Oral Answers to Questions
(1 day, 5 hours ago)
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Sir Desmond Swayne (New Forest West) (Con)
The Secretary of State for Northern Ireland (Hilary Benn)
This issue arose following the Supreme Court judgment in 2020, which found certain custody orders to be unlawful. The amendment to the legacy Act to try to deal with that has also been found unlawful by the Northern Ireland courts, so the Government are carefully exploring how to lawfully address this complex issue, alongside our commitment to implement legacy mechanisms that are fully compliant with human rights. I will, of course, keep the House updated.
Sir Desmond Swayne
Will the Secretary of State withhold the remedial order until he is certain that he can deliver the Prime Minister’s pledge to prevent Gerry Adams from receiving compensation?
Hilary Benn
The Government are currently considering the report of the Joint Committee on Human Rights and the representations made to it.
Mr Paul Foster (South Ribble) (Lab)
I am a veteran, as many Members know, and lots of my colleagues served in Northern Ireland. I was based in a barracks in Germany that was attacked by terrorists, so I get it, but the last Government’s legacy Act offered a path to immunity for those who committed the most appalling terrorist crimes. Does the Secretary of State agree that it is no surprise that the legislation was so widely opposed and has been found to be unlawful?
Hilary Benn
I thank my hon. Friend for his service in our armed forces, alongside all those who served. He is absolutely right about the flawed piece of legislation that this Government inherited, and we are working hard to put that right.
Alex Burghart (Brentwood and Ongar) (Con)
In his opening remarks, the Secretary of State left out one crucial detail: the truth is that the last Government did legislate with cross-party support to prevent people like Gerry Adams from receiving taxpayer-funded compensation. The High Court in Northern Ireland ruled that that was incompatible with the European convention on human rights, and the Conservative Government then appealed that judgment. When the Labour party came to power last summer, it dropped that appeal. Will the Secretary of State please set out why the Government decided to drop that appeal?
Hilary Benn
As I told the House a moment ago, the courts found that clauses 46 and 47 were unlawful. Although the Northern Ireland Court of Appeal was not obviously asked to rule on that, because we had withdrawn the appeal, it did comment unfavourably on those provisions. We supported clauses 46 and 47 at the time, but they have not worked, and that is why we have to find an alternative way forward. I just say to the House that the main issue here is the Carltona principle, which the last Government argued meant it was lawful for junior Ministers to sign ICOs. The amendment to try to deal with that failed, and we need to find another way of reaffirming that principle. That is at the heart of this case.
Alex Burghart
The whole House will have heard the Secretary of State not give a reason why the Government did not continue the appeal. Government lawyers told the last Government that there were grounds for appeal. Policy Exchange, in a report in January written by Professor Richard Ekins and Sir Stephen Laws, said that the High Court had almost certainly been “mistaken” in its judgment and that there were strong grounds for an appeal. Why did the Government drop it, and why have the Government not yet brought forward their own legislation to clear this mess up once and for all?
Hilary Benn
The Supreme Court judgment was in 2020, and the last Government could not find a legal solution in almost three years. I am committed to finding one, and I promise that I will update the House when we have found it.
Colum Eastwood (Foyle) (SDLP)
The Parliamentary Under-Secretary of State for Northern Ireland (Fleur Anderson)
With New Decade, New Approach, the UK Government committed to make funding available for a range of projects aimed at supporting community and reconciliation initiatives. My officials regularly discuss these commitments with their devolved counterparts. On addiction services, it is now for the Northern Ireland Department of Health to consider how best to use this funding and bring forward a business case to the Government on that basis.
Colum Eastwood
The people of Derry were made a promise during the NDNA negotiations. I remember, because I negotiated that particular part of it. They were promised that the Northlands addiction treatment centre would be given £1 million for the development of a brand-new addiction centre. The Northlands organisation has saved countless lives in Derry, but it has now been told by the Department of Health in Stormont that its core funding has been cut, and that the promised money is not guaranteed. Does the Minister agree that the Department of Health is in no position to undermine an international agreement?
Fleur Anderson
The hon. Member is a powerful advocate for his constituents, for the Northlands centre, and for the need for services to tackle the scourge of addictions. I join him in recognising the need for support for people with addictions, but given that this matter is devolved, it is now up to the Department for Health to present a business plan, based on its review of addiction services, for the services that will provide the best support for the most people.
Katrina Murray (Cumbernauld and Kirkintilloch) (Lab)
The Secretary of State for Northern Ireland (Hilary Benn)
Economic growth is this Government’s priority, and our industrial strategy is central to that. It will be published in June, and will support the Executive’s plans for growth. The latest figures from the Northern Ireland Statistics and Research Agency show that Northern Ireland experienced stronger growth than the United Kingdom as a whole last year.
Katrina Murray
Northern Ireland has a long and proud history of advanced engineering industries. What discussions has my right hon. Friend had with the Ministry of Defence to ensure that companies such as Spirit AeroSystems have access to the Government’s increased investment in defence?
Hilary Benn
I am sure that my hon. Friend, and the whole House, welcomes the recently announced increase in defence expenditure. Northern Ireland has a strong and significant defence sector, and Spirit is part of that. The Secretary of State for Defence has made it very clear that he wants the increased expenditure to result in more jobs and more orders for British companies.
Mr Gregory Campbell (East Londonderry) (DUP)
Economic growth will be supported by physical connectivity. One example is the new Grand Central station in Belfast, where there is some controversy over Irish language signage. The Secretary of State has commented that there are
“so many more important things”
in which to be involved, but, setting that view to one side, can he confirm that if there were no Executive at Stormont, he, as Secretary of State, would be in a position to make decisions on that and other equally important issues?
Hilary Benn
The new Grand Central station is a magnificent piece of infrastructure, and I recommend any Members who have not yet had a chance to visit it to do so. I am not contemplating for one second that there will not be an Executive in place. Perhaps the single most important contribution that the Executive can make to continued economic growth in Northern Ireland is to stay in place and give confidence to those whom we are all working hard to encourage to come and invest in Northern Ireland’s economic future.
Claire Hanna (Belfast South and Mid Down) (SDLP)
I regularly receive representations from businesses, some of our biggest employers, who are frustrated by the apprenticeship levy. They pay in like businesses in Britain, but cannot access the fund to reinvest in skills and fix our broken skills pipeline. Does the Secretary of State agree that there is merit in devolving this to the Assembly as part of a package of measures to encourage the Executive to take responsibility and control, to be ambitious for the local economy, and to drive growth?
Hilary Benn
There is a great deal that the Executive can do to help promote economic growth. I have just given one example, and investing in and supporting the development of skills is another. Northern Ireland has the lowest unemployment in the United Kingdom, but it also has a higher rate of worklessness, and getting more people back into work and giving them the skills that will enable them to take part in the economy will help to boost growth.
Alex Easton (North Down) (Ind)
Economic growth has been severely damaged as a result of the Northern Ireland protocol and the Windsor framework. The new EU arrangement will enable animals and food to travel unfettered between Northern Ireland and the rest of the UK. Why was manufacturing not included in that arrangement, and when will the customs process be removed?
Hilary Benn
The agreement on the application of sanitary and phytosanitary measures that was reached with the European Union on Monday is extremely significant. As the hon. Member will know, it has been widely welcomed by businesses throughout Northern Ireland, including supermarkets, retailers and farmers, because of the assistance it will give in getting rid of many of the elements associated with the SPS arrangement. It is the fruition of this Government’s determination, when we came into office, to negotiate a closer relationship with the EU, which is exactly what we have done.
Dr Al Pinkerton (Surrey Heath) (LD)
As we have just heard, since last we met in this place for Northern Ireland questions, we have had the announcement of the UK-EU SPS agreement. That comes as a great reassurance to many Northern Irish agrifood retailers, but the Northern Ireland Chamber of Commerce and Industry has cautioned that key trade barriers remain, particularly around broader regulatory divergence across supply chains and ongoing customs issues under the Windsor framework. In the Secretary of State’s opinion, how will the latest arrangements ease east-west trade in practice? What specific customs reform does he intend to pursue to further cut red tape and unlock the full potential of dual-market access and latent economic growth in Northern Ireland?
Hilary Benn
On customs, in addition to the SPS deal, the significantly reduced Windsor framework customs arrangements, introduced on 1 May, will of course remain in place, because the UK is not in the EU customs union and we have no intention of joining it. It is clear from the text of the agreement what will be removed and that customs information will remain for SPS goods, but we are working hard to make life easier and introduced changes on 1 May. Reducing the number of lines of information that need to be provided from 75 to 21 is a very good example of how we are working with the EU to make it easier for goods to flow.
David Davis (Goole and Pocklington) (Con)
The Secretary of State for Northern Ireland (Hilary Benn)
The veterans who served in Operation Banner did so with distinction in very difficult circumstances, and ultimately helped to bring about the peace that Northern Ireland now enjoys. We owe them a huge debt of gratitude. Together with the Defence Secretary and Minister for Veterans, I am currently considering measures for our legacy legislation to ensure better protections for elderly veterans.
David Davis
Seven hundred and twenty-two of our soldiers were killed by paramilitary murderers during the troubles. Not one of those deaths will be revisited. Because of the current circumstances, however, hundreds of brave men—who, as the Secretary of State says, served their country with honour, patriotism and integrity—face a sword of Damocles of politically motivated trials hanging over them. I can think of no better example of two-tier justice. Whatever the Government do, they have to take that away, and do so in a way that cannot be circumvented by clever, politically motivated lawyers. Will he give the House an undertaking that he will do that?
Hilary Benn
I agree with what the former Defence Secretary said in 2019. He said:
“The British Army uphold British values, which is the rule of law, and that’s what we stand for.”
I advise the right hon. Gentleman to be a little bit careful about using the phrase “politically motivated” prosecutions—I hope I have correctly quoted him. Let us be clear: decisions about any prosecutions, in any cases, are taken by the independent Public Prosecution Service, which is entirely separate from the Executive.
Mike Wood (Kingswinford and South Staffordshire) (Con)
I strongly support the petition brought forward by my right hon. Friend the Member for Goole and Pocklington (David Davis). As of this morning, it has more than 90,000 signatures, showing the strength of public feeling on this issue. Almost a year ago, the Labour party published its manifesto, saying that it would scrap the legacy Act, yet it has still presented no alternative. Victims are in limbo, and veterans are in limbo. The last Labour Government handed out letters of comfort for terrorists, but nothing for elderly veterans. When will the Secretary of State finally show the House his plans, and how can veterans have confidence that they will get the protection they deserve?
Hilary Benn
We have begun the process of repealing and replacing the legacy Act in the proposed draft remedial order. It will deal with the conditional immunity that was struck down by the courts, and which we came into office committed to remove because it did not command support across Northern Ireland, as it would have given immunity to terrorists, including those who killed the soldiers to whom the right hon. Member for Goole and Pocklington (David Davis) referred earlier. I intend to bring forward legislation to complete that process when parliamentary time allows, because this Government inherited a completely hopeless piece of legislation, which has been found time and again to be incompatible with our international obligations.
Gavin Robinson (Belfast East) (DUP)
The Secretary of State will know that, as part of a Northern Ireland Affairs Committee inquiry, we have been engaging with victims across Northern Ireland and the rest of the United Kingdom to assist them in their quest for some personal closure, truth and justice on legacy. Veterans, like many other victims, have indicated to us that while they are listened to, they have not been heard. Will the Secretary of State confirm that he intends to announce his proposals on legacy in parallel with the Irish Government before the summer recess?
Hilary Benn
I will inform the House of proposals in due course. I am in discussions with the Irish Government, and that is well known publicly. The reason the legacy Act resulted in so much trouble and difficulty, and produced so much incompatibility with our international obligations, is that the last Government, having negotiated the Stormont House agreement with the parties and the Irish Government, decided to perform a 180° turn and put in legislation that did not command support in Northern Ireland. I want to make progress on this as quickly as possible, and I am continuing to talk to all the parties about doing so.
Gavin Robinson
I caution the Secretary of State that he should be adhering to the three-stranded approach, and where it is appropriate to talk to the Irish Government, it should be within that context. He should not be subjugating our responsibilities on legacy, but he should not be letting the Irish Government get away with their obfuscation on this issue either.
One of the most startling things the Committee experienced last week was a victim who asked us collectively whether we were aware of Government plans to secure a ceasefire from dissident republicans that, in return, would lead to the release of dissident republican prisoners. Can I ask the Secretary of State, in all good conscience, to recognise that dissident republicans are a cancer in Northern Ireland, and more of them should be in jail? Will he rule out the suggestion that was brought to us as a Committee?
Hilary Benn
I can say directly to the right hon. Gentleman: there are no such plans.
Shockat Adam (Leicester South) (Ind)
The Secretary of State for Northern Ireland (Hilary Benn)
The Good Friday agreement has brought peace, security and a better life to the people of Northern Ireland. It remains an unparalleled achievement almost 30 years on from its signing, and I pay tribute to all those involved in its creation for their political courage, bravery and willingness to compromise.
Shockat Adam
I recently visited the west bank and the Occupied Palestinian Territories with the hon. Member for St Ives (Andrew George). There we saw a systematic process of one community being taken over by another, with the Israeli Government building walls and fences to protect the settler community. The Secretary of State is of course aware of the great results Mo Mowlam achieved in securing peace in Northern Ireland following a process of engagement with both sides—a process that resulted in walls and fences being broken down, and a mutual respect and a common peace being achieved. Will the Government commit to using the lessons of Mo Mowlam and the Northern Ireland peace process to help secure a lasting peace in the middle east?
Hilary Benn
I share with the hon. Member and the whole House a wish to see lasting peace in the middle east, and what is happening at the moment is appalling and intolerable. However, I think the most important lesson from the Good Friday agreement was the courageous political leadership shown by the parties to the conflict—people such as John Hume and David Trimble—and I have to say that, tragically, that same courageous political leadership is absent in the middle east.
Dr Lauren Sullivan (Gravesham) (Lab)
The Parliamentary Under-Secretary of State for Northern Ireland (Fleur Anderson)
Rates of violence against women and girls are higher in Northern Ireland than anywhere else in the UK. This Government are committed to working with the Executive to tackle this emergency, and I have met and supported many politicians and organisations across Northern Ireland that are doing just that. The Under-Secretary of State for the Home Department, my hon. Friend the Member for Birmingham Yardley (Jess Phillips), and I recently met the Northern Ireland TEO—The Executive Office—and Justice Ministers in Belfast to discuss working closely together, including on online safety and support for frontline organisations.
Dr Sullivan
The strategy for tackling violence against women and girls must challenge the attitudes that enable it. What recent discussions has the Minister had with stakeholders across Northern Ireland to support these campaign efforts?
Fleur Anderson
I absolutely agree with my hon. Friend about tackling attitudes. I have met and I am supporting many groups, and I will highlight two that I have visited. The excellent Foyle Family Justice Centre in Derry/Londonderry supports victims, and the St Joseph’s Boys’ school in Creggan is doing fantastic work, with the support of White Ribbon NI, through the shaping mindsets programme, which tackles toxic masculinity head-on in the school.
Jim Shannon (Strangford) (DUP)
I thank the Minister of State for all she does on her visits to encourage people across Northern Ireland, especially women, ladies and young girls. What we really need in Northern Ireland is legislative change, longer sentences and more people convicted. What discussions has she had with the Minister responsible for police and justice in Northern Ireland to ensure that, legislatively, we are moving fast to try to stop violence against women and ladies in Northern Ireland?
Fleur Anderson
I thank the hon. Member for raising this issue, and he is absolutely right that what we do needs to be rooted in what happens on the ground. I met the executive unit working with the police to tackle perpetrators, and they are seeing evidence of that. The legislation for our jurisdictions can be joined up—that is absolutely right—but what has come across to me on many visits is the need to tackle what happens online. The Online Safety Act 2023 is now being enacted through Ofcom, which undertook a consultation in Belfast recently on its draft guidance. It proposes practical steps for online safety, and steps to tackle misogyny, pile-ons, domestic abuse and other harms. He is absolutely right about what we can do, through our efforts on the ground, if we all work together.
Dr Luke Evans (Hinckley and Bosworth) (Con)
The Secretary of State for Northern Ireland (Hilary Benn)
The trade deal with the USA, together with the agreements with the EU and India, are very significant. Northern Ireland exporters, including those exporting services, technology and farming goods, will benefit in the same way as those in other parts of the UK. In particular, the US deal is a major opportunity for Northern Ireland farmers to sell their high-quality beef to a US market of over 300 million people.
Dr Evans
I am grateful to the Secretary of State for his answer, but there seem to be wildly different interpretations of what the deal means for Northern Ireland. Will he clarify what it means for imports and exports in the light of the impact of EU tariffs? Was that explicitly discussed at the EU-UK summit?
Hilary Benn
The hon. Gentleman is right to point out that EU retaliatory tariffs directed at the USA would have an impact in Northern Ireland, because of its dual-market access. I can write to him with further details of how precisely that would work. It depends partly on whether there is less or more than a 3% difference between the tariff in the EU and the tariff that applies in the UK.
Jim Allister (North Antrim) (TUV)
The Secretary of State for Northern Ireland (Hilary Benn)
The Union between Great Britain and Northern Ireland, which we will discuss next month at the East-West Council, remains strong. The deal with the EU will enable the smooth flow of agrifood and plants within the UK’s internal market. That is why it has been overwhelmingly welcomed by businesses.
Jim Allister
In referring to the deal with the EU, what the Secretary of State ignores, of course, is that Northern Ireland continues to be under a foreign customs code, which means that there are still customs checks on all goods, including agriculture goods, moving within the United Kingdom. Ideologically and personally, is he committed to the Union? I am not asking if he is committed to the consent principle; any separatist can accept that. Is he personally and ideologically a Unionist?
Hilary Benn
The Government and I support the Union, and I also support the Good Friday agreement. I point out to the hon. and learned Gentleman that when it comes to customs arrangements, there are no mandatory checks. There are checks that apply generally on the basis of risk and intelligence.
Greg Smith (Mid Buckinghamshire) (Con)
The Secretary of State for Northern Ireland (Hilary Benn)
The Government have begun the process of repealing and replacing the previous Government’s legacy Act. The draft remedial order in Parliament represents the first step. The Government will address the other issues arising from several court findings of incompatibility in primary legislation.
Greg Smith
I listened carefully to the answers the Secretary of State gave just now to the shadow Secretary of State, my hon. Friend the Member for Brentwood and Ongar (Alex Burghart), and to my right hon. Friend the Member for Goole and Pocklington (David Davis). The Secretary of State must understand the severe anxiety, particularly for our veterans, caused by not having a timescale on this matter. Will he at least commit to putting in place a deadline? Will he also take seriously the findings of the Policy Exchange report?
Hilary Benn
I listen carefully to all the representations that are made to me, including in that report, which I have read. I am committed to introducing legislation as soon as possible, although that is subject to the availability of parliamentary time. This Government came into office absolutely committed to remedying the absolute failure of the Legacy Act passed by the previous Government.
Lewis Cocking (Broxbourne) (Con)
The Prime Minister (Keir Starmer)
My deepest condolences—and those of the whole House, I am sure—are with the families and friends of Jennie, Martyn and David, who were tragically killed in the fire in Bicester last week.
I welcome to the Under-Gallery Cheryl Korbel, the mother of Olivia. I am always humbled by those with the courage to respond to appalling heartbreak by campaigning for change. I know that the whole House will pay tribute to her extraordinary courage and extraordinary resolve.
Because of the actions taken by this Government, the UK is now the fastest growing economy in the G7, interest rates have been cut four times, and we have secured our third trade deal in three weeks—deals with India, the US and the EU. These deals are in the national interest and will improve the lives of working people and businesses across the United Kingdom.
This morning I had meetings with ministerial colleagues and others. In addition to my duties in this House, I shall have further such meetings later today.
Lewis Cocking
This Labour Government have been in power now for almost 12 months. When will the Prime Minister stop defying the will of the British people, stop dancing around the subject, and stop all illegal immigration into the United Kingdom, which has been rising on his watch?
The Prime Minister
It was the previous Government who lost control of immigration; they had record numbers for net migration, and lost control of the borders. We are bringing forward legislation to give law enforcement the greatest possible powers. What are the Conservatives doing? They are voting against it.
Sarah Owen (Luton North) (Lab)
The Prime Minister
We all know that the economy was left in an absolute mess by the Tories. We had to stabilise the economy with tough decisions, but they were the right decisions. Because of them, the economy is beginning to improve: there were those growth figures last year—we had the highest growth in the G7; there were four interest rate cuts in a row; and there have been three trade deals. However, I recognise that people are still feeling the pressure of the cost of living crisis, including pensioners, and as the economy improves, we want to make sure that people feel those improvements each day as their lives go forward. That is why we want to ensure that more pensioners are eligible for winter fuel payments as we go forward. As you would expect, Mr Speaker, we will make only the decisions that we can afford, and that is why we will look at that as part of a fiscal event.
Mrs Kemi Badenoch (North West Essex) (Con)
It was extraordinary listening to that last answer from the Prime Minister. Inflation was 2% when the Conservatives left office; it is now nearly double that. When will he recognise that it is Labour’s Budget that is driving up inflation?
The Prime Minister
What the right hon. Lady forgot to say was that inflation rose to more than 11% on the Conservatives’ watch, and she did not say a word. I am confident that those numbers will come down; the Bank of England is confident that they will come down, too, which is why we have seen four interest rate cuts in a row. I notice that the right hon. Lady cannot resist grabbing any opportunity to talk the country down. She does not mention the growth figures, the interest rate figures, the record investment, wages being up more than prices, the 200,000 jobs created or the three trade deals. The reason is that the Conservatives have not learned and they have not changed. As George Osborne said, the Leader of the Opposition does not have a credible economic plan.
Mrs Badenoch
That is laughable from the Prime Minister. He knows that inflation was brought down by us to 2%—bang on target. We were reacting to a war in Ukraine that brought inflation up all over Europe. While he is doing trade deals with countries such as the US and India, their inflation is going down, but it is going up here. Why? The Office for National Statistics says that the inflation figures are driven by significant increases in household bills. We warned him repeatedly that this is exactly what would happen—what his policies would do. We called it “awful April”. The Prime Minister came into office saying that he would tackle the cost of living crisis. He has failed. He has not got a clue, has he?
The Prime Minister
The right hon. Lady talks of the Conservatives’ record. There was the disastrous Liz Truss mini-Budget; inflation was through the roof; there was a £22 billion black hole; living standards were at an all-time low; energy prices went through the roof; and mortgages went through the roof. We are taking measures to bring prices down. The EU deal will bring prices down; that is why supermarkets have welcomed it. What does she do? She opposes measures to bring prices down.
Mrs Badenoch
The Prime Minister needs to stop whining about what the last Government did and look at what he is doing. He is the Prime Minister. Look at the numbers this morning. As if inflation figures were not bad enough, we have also learned that the Deputy Prime Minister is on manoeuvres. The Prime Minister has lost control of the economy and he has lost control of his Cabinet. The Deputy Prime Minister is sitting there staring at me. She knew exactly what she was doing when she briefed the papers. She is demanding eight new tax rises—as if we have not suffered enough. People out there are struggling. Businesses are struggling. People are losing their jobs. We cannot have more tax rises. Will the Prime Minister rule out new tax rises this year?
The Prime Minister
The right hon. Lady has not learned or changed. The Conservatives lost the election because of their appalling record on the NHS, on health, on prisons—you name it. Now she accuses everyone of whining about the impact that had on the country. It had a huge impact on working people across the country and they are absolutely right to complain about it. She wants to talk about the Deputy Prime Minister. The Deputy Prime Minister, working with the Chancellor, is building 1.5 million new homes, reforming our planning system, putting £7 billion into our economy, and bringing forward an Employment Rights Bill, which will be the single biggest upgrade to workers’ rights in a generation.
Mrs Badenoch
That is desperate stuff. The whole House will have heard the Prime Minister refuse to rule out new tax rises. The whole House heard it: he did not rule them out. There is open warfare in his Cabinet. The Deputy Prime Minister is clearly calling the shots. What have we learned? We are heading for new tax rises. We know that inflation is up. It is just more and more bad news from a Prime Minister who has lost control. We heard the Prime Minister’s earlier answer on winter fuel. Let us try to get some more information. I shall ask him a simple question. It requires only one word: yes or no. Is he planning to U-turn on winter fuel cuts?
The Prime Minister
I made it clear in my earlier answer that as the economy improves, we want to take measures that will impact people’s lives, so we will look at the threshold, but that will have to be part of a fiscal event. The Conservatives lost control of every element of the economy, of prisons, of borders, of the NHS—you name it—and now she has lost control of her party. The Conservatives are sliding into oblivion. They will have to trade on their past, because that is all they have.
Mrs Badenoch
I made it really easy for the Prime Minister. It was a simple question—yes or no—and he could not answer it. I wonder how the public feel about a man who cannot give a straight answer to a simple question. Look at the MPs behind him—they are all cheering. When this inevitable U-turn on winter fuel comes, and it will, from a desperate Prime Minister, what will he say to the 348 MPs who went over the top and voted for the winter fuel cut last September? Just like the British public, how can any of them ever trust him again?
The Prime Minister
It is only because of the measures that we have taken that the economy is improving, with growth at the highest rate in the G7, four interest rate cuts, and three trade deals, because countries want to trade with us. Those things are because of the decisions that we have made, and all those decisions were opposed by Conservative Members. They have learned absolutely nothing and they are going absolutely nowhere.
Mrs Badenoch
This is a Prime Minister who says he is taking measures, but the jobs tax is killing jobs, inflation is up, and business confidence is down. Everyone is worried. He promised to cut bills, but today we see that they are rising because of his policies. He promised not to raise taxes on working people, but his jobs tax means that people are losing their jobs. Every week, we come here with a new company that says it is shedding jobs, and that is on his watch. He promised to protect pensioners, but his winter fuel cut has driven thousands into hardship. His MPs hate this—he cannot see them, but they all look sick just hearing what it he is going to do. [Interruption.] They are laughing—[Interruption.]
Mr Speaker
Order. I expect better from Whips, and to Boyzone at the back, I have my eye on you.
