that looks good but does not deliver.

I see real understanding and a commitment to resolve the issue. We are genuinely at an inflection point for the future of UK rail manufacturing. History will judge whether we get it right. For the employees in the rail manufacturing sector, it is imperative that we do.

16:47
Kevan Jones Portrait Mr Kevan Jones (North Durham) (Lab)
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May I say what a pleasure it is to serve under your chairmanship, Sir Gary?

I congratulate my hon. Friend the Member for Easington (Grahame Morris) on securing this very important debate. He and the hon. Member for Sedgefield (Paul Howell) said that the north-east has a long tradition in rail manufacturing, and it is one we should be proud of, but it also has a future. It had a future when we secured the investment in the Hitachi factory in Newton Aycliffe, which supported not only 700 highly paid jobs but the supply chain. People should remember the history of how we got Hitachi in the north-east. I pay tribute to Durham County Council; the NDA, which the coalition Government abolished, and Phil Wilson, who was the MP for Sedgefield and a great champion of getting that investment.

Why did Hitachi come to Newton Aycliffe? It saw opportunities in the tradition, but also the opportunities in the workforce. It came there because it saw the growth in the UK market, as well as in exports to Europe. Well, Brexit has dealt a hammer blow to that, but Hitachi was still determined to contribute to the development of the UK rail industry. Remember that the Japanese do not take short-term decisions; they take long-term investment decisions. They invested because they saw a pathway of work in the UK.

The hon. Member for Sedgefield talked about the challenge and about not making the issue political. Well, I am sorry, but this is a political decision. As he said, it is about ensuring that we have a rail strategy, and that is about UK factories, including Newton Aycliffe, having consistent orders. The answer is in the Government’s hands. He is a member of the governing party, and he cannot say that there is no solution. There is. The solution is ensuring that there is a drumbeat of orders, not just for Newton Aycliffe but for the rest of UK rail manufacturing, so that we get long-term supply chains in place and retain skills.

Hitachi quite clearly has a gap coming up for two years before HS2 comes on stream. I am sorry to tell the hon. Member, but we cannot treat the skills that have been developed at Newton Aycliffe like a tap, turning them on when we want them and turning them off when we do not. We have to invest in them and keep them there. Those people’s livelihoods are important. If the next generation of rail workers are to come through, we need the investment and the certainty that those young people will have a future, not just necessarily at Hitachi but in the wider rail industry.

Paul Howell Portrait Paul Howell
- Hansard - - - Excerpts

I will probably surprise the right hon. Member by agreeing with him. The way in which the Japanese and Hitachi work is all about generational levels of training, investment and continuity. I endorse his point about the need for skills to be invested in and continued over long periods of time.

Kevan Jones Portrait Mr Jones
- Hansard - - - Excerpts

I agree with the hon. Member, so why does he not criticise his own Government, who are not investing in the long-term strategy we need? We have had it in the shipbuilding industry and we have a shipbuilding strategy that makes that exact point: we need a drumbeat of orders. That the Government decide to put warships over to Spanish and not UK yards makes a mockery of their commitment to such long-term strategies.

If we are serious about levelling up, this is it in action. Levelling up is nothing new; the last Labour Government saw the need for it. It was the reason why we were involved in the NDA and why we attracted Hitachi to the north-east. I must say that it takes a lot, having dealt with Japanese politicians and industry for a number of years, for them to make the public statements they have made about the future of Newton Aycliffe. It is in the Government’s hands to ensure that we have the continuation of skills. Without that, it has a bleak future.

I pay huge tribute to the management and staff at Newton Aycliffe. With my hon. Friend the Member for Easington, I met representatives of Unite the union the other day and they are fully committed to the future of the plant. They are the people who want to ensure that not only they but future generations have jobs. The answer to Newton Aycliffe’s future is in the hands of the Government, who can make sure that in the next few years we have a continuous stream of orders going through, but this is not just an issue for Newton Aycliffe; other plants face it as well. It comes down to the sad fact that for the last 14 years of Conservative Government, there has been a lack of industrial strategy across the UK. This is a good example not only of how that lack of strategy will endanger our great jobs in Newton Aycliffe but of how hollow all the nonsense spoken about levelling up over the last few years has been.

16:51
Iain Stewart Portrait Iain Stewart (Milton Keynes South) (Con)
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It is a pleasure to serve under your chairmanship, Sir Gary. I add my congratulations to my comrade from the Transport Committee, the hon. Member for Easington (Grahame Morris), on securing this important debate.