Mr Speaker
Order. Which one of you wants to leave first? [Interruption.] There we are, we have the first volunteer. Are you going to behave? I call the Leader of the Opposition to respond.
Mrs Badenoch
His MPs are laughing, just as they laughed at the Budget. Hands up who here wanted winter fuel cuts? Not a single one of them. The fact is, this Prime Minister is destroying them. They need to look at what they are doing to the country. The truth is, and we all know it, that it is this Prime Minister, this Labour Government and their policies that are shafting the country, is it not?
The Prime Minister
They look in pretty good form to me, and there are lots of them. The Leader of the Opposition talks about business confidence. I did not have time yesterday to read out all the businesses that have come out in support of our EU deal, and I do not have time today—it is a long list. I went immediately to Lidl and spoke to the staff there. They are delighted with the deal we put forward yesterday. Business like the work we are doing, and it is giving them confidence in the EU deal, but the right hon. Lady is opposed to each and every measure.
Louise Jones (North East Derbyshire) (Lab)
The Prime Minister
I thank my hon. Friend; we are united by a shared focus on creating better life chances for our children, and I am delighted to hear that her constituents are already benefiting from our changes. Thanks to our plan for change, we will deliver free breakfast clubs in every primary school in England. I am determined to support parents to give every child the best start in life. That is why we are rolling out free childcare, expanding the first 300 school-based nurseries, and delivering more family hubs.
Ed Davey (Kingston and Surbiton) (LD)
Can I associate myself with the Prime Minister’s remarks about the terrible fire in Bicester last Thursday? I know from my hon. Friend the Member for Bicester and Woodstock (Calum Miller) how deeply the close-knit community there has been affected by this tragedy. The firefighters Martyn Sadler and Jennie Logan were true heroes, as was Dave Chester. I hope that the prayers and thoughts of the House are with their loved ones and the two firefighters still in hospital.
The Prime Minister has rightly said that his new trade deals will give a much-needed boost to economic growth, and thus the public finances, but will he make sure that struggling families and pensioners see the benefits of this growth? He teased the House in his answer to the hon. Member for Luton North (Sarah Owen); will he commit now to reversing his cuts to the winter fuel payment in full?
The Prime Minister
I thank the right hon. Member for his comments about the Bicester tragedy; it is important that in a moment like this the House comes together. We are taking measures to help with the cost of living crisis. The EU deal yesterday was so important because of the impact it will have on prices, particularly in supermarkets. That will directly benefit those who are affected by the cost of living crisis.
What I said before was that the economy is beginning to improve, but people are still feeling the pressure. That is why we are taking the measures we are taking and striking the trade deals we are striking. As it improves, I want people to feel the benefit of the measures we are taking. That is why I want to ensure that more pensioners are eligible for the winter fuel allowance. It is important, as Members would expect, that we are clear that we can afford the decision we are making. That is why this will now be looked at in a fiscal event.
Ed Davey
I think that I welcome what the Prime Minister has said, but we will look at the details. I hope that he will use some of these new proceeds to help others, like carers. The Government’s changes to the personal independence payment will have big consequences for family carers like Ginny, who cares for her husband Tim, who has myotonic dystrophy. Ginny holds her husband’s hand to keep him steady as he walks. He falls frequently and chokes on his food. Ginny is the sole earner in the family—she works part time on top of caring for Tim—but she has calculated that under the Government’s cuts her family will lose £12,000 a year. Will the Prime Minister tell Ginny and many family carers like her what he expects them to do?
The Prime Minister
We have approached this on the basis of the principle that we must support those who need support. On the question of getting people into work, we should support people into work where they can work—and of course, where they can work, they should—but it is undeniable that the current arrangements do not work and need to be reformed. That is why we are bringing forward necessary reform to ensure that the system works better.
Anneliese Midgley (Knowsley) (Lab)
The Prime Minister
I thank my hon. Friend for reading that victim impact statement. I know from talking to Cheryl how hard it was for her to make that victim impact statement in the first place; it took a huge amount of courage, and grief. She wanted to read that statement to the perpetrator, as she should have been able to do. I know from the meetings that I have had with her how visceral the pain is to her of not having been able to do so. I therefore thank my hon. Friend for reading that impact statement out in the Chamber, allowing it to be heard by the whole world.
Cowards who commit these heinous crimes should face the consequences of their actions, which have a huge impact on victims’ lives. That is why we will force offenders to attend their sentencing hearings, with longer sentences, unlimited fines and prison sanctions for those who seek to avoid facing justice. I pay tribute again to Cheryl, who I will meet later this afternoon, for having the incredible courage to push for that change, notwithstanding the incredibly painful impact it has had on her and her family.
Jim Allister (North Antrim) (TUV)
The Government assure us that Northern Ireland is still in the United Kingdom’s customs union. If so, how is it that British steel can be sold to the United States tariff-free, but that same British steel if sold into Northern Ireland is subject to EU tariffs? Why on Monday did the Prime Minister not even try to take back control over the trade laws that govern Northern Ireland?
The Prime Minister
It is important that we reduce tariffs on steel into the US market and other markets—including the EU markets—for obvious reasons. It is also vital that we seek to ensure that we reduce any barriers in trade within the United Kingdom as a whole. Yesterday was a step towards that. There is further work to do, but we do want to get to that place where we can trade without those barriers in the United Kingdom. We will continue to work on that.
Andrew Pakes (Peterborough) (Lab)
The Prime Minister
My hon. Friend is an excellent champion for his constituents. We are committed to supporting our nation’s high streets to adapt and thrive. Planning applications are required for any new betting office to ensure that locals have a say on individual cases and that communities can use the planning system to allow for a change of use of their properties. I will ensure that my hon. Friend gets the meeting that he has asked for.
Mr Alistair Carmichael (Orkney and Shetland) (LD)
The Prime Minister
The right hon. Gentleman knows the very limited impact of the inheritance tax, only on farmers at a very high level. He will also know the record amount of money in the Budget that we put into farming and the measures taken yesterday with the EU deal, which will massively help farmers who sell their product into the EU market.
Julia Buckley (Shrewsbury) (Lab)
The Prime Minister
Our plan for change will see the railways reformed to deliver more reliable and better value services for passengers right across the country. My hon. Friend has been a champion for better railways and easier journeys for her constituents. Open access operators have huge potential to offer passengers more choice. I will be delighted to ensure that she and other interested MPs meet the Rail Minister to put their case forward.
Dr Neil Hudson (Epping Forest) (Con)
The Prime Minister
The evidence is certainly coming in: the highest growth in the G7; four interest rate cuts in a row; and trade deals with countries across the world that want to do deals with this country because they can see the stability that this Government have brought about. Instability with the Conservatives; stability and growth with this Labour Government.
Andy MacNae (Rossendale and Darwen) (Lab)
The Prime Minister
May I begin by congratulating Tommy and everyone selected to represent the British and Irish Lions? It is an incredible achievement and we will be cheering them on.
It is important that we protect those with severe disabilities or lifelong health conditions who cannot work, paying them a premium and stopping those reassessments, which is part of the reform that we are bringing about. Ultimately, we also need to get back to face-to-face assessments by trained assessors and health professionals, which fell to only one in 10 assessments under the previous Government.
Lee Anderson (Ashfield) (Reform)
The Prime Minister
I am very proud that we have removed over 24,000 people: the highest record for nearly 10 years. We are taking other measures to get back control of our borders, including the Borders Bill, which gives our law enforcement enhanced powers, including terrorism-like powers. What did the hon. Member’s party do? What did he do? He voted against them, and I will tell you why: they do not want to fix this problem, because it benefits them not to fix it. Party before country.
It is very good that the hon. Member is standing in for the hon. Member for Clacton (Nigel Farage) today. There was no sign of him yesterday at the EU summit. He was the first through the e-gates to somewhere in the south of France: Nice work if you can get it!
Kirsteen Sullivan (Bathgate and Linlithgow) (Lab/Co-op)
The Prime Minister
My hon. Friend rightly and powerfully raises the broken promises of the Scottish National party on mental health services. This is important, and we will have positive discussions with the devolved Governments to work on addressing mental health waiting times. The SNP promised to invest in frontline mental health services, then cut them by £54 million in real terms this year. With a record settlement in the Budget and two decades in power, the SNP is out of excuses and out of ideas. Scotland deserves better than that.
Kirsty Blackman (Aberdeen North) (SNP)
The Prime Minister
What we contribute into a pot is parts for fighter jets, and if we were to stop that, they could not be used by other countries in other conflicts, including those in which we are involved—[Interruption.] The hon. Member does not know the detail at all. They are not sold directly. They go into a pot. If we were to stop that, they would not then be available to others around the world who desperately need them in the conflicts they are engaged in, and that is why we will not do it.
Cat Eccles (Stourbridge) (Lab)
The Prime Minister
I thank my hon. Friend and celebrate Lisa and all those who have saved this important source of local support. The Conservatives left local councils on the brink, unable to provide these vital services, letting down patients across the country. We are committed to improving dementia care through our plan for change, which is why we provided a £69 billion boost for local government, invested £26 billion in the NHS and made £3.7 billion available for social care, including an £880 million increase in the social care grant.
Rupert Lowe (Great Yarmouth) (Ind)
The Prime Minister
Sentencing is a matter for our courts, and I celebrate the fact that we have independent courts in this country. I am strongly in favour of free speech. We have had free speech in this country for a very long time, and we protect it fiercely. But I am equally against incitement to violence against other people, and I will always support the action taken by our police and courts to keep our streets and people safe.
Mr Paul Foster (South Ribble) (Lab)
I recently visited St Catherine’s hospice in Lostock Hall, which serves wonderfully my constituents in South Ribble, those of Ribble Valley and some of your constituents in Chorley, Mr Speaker. I discovered that the hospice has to pay an excessive £350,000 a year for medication, which can only be sourced from the private sector, not the NHS. After some investigating, I found that there is a postcode lottery for integrated care boards. Some ICBs are fully funded and supply all medication, some subsidise it and some do not supply it at all. Evidence shows that there is a disparity between hospices in the more deprived areas not being funded and those in the more affluent areas being funded. Will the Prime Minister please speak with the Health Secretary as a matter of urgency and get free medication supplied by all ICBs to all hospices across the country?
The Prime Minister
We have put record amounts into the NHS in the Budget, and we are beginning to see the results of that. I accept the point that my hon. Friend makes, and we will look again to ensure that the money is properly used in the most efficient way.
Wera Hobhouse (Bath) (LD)
The Prime Minister
The hon. Lady’s experience is deeply concerning, and I know it must have affected her. I think she was hoping to see, and later saw, her grandchild, but it must have impacted on her, and it is deeply concerning—we need to recognise that. Ministers, including the Foreign Secretary, have raised it on numerous occasions with their counterparts both in China and Hong Kong. Preventing UK citizens, including Members of Parliament, from entering Hong Kong without justification or for simply expressing their views is completely unacceptable. It will only undermine Hong Kong’s international reputation and the relationship we have with it, and so we will continue to raise it.
John McDonnell (Hayes and Harlington) (Ind)
You will know, Mr Speaker, that I have raised on several occasions in the House the case of Alaa Abd el-Fattah, the British-Egyptian human rights campaigner who has been imprisoned in Egypt for many years, and whose mother Laila went on a 100-day hunger strike. I thank the Prime Minister for fulfilling his promise to contact President Sisi of Egypt to secure Alaa’s release, but unfortunately, months on, Alaa remains in prison and this week Laila started her hunger strike again. Could I appeal to the Prime Minister to again speak directly to President Sisi to secure Alaa’s release?
The Prime Minister
I thank the right hon. Member for raising this case not just today, but on the many occasions that he has. It is incredibly important that we do everything we can in this case. I have met Laila and given her my commitment to do everything I possibly can. I have had a number of contacts myself, but I will not stop doing everything within my power to secure that release.
Paul Holmes (Hamble Valley) (Con)
Will the Prime Minister join me in welcoming my six-year-old constituent, Teddy, and his mum, Laura, to Prime Minister’s questions? Teddy is a self-professed eco-warrior, on a mission to change the world. He started out by saving thousands of plastic chocolate and sweet tubs from landfill, because they are not currently recyclable. Will the Prime Minister commit to asking the Minister for Local Government and English Devolution to meet Teddy and me to discuss how we can make those tubs recyclable? Does he agree with me that no matter how small you are, you are never too little to make a big difference?
The Prime Minister
On behalf of the whole House, I welcome Teddy. It is incredible that he has done so much already, and he is in the Gallery today. Many of us struggle for a whole lifetime to make an impact on Government policy, but Teddy is already having an impact aged six. I will make sure that he gets to speak to the relevant Minister.
Rosie Wrighting (Kettering) (Lab)
Following on from the question asked by my hon. Friend the Member for Stourbridge (Cat Eccles), this week is National Epilepsy Week, an important opportunity to raise awareness of a condition that affects so many but often remains invisible. Epilepsy comes with fear and uncertainty: the anxiety about having a seizure, the impact of losing a driving licence and the worry about medication shortages. In the UK, one in 100 people live with epilepsy, which works out as up to six of us in the Chamber, including myself. Will the Prime Minister join me and the inspiring campaigners watching from the Gallery in marking National Epilepsy Week, as we continue to raise awareness of seizures?
The Prime Minister
I congratulate my hon. Friend on her tireless campaigning on this issue, alongside the campaigners who are with us today. I know the impact that epilepsy has on people across the country, including on over 100,000 children and young people. We are committed to improving care for people with neurological conditions and we are setting up the UK-wide Neuro Forum to improve treatment and care for those with such conditions.
Points of Order
Richard Tice (Boston and Skegness) (Reform)
On a point of order, Mr Speaker. May I put on the record the sad passing yesterday of Patrick O’Flynn, a political journalist who was well known to many hon. Members? He died after a short battle with cancer. He was a Lobby journalist for some 20 years, spending many days, weeks and months in the Press Gallery. He will be much missed and I pass on the condolences of all hon. Members to his wife, Carole Ann, and his two children.
Mr Speaker
I am grateful to the hon. Member for his point of order. Patrick was a long-serving and well-respected member of the Lobby. I am sure that the whole House will wish to join me in sending our condolences to his family, for somebody who was taken so young.
Kirsty Blackman (Aberdeen North) (SNP)
On a point of order, Mr Speaker. I seek your guidance on how I can get a response from the Department for Work and Pensions. I have written to the Secretary of State in relation to one of my constituents, who was told by a first-tier tribunal that the DWP must make payments to him backdated to January 2020. The tribunal decision was in February and we have been chasing the Department for a response for over a month. Will you advise me on how I can get a response?
Mr Speaker
I think the hon. Lady knows exactly what she is going to do next, but she has certainly put the matter on the record and I hope Members on the Treasury Bench have heard. I find it pretty appalling that Government Departments are not answering correspondence from all Members, from all political parties, on time. In the end, Back Benchers are answerable to their constituents, and if Departments cannot provide a reply, they are letting down hon. Members. I hope the relevant officials are listening and answering as I speak.
Regulation of Bailiffs (Assessment and Report)
Mr Luke Charters (York Outer) (Lab)
I beg to move,
That leave be given to bring in a Bill to require the Secretary of State to publish an assessment of the effectiveness of current regulation of the debt collection and civil enforcement sectors and to report to Parliament on the potential merits of statutory regulation of those sectors; and for connected purposes.
Today, I introduce the Regulation of Bailiffs (Assessment and Report) Bill. We are in this place to speak up when others cannot and to put right what is clearly wrong. This Bill to get a grip on rogue bailiffs does exactly that.
I want to share some truly heartbreaking stories: stories of vulnerable people left petrified in their own homes and disabled people terrified that vital equipment could be wrongfully taken from them. It is time that despicable practices in the enforcement sector came to an end for the thousands across the country who have suffered serious injustices at the hands of cold-hearted rogue bailiffs—those who have brought shame to their own industry. I came into politics to fight for social justice and that is why I am proud to be a Labour MP, but nothing has fuelled that fight more than hearing from those crushed by the worst elements of the enforcement sector; their pain and their stories have imprinted themselves on me with lasting force, and it is for them that I am absolutely determined to change the law.
Let me first thank StepChange and particularly Sophie Morris, who is in the Gallery today. I also want to give credit to the Enforcement Conduct Board, known as the ECB, which voluntarily regulates 95% of the sector. In my view, it should oversee this regulation. At present it issues guidelines for the enforcement sector, but that, of course, is the issue: these guidelines lack legal heft.
The Statute of Marlborough, which passed in 1267 during the reign of Henry III, is one of England’s oldest pieces of legislation still partly in force today. It shows that even 750 years ago people were thinking about the need for fair debt collection, yet here we are today faced with the same challenges.
As a former regulator at the Financial Conduct Authority, I understand the importance of setting clear standards. The last changes to enforcement law were made about a decade ago and introduced a three-stage process and stronger protections for vulnerable people. Despite those changes, aggressive practices and inconsistent standards still exist. That is why the independent ECB was created in 2022 to voluntarily oversee the sector. According to Citizens Advice, one in three people who have had contact with a bailiff have experienced behaviour that breaks Ministry of Justice expectations, and even among the bailiffs that are regulated under its current scope, 1% of visits were deemed too aggressive by the ECB. That equates to hundreds if not thousands of visits a year. That is why we need a fair and proportionate debt collection system.
I want to tell Members Michael’s story. He is an inspirational chap who I welcomed to Parliament last week. Michael’s story began with an horrific motorbike accident that completely upended his life. He sustained injuries that made him unable to walk or stand, and after a lengthy spell in hospital, getting by on sick pay alone, he lost his job. During this time he received a letter demanding a full year’s council tax to be paid at once—by the way, we must end that punitive rule that is triggered when someone misses just one council tax payment. I am grateful to Martin Lewis for campaigning on that, and I welcome the Government’s consultation too.
Returning to Michael’s story, bailiffs were sent to collect the council tax. He was at home, bedridden and unable to move. The bailiffs visited repeatedly but he could not hear their knocks or get out of bed. Despite that, they unfairly added extra charges to his debt for their visits. He was left without carpet and with a broken bed and a broken boiler. On top of all this, he was preparing to become a dad. What should have been a proud and exciting moment in his life became one of immense stress and fear—fear that the bailiffs, given that they had nothing else left to take, might seize his baby daughter’s toys, her changing table or even her cot. As a father, I could sense the deeply personal pain behind that fear—the heartbreak of possibly failing her in the one way he still felt he could provide.
Michael went from being a homeowner with a near perfect credit score to nearly losing everything. I am pleased to say that he is back on his feet, and although he is still paying the debt off he is hoping to clear it soon. He is doing well. I took him out on to the Terrace last week in the sunshine, and we reflected on how unfair bailiff practices had added to his hardship.
I also recently met Adam, who got into debt through falling behind on council tax and card repayments after losing an agency job and struggling to find new work. His experience, like many others, began with letters and ended with visits to his home. As is often the case with rogue bailiffs, the visits were aggressive and intimidating. One forced his foot in the door, threatening to come in, which breaks virtually every rule in the book. Adam told me it was like
“someone was trying to boot down the door”.
He immediately told the bailiff that he had a disability and was classed as vulnerable. The bailiff said that he did not care and would take away Adam’s belongings regardless. A bailiff saying that he did not care? What cruelty!
The enforcement system is broken and punishes those who are already struggling. When rules allow such passive, cruel indifference to people in crisis, it is not about one bailiff in one moment: it is about the sort of society we want to be. Adam had Government-funded equipment for his disability—a specially adapted device—but again the bailiff said that he did not care and would take it anyway. Adam contacted StepChange. Its advisers helped him to come up with a payment plan, which the bailiffs wrongfully refused. He became genuinely terrified of being at home on his own.
Adam has made progress with his debts, and I welcomed him to Parliament last week alongside Michael. Both cases are littered with dozens of examples of unregulated rogue bailiff activity. The ECB does a good job, but many bailiffs are not in its perimeter. Statutory regulation would enable it to be even firmer and to drive up standards, so it is time for the Government to fix the regulation in the enforcement sector.
I do not want anyone in this country to have to worry about losing their disability equipment or their children’s toys. No one should ever have to face the same hardship. Fourteen years of Conservative Government saw only a few, although welcome, tweaks to the law. That has to change. The Labour party is built on principles of social justice, equality and fairness. That is why we need to bring bailiff regulation on to a statutory footing, changing the lives of millions of people in the process. For Michael and Adam, and in honour of all that they and countless others have endured, let us bring in statutory regulation of the debt and civil enforcement sectors once and for all.
Question put and agreed to.
Ordered,
That Mr Luke Charters, Adam Jogee, David Williams, Alex Baker, David Burton-Sampson, Amanda Martin, Callum Anderson, Lee Pitcher, Mike Reader, Alison Hume, Euan Stainbank and Dr Allison Gardner present the Bill.
Mr Luke Charters accordingly presented the Bill.
Bill read the First time; to be read a Second time on Friday 13 June, and to be printed (Bill 249).
Business and the Economy
(1 day, 5 hours ago)
Commons ChamberRead Hansard Text Watch Debate Read Debate Ministerial Extracts
16:32 - The House divided: - Ayes: 88 / Noes: 253 - Question accordingly negatived.
Mr Speaker
I inform the House that I have not selected the amendment.
I call the shadow Secretary of State.
Andrew Griffith (Arundel and South Downs) (Con)
I beg to move,
That this House regrets that unemployment is rising and causing misery for young people in particular, that this Government has displayed a negligible understanding of business and that investors and entrepreneurs are being driven overseas; further regrets that over 200,000 businesses have closed since Labour took office, as a result of the Government’s policies to raise employers’ National Insurance contributions, in breach of the Labour Party manifesto commitment, to scrap Business Property Relief, to impose £4.5 billion of additional costs on businesses through the Employment Rights Bill and increases to business rates; and calls on the Government to urgently change course to support jobseekers, small and medium-sized enterprises, family businesses and entrepreneurs who take risks to create wealth and jobs that benefit people across the country.
Allow me to paint a picture. A small business owner navigates the early morning darkness to their high street shop. They twist the keys and lift the shutters. They turn on the lights, the card machine, the heater and the shop music. They open the door in time for their first customer of the day, putting to the back of their mind the question of how to meet the rising costs placed on them by this Government—the taxes they have to pay before they open that door and the unreformed business rates, with many more than doubling. How will they pay the jobs tax on their staff? How will they ever keep their business intact when they seek to pass it to their children after they have gone? Not one single person around the Cabinet table truly understands those pressures, yet this Labour Government have crossed the road to start a fight with Britain’s businesses.
When it comes to business, the Government have broken every one of their promises. Members on the Government Benches looked business owners in the eye at the election and told them that they would be on their side, but it took barely 100 days for this Labour Government to revert to type. At the autumn Budget, the Chancellor slapped a £25 billion jobs tax on business, meaning that employers will have to pay an additional £900 a year for an employee on the median wage, according to the Institute for Fiscal Studies.
Only a few weeks later, the Business Secretary tabled the now 300-page, trade union-dictated Employment Rights Bill, drowning employers in red tape. Helen Dickinson, the CEO of the British Retail Consortium, said that businesses are
“left with little choice but to increase prices”—
as we have seen today—“or to reduce investment.” The CEO of UKHospitality, Kate Nicholls, said that these measures
“will simply force businesses to cut jobs, freeze recruitment, cancel planned investment, reduce trading hours and, in the worst-case scenario, close their doors for good.”
Several hon. Members rose—
Dame Caroline Dinenage (Gosport) (Con)
My hon. Friend is so popular. I am interested by how he is starting this debate, because it chimes with what I am hearing in my constituency, where venues such as pubs, restaurants and cafes, which are such a vital part of the effort to regenerate our high streets and local community spaces, are seeing their margins slashed because of the cost of labour and the increase in business rates. Does he agree that Labour’s jobs tax and the ending of business rates relief is putting the regeneration of our town centres and community spaces at risk?
Andrew Griffith
How tragic is it that from Gosport to Gloucester and everywhere between, businesses on our high streets are closing? This Government do not understand that. If they do understand, they do not care, and if they care, they have not acted. The message from this Government to anyone willing to put their capital, time and energy on the line by taking risk to create wealth as a business owner is abundantly clear.
Dr Luke Evans (Hinckley and Bosworth) (Con)
Exactly to that point, is it not a shame that for the first time ever since records began in 2012, the number of new businesses registered at Companies House has fallen? The exact risk-taking behaviour that we need to grow the economy is not taking place; is that not a damning indictment of what this Government are doing?
Andrew Griffith
My hon. Friend makes an incredibly important point. I believe that all of us come to this House to try to do our best and to grow the economy, but any Government faced with that terrible metric about the failure rate and formation rate of businesses would be acting immediately, with haste, and reversing so many of the measures. The choices this Government have made have delivered precisely the outcome my hon. Friend describes.
Jerome Mayhew (Broadland and Fakenham) (Con)
Pubs are the lifeblood of communities, particularly in rural constituencies such as mine in Broadland and Fakenham. People could perhaps make an argument for individual tax rises, but it is the combination of three in particular that are hitting pubs so badly. It is the increase in the minimum wage—the Government are very good at increasing prices for everyone else, but not themselves—as well as the removal of business rates relief for hospitality and leisure, and the rise in national insurance contributions for employers. The latter point is not so much about the overall percentage rise, but the reduction in the threshold from £9,200 to £5,000, which particularly impacts those who employ part-time staff and those on low wages. It is a triple whammy on pubs. Is that why so many are closing across the country?
Andrew Griffith
My hon. Friend makes exactly the right point about that triple whammy, and about the cumulative effect of changes and the consequences—potentially unintended—that manifest themselves most acutely in industries such as UK hospitality and retail, which have the great virtue, among many others, of contributing to the character of the places in which we live and giving so many young people their first step on the ladder of opportunity and their first experience of work. Without those businesses, it will be inexorably harder for young people. That is one reason that it is of such great concern that the number of people employed on payrolls under this Government has already fallen by 100,000, with a faster rate of decline in the first quarter of this year. This Government are perfectly positioned to achieve the unbroken track record of every Labour Government in modern history of leaving office with unemployment higher than when they started.
Sir Oliver Dowden (Hertsmere) (Con)
Does my hon. Friend agree that another factor that will undermine job creation and employment under this Government is their approach to international wealth coming into this country? When other countries, such as the US, are granting golden visas, we are closing the door with these ideologically-driven non-dom reforms, which will not even raise any money. If the Government want to increase job opportunities, they should take the chance at the next Budget to reverse that foolhardy policy.