Rail rolling stock manufacturing in the UK has a bright future in the medium to long term, as my hon. Friend the Member for Sedgefield (Paul Howell) pointed out. In the coming years, there will be significant new orders, not just from HS2 but from Northern, Chiltern, ScotRail, Southeastern and others, which will be putting through considerable orders. The challenge at the moment is how we get over this short-term trough of orders. I am heartened that my hon. Friend the Minister and the Secretary of State are meeting Alstom, Hitachi and others to find out how that can be resolved. Those conversations will be confidential, so I will not press him on that.

My main point today is that the peaks and troughs in the procurement of rolling stock and, indeed, other parts of rail infrastructure are not a new phenomenon. For many decades, the industry has had a tap-on, tap-off approach and we need to address that. There is an opportunity to do that with the creation of Great British Railways, the way for which was paved by the draft Rail Reform Bill my Committee is scrutinising. I believe that if that is done in the right way, it can help to knit together the industry’s objectives and create a long-term horizon that will engender investment from Hitachi, Alstom and others. I do not want to prejudge the outcome of my Committee’s work, but we have already received considerable written evidence, and that is what the industry is calling for. For example, the Rail Industry Association made that point forcefully.

It is not just about having a strategy of buying new rolling stock; it is about the type of rolling stock that is needed, which is why we require a whole-industry perspective for the long term. There is an ongoing and evolving debate about the extent and type of electrification of the network. For some lines, the cost of electrifying the whole line are prohibitive, so we can have what is known as discontinuous electrification with battery electric trains. To arrive at that point, which I think is eminently sensible, different parts of the industry need to work together. I believe GBR can do that, and that is one of the areas that the Committee will explore.

The second point I want to make in the little time I have left is that although the procurement of new rolling stock is important, another important part of the rolling stock industry is refurbishment. Rolling stock has a long lifespan—typically, 30 or 40 years—but it often requires a refresh halfway through. Avanti currently has a refurbishment programme for the Pendolino stock carried out by Alstom at its site near Widnes, which I had the privilege of visiting not long ago.

We can do better in other parts of rolling stock system, too. I will give a brief example from my own line—the west coast main line. London Northwestern Railway is about to take delivery of brand new rolling stock, which is great; it will be faster and have more capacity, and it will be warmly welcomed, but the units it will replace are not life expired; they are perfectly good trains. They might need a refresh and some new kit in them, but they can be used. There is a gap in the thinking about how we can most efficiently use that cascaded rolling stock elsewhere in the network, where it might be needed. I appreciate the short-term anxieties about Hitachi and Alstom, and I hope they are resolved, but we need a much longer term, holistic perspective for this industry.

16:58
Alex Cunningham Portrait Alex Cunningham (Stockton North) (Lab)
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It is a pleasure to serve under your chairmanship, Sir Gary. I am terribly concerned that Britain is facing a cycle of managed decline, so I congratulate my hon. Friend the Member for Easington (Grahame Morris) on securing this debate, which addresses some of that.

I spoke to Hitachi Rail ahead of this debate, and it cannot be stressed enough that if the Government do not take robust action, the company will see a colossal loss of skills and capability, and could be talking to its staff within very few months. Let us not forget that, thanks to an agreement with the Government of the day and as a consequence of the tremendous work of my former colleague Phil Wilson, it invested £110 million to open the state-of-the-art train manufacturing facility in 2015. It has 750 highly skilled workers and supports 1,400 jobs in the wider supply chain—many in my Stockton North constituency. Now, just nine years later, the company is needlessly facing a gap in its workload. It has a two to three-year production gap from when the last train leaves in March 2025. Unite’s press release confirms that work on those contracts is set to decline by October 2024.

Hitachi Rail tells me that it started engaging with the UK Government more than two years ago on this issue, and more importantly, on the solution. There was a visit from the Prime Minister, who was briefed on the challenges and the solutions. During that visit, he promoted the world-class manufacturing taking place. Hitachi Rail identified a contract variation for an additional 29 of the Avanti West Coast trains that are currently being manufactured. The volume of work and the ability to exercise and option an existing contract in the necessary timeframe made this the best way to maintain the skills base and bridge the production gap to HS2. It is a genuine long-term solution to the challenge.

As part of those discussions, Hitachi Rail also proposed the hybridisation of the Newton Aycliffe site, which entails investment so that maintenance work, bogie overhaul and repair work can take place at the site. However, those hybridisation—that is a new word to me, Sir Gary—solutions alone cannot maintain the manufacturing skills base. After two years of regular engagement, the UK Government informed Hitachi Rail in March 2024 that they were unable to exercise that option, citing the risk of third-party legal action as being too high.

Receiving a negative decision so late in the process means that finding viable solutions in the necessary timeframe increases the risk for the workforce. Of course, it is 19 years not nine years since the factory opened. Sharon Graham, Unite’s general secretary, said:

“The government needs to pull its finger out and tender the extension of the West Coast contract to Hitachi immediately. Ministers talk a good game about levelling up. The fact is, however, that at both Hitachi in Newton Aycliffe and Alstom in Derby, workers are in disbelief that ministerial incompetence is delaying announcements that would safeguard highly skilled jobs.”

We in the north-east have been let down time and again by the Tory Government. Not so long ago, the world-renowned Cleveland Bridge and Engineering Company at Darlington was abandoned. Before that, they abandoned primary steelmaking, and not long after that, they failed to support the communities that had invested in the Sirius mine and allowing it to be sold to one of the world’s biggest companies.

It is vital that trade manufacturing in the UK is seen as part of the long-term strategy for rail and that it does not go the same way as the likes of Cleveland Bridge and Engineering Company, which built the Sydney Harbour bridge and the Tyne bridge, among others. Some of the best trains are being built in this country, and we need to do much more of that. A Labour Government would exercise the option to bring forward the work, and today’s Government should do likewise. I hope the Minister understands that and will revisit all the negative decisions taken around this crisis to ensure the industry’s long-term and continual viability.

17:02
Sam Tarry Portrait Sam Tarry (Ilford South) (Lab)
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It is a pleasure to serve under your chairmanship, Sir Gary. I will keep my remarks short because, as my hon. Friend the Member for Easington (Grahame Morris), whom I thank for securing the debate, clearly set out and as many hon. Members have said, this affects people in constituencies across the country where thousands of jobs have already been lost across the supply chain. The basic issue is the lack of long-term orders on the books at many of the rolling stock manufacturers. The wasteful rolling stock company—ROSCO—system we have for leasing does nothing to help the industry, nor indeed the taxpayer. That money, which amounts to billions of pounds over the past few decades, could have been saved through a different leasing system and could be going back into support the industry right now.

The simple fact is that Alstom and Hitachi Rail have the lion’s share of the market between them—around 55%—so they dominate the entire sector. What happens to them is crucial for the whole long-term strategy of the industry. Their issue is that they were asked to clear their past order books so that they could commence construction for what they expected to be many years of building HS2 trains. Currently, those orders are 18 months to 24 months behind.

Previously, the Government have not taken seriously a procurement strategy that supports British jobs. In 2011, they gave away the contract for Thameslink to the German-based firm Siemens, which cost at least 1,400 jobs directly. On top of that—this is just one example that we know has already happened—it meant that there were 12,000 losses in the supply chain. We know that around 900 people are employed on temporary contracts at Hitachi Rail and Alstom. That means that even before any formal redundancy process has happened, those people—nearly 1,000 people—are very much at risk of losing their job. In fact, it has now been reported that in at least one of those firms, some formal redundancy processes are starting.

Part of what is absurd about this situation is that it was HS2 that enticed CAF, Siemens and Hitachi Rail to set up their operations here in the UK and to build manufacturing plants in communities where we thought, as many hon. Members have described, jobs would be kept for generations to come—as they should be, because rail is still the transport solution of the future, not just of the here and now. That feast and famine scenario means, however, that some manufacturers can maintain only a core of staff working as trained engineers on the production lines, with the vast majority of staff being employed part time or on agency contracts. That is not ideal. When manufacturers feel the pinch because of a lack of orders coming onstream fast enough, it is easy to remove those staff and potentially none of them will be re-employed any time soon. In fact, at Alstom, only one of the 40 manufacturing sheds remains in operation while it waits for parts from other parts of the supply chain.

Over the Easter holidays, I took my children on the Bluebell railway—the Minister will know it well. It is a fantastic heritage railway. Being on those amazing steam trains made me reflect on the fact that we are the country of Stephenson’s Rocket, the industrial revolution, the Mallard and the Flying Scotsman. We are also the country of advanced passenger technology. Ironically, a Conservative Government sold that to the Italians, and it has now been sold back to us so we can use it on the Pendolino trains that go up the west coast.