Andrew Griffith
My right hon. Friend is exactly right. He will correct me if I am wrong, but as I understand it, one millionaire is leaving our wonderful country every 45 minutes. That is to say nothing of a generation of young people who are yet to have their opportunity. How tragic it would be to think that young people see greater opportunity—notwithstanding their birthright of being born in this wonderful country—in other parts of the world than is present on their doorstep, in their communities and in the heart of their families.
It has to be said that this Government’s combination of actions are sending a clear and regrettable message to those who seek to create wealth: “Don’t bother. Don’t even try.” This socialist Government do not want people to succeed. There could be no better example of that than the vindictive family business and family farm death tax, which will carve up successful businesses as and when they are handed down to the next generation.
Why do we think this vindictive policy exists? One of the more benign interpretations, to be charitable, is simply the dearth of business experience in the Labour Cabinet. It has to be said, though, that the Cabinet members are world-class in their understanding of, and potential avarice in relation to, trade unions. Perhaps that is why the Secretary of State, who has not deigned to be here with us today, is currently undertaking the most expensive work experience placement in history at taxpayers’ expense at British Steel in Scunthorpe.
It is not just that this Government do not understand the mechanics of business; they do not understand and value the principle of business. Running or investing in a business at its core is a profound act of human courage—the triumph of optimism over inertia, and a mindset of someone solving problems themselves rather than waiting for permission from others. It is about embracing risk knowing that there are no guarantees, no bail-outs and that no one is coming to the rescue. When enterprise succeeds, such people create the wealth that funds our public services.
Every time a Minister dispenses money and largesse in Whitehall, as this Government are doing at record velocity, they can do so only because a founder, an entrepreneur, or a businessman or businesswoman, took that leap. It should be the Government’s job to get out of their way and to help the business builders, not the blockers, but this Labour Government understand none of that. Instead of leaving business to get on and flourish, they have erected a blockade of bureaucracy and taxes that they promised would never come. They have declared war on employers across this land from the ramparts of Westminster.
Jerome Mayhew
My hon. Friend will know that business confidence has plummeted since Labour came to power. Does he agree that one of the reasons it has plummeted is the loss of faith in this Government? Businesses were promised that their plans were fully costed and fully funded in advance and there would be no increased business taxes, but within 90 days the Government went back on that. How can business ever trust this Government again?
Andrew Griffith
My hon. Friend, who is himself a very distinguished and successful businessman, knows exactly the importance of that intangible quality of confidence that the Government have your back and you will not wake up in the morning and be hit with a £25 billion jobs tax—on which subject there was not one word, not one syllable, in the Labour party manifesto. We toured the studios jousting with Labour Members and issuing warnings, but we were met with a repeated barrage of denials in respect of their £25 billion jobs tax. [Interruption.] The Ministers are chuntering, and there is probably a fair amount of chuntering to do if they have to explain an inability to balance the public finances along with an attempt to do so by means of a set of vindictive and arithmetically incorrect taxes on business.
We can move on from tax. That is just one of the many barrages faced by businesses that are sapping confidence and producing some of the very worrying statistics that we are seeing. We could, for instance, move on to the “Unemployment Rights Bill”, which is an egregious example of red tape and state intervention and overreach. At this point Labour Members are normally uncharacteristically quiet, because they are aided and abetted to the tune of £31 million by the trade unions.
The Bill shackles the hands of employers in pubs, bars, garden centres, grocery stores, butchers, hairdressers —businesses rooted deep in our communities—with little clarity and no lead-in time. Seasonal work could be made impossible by the Bill. It is certain that compliance costs will rocket. There will be long delays for employment tribunal hearings; in some parts of the country, the wait for a hearing is already approaching 18 months. Even according to the Government’s own estimate, on top of every other measure, there will be a headwind cost for business of an unwanted £5 billion a year.
Alison Griffiths (Bognor Regis and Littlehampton) (Con)
You have talked about the risk of seasonal jobs being lost as a consequence of the Employment Rights Bill. In my constituency it is a serious risk, as a number of businesses have told me. Would you say that the Minister should withdraw the Bill, or, at the very least, conduct a proper assessment of its impact?
Madam Deputy Speaker (Ms Nusrat Ghani)
Order. May I point out, to prevent any further errors, that the term “you” is not used in the Chamber, because it refers to me, in the Chair? Hopefully no one else will make the same mistake.
Andrew Griffith
No one would believe, Madam Deputy Speaker, that you would implement such terrible measures without a proper impact assessment. More significant, however, is the fact that we have heard not just the voice of my hon. Friend the Member for Bognor Regis and Littlehampton (Alison Griffiths), representing those important seasonal industries, but the voice of employers across the country, who have pointed out that it will no longer be possible for seasonable and flexible work to deliver the economy that we need.
Dr Evans
The problem with the Employment Rights Bill is not only its implied cost and the red tape it will introduce, but the fact that it is a poor piece of legislation in the first place. The Government’s own regulatory independent commission has said that eight of the 23 criteria are not fit for purpose. Does my hon. Friend not agree that if the Bill is to proceed, it should be reworked?
Andrew Griffith
My hon. Friend is exactly right. If Labour Members were honest enough to do so, they would admit that the Bill is a rushed piece of legislation. It was introduced because of an arbitrary promise to do so within 100 days, and it was introduced at half its current length, which means that 50% of the words that it now contains—the red tape that our businesses will have to implement and wrestle with for years to come—did not even benefit from scrutiny in this place. Many of the powers in the Bill are not fleshed out or clarified. We will wreak great havoc and uncertainty on business if the Government are determined to proceed. It would be far better for them to shelve the Bill, to listen, to learn and then to come back so that we could use the proper mechanisms of this House to do our jobs for all our constituents to avoid the unintended consequences and the damage that I do not believe anyone would want.
Andrew Pakes (Peterborough) (Lab)
In that spirit of listening and learning, I have been speaking to businesses in my constituency this week, and the chambers of commerce have signalled that the trade deal is a new start for British business because it is reducing red tape, giving certainty to businesses and allowing them to trade and do well, in my constituency and elsewhere. Do you think they are wrong?
Madam Deputy Speaker
Order. “Do you think they are wrong?” We have a long afternoon ahead of us—even longer for me in the Chair.
Andrew Griffith
One has to celebrate small mercies, and I am delighted by the hon. Gentleman’s conversion to the cause of free trade. Free trade is what has lifted billions of people in the world out of poverty. It has made us the great country that we are today. The business in the hon. Gentleman’s constituency that has formed such a clear view has obviously benefited from considerably more detail than the House, so perhaps he will share its name. We would be very happy to hear about the details of the trade agreement that has been reached.
Perhaps, in having that conversation with his local business, the hon. Gentleman would like to engage in a discussion about its views on the Employment Rights Bill. Despite legion opportunities that I, and others, have given Ministers to name a single business that is in favour of all the measures in the Bill, answer still comes there none.
Sir Desmond Swayne (New Forest West) (Con)
May I tell my hon. Friend why I think the hon. Member for Peterborough (Andrew Pakes) is wrong? Since the very inception of our negotiations to join what was then the common market—now the European Union—it has attached huge importance to fishing. We have just handed over the enormous leverage of an annual negotiation, and for what? Absolutely nothing.
Andrew Griffith
I hesitate to stray into the matter of fishing, which I suspect we will debate many times in the future, but I note that those on the other Government Benches next to us tabled an amendment, which has not been selected for debate but which seeks to shackle our small businesses further by having us reverse across a much broader range of topics than the pass that the Government already sold earlier this week, so that we become a taker of rules from Brussels, and our small businesses, entrepreneurs and founders are crushed by the red tape that would originate there.
Jerome Mayhew
Fishing is one sector, but there is a clause in the Employment Rights Bill that affects all businesses. At this point I should draw attention to my entry in the Register of Members’ Financial Interests, as a former entrepreneur who has employed well over 1,000 people in my time. The problem is that if day one employment rights are imposed for any hire, it will be a massive disincentive for businesses to take a chance and take on people who are more vulnerable: the young and the less well qualified. Why would a business take that chance if it risked being hauled up over day one employment rights?
Andrew Griffith
Once again, my hon. Friend has demonstrated his deep and real knowledge of business, having himself, in a past life, employed more than 1,000 people. One rather suspects that taking that risk, having that responsibility and shouldering that burden, moral and financial, is greater than the entire aggregate responsibility of Labour Members for hiring anyone. My hon. Friend has made the right point about who will end up on the receiving end of the higher unemployment. It will be the young, looking for their first opportunities, and it will be excluded and vulnerable groups on whom a benign employer would today take a chance—but not if that chance is likely to lead immediately to being at the back of an 18-month-long queue for an employment tribunal hearing.
Gareth Snell (Stoke-on-Trent Central) (Lab/Co-op)
The point made by the hon. Member for Broadland and Fakenham (Jerome Mayhew) was about day one rights, but that right is to stop unfair dismissal from day one. Is it now the policy of the Conservative party to allow for unfair dismissal between the first and second days? If the shadow Minister is unhappy with that being a right from day one, presumably he is unhappy for people to have that right at all.
Andrew Griffith
I am afraid that to make those points is to misconstrue wilfully what is actually in the Bill. We have a very settled and balanced position of employment rights that dates back to before previous Labour Governments as well as the Government in office before the election. It strikes what will always be a difficult balance between offering employees the chance to enter the workforce and the ability of businesses, and of the public sector and others, to hire and to operate in a way that is profitable. It does nobody any favours to think that we can, merely by passing words of statute, change the outcomes in a way that advantages the most vulnerable, who are the youngest employees. The failure to learn from that point will once again lead to exactly the same outcome, which is why every Labour Government have left office with unemployment higher than where it started. In his response, the Minister may wish to confirm that this time will be different and perhaps lay out exactly why it will be different, but he has a job of work to convince us and, more importantly, every employer in the land that that is the case.
Dave Doogan (Angus and Perthshire Glens) (SNP)
The shadow Minister takes a casual swipe at the business acumen of Ministers, and I wonder whether I can encourage him to develop that point. When I speak to businesses in Angus and Perthshire Glens about the changes that have been instituted since July last year, they are incredulous that anybody with even a passing knowledge of business, enterprise or entrepreneurialism of any nature would put such roadblocks in the way of business and wealth creation. Would he like to expand on that?
Andrew Griffith
I thank the hon. Gentleman for making that very perceptive observation. I hate to say this, but I was not making a casual point; it was a considered point. When we think about how this House continues to legislate and tax in a way that reduces economic growth, that does not celebrate a culture of entrepreneurialism and founders, and that is leading to higher employment, with 100,000 fewer people on payroll than there were a year ago, we should all look deep into our souls. What is the endemic failure in Parliament, and of this Government in particular, that is leading so quickly to precisely those outcomes?
It is sad to say that sometimes there is a lack of voice for business. Although one does not want every single sector to be represented in this place, the compensatory mechanism for that involves consultation and diligent impact assessments. In introducing legislation, this Government have been serially criticised for the way that they have casually discarded such measures, and the Treasury maths simply do not add up.
Dr Evans
I think it goes wider than that across the top of Government, because Members on both sides of this House are grappling with what to do about people who are long-term unemployed. If we make it more likely that companies will not take a risk on getting someone back into work while increasing unemployment at the same time, we will create a toxic concoction at a time that we are trying to get people back into jobs because we know that that is better for the economy and better for them, their health and their family. Does my hon. Friend agree?
Andrew Griffith
I do indeed agree. We ought to confront how we have got here—I acknowledge that it has happened over a period of time—with so many young people unable to work, get an education or be in productive training. That is a headwind on the economy, and a moral failure of us all. The question that we should confront ourselves with is this: what are we doing each and every day in this place to give opportunities to 1 million young people and the 9 million others of working age who remain stubbornly on welfare, while improving our public finances and making the maximum use of the wonderful resources, education and skills of the British people, so that we can grow our economy and be the prosperous nation that we once again deserve to be?
Jerome Mayhew
My hon. Friend talks about the message of this Government, and just last week I spoke to a first-generation immigrant, who talked about the message for entrepreneurs in this country. She said, “If you can’t hand on more to the next generation through your own hard work, what’s the point?” She is right, isn’t she?
Andrew Griffith
She is right, and that is one of the chilling headwinds that anyone who wants to grow the economy, and anyone who serves in the wonderful Department for Business and Trade or our Treasury, should confront. We should be going back to officials and challenging exactly that. How can we achieve a culture vibe shift on growth and entrepreneurship? That is the best contribution that we could all make.
Dame Caroline Dinenage
May I just take my hon. Friend back to what he was saying a moment ago about opportunities for young people? I recently met hair and beauty salons in my constituency. As he knows, they have historically been the most amazing employers of apprentices and have given such wonderful chances to young people. I was worried to hear that the rate at which they are taking on apprentices is dropping off. By 2027, there will be no apprentices left in the sector. It is not just hair and beauty saying that; other sectors in my constituency, such as adult social care and early years education, are saying the same. Is he as worried as I am about the lack of opportunities for our younger generation?
Andrew Griffith
Yes, I am enormously worried. We have to understand and make the connection that it is only the private sector that truly creates sustainable jobs. We need people to work in our wonderful public services, but ultimately growth and opportunities come from the expansion of the private sector, which is most encapsulated by female-led businesses, such as those in the hair and beauty sector. They often survive on small margins, deal with lots of different pieces of regulation, and try to keep our high streets and communities alive—as well as performing, I suspect, rather a better service for my hon. Friend than for me and some other colleagues. It is a valuable and vital industry.
Sir Roger Gale (Herne Bay and Sandwich) (Con)
We ought to ram this point home so that the Minister understands. Before he stands up, he has plenty of time to think this through and provide us with a sensible answer, rather than something that is off the cuff, so here is a note of warning. This morning, I attended an event run by one of the national clearing banks, which is putting a huge amount of effort into trying to create, and helping its customers to create, opportunities for young people. The bank has come up with a raft of good ideas, but every single one of them—this point was made very clearly—will hit the roadblock of the Government’s employment legislation. Where is the sense in that? If my hon. Friend does not have the answer, the Minister no doubt will have.
Andrew Griffith
Let us hope that the Minister does indeed have an answer. I am somebody who always travels optimistically, and though we have sparred on the important subject of the 300-page, 120,000-word Employment Rights Bill, it is never too late. That Bill is undergoing scrutiny in the other House as we speak, and the Opposition would welcome and support the Government’s shelving it until we have dealt with the cacophony of headwinds that my hon. Friend the Member for Broadland and Fakenham (Jerome Mayhew) talked about earlier, including the changes to the tax system and other changes; the damage that has already been inflicted on the economy; the headwinds on costs that we saw this morning, with inflation 75% higher than the Bank of England’s target rate, which will mean that interest rates are higher for longer; and the failure to reform business rates. There is an opportunity to revisit bringing forward specific proposals on employment to enduringly reduce business rates, if the Government feel a burning desire to do so.
My right hon. Friend the Member for Herne Bay and Sandwich (Sir Roger Gale) is quite right: would it not be good if the Minister could use the ample time that we have this afternoon to consult, and to bring forward some sensible answers that will give us all confidence that we are going to see a Government who are properly on the side of business?
Sir Ashley Fox (Bridgwater) (Con)
Does the shadow Secretary of State agree that the cumulative effect of all the Government’s measures over the past 12 months—a £25 billion jobs tax, the £5 billion burden of the Employment Rights Bill, the removal of business property relief, which is reducing the incentive to be an entrepreneur—will be to drive unemployment higher?
Andrew Griffith
Of course, I agree with my hon. Friend, but it does not actually matter what I or others think, because the reality is that the data does not lie. As of now, we have 100,000 fewer people on payroll than we did 12 months ago, so the data is already telling us about the cumulative chilling effect of those measures.
That is perhaps unintended. We learn today that the Chancellor and the Deputy Prime Minister are at odds, and perhaps the Business Secretary is the third leg on that stool, with each of them bringing forward measures that are enormously damaging to business. They are perhaps not adding up the sums and seeing eye to eye to understand the lived experience of what it is like to be a business on the receiving end of all of those changes, cumulatively and all at the same time.
Many businesses will, from the start of April this year, not only face a payroll increase of around 10%—in an economy without such a level of topline growth, so that hits margins directly—but, because of the failure of the Government to maintain business rates relief at anything like the same level for our retail, hospitality and leisure, have seen their business rates double. Imagine that all hitting a business on 1 April this year.
Jamie Stone (Caithness, Sutherland and Easter Ross) (LD)
I was a little startled to be described as sitting on the “other Government Bench”, but perhaps that is the shape of things to come—who knows? I do not have my crystal ball with me.
There has been a predictably negative barrage from the Opposition, which does not surprise me because that is how we work in this place, but thinking of businesses, there are businesses that from this year will get better in my constituency and, indeed, in that of the hon. Member for Angus and Perthshire Glens (Dave Doogan). I am talking about the seed potato industry. We have been crying out to get the best Scottish seed potatoes into European markets, and I therefore do thank the Government. It means a lot to farmers, and I have had very positive comments about it. I am being absolutely fair-minded about that.
Andrew Griffith
I am enormously glad, and we should be balanced, that we have found something that goes the other way. I am not sure if one can subsist entirely on a seed potato—it may have been tried historically, and not with enormous success—but I congratulate the hon. Member on the success of his seed potato industry.
To be charitable, we have found a rare example of the Government actually having the back of a business and supporting it, but would it not be wonderful if they could extend that to much larger sectors of the economy, such as financial and professional services, retail and hospitality industries and even our manufacturing industries, as they wrestle under the cosh of uncompetitive energy costs, so that a business in Birmingham, west midlands, will face an industrial energy cost four times higher than that of a competitor in Birmingham, Alabama?
Andrew Griffith
My hon. Friend has made so many good points that I will of course give way again.
Jerome Mayhew
My hon. Friend is being enormously generous in giving way, and I am genuinely grateful. Labour parroted during Prime Minister’s questions that there has been growth of 0.7% in the first quarter of this year. Does my hon. Friend agree that, if we look into the figures, we see that a chunk of that is production rising by 1.1%? That is actually due to electricity, gas and water prices being raised, and the Government count that as economic growth.
Andrew Griffith
Most of us would put higher energy costs into the liability rather than the asset column of our economy. We are debating business, unemployment and the economy, and I hope the Minister will devote an ample proportion of his response to the measures this Government will take to remove the yoke of uncompetitively high energy costs, which is simply crushing so many British manufacturing businesses.
Jim Shannon (Strangford) (DUP)
When it comes to business and the economy, we want to ensure that every region in the United Kingdom of Great Britain and Northern Ireland can benefit. Northern Ireland is the UK’s smallest region by GDP, but it has higher GDP per head of the population than some regions. It is really important that Northern Ireland has the same advantages and opportunities, and to be fair, I think the Minister is committed to that. Would the hon. Gentleman agree that, when it comes to improving business and the economy, my young people in Strangford deserve the same opportunity as those in his constituency or, indeed, in Scotland, Wales or wherever it may be?
Andrew Griffith
The hon. Member is exactly right. When I describe my constituency as “South Downs”, people occasionally assume that it is in Northern Ireland, but all of our young people deserve the best opportunities. We know that the best outcomes for young people are when they can enter the workforce, and that if, when they graduate from school, college or an apprenticeship, those young people cannot immediately find productive work, the scarring impact of that can run through the entirety of their adult life and they never catch up with their peers’ earnings. That is why it is so important that we have a healthy labour market, and a healthy labour market relies on the ability of employers to feel that they can take a chance, give people opportunities and benefit from that.
I want to make some progress, which I suspect may be popular. There are many Members on the Opposition side; sadly, there are disappointingly few on the Government side. Given the paucity of business experience on that side, it is probably appropriate for there to be more listening than talking on the Government Benches.
Let us imagine—and, Madam Deputy Speaker, you will know this from your wonderful constituency—that despite all the headwinds this Government have imposed on business, an entrepreneur does well, grows their business into a successful operation and wants to hand it down to the next generation after they are gone. Those people, who have taken risks to create something good for society, are now at a competitive disadvantage as a result of the family business death tax. They will be forced to carve up, slice up, or close up shop forever to meet the demands for business property relief and inheritance tax.
Analysis from CBI Economics for Family Business UK estimates that this measure alone will result in 208,000 job losses and a £2 billion net loss to the Treasury. Again, I hope the Minister will address that directly when he responds. Family Business UK’s chief executive, Neil Davy, says that “far from stimulating economic growth” this policy “will achieve exactly the opposite.” He is right. To illustrate just how ridiculously flawed this policy is, it applies to families here in the United Kingdom, but it does not apply to overseas businesses that operate here, or to those owned by private equity or foreign corporate owners.
Labour has stolen any incentive for success from a generation of home-grown entrepreneurs. We really cannot go on like this. The gulf between those who create wealth and those who govern us has never been larger. Only one Cabinet Minister, the Secretary of State for Scotland, has any real experience of running a business. Trying to find business experience among those on the Labour Benches is like trying to find a tax the Deputy Prime Minister does not think needs to be raised. It is no surprise that, according to the Institute of Directors, over two thirds of businesses are now pessimistic about the future of the economy.
Dr Luke Evans
I would argue that it is actually worse than that. A study by the Chartered Institute of Personnel and Development has said that business confidence is at the same level it was in the pandemic. In the pandemic, businesses shut up shop and were not sure they would ever open again, and that is the level of business confidence we are dealing with at the moment. A quarter of businesses say they will lay people off, and that is the reality out there. Does my hon. Friend agree that that is why the Government need to listen, and change course?
Andrew Griffith
Our business community is ravaged; my hon. Friend is exactly right. We are plummeting to depths last reached only when the entire global economy was shut down due to an unknown pathogenic virus. If that is the bar the Government set themselves, I urge them to have a little bit more ambition and confidence in their ability to grow our economy.
No nation can spend its way to growth, or tax its way to success. I fear that we are about to see a case study showing exactly that this does not work. It has been tried before, and it did not work then. We cannot afford the ignorant short-sightedness of this Government. To achieve growth, we need a country in which everybody’s spark of ambition can find ignition. Not everyone needs to run a business, but for those who do, we want a country that values, cherishes and honours its wealth creators; where transforming a side hustle into a main hustle is straightforward; and where His Majesty’s Revenue and Customs is transformed from a predator to a partner, and the tax system goes out of its way to reflect the risk of investing, and of running a business. We want our regulators to think carefully before they intervene, and not to pounce on every perceived failure as another reason to try to eliminate risk.
John Cooper (Dumfries and Galloway) (Con)
May I give the House the news that ex-special forces soldiers, including the Minister for Veterans and People, have reached the top of Everest today? Congratulations to them. We also have a mountain to climb to create growth in this country. My hon. Friend mentioned HMRC; does it not reflect the Government? The Government’s attitude to business is that it is a dripping roast to be devoured and taxed to a standstill.
Andrew Griffith
So many businesses feel like that, even when HMRC is doing its legitimate job of trying to balance the books and raise money for the public purse. That is because of how it goes about that job, its one-sided nature, and the uncertainty that it inflicts on small businesses, whose biggest asset is their time, and whose greatest opportunity cost is the need to comply with myriad regulations and taxes.
We want a Government with a philosophy of trust in business, and a Government who celebrate personal responsibility and clear the path for innovation. That requires the courage to champion risk-takers and elevate enterprise above sectional interests. As right hon. and hon. Members have said, it is sad that investors and employers clearly do not have faith in this Government to deliver the contract between the state and those who seek to run a business. Instead of this Government opening up investment for wonderful British businesses around the world, top investors are fleeing the country and taking their wealth, creativity and entrepreneurship elsewhere. What could be sadder?
Harriet Cross (Gordon and Buchan) (Con)
The industries and business groups that are leaving the country quicker than any others are in the oil and gas sector. Investors in oil and gas—in the North sea, Aberdeenshire, and my Gordon and Buchan constituency—are fleeing the country at an astounding rate, taking investment, skills and jobs with them. We are losing a generation of investors, skills and skilled workers. What does the shadow Minister think we should do to keep those skills, that investment and those jobs in the UK?
Andrew Griffith
One is tempted to say that we should try to remove this wretched Government as quickly as possible. That, of course, is part of the answer. We need a Government who listen to the points my hon. Friend makes so eloquently on behalf of her constituents and the industry; a Government who understand the reality of the energy situation and the high cost of energy for business, rather than pursuing a failed dogma and ideology that is not being pursued by the rest of the world; and a Government who listen to enterprise and businesses, many of which I have met. We could take that approach from a perspective of trying to grow the economy, in order to reduce energy costs to a competitive level, or because one believes in the climate transition but understands that special skills in dealing with the harsh offshore environment need to be nurtured, rather than squandered in a way that results in people with those skills fleeing elsewhere.
John Glen (Salisbury) (Con)
The shadow Minister is making a forensic case against the Government. May I ask him to focus on an issue that he will be familiar with from his prior ministerial experience? We had the banks before the Treasury Committee yesterday. The imminent outcome of the advice guidance boundary review will require the Government to work closely with the regulator to ensure absolute clarity, so that investors across the country can invest in the future of this country through equities, rather than just leaving their investments in cash. That will require action and direction from the Government. It is an issue on which there is probably consensus, but the Government need to step up to the mark.
Andrew Griffith
I thank my right hon. Friend and predecessor in the role of City Minister. This is an important point: where we can, we will support the Government in continuing the work, which he and I started, of trying improve the investment outcomes for our economy. We want to increase equity investment to mobilise pension funds and, most importantly, deliver good returns for our investors: the constituents who send us here, and who want the best possible outcome for their pension. It is really important that the Treasury leans into that, and that we have abundant capital markets that are well regulated but not over-regulated. We must create the right culture when it comes to the advice guidance boundary, our tolerance of risk, and our financial literacy and education in our schools. That is a really big point. I hope we continue to work collaboratively and supportively with the Government, along with the excellent Select Committee of which my right hon. Friend is a Member.
None of that helps if wealth creators and global investors have left these shores due to vindictive measures that simply will not raise anything like the money needed. It is perfectly okay to admit when one makes a mistake, and in this case Treasury Ministers have made a mistake. The amount raised will be nothing like the amount expected. The Centre for Economics and Business Research has done important research on that, and found that the cost will be significant. Far from raising money for the Treasury, the country will, I am afraid, lose money.
It is a truism—one that we Conservative Members have to continually teach Labour Members, I regret to say—that we do not make the poor richer by making the rich poorer. Like all socialists, Labour Members are attracted to superficial measures that will ultimately make all of us poorer. Those of us who are left behind will have to pay more, or endure less well-funded public services, as a result of this Government shepherding the golden geese into a pen and then exiling them.
The Deputy Prime Minister was right in her memo, which we saw today: this Government are indeed coming for your job, your business, your pension and your savings. It is all very clear in black and white. Whether Members are Team Rayner or Team Reeves, when it comes to decisions on the economy, it is all bad for business. When the Minister responds, perhaps he will share with us whether he believes that the tax measures advocated by the Deputy Prime Minister, which will have a chilling effect on business, are the right way to proceed.
Whether they are stabbed by employment red tape or shot by higher taxes, the outcome for businesses is the same. The Government duck the difficult questions while the Chancellor fiddles the fiscal rules, making it up as she goes along. Families know that the cost of living is getting higher under Labour. [Interruption.] The Parliamentary Secretary to the Treasury is so animated that I feel I should keep going, rather than disappoint him. He should listen, rather than chunter.
The Conservative party has a clear vision. It understands business from first principles—[Interruption.] Conservative Members could usefully listen and learn. This could be an exercise in understanding what a proper strategy that is on the side of business looks like. We back the millions of entrepreneurs and businesses who create wealth and jobs across this country. We are unafraid to talk about the need for business, and celebrate private capital, international investors and risk taking.
It was the Conservatives who delivered the single biggest tax cut for business in modern history through the move to full expensing, and the Conservatives who slashed business rates when we introduced retail, hospitality and leisure relief, and during that terrible covid pandemic, it was the Conservatives who provided billions in finance to keep business and the economy going. That is what leadership looks like. That is what a party that is truly on the side of business looks like. I urge Government Members to do a little less talking and a little more listening. They should think of every business owner and employee whom they told, during the election campaign, that the Government would have their back, and ask themselves whether their actions, rather than their words, have proved that to be anything like the case. With employment falling, wealth creators leaving this country at a rate never before seen, businesses closing, investment crashing and inflation rising today, the Conservatives certainly do not believe so. I commend this motion to the House.
Madam Deputy Speaker (Ms Nusrat Ghani)
A substantial opening speech there. I call the Minister.
The Parliamentary Under-Secretary of State for Business and Trade (Gareth Thomas)
Although that felt like a very long 50 minutes, it is always nice to see the hon. Member for Arundel and South Downs (Andrew Griffith) taking centre stage for the Conservative party. As one of the authors of the Liz Truss Budget, he is a constant reminder of the fiscal mess the Conservatives very kindly left this Government to confront.
Once again, the Opposition are trying to make us all believe that we are living in an alternate reality where the economy is shrinking, not growing, and investment is low, not high. There is only one problem with that analysis: none of it is true. Figures published last week showed that the economy grew by 0.7% in the first quarter of this year—the fastest growth of any G7 economy. The Office for Budget Responsibility’s forecast for growth has been revised up for future years, and the latest forecast from the International Monetary Fund predicts that the UK will see the third highest growth in the G7 over the course of this year. This Government have a plan for change, and it is working.
Harriet Cross
I just wanted to clarify whether inflation at 3.5% is higher or lower than inflation at 2%, which is where it was last July.
Gareth Thomas
I say gently to the hon. Lady that the current rate of inflation is an awful lot lower than the 11% it rose to under her party.
I was a bit surprised that there was nothing in the shadow Secretary of State’s lengthy speech on trade until my hon. Friend the Member for Peterborough (Andrew Pakes) provoked him. We have secured three massive trade deals: with India, the United States and, this week, the European Union. That will slash the cost of doing business abroad, reduce border checks, cut tariffs and axe red tape. Those trade deals will support jobs for British people, and create opportunities for Great British businesses in our biggest current markets, and in one of the world’s biggest future markets.
The Conservatives tried to do a deal with India, but could not; it has taken us just 10 months. They wanted a trade deal with the US—indeed, they had four years to do a trade deal with President Trump—but they could not; we have managed to do one in just four months. The deal they did with the EU was the worst trade deal in history; every opportunity they had to minimise red tape and border checks, they rejected. What was the result? Businesses stopped exporting to Europe in their thousands. Our deal with Europe sticks to our red lines, will save businesses thousands of pounds, will cut the cost of food in our supermarkets, and will help to get great British food products—from sausages to shellfish to seed potatoes—back into European markets.
Once upon a time, the Conservatives were in favour of free trade and trade deals. Now, they are against just about everything. Far be it from me to give advice to the Opposition, but the party in opposition is still allowed to support measures that are obviously in the national interest.
Dr Luke Evans
The key thing is, the Conservatives are in favour of free trade, just not at any cost. That has been the biggest problem with these deals. The Minister says that the previous Government did not sign off on them, and for jolly good reason—that is the point we are trying to get across. There will be people queuing up to come to the UK because they see us as a soft touch now and think they can get anything out of us. That is what we want to stop.
Gareth Thomas
Well, I am grateful to the hon. Gentleman for confirming once again that he is against the India trade deal, against the deal with the US and against the deal with the European Union.
I turn now to business investment. The Opposition’s motion claims that
“investors and entrepreneurs are being driven overseas”.
I hate to break it to Opposition Members, but the facts tell a rather different story: business investment actually rose by 5.9% in the first quarter of this year, the fastest quarterly growth in two years. In other words, business investment is higher than when the Conservative party left office.
Dave Doogan
Is the Minister a little worried that the unexpected growth in the first quarter of this year was businesses making capital investment to get in ahead of tariffs?
Gareth Thomas
One way that the hon. Gentleman could help businesses in Scotland would be to call for the Scottish Government to do what we are doing in this country and extend business rates relief to hospitality and leisure.
Investors from across the globe are choosing to put their money in the UK. Our international investment summit last year saw £63 billion committed to the UK—double the amount secured by the previous Government, when the Leader of the Opposition was the Secretary of State for Business and Trade—which is set to generate 38,000 new jobs. Crucially, the leaders of companies that committed to invest in our country at our international investment summit have hailed our pro-business approach as a driving factor behind their decision.
Sir Gavin Williamson (Stone, Great Wyrley and Penkridge) (Con)
I am sure Members across the House agree on the need and desire to promote growth and business investment. However, small and mid-sized businesses in my constituency—especially those in the hospitality sector—have been particularly squeezed, not just through the change of rate of national insurance, but with the threshold lowering, as they employ a lot of younger people on sometimes part-time wages. Will he make representations to the Treasury for those hospitality businesses to be included in future fiscal considerations?
Gareth Thomas
I can assure the right hon. Gentleman that we are always talking to businesses in the hospitality sector and across the economy. I say gently to him, though, that we had to take those difficult decisions in the Budget because of the mess that we inherited from his party. Businesses in the hospitality sector and beyond need to ensure that our schools, hospitals and police are properly funded.
Gareth Thomas
I am happy to give way to the right hon. Gentleman one more time.
Sir Gavin Williamson
Could the Minister set out to the House how much his Government actually raised through additional taxes in the Budget, and how much the Government set out in terms of additional spending?
Gareth Thomas
Those assessments were published in the Red Book at the time of the Budget. The right hon. Gentleman can do his own research and look those figures up.
Turning back to the international investment coming into our country and the support from business leaders for our measures, Iberdrola’s executive chairman said at the time of our international investment summit that
“the clear policy direction, stable regulatory frameworks and overall attractiveness of the UK”
have led the company to double its investments over the next few years, reaching up to £24 billion. We have seen more ringing endorsements of this Government’s approach since the summit. In April, the CEO of BlackRock, Larry Fink, praised our pro-growth agenda and said that investment in Britain is “undervalued”. He said that he has more confidence in the UK economy than he did a year ago. Meanwhile, the chief executive of JP Morgan, Jamie Dimon, has told the Financial Times that he backs this Government’s economic reforms, noting that there is much to like about the new Government’s pro-growth agenda. Our forthcoming industrial and trade strategies are further steps to support businesses and accelerate growth in the sectors of our economy with the most potential.
There has not been a strategy to help small businesses for more than a decade. The Conservatives cut support to small businesses to get into new markets. They cut support to help businesses to adopt new technologies and they failed to tackle the scandal of late payments from big businesses.
Jerome Mayhew
The Minister talks about growth and his pro-growth policy. In quarter 1, he had the unexpected growth of 0.7%. The UK Treasury’s April 2025 survey of independent forecasts assesses that the entire growth for the year is 0.8%. Does that mean that he is looking forward to 0.1% growth for the whole of the rest of the year? His policy is not working, is it?
Gareth Thomas
With due respect, the hon. Member is wrong. The OECD says that we will have the second fastest growing economy in the G7.
Let me come back to small businesses. Since taking office, we have sought to hardwire the views of small businesses into everything that we do. Together with the Federation of Small Businesses, we have announced robust measures to tackle late payments. Large companies will soon have to include their payment performance in their annual reports—a massive incentive to pay their suppliers more quickly. We have also launched our new fair payment code, overseen by the Small Business Commissioner. We intend to go even further, developing a strong package on late payments, including stricter maximum payment terms and strengthened powers for the Small Business Commissioner.
Jerome Mayhew
The Minister said that I was wrong. And, yes, it was the Treasury’s own survey, so perhaps it was wrong, but is the Bank of England wrong as well? It has a forecast of 0.75% growth for this year, and even the OBR has a forecast of just 1% growth. His growth policies are simply not working, are they?
Gareth Thomas
With due respect to the hon. Gentleman, he needs to track these things over a period of time. The Bank of England has revised the growth numbers up for this year, as a result of the measures that we have been taking.
As I said earlier, we have had to take some difficult decisions in the Budget to fill the £22 billion black hole left to us by the previous Government to tackle record NHS waiting lists, to invest in schools and to invest in our police. But we have been making headway to deliver on our manifesto pledge to reform business rates. One reason the Conservatives lost the confidence of the business community is that, time after time, they promised to reform business rates and never actually did. We are delivering lower tax rates for retail, hospitality and leisure properties from 2026-27. We are also scrapping the Conservative party’s policy of immunity for low-value shoplifting, and providing additional funding to crack down on the organised gangs who target retailers. We know that this has plagued businesses for years, with both staff and store owners feeling powerless. That changes now.
At the same time, we are reforming the British Business Bank to free up precious capital for businesses to expand. This includes our start-up loans and the growth guarantee scheme, so that, if people want to set up a new shop or business, the support is there to help them. It is why my Department launched a call for evidence on access to finance for SMEs last month, as part of our work on our upcoming small business strategy. All of this work is having a positive, tangible impact: the newest ONS statistics revealed that the number of businesses set up in this first quarter is up 2.8%, compared with quarter 1 last year.
Dr Caroline Johnson (Sleaford and North Hykeham) (Con)
The Minister mentioned talking to businesses, but I would urge him to do a little bit more listening to them. My right hon. Friend the Member for Stone, Great Wyrley and Penkridge (Sir Gavin Williamson) asked how much in additional taxes and spending commitments was raised in the Budget, but I did not hear an answer. Can he please give the House an answer? If he does not know, will he agree to write to my right hon. Friend and leave a copy in the Library, so that we can all know the answer?
Gareth Thomas
As I understand it, the hon. Lady actually supports the investment that those tax changes are delivering—she supports every penny of that investment coming into our economy. I wish the Conservative party—perhaps the hon. Lady has some influence with the shadow Chancellor—would set out its plans to raise a similar amount of money, if it does not like our spending plans.
I was reflecting on the newest ONS statistics, which show a 2.8% increase in the number of new businesses during this first quarter. Despite what Conservative Members have claimed, business closures are actually down 4.4%. The latest business confidence index of the Institute of Directors showed a significant rise in economic confidence, with their members stepping up recruitment and investment plans for a second month in a row.
Dr Evans
Employment statistics are really important. In the Minister’s constituency, unemployment has risen by a staggering 31% in the past year. In my constituency, it has gone up by about 10%. That will have a real impact. Perhaps he will come on to how he will support people into work, because it looks like unemployment has gone up by 10% across the country. That is a real concern for people, as they need to work and look after their families.
Gareth Thomas
The ONS numbers on employment show an extra 200,000 jobs in the economy since the general election, so I gently encourage the hon. Gentleman to look at a slightly wider range of statistics.
The shadow Secretary of State once again turned to the making work pay and Employment Rights Bill agenda of the Labour party. Let me remind the House that the reforms are about increasing job security for working people. They are about raising both the national minimum wage and the national living wage so that more than 3 million eligible workers receive a pay rise of up to £1,400; ending exploitative zero-hour contracts; and bringing an end to unscrupulous fire and rehire policies.
Alison Griffiths
I hear what the Minister says about job security, but if businesses will not be providing jobs because of day one rights, as my hon. Friend the Member for Broadland and Fakenham (Jerome Mayhew) has so eloquently laid out, there will not be more people in work—[Interruption.] As my hon. Friend says, that is what the figures already show.
Gareth Thomas
With due respect to the hon. Lady, it is not one or the other: a pro-worker economy is a pro-business economy. That sentiment has been echoed by experts such as Simon Deakin, a professor of law at the University of Cambridge. He says that, on average, strengthening employment laws in this country has had pro-employment effects. He said that the consensus on the economic impacts of labour laws is that, far from being harmful to growth, they contribute positively to productivity. Right now, it is worth noting that optimism among business leaders is rising, with improved expectations for investment, hiring and costs. Employment has risen by nearly 200,000, as I have said, since we took office. Payroll employment remains near record highs at around 30.3 million, and wage growth has been consistently outpacing inflation. These indicators suggest a labour market that remains robust and responsive, not one being held back, as the Opposition contend.
Let there be no doubt: this Government are delivering on our plan for change with investment and reform to deliver growth, put more money in people’s pockets, rebuild Britain and realise a decade of national renewal. We are the party of entrepreneurs and wealth creation. We are the party of workers, the party for economic growth and the party of social justice. The Conservative party has no ideas, no imagination, just a dismal record that it does not have the courage to face up to. We are delivering for British workers and for British businesses, so I urge the House to reject the motion before us.
Madam Deputy Speaker (Ms Nusrat Ghani)
I call the Liberal Democrat spokesperson.
Sarah Olney (Richmond Park) (LD)
I share the bemusement of my hon. Friend the Member for Caithness, Sutherland and Easter Ross (Jamie Stone) that we on these Benches are being called the “other Government”. I puzzled over that for a little while, but perhaps, based on recent opinion polls, the shadow Minister was reflecting how the Liberal Democrats are now more likely to form the next Government than the Conservatives. The stones being thrown from the very fragile glasshouse of the Conservative party are astonishing, given its appalling mismanagement of the economy and the dismal inheritance that it left behind. Its record is a dispiriting picture of low growth, high interest rates and a record fall in living standards.
For years the Conservative party took people for granted. Our constituents saw this reflected in their mortgage payments, the hike in their energy bills, and the prices they paid for their weekly shop. Under the last Administration, public services were left crumbling, and the Tories’ pitiful Brexit negotiations saw reams of red tape introduced, causing untold damage to businesses across the country.
We know that the Labour Government have inherited a mess, and we know that the cause of that mess is a legacy of reckless economic mismanagement left behind by the previous Government. But that cannot be allowed to serve as cover for measures that damage business or cause suffering for the vulnerable in our society.
Labour’s autumn Budget has not worked. The national insurance jobs tax will damage small businesses and lower people’s living standards, and it undermines the Government’s own ambitions for growth. People endured years of Conservative mismanagement, which is why this new Government should be doing far more to grow our economy, create new jobs and improve living standards.
We know that the Government had tough decisions to make, but instead of hiking national insurance, cutting disability benefits and squeezing departmental budgets even more, they should be showing far more ambition in growing our economy, which is the best way to raise tax revenue and boost living standards. That is exactly why we have been urging Ministers to ignore the naysayers in the Conservative and Reform parties and to urgently negotiate a new, bespoke UK-EU customs union.
When it comes to taxation, the Government should look to raise revenue in much fairer ways, such as asking social media giants and online gambling firms to pay their fair share. That is the right way to repair our public finances and boost public services—not short-sighted cuts that make things worse for people.
Sarah Dyke (Glastonbury and Somerton) (LD)
My hon. Friend is right: there is no doubt that the Government have a really difficult job to clear up the mess left by the Conservative Government, but there have been far too many erroneous decisions and policy disasters already. For example, Matthew from North Brewham has run his small business for the last 28 years and is facing difficulties—
Madam Deputy Speaker (Ms Nusrat Ghani)
Order. An intervention cannot have examples; it is short and to the point. What is the question?
Sarah Dyke
Excuse me, Madam Deputy Speaker. Does my hon. Friend agree that we need a fundamental overhaul of the harmful business rates system so that small businesses in rural areas can survive and succeed?
Sarah Olney
My hon. Friend is exactly right; there are so many things currently holding our small businesses back. The Conservatives failed to reform business rates. We are now looking to the Labour Government to bring forward measures that make it easier for people to set up businesses in their local communities.
Let me be clear: stripping support from many of the poorest pensioners while energy bills are still sky high was the wrong thing to do. I and my Liberal Democrat colleagues have listened to our constituents and have heard from countless pensioners who have been affected by the cut. We have heard warning calls from sector representatives including Age UK and Disability Rights UK, and indeed from many pensioners themselves, regarding the huge damage that the cuts have done. Some pensioners have been put in the position of having to choose between heating and eating.
Back in December last year, the Government admitted that their changes to the winter fuel payments will result in an additional 100,000 pensioners being pushed into poverty.
Dr Caroline Johnson
The hon. Lady is talking about the effect of the Government’s winter fuel payment cuts. Does she agree that the cuts were not just cruel and unpleasant for the elderly people who have suffered, but economically illiterate because of the increased cost to the NHS from individuals becoming sick as a result of being cold?
Sarah Olney
I am grateful to the hon. Lady for her intervention. I have engaged the Minister directly on this point and shown him examples of how the cuts have directly impacted on pensioners in my constituency very harshly.
The Liberal Democrats voted against the removal of the winter fuel payment to prevent millions of the most vulnerable in our society from losing out on vital support. Following the Prime Minister’s comments earlier today, we continue to call on the Government to reverse the cut in full, to guarantee that it will not be in place by next winter and to ensure that all pensioners who need support will receive it. I ask the Minister for full details of the proposed changes as soon as he is able to give them.
It is not just in their cuts that we hope to see a change of direction from the Government. After the last Government did so much damage to our high street businesses, the Labour Government’s national insurance jobs tax has made things even harder for businesses and their workers. The changes to employer national insurance contributions announced in the autumn Budget are an unfair jobs tax that will hit small businesses, social care providers and GPs. SMEs are the beating heart of our economy. They are at the centre of our local communities and create the jobs that we all rely on. Raising the employment allowance will shield only the very smallest employers, while thousands of local businesses will still feel the damaging impact of the changes. The Liberal Democrats voted against the changes to employer NICs at every opportunity, and I once again urge the Government to scrap these measures.
Even more damaging for our small businesses is our broken trading relationship with Europe. The Conservatives’ botched Brexit deal has been a complete disaster for our country, especially for small businesses, which are held back by reams of red tape and new barriers to trade, costing our economy billions in lost exports. The dismal picture of the financial impact of their terrible Brexit trade deal is becoming increasingly clear. While the Conservative party’s motion notes that
“over 200,000 businesses have closed since Labour took office”,
it was under its Administration, in the years 2020 to 2024, that the rate of small business closures in this country started to outpace the rate of new businesses starting up. Since 2019, there has been an average business closure rate of over 12%, outstripping the rate of businesses opening.
A recent survey of 10,000 UK businesses found that 33% of currently trading enterprises experienced
“extra costs directly related to changes in export regulations due to the end of the EU transition period”.
Small businesses have been particularly badly affected, with 20,000 small firms stopping all exports to the EU. Another recent study found that goods exports have fallen by 6.4% since the trade deal came into force in 2021.
I welcome the actions taken by the Government at Monday’s UK-EU summit—particularly the impact they will have on our seed potato trade—but I urge the Government to recognise that the deal should only be a first step toward negotiating a new UK-EU customs union, which would ease the pressure felt by so many businesses and boost the economy as a whole.
More broadly, we continue to call on the Government to introduce vital reform to the business rates system. Business rates are harmful for the economy because they directly tax capital investment in structures and equipment rather than profits or the fixed stock of land. Liberal Democrats would abolish the broken business rates system and replace it with a commercial landowner levy. We believe that we need to see a fundamental overhaul—not just tinkering around the edges or sticking-plaster solutions. We are disappointed that, yet again, serious reform of the system has been kicked down the road. We need fundamental reform of business rates if we wish to boost small businesses and high streets and to stop penalising productive investment.
The Liberal Democrats acknowledge that the Government inherited a dire economic landscape, compounded by the challenges posed by an aggressive Russia and an unreliable US Administration, but that cannot be an excuse for the mistakes they are making. People are still struggling with the cost of living crisis, just as small businesses are struggling with the cost of doing business, as energy prices soar, food costs keep going up and mortgage bills remain sky high. The Government must take bold action to boost our economy. We urge Ministers to U-turn on the winter fuel payment cut, scrap the national insurance jobs tax and row back on removing support for disabled people, many of whom need that support to stay in work.
Sarah Dyke
My hon. Friend talks about U-turns. Does she agree that the Government should also reverse the family farm tax?
Sarah Olney
I thank my hon. Friend for making that point—her constituency is more rural than mine, I admit. She is right that we would also like to see the Government urgently U-turn on the family farm tax, because it is creating such difficulty in our rural communities.
We are calling for bolder, more ambitious and fairer measures. We want the Government to replace business rates with a fair new system to boost high streets and town centres, and to negotiate a new customs union with the EU, which would cut red tape for small business and boost our economy as a whole.
Madam Deputy Speaker (Ms Nusrat Ghani)
We now have the pleasure of hearing from Chris Vince.
Chris Vince (Harlow) (Lab/Co-op)
Thank you, Madam Deputy Speaker—you are far too kind. Can I start by joining others in congratulating the Veterans Minister on his epic adventure to the peak of Everest? Before I get into the politics, I say anecdotally that I often see him in the gym, and he talks about his gym routine, which is considerably more thorough than mine. It is also a pleasure to speak so early in a debate—I am often compared to the hon. Member for Strangford (Jim Shannon) in that regard—so thank you for calling me, Madam Deputy Speaker.
It is a privilege to speak in the debate. As hon. Members across the House know, I will take any opportunity to talk about my town of Harlow and the greater constituency. As I told the Prime Minister yesterday, Harlow is home to some great businesses. It is ironic for me as a vegetarian that the first business that contacted me following my election was a bacon company called A1 Bacon, which raised legitimate concerns about the increasing costs of import from and export to the EU. From what the Prime Minister said yesterday, I am hopeful that the deal we have negotiated will help A1 Bacon and businesses like it in Harlow to continue to thrive and to trade with our EU neighbours.
Sir Ashley Fox
Could the hon. Member tell us whether A1 Bacon—indeed, any business in Harlow—believes that the Employment Rights Bill will enable it to employ more people?
Chris Vince
In all honesty, A1 Bacon has not contacted me about the Employment Rights Bill. As I said, it is concerned primarily with the increase in tariffs since we left the EU. I do not want to reopen that debate, as some hon. Members across the House seek to do, but I hope that the deal negotiated by the Prime Minister will help deal with that issue while ensuring that we maintain our sovereignty, which so many people who voted leave clearly want.
I want to recognise some other businesses in Harlow. What is brilliant when we are first elected as MPs is that we get to see many hidden treasures in our constituencies that perhaps we could not see before we were elected. One of my early visits was to Harlow Group, which makes components for Boeing aircraft that travel the globe. I understand that it is the only business in the UK that produces the boxes into which all the electrics go on a Boeing 747, which is pretty awesome. I also pay tribute to Wright’s Flour; New Ground café; Stort Valley Gifting, where I do my Christmas shopping, as did my predecessor; O-I Glass; and Ecco, which is a fantastic environmentally friendly charity that I will visit next week. Of course, the Minister would rightly criticise me if I did not mention our wonderful local Co-ops.
Chris Vince
Thank you very much. One thing I will raise with the Minister, which has been fed back from my local Co-op—I am sure it is the same at his as well—is the increase in retail crime. I hope that he will take that seriously. He is nodding appreciably. I look forward to hearing him talk about that in his wind-up.
Harlow is a great town. I have always said that it may not be the oldest new town, it may not be the newest new town, and it may not be the most successful economically, but it is absolutely the new town with the biggest heart. This morning, as a member of the all-party parliamentary group on new towns, I looked at some data produced by Visa on all the towns in the country and the challenges that many of them face. The challenges that Harlow faces, based on the metrics that Visa used, did not come as a big surprise to me. In relation to growth in particular, they were housing and productivity. The solutions that will increase Harlow’s productivity and that of the country as a whole come down to three key areas.
First, I will talk about skills. I pay tribute, as I have a number of times in the Chamber, to the fantastic work of Harlow college, which for many years has supported Harlow’s next generation of young people, giving them the skills they need not only for today, but for the jobs of tomorrow.
Equally, I want to talk about the importance of transport links. I will later do a little pitch for Harlow; I hope that the Minister does not mind. We are ideally located between London and an international airport, so there is lots of potential.
The other thing is transactions, and stimulating the economy through the transactions we make. I welcome the £20 million of Government investment in Harlow town centre, but I do want more for my town. I appreciate that the right hon. Member for Salisbury (John Glen), who is not in his place—I told him that I would mention this—has today’s Adjournment debate on this issue, but I will continue to lobby for the new site of the UK Health Security Agency to be in Harlow, which would mean 3,000 new high-tech jobs, providing Harlow’s next generation with the opportunity not only to aspire, but to really achieve in those jobs of the future. Economic inactivity rose in Harlow under the previous Government. My big ask of this Government is to invest in my town and my community.