We are also the country of High Speed 1 and, in partnership with our French friends, built the first high-speed rail network under a seabed. We are a nation that has been more than capable for more than 150 years; we are the foremost rail manufacturing industrial country in the world. The Minister has within his hands—within the procurement strategy and the country’s long-term industrial strategy—the power to make Britain’s rail industry great again. I urge him and his colleagues in Government to stand up and do what is right, so that we have a proud manufacturing history in this country for my children and for the next 100 years.

17:07
Gavin Newlands Portrait Gavin Newlands (Paisley and Renfrewshire North) (SNP)
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It is a pleasure to serve under you, Sir Gary. I congratulate my good friend and colleague from the Transport Committee, the hon. Member for Easington (Grahame Morris), on securing today’s debate. I could not disagree with a single word he said in his contribution. He spoke of the Hitachi Newton Aycliffe plant in his local area, in the constituency of the hon. Member for Sedgefield (Paul Howell), who is also my colleague on the Transport Committee. The hon. Member for Easington made a spirited plea for jobs there, and mentioned ROSCOs, as did the hon. Member for Ilford South (Sam Tarry), which I will come on to.

We have heard contributions from the Chair of the Select Committee, the hon. Member for Milton Keynes South (Iain Stewart), as well as the right hon. Member for North Durham (Mr Jones) and the hon. Members for Stockton North (Alex Cunningham) and for Ilford South. Only two of the contributors today are not current or very recent members of the august Select Committee on Transport, including the Minister himself.

We welcomed Great British Railways, at least in principle, because it was a step closer to reintegrating strategic decisions on track and trains. In many ways, it sought to replicate the arrangements that have been in place in Scotland in recent years, but which have been completely absent in England and Wales for 30 years since franchising. It has been six years since the Government commissioned a report that three years ago called for legislation to formally establish Great British Railways. Too much time has been wasted over these last years.

There are not many hon. Members present who would disagree that the Rail Minister is a fundamentally decent man who wants to see a better railway. I am sure he will form part of the shadow Cabinet in the not-too-distant future—what the Lord giveth, he taketh away—but he has inherited an utterly dysfunctional system. Not for the first time, that dysfunction is threatening tens of thousands of jobs in the rail industry, not just in primary manufacturers, but across the supply chain. I say that despite the welcome but last-minute intervention last week.

While I was researching for today’s debate, I came across a similar debate that took place in the Commons nearly 30 years ago. On that occasion, the debate was secured by the former Member for Cunninghame North, Brian Wilson. I need to wash my mouth out with soap, but this is one of the few occasions where I agree with the bulk of what he said. I can guarantee that this will not become a habit. On the last day before the Christmas recess in December 1994, Brian Wilson discussed the threat to the rail manufacturing industry that was posed by the Government’s policy and strategy, or rather the lack of them. He said:

“It is a rapidly unfolding, utterly unnecessary tragedy created solely by the Government’s policies towards the railways…Ministers could not have been more effective in creating a fatal hiatus for the train building industry if they had planned to do so.”—[Official Report, 20 December 1994; Vol. 251, c. 1538.]

Again, I do not want to make a habit of agreeing with Mr Wilson—I do not think that he would welcome that—but he was on the money then. Warnings were given that the ABB rolling stock works at York were under threat, due to a lack of orders, and that prediction came to pass just two years later. In major part, that lack of orders was caused by the confusion and dislocation caused by privatisation and franchising, which in turn paralysed British Rail, as it was then.

The creation of ROSCOs did not help matters, because they were hived off by the Government to the private sector at criminally low prices. The Minister who responded to that 1994 debate told the main Chamber that the rail industry had to face up to

“the realities of the marketplace.”—[Official Report, 20 December 1994; Vol. 251, c. 1545]

Grahame Morris Portrait Grahame Morris
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The hon. Member is making some excellent points. On ROSCOs, I remind hon. Members that in the current year, I believe that they are making in excess of £400 million in profit.

Gavin Newlands Portrait Gavin Newlands
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I would not disagree with the hon. Member on that.