Anyone who knows me will know that I am a pretty positive guy. [Hon. Members: “Hear, hear!”] Thank you. The Minister set out the reasons why we should be positive. The UK has the fastest growing economy in the G7, we have had four interest rate cuts in a row, and this week and last week we have signed three international deals to boost trade. For the first time in a long time, there is hope on the horizon for the people of Harlow. I know that under this Government, this country will have a great future on the world stage. My only ask of the Minister is to ensure that Harlow is part of that bright future.
Mr Gagan Mohindra (South West Hertfordshire) (Con)
It is a pleasure to follow the hon. Member for Harlow (Chris Vince). Harlow is quite close to my old stomping ground, so I know some of the areas to which he referred, although I am surprised that he did not mention the enterprise zone, which is a world-class area for business.
I will focus my comments on my constituency—Three Rivers district council is the main council area there—where we have seen business closures outpace new openings since July 2020. My local high streets in Rickmansworth, Chorleywood and South Oxhey are visibly suffering, with shuttered shops, rising costs and dwindling support. Historically, those high streets never had vacancies. As a former retailer, I am increasingly concerned about the volatility in our high streets. Whichever side of the House we are on, if we do not fix this problem, we will leave a poor legacy.
The small businesses that I speak to say that they feel abandoned by the Government. They are facing high energy bills and rent, and poor footfall. Part of that—things like parking charges and on-street parking—is not the Government’s responsibility but down to decisions made by Lib Dem local councils. I continue to have dialogue with those councils to ensure that high streets like Kings Langley’s can survive during these difficult economic times.
On an international basis, we need to recognise that a lot of wealth creators are leaving our country. Many years ago, I read a book called “Atlas Shrugged” by Ayn Rand, and I did not think at the time that it would have such an influence on my life. As many hon. Members will know, I was not politically active at school or university, so I never thought or dreamed of being in this place—let alone aimed to be here—at this stage of my life, but all of us come to this place with life experience and a journey, and part of that for me has been that Ayn Rand book. My overriding memory from that book was that, if the Government do not support wealth creators, those people will find a way to leave, to the detriment of the rest of society.
Mr Mohindra
According to a New World Wealth report, 9,500 millionaires left the United Kingdom in 2024: the highest outflow in recent memory. [Interruption.] Is the hon. Member for Earley and Woodley (Yuan Yang) looking to intervene?
Madam Deputy Speaker (Ms Nusrat Ghani)
Order. Just to help Members, let me say that those looking to intervene have to both stand and make a sound; otherwise, the Member who has the floor may not be aware. If requests for interventions are not taken, those looking to intervene must sit down. They may then stand up and try again.
Yuan Yang
I thank the hon. Member for giving way and apologise for not being louder. I wonder if he has a source of data on the so-called exodus that does not come from a firm that gives advice to the very wealthy to migrate abroad, and which therefore has a great economic interest in propagating such figures.
Mr Mohindra
I am conscious that the hon. Member was a journalist for the Financial Times, so she will know the data source better than I do. I am not an economist and have never claimed to be—I have never claimed to be a lawyer, either. I come from a small business background and have local government experience. When I speak to people in my own limited social circle who are employers—people who I hope will inspire the next generation—I hear that a lot are looking to leave these shores. That causes me massive concern. Although our parliamentary system means that parties come and go, we rely on such businesses to grow, succeed and expand.
I am a second-generation Indian. When my parents came across in the 1970s, they had the aspiration and hope that, by being willing to work hard and being lucky enough to be in the right place and the right industry at the right time, the state would not intervene. I do not see that type of ambition now. I do not wish to get party political; it is an issue that we all need to be concerned about. Governments of all stripes will spend taxpayers’ money, but it is well worth remembering that Governments have no money.
That money comes out of the pockets of people who pay taxes, and we need to acknowledge that wealth creators pay a lot more tax than other parts of society. We live in a global world, and if those people choose to leave, it will mean that the Treasury—I look at the Parliamentary Secretary to the Treasury in his place—will not have the benefit of income in its coffers to spend on things that are vital to us and to our communities.
Business confidence was mentioned earlier. We need to recognise that there is significant volatility, both around aspiration and potential capital expenditure for small and large businesses. Businesses need certainty about the direction of travel.
David Pinto-Duschinsky (Hendon) (Lab)
The hon. Member is right that businesses need certainty. Does he agree that the thing that most undermined the certainty of businesses was the chaos that the Conservative party created through Liz Truss’s disastrous mini-Budget?
Mr Mohindra
I will let the new Member make his political point. The only thing I will say in response is that in my first two years in Parliament, we dealt with a global pandemic, in which we spent more than £400 billion of taxpayers’ money. When I was elected in December 2019, as part of an 80-seat majority, we were looking to reform our tax base and the way we financed our Government spending, but we did not have that opportunity. With the Government’s current majority, I hope that they are ambitious.
Other Members have spoken about business rates reform. It is massively outdated to look at businesses based on bricks and mortar, and if I were a furniture retailer today, I would have an online presence only. However, that would mean that the vibrancy of our high streets would be lost, because they would end up with only bookmakers, hairdressers, charity shops and coffee shops. There is nothing wrong with those, but the high streets that I support and am honoured to be the Member of Parliament for offer significant diversity; we have not yet spoken about banking and the move away from on-street branches, but we are trying to deal with that issue locally through places such as post offices becoming banking hubs.
There was a reference earlier to HMRC—and my remarks in this regard are a pitch to the Minister. From my limited experience over the years, HMRC has become increasingly aggressive and not necessarily fair, including in regard to interest rates. If an employer or business makes an overpayment, the interest rate that they receive is different from that which HMRC takes. We should not regard businesses as a cash cow if they have done nothing wrong. I will leave that with the Minister. Further, I would prefer HMRC not to be an arm’s length body; I would be willing at least to investigate whether ministerial control and oversight was practical, on the full understanding that civil servants need to have the freedom to raise and collect revenue.
In Hertfordshire, the median weekly wage is £851, which is higher than the UK average of £728. However, with inflation rising—we heard overnight that it is now at 3.5%—and the rising cost of living, people are feeling poorer, which means that they are spending less on our high streets and are less likely to use capital expenditure on their homes, on a new car or on whatever else they would have spent it on if they felt more flush with cash.
Jess Brown-Fuller (Chichester) (LD)
The hon. Member makes a great point. I was contacted by Yoddi, who owns La Fish in my constituency of Chichester. He says that the rise in national insurance contributions will cost him £1,200 a month that he now has to find. He has two choices, one of which is passing on that cost to consumers. We already know that the price of fish and chips has risen exponentially over the years and the cost of living pressures continue to make that worse. Does the hon. Gentleman agree that small businesses like that one are at risk from the Government’s NICs rises?
Mr Mohindra
That is an excellent point. I have a plea to Government. Perversely, reducing tax rates sometimes increases the amount of money received in the coffers. I say that as a retailer. When VAT was reduced to 15%, it allowed me the certainty to expand our furniture business; we secured another outlet, employed more people and paid more business rates. In effect, it was a win-win for both the state and for our small business.
We have spoken about NICs, but the Employment Rights Bill also causes me massive concerns. I would now think twice about the risks that I would have taken hiring a 16 to 18-year-old, because it would cost me the same to employ someone in their 30s or 40s as to employ a first-jobber. There is a ticking time bomb for people leaving university or college in the summer. Where are they going to work? We have spoken about the 100,000 fewer jobs over the last 12 months; that will only get worse when those people finish their degrees, A-levels, BTECs and so on, and cannot get into employment. That is going to affect the Minister’s workings.
We on the Conservative Benches will be fully supportive of the Government if they do the right thing. Our role in this place is to be critical friends because we all want—
The Parliamentary Secretary to the Treasury (Torsten Bell)
Are the hon. Gentleman’s colleagues listening?
Mr Mohindra
Well, I have been listening; I spend a lot of time in the Chamber. Yes, there is an element of Punch and Judy, but the reality is that there are 650 of us here who want great legislation to support our communities and make sure that people can get on with their daily lives without the burden of having to think about legislation. They want us to get on with it on their behalf.
On tax rises, we have seen the leak of the Deputy Prime Minister’s letter to the Chancellor. I remain concerned that any ambition to increase taxes is another death by a thousand cuts for our small businesses. We need certainty and support from this Government, saying to people, “Go and be ambitious.” If people are risk-averse, there will be a structural problem for us on our high streets and for our small businesses. That means that we will not create the world’s next unicorn because those ambitious people will already have left our country to generate their income in a better financial climate, typically in the middle east or other parts of Europe.
Edward Morello (West Dorset) (LD)
I was touched by the hon. Gentleman’s story of his father’s role in contributing to the economy. I hope that he will be present in the immigration debate later this afternoon to make the same points about the vital work of immigrants contributing to wealth creation in the UK.
The hon. Gentleman mentions NICs and the other headwinds facing small businesses. One small business in West Dorset has seen its business rates go from £8,000 to £27,000. If we want to help small businesses grow, surely we have to stop taxing them so much.
Mr Mohindra
I have always thought that business rates were totally outdated. They generate a significant amount of money for the Treasury, so it is resistant to reform without knowing for certain how it will fill that significant black hole.
We have not spoken about hospices and the effects of NICs increases on the charity sector. Others have spoken about the winter fuel allowance. All these things affect our most vulnerable individuals, and the community groups and charities that fill a massive void that the state or the private individual do not. My worry, which is increasing, is that we are doing things that will have unintended but significant consequences.
We chose this subject for debate to ensure that the Government heard loud and clear from across the House that where they do the right thing, we will support them, and where they need to adjust their direction of travel—I will not say “U-turn”—we will support them. It benefits no one, and provides no benefit to our communities, if we just chuck political grenades.
I will end my remarks on the loss of business confidence. Small businesses are closing, investors are leaving, inflation is rising and confidence is collapsing. I know that there is a direct lack of business experience on the Treasury Bench, but that is neither here nor there. I know that there are various economists, think-tankers and so on in the Minister’s party, but I urge him to listen to those who run businesses of whatever shape or size, because that life experience brings them value in this place. My hon. Friend the Member for Broadland and Fakenham (Jerome Mayhew) created a business that employs 1,000 people. That is real life experience; he knows how the Government’s decisions would have influenced the projections and ambitions of his business. I know from my continuing conversations with businesses that they are looking to shrink and be secure rather than expand and be ambitious. That is not what the UK is about; we are outward-looking and globally ambitious. I wish the Government success in getting to that point.
Dr Jeevun Sandher (Loughborough) (Lab)
We know that a nation in which every single one of us can earn a decent life is a stronger nation. That is exactly the kind of country that the Government are creating. In this country today, too many people cannot earn a decent life. Our nation is weaker as a result. The task before us is to create a stronger nation, not the weaker and more divided one that some Members would like to see and speak about time and again.
I take the Opposition’s motion in good faith, but each of its points, which I will come to in due course, is mistaken. We live in dangerous times. A third of us cannot earn a decent living, because the Conservatives left us with some of the highest energy, housing and childcare costs in the world. They left us a no-growth economy: wages did not grow for 14 years—the longest squeeze since Napoleon. Their hero Margaret Thatcher destroyed manufacturing in this country—the fastest deindustrialisation in western Europe. Non-graduates cannot get good jobs and are now turning away from democracy itself.
Dr Sandher
I give way first to the hon. Member for Angus and Perthshire Glens (Dave Doogan).
Dave Doogan
I am on dangerous territory here—it ill behoves me to defend the party to my extreme right—but does the hon. Gentleman not remember the note that was left by the Labour Chief Secretary to the Treasury in 2010 about all the money being gone?
Dr Sandher
I was a very young man then as it happens; it was rather a long time ago. I believe that the hon. Member for Harborough, Oadby and Wigston (Neil O’Brien) wanted to intervene too. [Interruption.] Or perhaps not any more—he is busy tweeting away. That is okay.
Neil O’Brien
The hon. Member talks about deindustrialisation. Can he remind me what happened to the manufacturing share of the economy under the previous Labour Government? Did it go up?
Dr Sandher
Manufacturing has been falling in this country since Margaret Thatcher came to this place. The lack of manufacturing jobs, and the inability of graduates to get a decent job in this country, is precisely why they are turning away from democracy itself. More than that, the UK has suffered the fastest deindustrialisation in western Europe.
Dr Sandher
In a moment. On top of that, young people cannot move out: some 40% of 18 to 35-year-olds live at home with mum and dad. Each of them is now turning away from democracy.
Neil O’Brien
I want to continue on the subject of deindustrialisation. Is it not the case that the manufacturing share of the economy dramatically fell under the previous Labour Government and then stayed the same under the last Conservative Government?
Dr Sandher
Luckily, I will come back to reindustrialising the economy and what the Labour Government are doing right now, but let me turn to the motion at hand, which does not really add up, taking each point in turn.
The motion speaks of employment. Employment, including youth employment, is higher than it was at the July election. More people are entering the labour market, and fewer people are off sick. That is because we are getting waiting lists down.
The motion speaks of business closing down. Over 230,000 businesses have been created—a net increase of 10,000. We have made a permanent 40% reduction in business rates for high street shops. Page 4 of the impact assessment of the Employment Rights Bill, of which we Labour Members are incredibly proud, states:
“The package will be significantly positive for society (i.e., the benefits will outweigh the costs)”.
It goes on to mention
“a direct and positive impact on economic growth”.
Pro-worker, pro-business, pro-growth—that is the record and legacy of this Labour Government.
Where we differ entirely and fundamentally from the Conservative party is that we do not believe that it is simply business owners and entrepreneurs who create wealth and growth in this country. Every worker—ever nurse, doctor or teacher—creates wealth in this nation. It is a joint enterprise between capital and labour to produce more. That is where we are. A stronger nation is one where each person does well, and that is the country that we are creating—in stark contrast with what the Conservative party left us.
To get everyone to live a decent life, we need to get costs down. Opposition Members have spoken about inflation. A third of today’s price increases come from energy costs. Why? It is because we depend on natural gas, which sets our price 98% of the time and is 50% to 75% more expensive than wind and solar. That is why we are investing in clean energy—cheaper and secure energy in the long run, not just for the next five or 10 years. We also have some of the highest childcare costs in the world. The Chancellor has put more money into childcare so that everyone can get the care they need and get their bills down.
We are creating good jobs for non-graduates—that goes to the point made by the hon. Member for South West Hertfordshire (Mr Mohindra)—as well as building 1.5 million homes, establishing Great British Energy and implementing the warm homes plan. For young people—our generation—we are building homes so that they can move out of mum and dad’s. That is how we create a better and stronger nation in which each of us can do well—stronger because we produce more, stronger because we have a stake in each other’s wellbeing, and stronger because we have a shared sense of purpose.
These are some of the most dangerous times in our country for almost a century. A third of people cannot earn enough to live, and non-graduates and the young see no prospect of being able to earn a decent life and are turning away from democracy. What was despair and despondency is now becoming anger. We are now up against those whose only answer is to tear everything down, to blame someone else for all our problems. They seek to create division, and a divided nation is a weaker one. That division leads to anger and sometimes, as we saw last summer, to violence. We meet this moment with decency and determination. We meet it by creating a stronger nation, in which every single one of us can earn a decent life.
Damian Hinds (East Hampshire) (Con)
It is a pleasure to join this lively debate. Small businesses are the backbone of the economy in my constituency. In fact, 99.9% of businesses in East Hampshire are small or medium-sized enterprises. We over-index in professional services, retail, information and communications, and, of course, agriculture. [Interruption.] I thought there were few Labour Members present before I stood to speak! The biggest sectors for employment are retail, health and care, and manufacturing. [Interruption.] I am starting to get a complex!
I have heard from all those sectors, which are worried about the prospects for their businesses and the economy under this Government. We must always remember two things about business. First, contrary to what the hon. Member for Loughborough (Dr Sandher) said—he is no longer in his place but I know he will return—only business can create the wealth and jobs, make the livelihoods and generate the tax that, in turn, makes the high-quality and brilliant public services that we all so value and on which we rely.
There is a second thing that we should always remember about business, and I encourage Ministers to remember it. Accountants talk about the entity principle and describe a business as an entity that is separate from the people who run it. That might be true in an accounting sense, but in a broader sense, businesses are people. They are collections of people coming together to achieve something. The joint stock company was created to share risk among different people, and the way that organisations work within companies is a way of increasing efficiency and productivity, compared with everybody doing their own thing as a sole trader. So, because businesses are ultimately people, there is ultimately no such thing as a tax on a business. Taxes can only ever fall on people. A so-called business tax falls on one or more of three groups of people: the business’s customers, the business’s employees or the business’s owners.
Sarah Dyke
The hon. Gentleman talks about the impact on people. A small business in Fifehead in my constituency has recently had to reduce its staff by four—small business, real impact. Small businesses create so much for our rural economy. Does he agree that the Government should scrap the national insurance contributions rise and replace the broken business rates with a new, fairer funding system to boost our rural economies and jobs in our rural areas?
Damian Hinds
The hon. Lady makes a good point about small businesses, particularly rural small businesses, and I will talk about national insurance contributions and business rates, but let me come back to how taxes on businesses are ultimately taxes on people.
Some Labour Members might say that they do not mind a tax on business owners, because they are the capitalists and they can afford it, but we need to remember that the owners of businesses are a mixture of institutional owners—which, by the way, includes your mum’s pension fund—small business owners, who are quite often sole traders, and family businesses. If the owners are not affected, either the customers or the employees will be affected, and I am afraid the effect of the national insurance contributions rise will ultimately be felt by those two groups of people, and particularly by employees, through a mixture of wage suppression over time and possibly some job losses. The bigger effect will not be about job losses; it will be about jobs that are never created in the first place, particularly among the youngest people and those furthest from the labour market.
Jerome Mayhew
My right hon. Friend is making a good point. When the Government brought in the increased national insurance contribution for employers, they used sleight of hand, saying that it was not a tax on working people, but does he agree that the Office for Budget Responsibility’s assessment of the impact concluded that the overwhelming majority of that cost will be borne by the employees and not by this notional employer?
Damian Hinds
It will, and I repeat that it can only be one of those three groups. There will be some price increases, and those costs will be felt by customers and consumers, but all the indications are that the big effects will be felt in wage suppression and in employment, which will ultimately mean slower economic growth.
In the same way that taxes on business ultimately land on people, taxes that look like they are on people can sometimes have an effect on business. I want to talk briefly about two examples. The first is the family farm tax. This is clearly a desperately ill-conceived measure, although, to be fair to Labour Ministers, they probably did not realise at the time quite what they were doing. However, their Members of Parliament representing rural seats found out very quickly exactly what they were doing and the effect it would have.
There is an alternative proposal on the table, which we know has been put to the Treasury by representatives of the sector. As this brilliant Treasury Minister the Parliamentary Secretary to the Treasury, the hon. Member for Swansea West (Torsten Bell) will be winding up, I am sure—at least I hope—he will find it possible to share with the House the Treasury’s critique of that alternative proposal, the so-called clawback proposal, which would be much fairer, and tell us why the Government are rejecting it.
There has been quite a lot of debate in the House on the family farm tax, but somewhat less on the business property relief situation, which is not quite as acute in some ways, but there are a number of parallels and similarities. Business property relief was put in place to level the playing field for family-owned businesses and others, so that people could invest in their family-owned businesses, confident that they could pass it on, within the family, without incurring a tax that applies to no other business ownership model.
Typically, these businesses will not have large amounts of net cash or liquid assets that will allow them to settle the tax bill upon the demise of the owner, and there are no listed shares, so there is typically no market for those. There has to be a theoretical valuation, because the shares cannot be valued, and that figure is likely to be considerably higher than the amount that could be realised in the event of a sale. The relief was created specifically to stop family firms having to be broken up; however, the net effect of the changes is that a substantial number of firms in this situation will be bought up, either in whole or in part, by foreign owners or private equity. Is that really what a new Labour Government had in mind?
Jerome Mayhew
Labour used to agree with the point that my right hon. Friend makes. Am I right in saying that it was a Labour Government in 1976 that generated the policy of having a relief in the first place?
Damian Hinds
Forgive me, but I do not have the history at my fingertips. The relief has been recognised over the years, and has been looked at in the past by Treasury officials. I have been a Treasury Minister, and I know that they get presented with various things that could be done, but generally speaking, when many Ministers before you have found good reasons to keep a measure, it is a good idea to wonder what those reasons might be.
Overall, this Government’s changes to the business taxation regime will affect many sectors, but particularly those that are labour intensive. We can all name hospitality, retail and care as the three really big-volume employers in the country. In my constituency, I would also mention nurseries, pubs and hair and beauty businesses. Of course, there are sector-specific pressures. For nurseries, for example, the issue is whether the unit rate per child per hour is sufficient. Many of my nurseries say that it is simply not sufficient to cover their costs, at a time when entitlement to nursery care is increasing. In the hair sector, there has long been an issue about those who have created a business that has employees, and their ability to compete with others who are below the VAT threshold.
The confluence of four things that the new Government have done is creating a big headache. First of all, the national living wage going up to £12.21 is a good thing in and of itself. We absolutely support a rise in wages for people on lower wages; it is the fact that it is happening at the same time as all the other things that is causing the problem. I will not talk in detail about the national insurance contributions increase, because others have done so, but that will have an effect, particularly on part-time employees, and the Government ought also to acknowledge the gender differential effect of that, which we have heard little about.
Today I have heard two Labour MPs say that business rates have gone down for retail and hospitality businesses. One was the Minister. Try telling that to those businesses—
Damian Hinds
Perhaps the hon. Gentleman is going to tell me that he has told that to his local retailers and pubs.
Dr Sandher
You brought in a temporary reduction of business rates during covid, but as with so much else, you did not fund that beyond those years, so you made a permanent reduction of 40% for the future.
Madam Deputy Speaker (Ms Nusrat Ghani)
Order. It is good etiquette to speak through the Chair, and to not use the word “you”; it just dampens the tone of the debate a little bit.
Damian Hinds
I shall suitably dampen. At a time when the Government are changing the relief from 75% to 40%, try telling those businesses already facing the national insurance contributions increase and all the other cost increases that their bill is being reduced. Clearly, it is going up.
Damian Hinds
I am conscious that I have gone on for quite a while, and I want to wind up.
Fourthly, there is the Employment Rights Bill. On the face of it, who would not like something with that name? It sounds like a positive thing, but the point is the effect that it will have, particularly on seasonal businesses, which might otherwise take somebody on at Christmas or in the summer. Hospitality, travel and events businesses rely on doing that. The Bill will affect the national health service, which will have to deal for the first time with some of those considerations. It turns out that the national health service is a considerable user of zero-hour contracts—by the way, not for someone’s first job, but usually for their second—so that staffing can vary according to the demands of a hospital or clinic. The Minister is a labour—and a Labour—economist, so I would be interested to hear his comments on the shift that we are likely to see from permanent to temporary contracts, and the shift that we are already starting to see in companies that are moving from relying on contracted, salaried employees to relying on agency workers.
Damian Hinds
Forgive me; I will not. Finally, there is the effect that the measures will have on the removal of job opportunities for those further from the labour market—perhaps those who have been out of work for a long time; ex-offenders, who it feels like more of a risk for an employer to take on; and, most of all, young people. That is the concern with this package of measures: the effect on unemployment, especially youth unemployment.
Today we heard the Government make the first of what I hope is a series of U-turns over the winter fuel payment. I ask the Government to look at what is happening, and what will happen to our small businesses and the unemployment statistics, and to please think again.
Yuan Yang (Earley and Woodley) (Lab)
The hon. Member for South West Hertfordshire (Mr Mohindra) mentioned my work before I came to this place. In my work at the Financial Times, I spoke to business leaders every day. Since my election to this place, I have had the honour of speaking to many businesses in my constituency. In the last month, that has ranged from the small shopkeepers in Whitley in south Reading to the leaders of Sanofi, a pharmaceutical company that is one of the biggest listed companies in the world, also headquartered in my constituency. The topics they want to talk about again and again are threefold: trade and prices; industrial strategy; and infrastructure. Those are the areas that come up time and again when I speak to my local businesses and the Thames Valley chamber of commerce, because businesses—unlike the Conservative party—have to be forward looking. They have to have a vision of the future and where they will fit into it. I will concentrate on those three areas.
First, on trade, many of my constituents have thoroughly welcomed the trade deals that the Government have done over the last two weeks—not just with the EU, but with the US and India. Small businesses in Reading and across the UK have suffered from the previous Government’s bungled Brexit of 2019. They have suffered from increased trade frictions, red tape and bureaucracy. For smaller companies, those are an increasingly large part of their overheads, and they are more difficult for small retailers doing import-export business to handle. I heard that again and again on the doorstep during the general election campaign from the many entrepreneurs in my constituency. I know already from speaking to residents last weekend how deeply the trade deal with the EU is welcomed. It will decrease the inflation of food prices in the UK and give opportunities to those exporting to the EU. That is also true for the deals with the US and India, which will create and save many jobs across the country.
Secondly, on industrial strategy, the Thames Valley is one of the biggest destinations in Europe for life sciences foreign direct investment. I am proud to say that the life sciences companies that I have spoken to are tremendously excited about the opportunities brought by the life sciences White Paper and the industrial strategy, which will be unveiled next month. In an age when countries across the world, from the US to India to Japan, are unveiling their industrial strategies, we cannot afford not to compete on the same stage. We have to decide as a country where we fit into the global supply chain, what our comparative advantages are, and what we will invest in. I am glad that our Government are doing that, and that is what the multinationals headquartered in my constituency want to hear.
Finally, on infrastructure, I am proud that my constituency in the Thames Valley is the fastest growing region in the UK outside of London. That is the case not because there is something in the water—though these days, with Thames Water, you can never tell—but because of the infrastructure. We are close to Heathrow and, via the M4, to many major cities and London. We have the Elizabeth line, and rail links that connect us with so many ports and cities across the UK. That infrastructure is paid for and funded by the Government. There is not just physical infrastructure; there are services, schools and hospitals that mean that families want to move to our area, build their lives there and bring their professional skills there. That is why I continue to press for the investment in the NHS that we sorely need, and for investment in our local hospital, the Royal Berkshire.
Blake Stephenson (Mid Bedfordshire) (Con)
I know the hon. Member was about to conclude, but it is notable that she decided not to talk about hospitality, leisure and retail businesses, private schools or all sorts of other industries in her constituency. Businesses talking to me are deeply worried about the policies of this Government. Will she reflect on the impact on smaller businesses in retail and hospitality?
Yuan Yang
The first businesses I mentioned in my speech were the small shopkeepers in Whitley—the retail businesses that want to keep their food prices low, that are dependent on imports, predominately from the EU, and that want to ensure that their customers get a good deal, and I very much support them.
Those are the three areas that businesses speak to me about regularly, and I hope that our Government’s agenda will continue to reflect those interests. I cannot help but touch on one final issue that the shadow Minister, the hon. Member for Arundel and South Downs (Andrew Griffith), brought up: employment. It is when we talk about employment rights that the Conservatives sadly show whose side they are really on. They talk about the benefits to young people; it is young people in my constituency at the University of Reading who stand to benefit from the increase in the minimum wage, and who are the most glad about that policy, and about the employment rights that they will benefit from, through the Employment Rights Bill.
Yuan Yang
No, thanks; I am about to draw to a close. Young people are the future, and they need a rise in their wages because of the living standards crisis that we face across this country. The University of Reading employs those young people and is a source of education for them. As an employer, it sees that it is better if all employers lift their standards, so that it is not undercut by other employers seeking a race to the bottom.
Madam Deputy Speaker (Ms Nusrat Ghani)
Order. It is known that the hon. Lady is not giving way, and is about to conclude.
Dave Doogan (Angus and Perthshire Glens) (SNP)
It is a pleasure to be speaking up for Scottish constituents on such an important issue. I see that one of my Conservative colleagues, the hon. Member for Dumfries and Galloway (John Cooper), will be speaking up for his Scottish constituents. Nobody on the Government Benches has turned up to speak for their Scottish constituents on this issue.
I want to start with the good bits. Now that we have got that done, we will get into the meat of this. As has been said, we see an incredibly wrong-headed brake on investment and enterprise in the jobs tax—the increase to employers’ national insurance. I do not think that measure is a sleight of hand; it goes beyond that. To say that employers’ national insurance is not a tax on working people stretches disingenuousness to its absolute limits. The measure is also counterproductive. The £22 billion or £23 billion—whatever the Government’s target amount was to take in from employers—has already been attrited to well below £10 billion. If they actually did the right thing by hospices, it would go down even further. The measure is a massive burden for a modest gain for the Treasury, and that does not take into account the consequential costs of imposing such a burden on businesses and employers. The impact has already been felt in care homes in Scotland, with five closing ahead of this disaster for enterprise.
The Office for National Statistics has predicted that 25,000 jobs will be lost across the United Kingdom as a result. When the policy was introduced, I ordered a pint at one of my local pubs and jokingly asked the barman if the penny was already off the pint. He said, “Yes it is, and I have stuck on another 20 for your national insurance increase.” Although that is anecdotal, it speaks to the gulf in understanding between UK Treasury Ministers and the real economy that makes things tick. The Scottish Government estimate that, on average, the policy will cost £850 per job per year in Scotland. Except for the Scottish living wage and the slight difference in the income tax regime in Scotland, I see no reason why that figure would not be broadly the same across the whole of the United Kingdom economy. It is utterly unrealistic.
The genesis of the measure is the UK Government’s insistence that they had no idea that there was a £22 billion black hole in public finances—there probably was, although they probably made about a third of that with what they decided to do when they came into government. There is a brazen willingness by the Labour party to reinvent reality—it is bare-faced. Despite being engaged on that repeatedly in debate during the election campaign, the say that they did not know there was a multibillion pound black hole in the UK public finances. What were they debating if they did not think it was real? It is totally disingenuous.
Inflation jumped again in April to 3.5%, up from 2.6% in March. That was not caused by an economy firing on all cylinders or by a rejuvenated consumer sector, high on the output from a new Government, full of ideas and creativity. No, it is driven by electricity and gas prices and by water bills that consumers can do little or nothing about, but which they are still having to fight to pay on top of higher interest rates, as the Bank of England tries to get on top of inflation in a deeply dysfunctional economy.
The Government should seek to address the actual drivers of inflation and take on those energy prices. Let us not forget that not that long ago, at the election, we were promised a £300 reduction in energy bills. It was not “maybe”, “around” or anything of that nature; the message was that if people voted Labour, they would get a £300 reduction in their energy bills. In less than a year, however, energy bills have gone up by £281, so they are now almost £600 higher, emptying consumers’ bank accounts and driving inflation.
What is Labour’s response? Labour Members say, “That is because of our reliance on gas.” Well, we were reliant on gas before the election as well, so there are two possible reasons for that to have happened: Labour was playing fast and loose with the truth; or it did not understand how energy in GB works. I know which one I think it is, but either way it does not reflect well on this Labour party. In under a year, business confidence is falling, job losses and unemployment are rising, borrowing costs are soaring, prices are rising, growth is sluggish and there is rampant inflation. When speaking about growth at the beginning of the year, the Chancellor said that she was pleased but that she had got more to do. Well, God help business if she has got more to do. We have seen quite enough damage in the first nine months of this Labour Government.
I turn to agricultural property relief. In the garden of Scotland that is Angus and Perthshire Glens—I will take no dispute on that fact—we have some of the most productive agricultural land on these islands. As hon. Members would anticipate, with such productive agricultural land, we have extremely high-performing food producers who invest heavily in the latest technology and equipment, and ensure that there is a tremendous return on investment, so that they get the best yields possible so that they can drive down prices and deliver good-value food for tables across these islands and beyond.
What will happen now with agricultural property relief? What signal is being sent out to farms and farm businesses? Is it for those businesses to invest in their farms, so that they have to give it all away when somebody dies? Older farm owners in Angus and Perthshire Glens are now petrified of dying, and it will be the same everywhere else across the United Kingdom: what an ignominious, invidious position for any Government to put the people who produce our food into—it is incorrigible. I say to the Minister, with as much sincerity as I can muster, that quietly with his colleagues in the Treasury, at the spending review or some other opportunity—call it a review or whatever he likes—he should call off the dogs from our farming businesses up and down these islands. They deserve better.
Business property relief is not unrelated, and we have heard some of the testimony from other right hon. and hon. Members on the necrotic effect that has on investor confidence. There is good reason why large-scale family businesses are really good for economies, especially local economies. They employ local people, they headquarter locally, and they try, as much as possible, to establish and stand up their supply chains locally. They sell nationally and internationally. It is a virtuous conveyor of capital from outwith to within. It is excellent for the economy. It is far better than the same economic output from a public limited company, although of course PLCs have their role. But what large-scale businesses in Scotland and elsewhere are speaking to me about is that disincentive to invest.
Llinos Medi (Ynys Môn) (PC)
Family Business UK says that 55% of businesses have paused or even cancelled planned investments due to the Government’s plans to cap business property relief. Does the hon. Gentleman agree that the Government should delay the planned BPR changes and conduct a thorough consultation and an impact assessment?
Dave Doogan
I cannot help but agree with the hon. Lady. At the very least, that is what the Government should do, and other hon. Members have suggested that too. To be fair, it cannot be easy to form a new Government—it certainly does not look easy. Any new Government must come in, make decisions and quietly think, “Och, I wish we had not done that.” I am certain that APR was put under the nose of a Minister by a civil servant, in the full expectation that the Minister would have the wit to say, “We are not going there—we are absolutely not doing that.” And blooming heck, they have gone and done it. I am sure that when the civil servants walked away they were saying, “Oh God, we never expected that.” And so it is with business property relief, because of the consequences. The cost-benefit relationship between what they are doing to enterprise and business and what they will accrue to the Treasury is out of all kilter. The damage is way in excess of the potential accrual, and that is before behavioural changes are brought into effect.
I recently spoke to a large-scale potato farmer near Kirriemuir, in my constituency, who has massive cold storage, a vital element of potato production, so that farmers can keep the potatoes in tip-top condition and ensure that the supermarkets are supplied as and when, just in time. I sometimes think that the Government think that farmers are trotting around in their tractors, chewing on a bit of straw, but these are really switched-on businesses that are doing the utmost to keep food prices down. We have some of the lowest food prices in Europe, and that does not happen by not investing seriously massive sums in capital and equipment. At a stroke, the Government have catastrophically disincentivised the very behaviour that helps keep food prices down and is anti-inflationary. Look what is going to happen with that.
Sir Ashley Fox (Bridgwater) (Con)
Does the hon. Gentleman agree that the changes to agricultural property relief and business property relief will raise relatively small amounts for the Treasury, but they will have a devastating effect on those businesses, and the reason they are being brought in is that Government Ministers have no idea how small businesses and farmers operate?
Dave Doogan
I do agree; I would rather not agree, but I do agree. That is why I implore the Treasury Minister, who is in his place, to have whatever private conversations Ministers have in their Departments about things that they may have got wrong. They cannot U-turn or row back on everything, but honestly, agricultural property relief and business property relief is an absolute landmine for businesses to be pulled across by this Government. He does not even have to address it in his summing up; he can just go back and quietly look at it again and have a review—kick it into the long grass at least.
I want to speak briefly on quantitative tightening by the Bank of England; I probably will not have too many supporters in the Chamber on this issue, but no change there. I have raised this matter a couple of times with the Chancellor and she talks about all manner of things in response, none of which are quantitative tightening. The over-zealous nature of the Bank of England’s disposing of Government bonds is hugely costly to the Exchequer. There is no need for the rate of quantitative tightening that the central bank of the UK is undertaking. It is not replicated by other central banks. Even if the Bank was to go to a passive model of quantitative tightening that would have substantial, multibillion-pound savings for the Exchequer, at a time when the Chancellor returning from China was getting excited about £600 million for the whole UK economy over five years; £600 million is not even the annual budget of my local health board in Angus and Perthshire Glens. If those types of numbers are important to the Chancellor, the total quantitative tightening cost of £45 billion since 2022 should really be nearer the top of her red box for her attention.
Jerome Mayhew
I was going to point out to the hon. Member the size of the sum involved but he went on to mention it himself. This is translating a theoretical loss into a real one guaranteed by the Treasury with taxpayers’ money, so I think the hon. Member is definitely on to something.
Dave Doogan
I thank the hon. Gentleman for his reassurance, particularly as I actively did not anticipate any reassurance.
Total costs for quantitative tightening are predicted to be in the region of £130 billion, all borne by the taxpayer of the United Kingdom. The one relevant thing the Chancellor did say to me when I raised this with her during Treasury questions was that she highly values the operational independence of the Bank of England, and so do I, but that does not mean she cannot chat to them about what is patently unnecessary and extremely expensive to the public purse.
Finally, we see a very unsavoury lurch to the right from a Labour Government on immigration. I will not rake over those coals but it is clear that the Prime Minister regrets some of his more florid language on immigration, and the Chancellor has provided no costings and no analysis of this dangerous policy that has been dreamt up on the back of a fag packet. Scotland has a declining birth rate, as do many other parts of the United Kingdom. We actively need immigration. We need it for our care sector, for our hospitality sector, for our agricultural sector and for our energy sector. It is not just low skilled seasonal work that we require, but all manner of people to come and work in our broad and diverse economy. In Scotland we have no idea why we have been dragged down this route—actually we know fine well why we have been dragged down it—but it is hugely damaging, again, for a Government whose stated ambition is growth, and choking off the labour component from the economy is really not consensual.
This relates to the whole debacle on the EU. I heard the Chancellor say the other day that there is no going back on Brexit and there will be no regulatory alignment and no free movement of people and they will honour the vote of the people—not the vote of the Scottish people, let me add—and Brexit is water under the bridge. Well, it is not water under the bridge, or rather in so far as it is water under the bridge it is a pool of stagnant, rancid water that refuses to shift its acrid whiff from across society in Scotland and elsewhere.
I heard a Lib Dem getting all doe-eyed earlier about seed potatoes; and he was right. Seed potatoes are very important in my economy, but I remember when a Lib Dem would give a full-throated endorsement to membership of the European Union, rather than doffing their cap to a Labour Government for frittering around the edges. This is frittering around the edges, and it has come at a tremendous cost to the Scottish fishing industry. Some 70% of the revenue from aquaculture and fishing in the United Kingdom comes from Scotland, and the Scottish aquaculture and fishing industry is 50 times greater a part of the Scottish economy than it is of the UK economy, yet no discussion was had with the Scottish Government or sector ahead of that, just as no discussion was had in 1970 when the Scottish fishing industry was thrown under a bus at that stage as well.
The Minister might say, “Well, you can’t have it both ways, you SNP type: you can’t say you want to be back in the EU and then lament the loss of your fishing rights to EU boats”—the Minister can score that point out now. Although of course we want to be back in the European Union with all our other European nations, and we would have to take some of that pain on fishing, we would get the gain to go with it. What Labour have foisted on Scotland is all the pain of conceding our fishing grounds to European boats and none of the gain of being in the European Union, and nothing they have agreed this week is remotely like being back in the European Union.
There is an ill wind blowing through the political landscape on these islands, and the actions of this Labour Government are simply making matters worse.
John Cooper (Dumfries and Galloway) (Con)
As a member of the Business and Trade Committee, it has been a privilege to traverse this land from Exeter to Belfast and from Glasgow to Cardiff to speak with people on the frontline of business. They are a doughty, resilient lot, doing amazing things; Britain’s got talent, but heads are going down. The barrage of red tape is taking a toll. Costs are up, and I must reference the speech from the hon. Member for Loughborough (Dr Sandher), which probably owed more to the boards of the Globe theatre further along the Thames than to this place. In his highly colourful speech, I was not quite sure whether he was blaming Mrs Thatcher or gas prices for high energy bills, but he should really look towards his own Secretary of State for Energy Security and Net Zero, because much of the increase in energy prices, which hammer businesses right across this country, comes from carbon taxes applied by this Government.
Critically, all this leads to expansion plans being shelved, as confidence slides. That means fewer jobs, especially for young people and those chasing that all-important first job. This Government’s boast is that they are putting money into working people’s pockets. Setting aside the questionable veracity of that claim, there is no doubt that if someone loses their job, or if they do not have a job in the first place, there is no extra money in their pocket.
What this Government are creating is a hostile environment for some sectors. Yes, there are millions of pounds—maybe billions—for steel, plenty for unionised train drivers and no-strings pay boosts for NHS staff, but what about agriculture, which is the key driver of the economy in rural Dumfries and Galloway, my constituency? Farmers and many associated businesses might just about survive Labour’s urban-centric indifference, but the active harm it is doing by taking steps such as the upping of inheritance tax and the driving down of agricultural property relief is a disaster.
The consequences of Labour’s avaricious increase in employer national insurance contributions are all too real. The Usual Place is a Dumfries charity that does amazing work helping young people with a host of mental and physical issues move into real jobs in catering. It is cutting back on those jobs because extra national insurance contributions put a bounty on each employee’s head, meaning jobs gone and life chances maimed. I hope the charity will celebrate its 10th anniversary next month, but Labour is doing nothing to help it get there.
At the other end of the spectrum, I spoke this week with a major firm whose payroll supports a five-figure number of employees. It has a strong social conscience and tries to tap into the huge cohort of economically inactive Britons and get them into the world of work, with all that that means for their pay packets but also for the intangibles such as the self-esteem and dignity that work affords. It calls itself a gateway employer, proud to be the first rung on the jobs ladder for thousands, but it is aghast at Labour’s anti-business approach. Its increased bill for extra national insurance contributions is eye-watering, and now it faces the thicket of rules and regulations that is the Employment Rights Bill—the Deputy Prime Minister’s love letter to the unions. The imposition of day one rights means that a taking a chance on employees with poor qualifications and a poor employment history, or perhaps ex-offenders, is much more risky for the firm. It knows—as do myriad other businesses, large and small—that it is less likely to recruit, while elements of the legislation are designed instead to swell the ranks of the increasingly restive trade unions.
We are through the looking-glass with this Government’s unbalanced approach to business. Black is now white.
Madam Deputy Speaker (Ms Nusrat Ghani)
Order. Has the hon. Member just arrived in the Chamber?
Madam Deputy Speaker
You cannot waft into the Chamber and make an intervention; you have to listen to the contributions. What time did you arrive in the Chamber?
Madam Deputy Speaker
Marvellous—we will check the record. You may continue.
Rosie Wrighting
The hon. Member for Dumfries and Galloway (John Cooper) is talking about the feedback that we heard on the Business and Trade Committee. Does he recognise that businesses also fed back about the political uncertainty under the previous Government and how that made it very difficult to create an environment in which they could expand?
John Cooper
The hon. Lady is a doughty campaigner on the Business and Trade Committee. Unquestionably, mistakes were made. We know that and we have been through it before, but this Government have been in charge for 10 months now, and we see inflation rising and jobs slipping away.
As I said, we are through the looking glass: trade deals are bad, except when they are good. The Secretary of State for Environment, Food and Rural Affairs last week criticised the Conservatives’ Australia and New Zealand deals for hitting farmers, while saying that his Government’s US deal protects farmers. The US deal put the welly boot into beef farmers, who face cheap imports here and US quotas over there that they just cannot fulfil.
Dave Doogan
I wonder what the hon. Member thinks about a couple of points. When is a trade deal not a trade deal? It seems that what has been agreed with the United States is a tariff deal and what has been agreed with the European Union is a modification to our pre-existing arrangement. What does he think the US trade deal will mean for beef farmers in his part of Scotland?
John Cooper
The hon. Gentleman is right. These are not free trade agreements in the normal sense of the words: they are frittering around the edges, as he said himself. The difficulty for beef farmers in Dumfries and Galloway is that prices are rising, which is partly down to a drop in stock because of costs and things like that, so they are unable to fulfil this idea of sending beef to America. That is unlikely—it is more likely that we will see cheap American beef coming here.
Again, we go back through the looking glass. Up is down when the Employment Rights Bill makes strikes more likely, yet is touted as a boost to productivity. It is incredible. The minimum wage is up, which is no bad thing, but let us not pretend that that is Government money: hard-pressed businesses have to find that extra cash, again. In short, Labour is not working and, terrifyingly, neither are increasing numbers of our constituents.
Sir Ashley Fox (Bridgwater) (Con)
This Government were elected on a promise to go for growth. They said that they had a costed programme and that everything else they wanted to spend money on could be paid for by increasing growth. Despite those promises, almost every single action that Labour has taken since entering office has been to stifle growth, not to improve it.
Before the election, many businesses backed the new Government. They believed their promises on tax, stability and growth. Many of those businesses have now lost confidence in the Government, and who can blame them? The impact of the hikes in national insurance contributions and business rates, combined with the red tape of the Employment Rights Bill and the removal of business property relief, has totally undermined business.
I had the pleasure of serving on the Employment Rights Public Bill Committee for more than 20 sittings to go through the legislation line by line. It is 300 pages of additional regulations and costs on our businesses. It is a pay-off to the trade unions for giving their support to the Labour party before the election. That is why the Bill was introduced within 100 days, basically unfinished, and why so many amendments had to be made to it in Committee and on Report. The Bill was written by the trade unions, which explains why the Government show no willingness to compromise on its most damaging parts.
The Deputy Prime Minister is using the Bill to burnish her credentials with the left of her party, for the same reason that she and her team briefed the press yesterday on why she wants another £4 billion of tax rises: it is all in order to be ready for a tilt at the top job. That is why one part of the Government are not listening to businesses when they say how badly they will be impacted by this legislation. However, there is another significant contingent: those who simply do not understand business at all. Vanishingly few Labour Members have experience in small businesses, and practically nobody in the Cabinet has any experience of business at all.
Who is going to be hit the hardest by the cumulative effect of this Government’s punitive attack on business? It will not be Amazon, Tesco or Shell; it will be the people at the margins—those who are looking for a job in their local family-run business. The real impact will be on those who are looking for work, because everything that this Government have done is an attack on jobs. Members must ask themselves: why would a small business, as an employer, take a risk on taking on an additional member of staff in this environment? It will be taxed more and it will be opened up to litigation from day one if it fails to follow the complicated legal processes in dismissing them.
Day one rights will have a disproportionate effect on those people who we most want to help into work: young people without qualifications, those who have taken long-term sick leave, those with disabilities who need reasonable adjustments, and former criminals. Right now, if a small business gives someone a chance, it can let them go easily if it does not work out for either the employee or the business. Why on earth would it take that risk in future?
It is deeply regrettable that unemployment is already on the rise. We know that every Labour Government leave office with unemployment higher than when they started. It is regrettable that business confidence is at an all-time low after this Government have been in office for only 10 months. That is all caused by their disastrous business policies. I urge the Minister that it is not too late to change course, but if the Government do not do so, they will create a whole new generation of people who are locked out of the job market altogether.
Neil O’Brien (Harborough, Oadby and Wigston) (Con)
The outlook for business and the economy is really not good, to be brutally honest. We learned today that inflation has gone shooting up to 3.5% in a surprise increase. The Chancellor said she is disappointed by that, but it is entirely the result of her own policies. She was warned by the OBR, among others, that if she increased taxation to record levels and increased borrowing to record levels, it would have an inflationary impact. We are now seeing that, and normal people are literally paying the price through higher inflation. That is more alarming because it is against a backdrop in which unemployment is up by 150,000 people and growth is stagnant, with the IMF downgrading its forecast for growth for both this year and the next.
Business confidence is down at levels last seen during the pandemic, when the entire world economy was brought to a stop. Businesses are clearly very anxious, and that is apparent from talking to businesses in my constituency. When business suffers, ultimately it is living standards that suffer. The brilliant Minister, the hon. Member for Swansea West (Torsten Bell), produced loads of good work when he was a think-tanker for the Resolution Foundation. He used to produce lots of wonderful charts—I am a great enjoyer of charts—about real household disposable income, and he was worried about that. Now the Government have come in, and the measures they took in their first Budget reduced the forecast for household disposable income. The post-measures forecast, in technical terms, was lower than the pre-measures forecast. The outlook for living standards in terms of disposable income is one of the worst for many decades, as shown in the OBR’s forecast for living standards; growth is a tiny fraction of what we have considered to be normal since 1945.
The outlook is bad, and it is not difficult to explain how we got here. The Government have taken the tax burden up to an all-time record high, and in lots of different ways. They increased national insurance and they cut agricultural property relief and business property relief. It is interesting to see how that is percolating out across the rural economy. People often think of the family farm tax as something that just hits farmers, but I have been struck by the multiplier effect. When I met local businesses, there was a whole group of people there—farmers, sure, but also suppliers of tractors, insurers, vets and those from the whole wider rural economy. It is all being dragged down. We have already heard from Welsh colleagues about the massive reduction in investment in their rural economies as a result of that unfair tax.
As has been noted by various Members, the family farm tax has been floated many times. It was certainly put in front of us when I was at the Treasury, and we said no. My right hon. Friend the Member for East Hampshire (Damian Hinds) said the same thing. This terrible idea has been produced many times, and I am afraid that there has been a mugging on Great George Street; naive, totally innocent young Ministers have come in and been mugged by wily civil servants, who have finally been able to have their way. We have all had that piece of paper on the winter fuel payment put in front of us, but we chose not to do it. Civil servants must not have believed their luck when these Ministers agreed to do it. The Government are now hastily trying to do a bit of a U-turn, but let us see what comes forth.
Josh Fenton-Glynn (Calder Valley) (Lab)
I am enjoying the hon. Member’s peroration on the halcyon days of the last Conservative Government, but he knows, as I do, that had the last Conservative Government seen growth even close to what we had in the mid-2000s, everyone in this country would be £2,400 better off. However, what we saw was stagnation and Liz Truss.
Neil O’Brien
One of the things that happened during our time in government was a massive global pandemic that brought the entire world economy to a complete halt, but memories are short. Perhaps more importantly, every single thing that this Government are doing is bad for growth. That is the bottom line.
Antonia Bance (Tipton and Wednesbury) (Lab)
Perhaps the hon. Member has not had a chance to see the piece of work produced by a former shadow Chancellor that sets out the relative recovery rates of different world economies in the developed world since the pandemic. It shows that the United Kingdom is right at the bottom of the pile thanks to the mess left to us by Liz Truss crashing the UK economy.
Neil O’Brien
Labour Members who were not in the House at the time—it is before their time—will not remember that the deficit we inherited in 2010 was twice the size of the one that Labour has inherited, and the structural deficit was twice as big. Indeed, we went into the global recession—the financial crisis—with the largest structural deficit in our peacetime history. That is the record of the last Labour Government.
We had had a recession that was the size of the 1980s recession and the 1990s recession put together, and when I say we were cleaning up the mess—I am afraid I am going to use a generation X metaphor—I mean it was like one of those enormous brontosaurus poops in the film “Jurassic Park”. We were cleaning up a big mess, and it took us a long time. We had to make some difficult decisions, particularly during the coalition years, to clean that up. Members have referred to my peroration, but I am afraid I am only getting started. [Interruption.] The House groans at the prospect.
Jerome Mayhew
My hon. Friend talks about the mess that the coalition Government, as it then was, inherited in 2010. Does he recall that youth unemployment was running at about 10%? The coalition and then the Conservative Government were successful in rebuilding the nation’s finances. Painful as those decisions were, at the same time that Government created 800 jobs every single day from 2010 to 2024.
Neil O’Brien
We inherited a situation where unemployment had doubled. One of the great achievements of that Government was to halve it again. This is confidential, but the first time I met Nick Clegg, I was accompanied by a gentleman wearing a chicken suit—this is the kind of serious economic analysis I am famed for—but I have to say that Nick Clegg was not a chicken when it came to making difficult decisions to clean up that huge mess; the Liberal Democrats made some difficult decisions along with us to try to do that.
I have talked about the increase to national insurance contributions, and I will return to that in a little more detail. We have also talked about APR and BPR. One of the most striking developments in my constituency, though, has been the effect of the doubling of business rates for the hospitality, leisure and retail sectors through the ending of the relief that we introduced—an effect that is very visible, particularly in the high streets such as the Parade in Oadby, and in Wigston and South Wigston. The situation is also bad in Market Harborough. The problem is compounded by some local decisions—the council has increased parking charges, which was a big mistake—but it is the ending of those reliefs and the huge increase in national insurance contributions that have been especially bad for our local high streets, and for pubs in particular.