To continue on ROSCOs, nobody has ever satisfactorily explained why we continue to have a system whereby rolling stock companies, which are all owned by private equity and investment funds, are the primary owners of multiple units, locos, passenger carriages and freight wagons, rather than the taxpayer, who ultimately pays for them. ROSCOs are generating almost risk-free profits for their owners, which are almost exclusively overseas funds, because ultimately, private rail operators have the Department for Transport as an operator of last resort. They were gifted BR stock at a bargain price and have spent the last three decades coining it in every time a new fleet is needed for an operator. That is just one example of the billions leaking out of the system to private finance that could instead be invested in the public rail network or in a sustainable and properly managed rolling stock procurement programme.

To conclude, the current model has failed. It was failing 30 years ago, it has failed since then, and it will continue to fail for the next 30 years unless this issue is specifically addressed in any rail reform package that is brought forward by this Government or any future Government.

17:12
Stephen Morgan Portrait Stephen Morgan (Portsmouth South) (Lab)
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It is a pleasure to serve with you in the Chair, Sir Gary.

I start by thanking my hon. Friend the Member for Easington (Grahame Morris) for securing and opening this important debate. It has been a well-informed and timely debate, and I thank all hon. Members for their contributions to it. My hon. Friend spoke with real knowledge and understanding of the transport network, including the current challenges facing the rail sector and rail manufacturing. He spoke about the consequences of a lack of an industrial strategy and the value of rail manufacturing jobs, not only to local communities but to wider regions, stressing the need to honour existing contracts to help secure the future pipeline of work.

My right hon. Friend the Member for North Durham (Mr Jones) was absolutely right to say how vital a steady drumbeat of work is to secure rail manufacturing for the future. I know that he knows that very well from his extensive work on shipbuilding and I thank him for the points that he has made today.

Other Members made very valuable points with regard to the need for a long-term, holistic view of what is required to secure work for the future. My hon. Friend the Member for Stockton North (Alex Cunningham) shared concerns about the delays in ministerial announcements and the implications of those delays, while my hon. Friend the Member for Ilford South (Sam Tarry) spoke about the Government not taking seriously their commitments to support industry and jobs, and about what that means in terms of putting the sector at risk.

As we have heard, Britain’s rail manufacturing is in a state of crisis. In Derby, 1,300 jobs are at risk at Litchurch Lane, a factory that has been making trains for 150 years. Another 700 are at risk in Newton Aycliffe, and more than 16,000 jobs are at risk in the supply chains.

Behind these jobs are people with decades of experience and expertise and centuries of family history in our rail sector. When I visited Alstom last year, I met people who were following in the footsteps of their parents, grandparents and great-grandparents by working on that site. They had no plans to leave, but the uncertainty of the past has already caused so many to do so. This uncertainty has been extremely worrying for those in jobs that are at risk and for the rail sector as a whole, which has been unable to plan for the years ahead.

The frustrating thing is that all this has been avoidable. Both Alstom and Hitachi are clear that their uncertain future is thanks to the Government’s inaction. Ministers have been warned about the feast and famine of rolling stock pipelines for years, yet they have continued with the short-term, sticking-plaster approach, which has created a crisis in our rail manufacturing sector. Instead of confronting this problem, the Transport Secretary spent months with his head in the sand, saying that a deal to save jobs was out of his hands. As a result, deadlines were missed, skilled workers have left for jobs elsewhere and supply chain companies have gone bust. The contractor Paintbox went into administration last year when its work painting new carriages in Derby dried up. Motherson, which did the wiring on trains, pulled out of the site, and Solo Rail Solutions in Birmingham, which made the doors, appointed administrators earlier this month.

This is not just about job losses; what the Government do not seem to recognise is that huge industries cannot simply be turned on and off. Laying off workers means a loss of skillsets that take years to replace. It also means a loss of capability in the British market, which means less competition, more imports and rising costs for future procurements.

Last week, the Transport Secretary proposed a last minute order of Elizabeth line trains from Derby, but no formal deal has yet been reached. However, if one is reached, let us be clear what this will mean: another short-term sticking plaster that reveals the gaping hole in the Government’s non-existent industrial policy and means we are likely to have another groundhog-day experience with Hitachi in the months to come—more workers fearful for their job security, more families moving away due to uncertainty and more supply-chain companies struggling to survive.

Alex Cunningham Portrait Alex Cunningham
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In my speech, I mentioned that the Government are using their problem with the level of risk to bring forward procurement. Does my hon. Friend agree that we have to balance that risk with the risk of losing all those skills in cases such as that of Hitachi?

Stephen Morgan Portrait Stephen Morgan
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My hon. Friend is absolutely right. We need to bring consistency and clarity to the sector, so that the investment can take place. Many Members have said as much, and I thank my hon. Friend for putting that message on record.