When I was talking to a brilliant pub landlady who owns several pubs in my area, she said, “We hoped so much that this new Government would be a morale-lifter and there would be a boost and a feel-good factor, but now we have a feel-bad factor.” I often drive past a number of pubs that have recently closed because of the confluence of the ending of the reliefs, the higher energy costs, and a number of the tax measures that the Government have introduced. It is desperately sad to see all those closed pubs that used to be huge centres of community life. When people lose their local pub, they lose a piece of their social fabric as well. Pubs are important local businesses, especially in rural areas.
We have had the tax increases, and we have also had the increase in energy costs as a result of everything that the Secretary of State for Energy Security and Net Zero is doing. We were promised a £300 reduction in our energy bills but instead we have seen a £281 increase, and that can only rise as the Government do all sorts of ill-advised things to hit their ill-advised target of fully decarbonising electricity by the end of the Parliament—something that will massively increase the costs of going green in comparison with the counterfactual.
At the same time, we have seen a massive increase in employment red tape. One of the bright spots in the UK economy over the last 30 years has been a relatively liberal labour market, but there has now been an extraordinary moment when all the big five business groups in the country came together for the first time—they have never done this before—to criticise the Employment Rights Bill. A Member on the Government Benches said earlier that it was all right because some Cambridge professor had said it was fine; on the other hand, every single business in the UK is saying it is a disaster. The fact that Members are accepting that kind of donnish approach to managing the economy, rather than listening to the views of the people who actually create jobs and drive our economy, really says something about the contemporary Labour party. This is no joking matter, though; it is a serious issue and a major economic detriment.
At a higher level, the wealth creators have been affected: the non-dom changes, some of which have already been rowed back on and more of which may be rowed back on in future, have driven away people who have a great deal to give to our economy. There are plenty of reasons for this picture of economic underperformance and gloom.
I would not mind so much if all the tax increases, leading to a record tax burden, had been imposed against a backdrop where the Government were bringing our debt and deficit under control. Perhaps the Minister will be able to correct me, as his knowledge of fiscal factors may be greater than mine, but I cannot recall any fiscal event when the Government have presented a Budget and at the end of the forecast period, public sector net debt was still rising. There have been plenty of fiscal events when debt has risen, because of events such as the pandemic or the war in Ukraine, but they have all shown a path towards falling debt. This is the first time I have seen a chart—I think it is chart 7.3 in the Office for Budget Responsibility’s economic and fiscal outlook—that shows debt still ceaselessly rising even at the end of the forecast period. I cannot remember another Budget like that. We are seeing the confluence of a stalling, stagnating economy, rising unemployment, increasing tax and, as a result of all that, debt rising and storing up major problems for the future.
I want to go into a bit more detail about a couple of matters, the first of which is that national insurance increase. Labour in opposition promised that there would be no tax increase for working people, so I was stunned—jaw on the floor—when the biggest tax increase that they introduced fell squarely not just on working people, but on low-income working people. It is like a laser-guided, heat-seeking precision missile, targeting those low-income workers, particularly women, who graft hard and are not paid a lot. I find it incredible that a Labour Government—a Labour Government!—should have chosen, as their big tax increase, to lower the threshold for national insurance while increasing the rate. It hammers those on the lowest incomes. That is amazing.
Why was that option chosen? It was chosen for all the wrong reasons. It was chosen because the Labour party hoped that it could say, “This isn’t a tax on the workers; this is a tax on businesses.” Of course, everyone can see through that. The problem for the Government is that the Office for Budget Responsibility immediately popped up and said, “No, three quarters of this will be passed through to people’s wages.” The OBR says that people on £13,000 a year will lose £500, which is a lot to lose for someone who is on only £13,000. People earning £9,000 a year are the biggest losers proportionately. According to the OBR, they will lose 5% of their income as a result of the huge tax increase being passed through into their wages. It is amazing that Labour Members are not up in arms about the fact that the Government have just implemented one of the biggest tax increases ever and have targeted it at lower-income workers. That is incredible for the Labour party—absolutely unbelievable.
On the other side of the ledger, what has happened to public services? Of course, they are all hit by the national insurance increase. We were promised in the autumn Budget that they would be looked after, but that is not what has happened in practice. First, we found out that lots of bits of the NHS would not be compensated, including primary care—that GPs, opticians and dentists were all going to have to suck up the increase in tax. We also found out that social care would not be protected and would have to suck it up.
Intriguingly, and as I pointed out at the time, there was a difference between the Budget document and the OBR’s EFO, which I am sure the Minister will remember. The EFO cited a different number for the cost of protection and it mentioned that social care would be included. One of the joys of having the OBR—although it is not a joy for those in the Treasury—is being able to see the Government’s handwriting and the last-minute changes; in this case, we can see that they were thinking very seriously about exempting social care from the big increase in tax, but that they chose not to do so at the last minute. That was the wrong decision.
Josh Fenton-Glynn
As a member of the Health and Social Care Committee, I welcome the hon. Gentleman’s conversion to the cause of social care. Could he point me to where in the record, between Dilnot reporting in 2011 and today, he mentioned it while his party was in government?
Neil O’Brien
The hon. Member was probably not here at the time, but I was actually Social Care Minister. He says I have been converted to the cause of social care, but I am quite passionate about it. In addition to the professionalisation of the profession and the investment in skills and technology, one of the things we chose to do—particularly in the wake of the pandemic—was to prioritise money going to the frontline, rather than towards the protection of people’s property income. I am not a social democrat, but occasionally we have to make tough choices; rather than protecting people’s property income, our choice was to protect and put money into the frontline of social care.
Neil O’Brien
In one moment.
I want to talk about some other public services that have been affected by the national insurance increase. There are a lot of examples in education. Nurseries have lost out, and they are screaming right now; they are in real difficulty. Lots will close and lots will fail to deliver the places that parents have been promised. If Ministers meet representatives of nurseries, they will hear a tale of incredible woe, because nurseries are caught by both the large increase in national insurance, which squarely hits their workforce, and the increase in the national living wage. I am not against the national living wage—in fact, I helped to give it its name—and I believe in fair pay for fair work, but we have to be conscious about what we are doing with tax, because we cannot have a big increase in the national living wage and then wallop those exact people with a massive tax increase. That way lies disaster for our public services and for our small businesses.
Nurseries have lost out, and schools are losing out. Schools were promised that they would be fully compensated. It is not us saying this; it is the Association of School and College Leaders, which is a trade union, and the Confederation of School Trusts. They have discovered that schools are losing out by up to 35%—that is how much they have been shortchanged by this Government. The Government have deliberately obfuscated the funding and they are not even attempting to compensate each individual school for however much money they are losing. The result is that schools might sack about 13,000 teachers.
In fact, I have been meeting representatives of schools and school trusts in recent weeks, and they are currently sacking teachers. The Harris Federation—one of the best trusts in the entire country, with an amazing and proud record of turning around London schools—is sacking people. The Synergy multi-academy trust is sacking people. Sir Jon Coles, who runs the largest school trust in the entire country, has said that schools are obviously going to have to sack people, because schools have been shortchanged over national insurance. It is pretty poor that they were promised something that has not been delivered.
It is the same for our universities, and I have to say that this was a masterclass in un-joined-up government. First, the Government broke their promise on fees. They said graduates would pay less, and they increased tuition fees instead. That was the first broken promise. Secondly, the universities did not even get the money; it was entirely wiped out by the increase in the national insurance rate. Thirdly, with industrial action looming across the sector because they had taken away all the money they had put in, the Government made it easier to strike through the Employment Rights Bill. It is now rumoured that the Office for Students are to bring in a new mechanism to make it easier for students to sue universities if there are strikes. This is a case of left hand, right hand—or of arse and elbow, if I am completely honest—and a masterclass in totally chaotic government.
The same is true in lots of other bits of our public services—public transport, culture, housing and local government. According to the Local Government Association, local authorities have been short-changed by £1.8 billion, which is an enormous hit. They were promised they would be compensated, but they have not been compensated.
However, the worst example for me is our charity and voluntary sector. As the Minister knows, at least 7,000 charity and voluntary sector leaders have written to the Chancellor asking her to change her mind and reverse the massive increase in national insurance on these small, vulnerable organisations. When I talk to charities and voluntary groups in my constituency, they tell me some pretty disturbing things about what they are having to do to their staff because of those big increases.
I pay tribute to organisations such as Helping Hands up in South Wigston, Voluntary Action South Leicestershire, Loros and Rainbows. I am afraid we were recently forced to use one of our brilliant local hospices, Loros, to help look after my mother-in-law, and it provided wonderful care. However, its job is not made easier by the fact that it has been hit by this enormous tax increase. If the Minister wants a really good measure for the next Budget, he should reverse that. It would be hugely popular, but more importantly, it would be the right thing to do. Public services have been short-changed, and low-income workers have been the hardest hit, which is a pretty bad combination.
I want to mention something that has not been much explored in recent days, which is a tax increase—a stealth tax increase—that has gone unrecognised. By linking the UK emissions trading scheme with the EU scheme, the Government have increased the tax on energy that firms face, because the ETS is of course a tax, albeit a traded one. Prices in the UK ETS have been driven upwards for the last couple of months not just by the final deal announced the other day, but by the prospect of a deal and the prospect of connecting those two different markets.
Two different things have become a bit muddled in the public discussion—one is about trading electricity and the other is about the actual ETS as a tax. In January, UK allowances were trading at about £36 a tonne for December 2025 delivery, and EU allowances were about £25 a tonne more expensive, so £36 plus £25. As of today, the UK ETS is £54 a tonne and the EU ETS is only £4 a tonne above that. We have seen a tremendous price convergence, with the UK tax rate—the UK carbon price—shooting up to match the EU one. Although the price had been ticking up on the prospect of connection to the EU scheme, it went shooting up on the announcement of the deal: it is up by a further 10% since Monday’s reset announcement. That is increasing the cost to businesses, and it will ultimately pass through to the wider economy and to the rest of us.
Looking at the EU ETS price movement so far, it seems to me that the UK Treasury will accrue about £1.2 billion extra as a result of these increased ETS costs, which would certainly outweigh the supposed benefits from the carbon border adjustment mechanism—not that that tax is necessarily paid by firms in the UK, because it is paid by importers in the EU—so the wider cost of this stealth tax could be more than that. I mentioned that the potential increase to the Exchequer is about £1.2 billion, but the overall cost could be higher at more like £2 billion or so. That is an immediate result of the deal announced on Monday, and it is in effect a stealth tax, because it has given us a higher carbon price immediately.
I thought it was ironic that the Draghi report—the EU’s own report into how it can become more competitive—was quite critical of the EU’s ETS. It said it had given the EU one of the highest carbon prices in the world—a high and volatile price. The Government were telling us what a wonderful benefit it was to be part of it, even as senior people in the EU were saying that it is a problematic scheme. That part of the deal has been a bit underappreciated so far.
Deirdre Costigan (Ealing Southall) (Lab)
The hon. Gentleman has spoken now for, I think, 23 minutes. He has criticised on many fronts the decisions the Labour Government have made to fix the foundations of the economy and clear up the mess that his Government left. Would he mind spending maybe 30 seconds on what decisions his party would take to put police back on our streets, fix our public services and put money in people’s pockets?
Neil O'Brien
I had not realised I had spoken so long. Even I, at 23 minutes, have probably had enough O’Brien at this point, never mind the rest of you poor souls! The hon. Lady talks about police. In the last Parliament, the previous Government added 20,000 extra police officers to our streets. I was not going to raise it, but national insurance hits the police as well. I see TV footage of prisoners released from jail by this Government popping champagne corks. I am not going to widen this out into a debate about criminal justice, but if I did so it would be more enjoyable for Conservative Members than for the current Government.
We have a pretty bleak picture: inflation up, unemployment up, growth stagnant and being revised down by international bodies such as the IMF, business confidence at its lowest level since the global pandemic, and an outlook for living standards that is absolutely miserable. Something has to change, and I hope the Government are having a rethink on the economy, as well as on other subjects such as migration. The Prime Minister used to be madly in favour of it, signing letters saying, “Don’t deport anybody.” I do not really think the policy has changed hugely, but at least the rhetoric has changed. On the winter fuel payment, let us see how far the policy goes. What we really need, above all else, is a change in economic policy to one that is more about getting growth moving. Until we do that, we will not get anywhere.
The Minister, being brilliant, will remember the economist who said:
“Once you start thinking about”—
economic—
“growth, it is difficult to think about anything else.”
I am sure he is thinking about economic growth, but we need to move from the wonking and the thinking to the changing of policy in a more growth-oriented direction if we are to get unemployment down and give people a chance of having better living standards and a better future.
Jerome Mayhew (Broadland and Fakenham) (Con)
What a great speech to follow. I have an ambition to reach 25 minutes, so here we go. I should start by making reference to my entry in the Register of Members’ Financial Interests. I was challenged by a Labour Member—I am not quite sure which one—and I should declare my background in entrepreneurialism. I ran an SME and then created something called an employee ownership trust, having employed well over 1,000 people. I am also a director of a farming company, which will perhaps have some relevance to my later comments.
This has been a very lively, interesting and well-informed debate—I have certainly enjoyed it so far—and it has been interesting in what it has revealed about Labour Members and Opposition Members. We have had no fewer than three academic economists speaking from the Labour Benches and we have had businesspeople with real-life experience of the economy speaking from the Opposition Benches. One might think, “Well, surely economists know lots about the economy.” You would have thought so, Madam Deputy Speaker, but if we look at how the Government have responded since 4 July, with their obvious surprise at business confidence going through the floor, we begin to see how out of touch academic economists can be when faced with the facts of the real economy.
It is undoubtedly the case that business confidence has collapsed. The BDO optimism index has now sunk—this is the latest figure—to 91.36%. What does that mean? What it really means is that it is the lowest since the entire world economy was shut down by covid. Looking at any one of a number of indices, both business confidence and consumer confidence have gone down massively as a result of Labour’s election. That prompts the question why there has been such surprise on the Government Benches that their actions have been so ill received by the people who drive the economy. One of the reasons is that the country as a whole—and businesses in particular—was actively misled by Labour in the run-up to the general election. We were all told that Labour had no plans for tax rises beyond those that had already been announced. We were all told that Labour’s plans were fully funded and fully costed and that they did not require tax rises above those set out in the manifesto.
Rosie Wrighting
As someone with a business background and who worked in a large international business before coming to Parliament, I think the previous Conservative Government misled businesses when they promised them a Brexit that was going to remove red tape, but which actually created barriers. Does the hon. Gentleman agree?
Jerome Mayhew
I am grateful for that intervention. I joined this House in 2019, but the original Brexit debate had hyperbole on both sides. We had Project Fear saying we would need an immediate fiscal event as soon as we had the referendum, but that did not take place. Growth has actually continued since the referendum back in 2016. In fact, growth in the United Kingdom has outpaced that of Germany, France and Italy, and, for that matter, Japan. There were a lot of arguments, both one way and the other, over the likely consequences of Brexit. My takeaway is that, overwhelmingly, it has not made that much difference to the world economy or to Britain’s relationship with the world. There have, undoubtedly, been some trade frictions, and those have been particularly acute for SME import/export—I recognise that. But overall, trade has continued, and we have actually outperformed our European big economy neighbours.
Andy MacNae (Rossendale and Darwen) (Lab)
The hon. Gentleman suggests that there was no damage done to businesses, yet I have been chairing business roundtables recently with industry representatives—people who run billion-pound businesses; significant businesses—and every single business recognises the impacts of Brexit as a principal drag on their profitability and growth.
Jerome Mayhew
As I said, we had a huge change to how our country was governed, which was dictated to us by the people, because we are a democracy. One of the reasons I entered Parliament was that, despite voting remain in 2016, I was outraged as a democrat by the failure of Parliament between 2016 and 2019 to effect the will of the people, as clearly expressed in a referendum. That pushed me from being an activist to being a politician in order to effect the will of the people.
Since then, there have been pros and cons. There are a lot of pros, and over the past five years I have seen for myself how important some of our Brexit freedoms have been. If there were a plebiscite today on whether to leave or rejoin the European Union, I would vote without hesitation to leave, because I have seen some of the benefits. In my area, the common agricultural policy was a disaster, both economically and socially, and had a hugely negative impact on the environment, farms and countryside of Broadland and right across the country. With our Brexit freedoms, we replaced that with the environmental land management scheme, a wholly beneficial policy change—imperfect though it was; it was part of an iterative process to learn from our experience with farmers. That would have been impossible without Brexit.
Similarly, some of the trade deals we have done would have been impossible without Brexit, as would myriad regulations that have been improved just a little in all those Delegated Legislation Committees we have all enjoyed so much over the years. Much of that could not have been achieved without Brexit. None of those regulations will reach the front pages of the newspapers, but iteratively, over the years, they have the opportunity to make our economy and our society stronger.
That is one of the main reasons I was so disappointed by the Government’s capitulation to the European Union on dynamic alignment just a couple of days ago. We have taken on the disadvantages of non-membership of the European Union—we become rule takers—without any of the benefits of dynamic divergence of our regulatory system, which would allow us to bend our rules most accurately to reflect the opportunities of our own economy.
That was an interesting divergence, but I will now come back to the main argument of my speech, which is that Labour misled the people in the run-up to the general election. It said that its policies would be fully funded and fully costed. It said that there would be no taxes on working people, and it expressly said in its manifesto that there would be no increased tax on national insurance contributions. What is reality? Labour chose to use a fig leaf, as the hon. Member for Angus and Perthshire Glens (Dave Doogan) might have said, which is this fabricated £22 billion black hole in the economy—the black hole, by the way, that the OBR failed to find. The former Financial Times journalist, the hon. Member for Earley and Woodley (Yuan Yang), who is no longer in her place, might recall that the Financial Times also failed to find the £22 billion black hole in the economy.
Labour uses that figure as a fig leaf not to raise £22 billion—no, that would be sufficiently unambitious—but to raise £40 billion of tax and another £32 billion of debt. It has done that by focusing the tax on jobs. National insurance contributions are focused on young people, part-time workers, and women in particular. The Employment Rights Bill put another £5 billion on taxation—on the Government’s own impact assessment. The increase in high street business rates is inexplicable in a period of such strain on our businesses, and that is not to mention the effect of agricultural property relief. What is the result? Some 200,000 businesses have closed, which is a 20-year high—a high only beaten by the previous Labour Government.
In January 2025, corporate insolvencies were up 10.7%. That is the highest since the financial crisis when Labour was last in power. Unemployment was up 10% to 4.5%. The Bank of England forecasts that it will go up further to 5%. Youth unemployment was up 11%. This feeds into the well-worn war narrative that Labour always leaves government with unemployment higher than when it arrived. The Government must stop and think again. I know that they were new to government; they had been out of power for 14 years, and they have made some really profound, rookie mistakes, but we must not let our businesses and those employed pay the price for that. The Government should look again and seek to recover their economic reputation.
Blake Stephenson (Mid Bedfordshire) (Con)
I am being closely supervised by the Whips, as I have been told to keep this speech quite short, so there will be no 25 minutes from me.
Hard-working British people are losing their jobs. Is it any wonder when every policy that this Government announce seems designed to make it harder for British people to do the right thing—create jobs and grow our economy. We have a tax on job creation; billions of pounds in extra costs through the Employment Rights Bill; and a family business tax, which pushes entrepreneurs and job creators elsewhere. We cannot grow an economy through sheer force of will alone; we need to give the people who build the businesses that employ the workers who power the economy the best possible environment in which to thrive.
We have seen what happens to hard-working people under this Government in my constituency of Mid Bedfordshire. Constituents who were part of a 120-year proud manufacturing history at the Stellantis plant in Luton now find themselves out of work, just a few months after the imposition of this Government’s policies.
Hard-working publicans in my constituency are now, sadly, closing their doors, because higher costs and crippling regulatory burdens are being applied by this Government. I note that not many Members have spoken about pubs, but they are an essential part to many of our communities, and pubs in my community are closing their doors. That means fewer opportunities for younger people to get their first job in our rural areas, which was exactly my experience growing up in north-west Hampshire. There will be less money for our local farmers and producers in the supply chain, damaging our rural economy, and it means the heart of two rural communities in my constituency being ripped out. This is happening up and down the country, with UKHospitality confirming that 70% of hospitality businesses expect to reduce employment and that one in seven are planning to close at least one site.
Worst of all, this Government’s economic policy is hammering our hospices and charities. Conservative Members have spoken passionately not just today but in previous months about the importance of this sector. Hospices and charities have relied on the British public’s unending good will and generosity to keep going through some tough years over the pandemic, but they can no longer rely on the good will of their Government.
The only jobs that seem to be safe from Labour’s tax hikes are in the new quangos being rapidly established to run our energy, railways and the rest of our country—all while the Government announce review after review into who is spending all their money.
I said that I would keep my speech short, so I will wind up. The tax rises that we all know are coming to pay for the expanding state and the debt that the Government are now running up will strangle any meagre growth that they plan to nurture. Their plans for growth are a mirage. Huge Government spending will only supplant private investment.
We have not spoken about it today, but the National Wealth Fund investment will not create any wealth. So far, the average National Wealth Fund investment since July 2024 has cost nearly £1.5 million per job created. It is a sad state of affairs. This Government talk up their plans for growth but fail to back the people who grow the economy. We can see from economic history that the larger the Government, the smaller the economic growth. The Government are putting big government over job creators and entrepreneurs. Confidence is being undermined, and that is resulting in rising unemployment, especially for our young people.
It is time for something to change. The Government need to urgently change course to support the aspiration, hard work and risk taking that is needed to create the jobs and prosperity that working people throughout Britain deserve.
Gareth Davies (Grantham and Bourne) (Con)
I am grateful to close this debate on behalf of His Majesty’s Official Opposition. Let me start by thanking all those who contributed and from all sides of the House, but particularly my right hon. and hon. Friends, who have highlighted so clearly the devastating impact that job losses and business closures have on families, communities and our national economy.
I should also thank those on the Opposition Benches—sorry, I mean the Government Benches; it will not be too long. Is it not amazing that just three Labour Members were brave enough to speak? I pay tribute to them: the hon. Members for Harlow (Chris Vince) and for Loughborough (Dr Sandher), and the hon. Member for Earley and Woodley (Yuan Yang), who is not in her place. So proud are they of their economic performance that only 1% of the parliamentary Labour party actually bothered to show up to a debate on the economy—but then 1% is a pretty high figure for the Labour party.
The truth is that since last July we have all heard a story of someone who is struggling to figure out how they will pay their new tax bills, or struggling to find a new job or pay their energy bills, which just keep on rising, despite people being told that they would go down. Many of my right hon. and hon. Friends have made very good contributions in interventions and speeches today. I cannot mention them all, but in particular I pay tribute to my right hon. Friend the Member for East Hampshire (Damian Hinds), who highlighted that businesses are people. That is something I mentioned in my maiden speech. My dad set up a business; he took a risk and made it work. He made it happen, despite it being very difficult. My right hon. Friend is right; when we in this place tax businesses, we are taxing people. It is something that we understand and the Government do not.
My hon. Friend the Member for Broadland and Fakenham (Jerome Mayhew) speaks with great authority, not least because he has employed so many people and driven so much growth. He is a proud colleague of mine. He highlighted right at the beginning the potent combination of taxation on businesses; it is not just one tax but a combination of taxes that are hitting retail businesses in particular, and there is also red tape being implemented.
My hon. Friend the Member for Dumfries and Galloway (John Cooper) spoke about his farmers. My right hon. Friend the Member for Stone, Great Wyrley and Penkridge (Sir Gavin Williamson) highlighted the impact of the NICs threshold increase, which is not always talked about—there was a two-pronged attack on businesses and people in that the rate changed and the threshold changed—as well as hospitality businesses in his constituency. My hon. Friend the Member for Mid Bedfordshire (Blake Stephenson) also did that—he talked about his pubs—and my hon. Friend the Member for South West Hertfordshire (Mr Mohindra) spoke about his personal experience from his previous career and his experience from his constituency. My hon. Friend the Member for Sleaford and North Hykeham (Dr Johnson) pointed out that if Ministers spent a bit more time listening and a little less time talking, perhaps the economy would not be in as bad a state as it is.
This time last year, the Prime Minister and the Chancellor were talking at people, telling anyone who would listen that the “growth lever” would be very first lever they would reach for in government, but the only economic lever they did manage to pull was the handbrake, otherwise known as the tax lever. Labour’s first Budget was the second-biggest tax raising fiscal event in the last 50 years, which, as my hon. Friend the Member for Harborough, Oadby and Wigston (Neil O'Brien) pointed out in an excellent speech, took the tax burden to the highest level on record. On growth, forecasts have been downgraded across the board by the OBR, the BOE, the OECD and the IMF—by this point, Labour’s economic performance has been panned by just about every letter in the alphabet.
Labour Members can crow all they want about growth data from the first quarter of this year, but it does not change the fact that growth was higher under the Conservatives during the same quarter of 2024. Debates about growth figures are not purely academic, as the Labour academics would have us believe; they have real-world consequences for workers and businesses up and down the country, most obviously when it comes to employment. As my hon. Friend the Member for Bridgwater (Sir Ashley Fox) pointed out, no Labour Government have ever left office with lower unemployment than they inherited. That is perhaps because in the last 60 years every Labour Government have left office with a higher tax burden than when they started.
As the shadow Secretary of State, my hon. Friend the Member for Arundel and South Downs (Andrew Griffith), highlighted at the beginning of the debate, the ONS says that there are 150,000 fewer payrolled employees in our country than there were last July when Labour entered office. We have had significant falls in employment by that measure in seven of the last nine months. Let us put that into context: that follows 42 months of near unbroken payroll growth under the Conservatives as we exited the pandemic. In that time, we saw 2.2 million workers added to payrolls, leaving payroll employment 1.4 million higher than it was pre-pandemic.
That is the difference that a Labour Government make: they send job recovery into reverse. Hiring expectations for the next three months are at a record low. Unemployment is going up and up, with the Bank of England now forecasting 5% unemployment by 2027. Of course, it is in the most heavily taxed sectors that we see the greatest damage. Earlier this month, 250 jobs were cut by Harbour Energy in the North sea after Labour raised the tax on the sector to some 78%. In retail and hospitality, it is small businesses who are hardest hit by the national insurance increases and the business rates relief cut. Labour Ministers talk about difficult decisions, but they are not the ones who are having to reduce opening hours, close on weekends, freeze pay and make redundancies of family members—mums and dads who just want to get up and go to work—just to survive.