This is a time when our rail industry needs certainty, stability and leadership. The managed decline that we have seen from this Government is only putting our railway jobs at risk. The Minister has many questions to answer. Other hon. Members have already asked many questions, so I ask him only one: what is he doing to stop a repeat of what we have seen in Derby over the past year happening in Newton Aycliffe in the coming months and elsewhere down the line? I look forward to hearing the Minister’s response and would like to restate my thanks to my hon. Friend the Member for Easington for tabling this debate.

Gary Streeter Portrait Sir Gary Streeter (in the Chair)
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I call Minister Huw Merriman to respond. If he would leave a minute or so for the mover of the debate to wind up, that would be great.

17:19
Huw Merriman Portrait The Minister of State, Department for Transport (Huw Merriman)
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With pleasure, Sir Gary. It is a pleasure to serve under your chairmanship. I start by thanking my good friend, the hon. Member for Easington (Grahame Morris), for securing this important debate on the future of rail manufacturing and for his engaging and impassioned speech. He is always a real warrior for the railway and the workforce. Rail remains a top priority for the Government. It connects people to places, delivers the goods we rely on and, as we have heard during the debate, supports jobs in our communities.

Turning straightaway to rolling stock manufacturing, since 2012 the Government have commissioned 8,000 new rolling-stock vehicles—that is out of the 15,600 we have in total. That has encouraged four train manufacturers to set up shop here in the UK. It is worth stating for the record, because it could have been missed in what has been said this afternoon, that in 2010 there was only one train manufacturer. We now are proud to have four. We are very keen to ensure that the four thrive and survive. I will come on to that point later in my speech.

These businesses are now assembling and building trains, while bringing growth to local communities. The average age of rolling stock has fallen from 21 years in 2016 to just under 17 years today. The hon. Member for Easington pointed to one particular train operator that has had a longer tenure, but I tend to look at the entirety of the network, and the average age is under 17 years, which is less than half the average life span for a vehicle, which tends to be 35 to 40 years. Britain’s modernised fleet of trains offers improved comfort and services to passengers across the country, while benefiting the UK rail supply chain, which came together to design, manufacture, paint and assemble the new trains. We have a workforce to be proud of. It is right that train manufacturing is a competitive, commercial market.

Alex Cunningham Portrait Alex Cunningham
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The Minister was talking about the comfort of travelling by train. I would like to personally invite him to take a trip with me from Darlington to Saltburn on the train one day, and we will see what comfort we have to put up with in the Tees Valley.

Huw Merriman Portrait Huw Merriman
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Look, I travel by train all the time, not just on my own line, which I believe has the oldest train stock, but across the country. I spend every single week travelling by train across the country. I am sure at some point I will experience that part of the country as well. The facts do not lie. Out of our total of 15,600 trains, 8,000 are new trains that have been built since 2012. That shows that improvements are happening, but there is more to do, and I am always keen to do more.

It is vital that rolling-stock-owning companies continue to play their role. The private sector has invested around £20 billion to transform our train fleets for passengers. Trains are major assets, and there will naturally be procurement cycles. Our travel habits have changed since the covid pandemic. While passenger numbers are now stabilising, we are still seeing a reduction in revenue. Despite this, the order of 54 high-speed trains for phase 1 of High Speed 2 remains unchanged. There has also been a sizeable contract awarded recently to LNER, and there are upcoming procurements in the market being run by Northern, Southeastern, TransPennine Express and Chiltern. This process will be open to all manufacturers, as is right. Over the next two to three years, we envisage contracts being signed for over 2,000 new vehicles, with a total value of more than £3.6 billion.

Competitions for procurements to upgrade existing rolling stock fleets are also in the works. East Midlands, Chiltern and CrossCountry are due to modernise their existing fleets. With several other operators, such as Avanti West Coast and the Angel Trains Pendolino fleet, refurbishment is already under way. None the less, we recognise that some manufacturers face gaps in their order books over the next two to three years. I disagree with the claim by the hon. Member for Easington that the Government have not acted quickly enough on potential job losses at Alstom and Hitachi. The Secretary of State and I have been involved in discussions with both companies over several months.

This is a complex issue. There are no straightforward solutions, and any intervention must comply with the law while ensuring value for passengers, taxpayers and Governments. As I referenced in the Chamber last week, Siemens gave us a good example of that by challenging in court the award for HS2 that went to Hitachi and Alstom. The Department was found to have won on every single point. That acts as a guiding point for how we must make our tendering process work. If we do not make that work and we award contracts that are ruled unlawful by the courts, we create more uncertainty for the workforce, which we are doing our best to help.

Alex Cunningham Portrait Alex Cunningham
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Will the Minister give way?

Huw Merriman Portrait Huw Merriman
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I have not got time, so I am sorry, I will not give way.

I am pleased to report my right hon. Friend the Transport Secretary had a constructive meeting last week with Alstom’s chairman and CEO and its UK and Ireland director. We have now entered a period of intense discussion with the company. It would not be appropriate to go into the details of those conversations at this stage. Work continues at pace, and I know the Transport Secretary plans to update the House at the appropriate time.

With regards to Hitachi, last week the Transport Secretary met Unite’s assistant general secretary and representatives from Hitachi’s Newton Aycliffe plant. I met a representative from Hitachi in Parliament yesterday as well. The Secretary of State was able to explain the facts of the situation and the Government’s position, facilitated by my hon. Friend the Member for Sedgefield (Paul Howell), who has assisted greatly. The Department remains keen to work closely with Hitachi to help the company find a solution. We strongly encourage Hitachi to continue to engage constructively with us.

The future for our plants is very much focused on exports, as it has to be. Now that we have four train manufacturers it is key for us to work with those manufacturers so that products that are designed and built in the UK are exported abroad and we can grow the plant. I will add that when it comes to rail infrastructure investment, we have published a £44 billion five-year funding settlement for Network Rail’s operations, maintenance and renewal activity in 2029, which provides further opportunities for UK rail manufacturers and suppliers.

The key to the future of rail manufacturing is to continue to invest in rail across the entire network. The £12 billion that we have just announced to help Northern Powerhouse Rail better connect Liverpool to Manchester and deliver new routes and stations across the north will provide more opportunities for train manufacturers and the rolling stock that they will produce. That is where the TransPennine route upgrade will help with the TransPennine Express order, which is to market. Of course, Network North also saw our commitment to deliver on the Ferryhill scheme, subject to a successful business case at each stage. I thank my hon. Friend the Member for Sedgefield for his unwavering commitment.

It has come up a number of times, so I will thank the Transport Committee for its work carrying through rail reform as the pre-legislative scrutiny Committee. I note there are six current or former members of the Committee in the Chamber for this debate. The Chair of the Committee, my hon. Friend the Member for Milton Keynes South (Iain Stewart), is spot on in saying that it gives us a longer-term, holistic approach to allow the railway to organise itself. One would hope that industry will be better supported by that holistic approach. I am very grateful for the work that the Committee is doing.

Time does not allow me to continue, but I shall conclude by saying that I cannot overstate the role of rail manufacturing in supporting a growing economy. We are really proud of the four train manufacturers we now have in this country. We want to do everything we can to work with them and the individuals working in the wider rail supply chain. Their jobs matter hugely to us. We understand the uncertainty and we are working hard to unblock it. That is why the Government are committed to working with businesses to overcome the challenges and maximise the opportunities ahead, both at home and abroad. We work towards our shared ambition to bring track and train together with rail reform, and support our fantastic rail and train manufacturers.

17:27
Grahame Morris Portrait Grahame Morris
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Thank you, Sir Gary, for the exemplary way in which you have chaired the debate. I thank the Minister for his thoughtful and considered responses. We are all aware that he knows the solutions to the problem and we seek to push him to make the decisions that are required in the interests of retaining those jobs, directly and in the supply chain, as quickly as possible.

I thank my right hon. Friend the Member for North Durham (Mr Jones), my hon. Friends the Members for Portsmouth South (Stephen Morgan), for Stockton North (Alex Cunningham) and for Ilford South (Sam Tarry), as well as my colleagues and comrades from the Transport Committee, the hon. Members for Paisley and Renfrewshire North (Gavin Newlands), for Milton Keynes South (Iain Stewart), and for Sedgefield (Paul Howell). I particularly thank the respective Front Benchers for their responses.

Without action, we will be modernising or replacing our trains with imported units using taxpayers’ money to support thousands of jobs and apprenticeships overseas rather than in the UK. We implore the Minister to act, and to preserve the excellent jobs that we have in our existing manufacturing centres.

Question put and agreed to.

Resolved,

That this House has considered the future of rail manufacturing.

17:28
Sitting adjourned.