In too many cases, we are seeing local businesses close down for good. The country is witnessing the fastest growth of corporate closure since Labour was last in office. The great irony of the Chancellor’s much lauded securonomics is that it has created insecurity and business uncertainty. Entrepreneurship is being suppressed and jobs are being sacrificed on the altar of Labour’s sanctimony. They have the brass neck to go about claiming that this is all in order to restore stability and the public finances, when the independent National Institute of Economic and Social Research has predicted that the true size of the Chancellor’s black hole is £60 billion.
Let us talk about black holes. The stable geniuses on the Government Front Bench took pensioners’ winter fuel payment away for the winter, but now that summer is appearing they talk about restoring it. They are taking pensioners for fools. What’s next—lower fuel duty for cyclists? The damage is already done. Who is to say that Labour will not be back in the winter to cut fuel payments again, just in time for Christmas, especially as Downing Street cannot guarantee today that the proposed changes will be ready by then? We shall see.
In Labour’s fiscal funfair, the only ride is a merry-go-round. Round and round the vicious cycle goes, to the point where we no longer ask whether Labour’s next Budget will bring in more tax rises, but which taxes it will hike. We do not ask whether the next Budget will downgrade growth forecasts, but by how much. We do not ask whether the next Budget will support jobs, but how much higher unemployment can really go under Labour.
As we found out this morning, the Deputy Prime Minister has put in her first draft, briefed to the press, for the Chancellor’s next Budget. Raising taxes on pensioners—that will hurt growth. Raising taxes on retail investment—that is anti-growth. Raising taxes on incomes—that is definitely anti-growth. When in a hole, stop digging. Labour simply cannot tax its way to jobs and growth, but it seems utterly determined to learn that the hard way. Our motion calls on the Government to learn from their mistakes and urgently change course. On behalf of millions of British workers and businesses across this country, I commend this motion to the House.
The Parliamentary Secretary to the Treasury (Torsten Bell)
This is hopefully one thing on which all Members and definitely those on both Front Benches agree: “It’s the economy, stupid.” It is a growing economy that raises living standards and that sustains public services and eases public finances. Perhaps most importantly, it is a growing economy that proves to people that tomorrow can be better than today.
I welcome it that the Conservative party has called this debate. It is an important topic, it is deserving of our time and I thank all hon. Members for their contributions, even if I cannot thank them all for the duration of those contributions. Fifty minutes to deliver one speech is Britain’s productivity crisis right there. [Interruption.] The hon. Member for Arundel and South Downs (Andrew Griffith) is still talking. The productivity crisis rolls on.
Given how important this topic is, it will be a surprise to hon. Members, probably those on both sides of the House, that this is the one and only time that the Conservative party has wanted to talk about the economy in the year since the election. It is the first Opposition day on the economy. I initially thought that that could not be true. I am a new Minister and I have a lot to learn, so I said to my office, “Go and check. They can’t have got through a whole year with no Opposition day on the economy.” My office checked and it found that it has been 10 months with not one debate on the economy. Private schools? Oh yes, the Conservatives want a debate on that. But investment, growth, jobs and the economy? Not one debate. It is no surprise that they do not want to talk about the economy, because their economic legacy was one of entirely unprecedented failure, as my hon. Friend the Member for Loughborough (Dr Sandher) set out.
Torsten Bell
I will in a second.
It is a legacy of stagnation not seen in living memory, with the lowest business investment in the G7; wages, which used to grow at a consistent 2% a year, flatlining for their entire period in office; the worst Parliament on record for living standards; and the public finances trashed as debt soared. It is no surprise that the Conservatives have nothing to say about the past—the Leader of the Opposition said that it was true that they had no plan for growth—and it is staggering that they still have nothing to say about the future.
Torsten Bell
I said that I would give way first to the hon. Member for Harborough, Oadby and Wigston (Neil O’Brien), but I will come to my hon. Friend.
That is not just my view, but the view of George Osborne. He says that the Tory party has no “credible economic plan”. I always enjoy listening to the hon. Member for Grantham and Bourne (Gareth Davies), so I listened extra carefully just now, and there is still no plan, credible or otherwise.
Neil O’Brien
I was just observing and enjoying the way in which the Minister was lecturing us about not wanting to talk about the economy, when at one point during the debate, literally only three Labour Members were in the Chamber—it is extraordinary. If they are so wonderfully proud of their record of higher unemployment, higher inflation and slower growth, why are none of them here?
Torsten Bell
Because Labour Back Benchers support and have total trust in their Front Benchers. All they would have said is everything that I am about to say about the record of this Government, of which we are very proud.
I will come on to the labour market, which the hon. Member for Harborough, Oadby and Wigston raised. The hon. Member for Richmond Park (Sarah Olney) asked about employment and changes to national insurance, and several Members claimed that there is a direct relationship between changes to national insurance and changes in vacancies in the labour market. Let us introduce some facts to the debate—[Interruption.] While the shadow Secretary of State chunters, here are some facts: vacancies in Britain have been falling for 34 months, there has been a Labour Government for 10 months, and there has been a national insurance change for one month. Those are the facts. We cannot let the Conservative party escape from their disastrous record by reinventing history.
Dr Luke Evans
One fact is that the claimant count and unemployment rate in Swansea West have gone up by 4% on the previous year. What does the Minister say to his constituents when they confront him because they are losing their jobs and the unemployment rate has gone up?
Torsten Bell
The most important fact for my Swansea West constituents is that wages at the end of the Conservatives’ period in office were stuck at the same level as when they came into office in 2010—14 wasted years for my constituents. To respond to the hon. Gentleman’s question about unemployment, I would not use the claimant count at that level because the data is not as robust as it should be. Several hon. Members have, over the course of the debate, talked about increases in the unemployment rate in recent months. Why has the unemployment rate gone up? It is not because employment has come down, but because the inactivity that shot up on the Conservatives’ watch has started to decline. That is what is going on beneath the numbers.
Why do Conservative Members not want to talk about their disastrous record on the labour market? It is because they left us as the only G7 economy whose employment rate still had not returned to pre-pandemic levels. They left us with 2.8 million people out of work through long-term sickness, and 1 million young people not in education, employment or training—more than one in eight young people were left on the scrapheap by the Conservatives.
Let me turn to the labour market today, which hon. Members have mentioned. Some 200,000 jobs have been created since the Government took office. Pay has outstripped prices, with the strongest real pay growth for years. Let me pause on the question of wages, because for many people, what they get paid is the economy. Here is a fact so staggering that it tells us all we need to know about the failure of the previous Government and the progress made under this one: wages have grown faster in the first 10 months of this Government than they did in the first 10 years of Tory Governments from 2010. That is what a country turning a corner looks like.
Torsten Bell
It is not boom and bust. Wages for workers need to rise in Britain once again. We also need to turn the corner on an economy that is far too unequal. That is what our Employment Rights Bill will do.
Neil O’Brien
The Minister is being incredibly generous with his time. He is saying what a wonderful outlook there is for wages. Why, then, is the OBR’s forecast for real household disposable income to be lower than in the 1950s, the 1960s, the 1970s, the 1980s, the 1990s, the noughties and the 2010s?
Torsten Bell
Real household disposable income per capita is growing quite fast, according to the latest measure at the end of the fourth quarter of 2024. The OBR says that the legacy of the previous Government has shown it that productivity and growth in this economy have been too slow. Our job is to turn around their record, so that the forecasts and real wages start to rise.
Matt Rodda
I thank the Minister for giving way on that point. He is making an excellent speech, contrasting the 14 years of utter failure by the Conservatives with the quick start by Labour. He has been quoting statistics for the period since Labour was elected, but will he say more about the potential benefits of the three trade deals for growth and investment?
Torsten Bell
What is great about my hon. Friend is that he has a forecasting ability that is significantly above that of many economic forecasters. He has predicted exactly where I shall be turning shortly.
I want to dwell on a few points about the unequal economy. Three million workers have benefited from the introduction of a higher minimum wage last month. That is worth £1,400 to a full-time worker. Just today, the Trussell Trust provided an update on the painful symbol of modern Britain that is food banks. Far too many food parcels were provided over the last 12 months: 2.9 million. That is up by nearly a half over five years, which is an absolute disgrace, but it is down 8% on the past year and we need to keep it falling.
Several hon. Members have raised the question of tax. The right hon. Member for East Hampshire (Damian Hinds) and the shadow Minister sounded as if they were opposed to all taxes and made it the core of their argument that a higher tax level is a problem that this Government have put in place. Neither of them mentioned that the increase in taxes under the Tories in the last Parliament was significantly higher than any change in taxes under this Government—[Interruption.] It is true.
The hon. Member for South West Hertfordshire (Mr Mohindra) raised the question of non-doms, but also asked whether HMRC was behaving more aggressively. He favoured direct control of HMRC by Government Ministers. The Exchequer Secretary to the Treasury now chairs HMRC, and I am sure he will have heard the hon. Gentleman’s points. On the idea that HMRC has become more aggressive, one of my first jobs in government was being involved in merging what was then the Inland Revenue and the Customs department, and I promise Members that nobody is as aggressive as the Customs department was in the olden days. There were guns involved.
This Government had to take difficult but fair choices on tax in the autumn Budget—
Jerome Mayhew
I am grateful to the Minister for giving way. A moment ago he told the House that real household disposable incomes were rising as a result of this Government, but does he not accept that the OBR, when critiquing the Budget last October, found that during the forecast period real household disposable incomes would fall as a result of the Budget proposals?
Torsten Bell
What the Office for Budget Responsibility has said is that disposable incomes will grow during this Parliament at twice the rate that they grew during the last Parliament. The hon. Gentleman has just given me another excuse to repeat my favourite fact, which is this: forget what anybody is forecasting, because in the real world, wages have risen more in the first 10 months of this Government than in an entire 10 years under the Conservatives.
We are going to stick to our promise not to raise working people’s rates of income tax, national insurance or VAT, and we are maintaining an internationally competitive tax system with the lowest rate of corporation tax in the G7. Nobody on this side of the House is pretending that these were easy decisions, but they were the right ones and the responsible ones, yet each and every decision has been opposed by the Opposition parties. It is no surprise to hear SNP Members joining with the Conservatives, as they do on almost everything these days.
Dave Doogan
The Minister is making great play of the way in which his new Government have increased wages across the United Kingdom since the election, but will he concede that 91% of earners and workers in Scotland were already earning more than the living wage level that his Government have recently set?
Torsten Bell
I will, and that is why I am celebrating the fact that average wage rises are happening. If the hon. Member does not want to be in favour of wage rises in Scotland, that says everything about today’s SNP.
We are all used to the Liberal Democrats’ fantasy economics, but the Conservatives used to believe in sound public finances. They used to understand that it is only on that basis that the Bank of England can sustainably cut interest rates, as it has done on four occasions since the general election. The shadow Secretary of State, in his very long speech, claimed that these choices were not pro-business choices. I tell him that these are pro-business choices because it is pro-business to deliver functioning public services. Was it pro-business when the Conservatives left shops up and down the country paying a retail tax, forced to employ their own security guards because the Tories took the police off the beat? Was it pro-business when employers everywhere faced a health tax under the Conservatives because the NHS was not functioning and their staff were off sick? As I said earlier, growth is key. Of course, the shadow Secretary of State is such a champion of the British economy that he predicted there would not be any. Back in December, he claimed with glee that Britain would start 2025 in recession—
Torsten Bell
I will quote the hon. Member. He said,
“‘could we be in recession’? Yes we could.”
He talked the economy down—he knows exactly what he did—and British business has proved him wrong: no recession and the fastest growth in the G7.
Although the economy is beginning to turn a corner, the Government recognise that there are big challenges ahead. There is no shortcut if we want to get the economy growing again; we have to start investing once again. That is why we have raised public investment by £113 billion over this Parliament. Compare that with the deep cuts planned by the Conservatives. It is why Britain’s pension funds—my day job is as Pensions Minister—are looking to invest more in productive assets and more in the UK. It is also why we are approving infrastructure projects from wind farms to reservoirs that were previously blocked for years. When firms decide to invest, they have to actually be able to build something. That is why Labour is the party of the builders, not the blockers.
Let me turn to trade. The Prime Minister has in quick succession secured three significant trade deals. Every single one has been opposed by the Conservatives—opposing our whisky industry exporting and opposing lower food prices in the shops. It is increasingly clear that they say they support free trade in principle, but there is no actual existing trade deal that they would ever support. They used to be the party of Robert Peel, and now they are just the party of plonkers.
We are under no illusions as to the challenges ahead. We all know, on both sides of the House, the deep cost of living squeeze that has left far too many British families suffering, but we are getting on with the job: stability in the public finances, investing at home, trade agreements abroad, interest rates down and wages up. After a long decade and a half of stagnation, Britain is growing at the fastest rate in the G7.
We have heard a lot from Conservative Members, but not a single word of apology has crossed their lips for the mess they left—no humility for the unprecedented economic damage they inflicted, no apology to businesses or workers, and not even a sign of an alternative plan to drive growth and investment in our economy. The British public learned a very long time ago: when Tories govern, Britain loses.
Question put.
Immigration
(1 day, 5 hours ago)
Commons ChamberRead Hansard Text Watch Debate Read Debate Ministerial Extracts
18:58 - The House divided: - Ayes: 83 / Noes: 267 - Question accordingly negatived.
Madam Deputy Speaker (Judith Cummins)
I inform the House that Mr Speaker has selected amendment (b) in the name of the Prime Minister.
I call the shadow Home Secretary.
Chris Philp (Croydon South) (Con)
I beg to move,
That this House regrets that there have been a record-breaking number of small boat crossings, amounting to over 12,000 this year alone and a lack of action from the Government to tackle this; further regrets that the Border Security, Asylum and Immigration Bill scraps the Government’s ability to remove illegal immigrants to a safe third country, designed as an effective deterrent; and calls on the Government to support the Immigration and Visas Bill introduced by the Shadow Home Secretary, which will prevent foreign nationals, including rape gang perpetrators, from exploiting the courts with spurious human rights claims to avoid deportation, double the residency requirement for Indefinite Leave to Remain and ensure that those who have become a burden can be removed, introduce tighter visa rules for civil partners, allow deportation of all foreign national offenders, and introduce a binding cap on migration, to be set by a vote in Parliament.
For decades, the British people have demanded and politicians have promised dramatically lower immigration. For decades, successive Governments, including the last one, have failed to deliver that. That failure over decades has undermined faith and trust in democracy itself, and it is now time to end that failure and deliver what the public want. That is why we have tabled the Immigration and Visas Bill, which presents a serious, credible plan to fix immigration issues.
According to Ipsos last week, 67% of the British public think that immigration is too high. The British public are right. There are around 11 million foreign-born people in the UK, and for too long immigration numbers have been far too high. Immigration at that level has serious consequences. Some 48% of social housing in London has a head of household who was not born in the UK. In the last 10 years, migration has absorbed around 50% of new housing supply, and some nationalities are exceptionally dependent on social housing—for example, 72% of Somalis live in social housing compared with only 16% of the population more generally.
Mr Jonathan Brash (Hartlepool) (Lab)
I think the right hon. Gentleman may have revealed something early on in his speech. He has told us that now is the time for “a serious, credible plan”. Is he therefore admitting that in the 14 years when his party was in government, there was not one serious or credible plan?
Chris Philp
I will talk a bit in a moment about the record of the last Government, but I have already said that for decades, under successive Governments—including the last one, but previous ones, too—immigration has been far too high. That is a failure by Governments over a period of decades, and it is now time to listen to the British people and put that right.
High levels of immigration, especially when there is not proper integration, undermine social cohesion. A nation state and a society cannot function properly when there are fractures in social cohesion.
Carla Denyer (Bristol Central) (Green)
Will the shadow Home Secretary give way?
Chris Philp
I will give way in a minute. In advancing the case that we have a problem with social cohesion and a lack of integration, I will present some evidence—it is not an assertion—in support of that. The most recent census revealed that a million of our fellow citizens do not speak English at all or properly. In one part of east London, 73% of children do not speak English as their first language. Some nationalities have extremely low rates of economic activity or very high rates of economic inactivity. For example, among people born in the middle east and north Africa, economic inactivity rates are 40%. That is double the rate for people born in the UK. Among people born in south and east Asia, the economic inactivity rate is 50% higher than it is for people born in the UK. By contrast, the economic inactivity rate for those born in Australia or New Zealand is only half the level of the UK-born population.
I am afraid to say that when it comes to crime and offending, there are some immigrant groups where levels of criminality are very high. For example, Afghans are 20 times more likely to commit sex offences than average. People of Congolese origin are 12 times more likely to commit violence, and Algerians are 18 times more likely to commit theft.
Jeremy Corbyn (Islington North) (Ind)
Will the shadow Home Secretary give way?
Chris Philp
I will give way in just a moment. These figures illustrate that we have a problem with integration, and that is why we need to get these numbers dramatically down, until such time as we can address these issues.
Let me turn to the economy, because it has long been thought that net migration is an unalloyed economic good. Indeed, that is one reason why successive Governments of both colours over some decades allowed immigration to get so high and to stay too high. [Interruption.] Both Governments, over many decades. Recent analysis, however, has shown that that belief is simply not true. Office for Budget Responsibility analysis last year showed for the first time that low-wage migration costs the Exchequer money. It is not a net contributor, but a net draw on the Exchequer. It costs other taxpayers money at low-wage levels, particularly where there are large numbers of dependants. It has reduced per capita GDP, which affects the level of affluence enjoyed by the population, and it is one reason that productivity in our economy has flatlined for so long. Businesses have reached for mass low-skill migration instead of investing in technology or automation, or simply becoming more productive.
That has all happened while 9 million of our fellow citizens of working age remain economically inactive. Many of those have caring responsibilities, some genuinely cannot work and others are studying, but many of those 9 million—likely more than half—could and in my view should be in the workforce, instead of large numbers of low-wage, low-skilled migrants being imported.
It is time for a different approach. We need to end the era of mass low-skilled migration and instead focus on small numbers of very high-skilled workers who should be welcomed. We need to invest more in technology and we need to get more UK residents of working age into work, including by investing in training and by reforming the welfare system. I think somebody wanted to intervene, so I will give way.
Jeremy Corbyn
When the right hon. Member has finished denigrating every community that has made its home in this country, will he reflect for a moment on the massive contribution made in education, in health, in transport and in many other industries by people who have come to this country? When he goes into a hospital, does he criticise those people who have come from another country and are working in our hospitals, looking after us and the health service, or is he interested only in denigrating people because they were born speaking a different language and they look different from him?
Chris Philp
I do not think that the right hon. Gentleman was listening very carefully. I expressly said that highly skilled migrants do make a contribution and should be welcomed, and when I referred to issues involving social housing, economic inactivity and criminality, I was reading out facts. I was reading out census data published by the Office for National Statistics. Those are facts. The right hon. Gentleman may not like the facts, but they are facts none the less. [Interruption.]
Nick Timothy (West Suffolk) (Con)
The hon. Member for Burnley (Oliver Ryan) has just said, from a sedentary position, that my right hon. Friend was “race-baiting”. My right hon. Friend was simply reading out official statistics in contributing to an important debate about the future of our country. Does my right hon. Friend think that the hon. Gentleman should stand up and put his views on the record, and tell his constituents what he thinks about their legitimate concerns?
Chris Philp
I think he should do that, because the British public have expressed very clear views on this issue, and if we cannot, in this House of all places, lay out the facts—published data—as a way of having an honest debate about it, I do not know where we have got to. That kind of shouting down, saying that it is somehow beyond the pale to discuss these facts, is precisely why we ended up in this mess in the first place.
Let me come on to some of the steps taken late in the time of the last Government—[Hon. Members: “Too late!”] Yes, they were too late: that is right. Those steps took effect in April 2023 and April 2024, and they included preventing social care workers and students from bringing dependants, and raising various salary thresholds. The official forecasts published by bodies such as the Office for National Statistics and the Office for Budget Responsibility show that, thanks to those measures, net migration is likely to fall by 500,000 compared to the peak—and those measures are already having an effect. If Members compare the number of visas issued in the second half of last year with the number in the second half of 2022, they will see a 76% reduction in the number of social care visas, a 21% reduction in the number of student visas, an 89% reduction in the number of student dependant visas, and a 45% reduction in the number of skilled worker visas; many of those people were not, in fact, skilled.
The truth is, however, that we need to go further, and the White Paper published last Monday does not go far enough. On the Laura Kuenssberg programme, on the Sunday before last, the Home Secretary said that the Government’s measures would have an impact of only 50,000 on net migration, whereas the number accompanying the White Paper was 100,000. Whichever number we take, however, it represents only between one tenth and one fifth of the impact of the measures taken by the last Government. That simply does not go far enough.
Chris Philp
I am going to make some progress.
I have a question for the Immigration Minister. She is welcome to intervene if she wishes to do so, or else respond in her speech. The last Government set out a plan to increase the salary threshold for family visas to £38,000, which was due to take effect on 1 April this year, just seven or eight weeks ago. The new Government suspended that measure, which will obviously have the effect of increasing immigration. Will the Government implement the increase in the threshold, as set out by the last Government? As I have said, the measures in the White Paper go nowhere near far enough, whereas we have delivered a detailed plan.
Julia Lopez (Hornchurch and Upminster) (Con)
Does my right hon. Friend agree that not only are the measures inadequate, but they potentially open a big new route for inward migration? At the weekend, the Paymaster General suggested that the youth mobility experience scheme that we have with the EU was comparable to the scheme that we had with Uruguay. That involved 500 visas a year. We read in the papers today that the EU is asking for hundreds of thousands of youth visas. Is my right hon. Friend as concerned as I am about the possibility of this being a back door to very substantial migration?
Chris Philp
Yes, I am. It could create an enormous new loophole. There are potentially around 60 million people eligible for that visa route, and we have no idea at all of the cap. A couple of days ago, the Leader of the Opposition asked the Prime Minister what a numerical cap might be. Characteristically, he did not answer the question. There is no answer to the question of whether people coming over on the scheme could claim benefits, and no answer to whether they could bring dependants. Some European countries grant citizenship to illegal immigrants just three years after they get asylum, and they would be eligible to come as well. It seems to me that this route could create an enormous loophole in our asylum system.
Mr Brash
It is really important that the right hon. Gentleman clarifies something to aid this debate. I have read his motion carefully, and the vast majority of it is about illegal migration. It repeatedly feels like illegal migration and legal migration are being conflated as the same issue, which does not help the debate. Could he clarify whether that is his intention?
Chris Philp
I intend to talk about both. I have been talking about legal migration, and I will come to illegal migration in a moment. The hon. Gentleman raises our Immigration and Visas Bill, and one of its measures speaks directly to the question of legal migration. The numbers have been far too high for decades, and the only way that this democratically elected House can get a handle on this issue is by having an annual binding vote in Parliament to set a cap on the level of legal migration. When the cap has been reached and the agreed number of visas has been issued, the Government would simply stop issuing any new visas. Never again would we see a situation where migration numbers end up being far higher than expected, because this democratically elected House would decide. The system would be transparent and open, and the level could be set at a number that is far, far lower than anything we have seen in recent history. But when we put that in an amendment to the Border Security, Asylum and Immigration Bill last Monday, the Labour party voted against the measure, which would at last give Parliament powers to limit inward migration. I call on the Government to think again and to support our Immigration and Visas Bill, which would provide Parliament with those powers.
Let me turn to the question of illegal migration, because the hon. Member for Hartlepool (Mr Brash) has invited me to do so, and it would be churlish not to respond to an invitation of that kind. The main mode of illegal immigration into this country—it is not the only one—is in small boats crossing the channel. First, there is no reason at all for anyone, no matter their circumstances, to cross into the UK by small boat from France, because France is a safe country. France has a well-functioning asylum system, and there is no war going on there. No one is being persecuted in France, and people do not need to get into a rubber dinghy to flee from Calais. Not a single one of the people coming across need to do so for reasons of fleeing persecution, and they should claim asylum in France.
The Government’s record in this area is lamentable. When they came into office last July, they cancelled the Rwanda scheme before it even started. Amendment (b), in the name of the Prime Minister and the Secretary of State, is grossly misleading. It describes the Rwanda scheme as being “in force”, but the scheme was never in force. It was not due to start until 24 July, so the amendment is deeply misleading. Last July, the new Government set out their alternative plan, which was to “smash the gangs”. How is that going? Well, since the election, about 37,000 people have illegally crossed the channel—a 30% increase on the figure for the same period 12 months prior.
Connor Naismith (Crewe and Nantwich) (Lab)
Will the shadow Minister give way?
Chris Philp
Let me just make this point.
This year has been the worst in history for illegal channel crossings. Today, an observer has counted 820 illegal immigrants arriving in Dover, which will make this the worst day of the year so far. The plan to smash the gangs is in tatters and is not working. Far from closing down asylum hotels, as the Government promised to do, they are opening them up. As of 31 December, there were 8,000 more asylum hotels than there were a year before.
The Minister for Border Security and Asylum (Dame Angela Eagle)
Would the right hon. Member take a moment just to reflect on and remember the woman and small child who lost their lives today in an incident in French territorial waters?
Chris Philp
Yes, of course I would. A number of people have tragically lost their lives crossing the channel, and that is precisely why we need to stop these crossings entirely, as Australia did about 10 years ago. If we can stop the crossings entirely, lives will not be put needlessly at risk and we can avoid tragedy.
Carla Denyer
I have to say that I am disgusted by the narrative coming from Conservative Members, who are continuing, even in opposition and in using this Opposition day debate, to scapegoat migrants for their own 14 years of failure to deliver proper public services, tackle inequality and tackle poverty in this country, which led to many of the problems the right hon. Member has listed. Now that he has moved on to tackling small boats, will he not acknowledge that, without providing safe and regulated routes for people to claim asylum, they are pushed into the hands of people smugglers, and that the most rational as well as the most compassionate thing to do would be to provide those safe and managed routes?
Chris Philp
No, I do not accept that. First, every single person getting on one of those boats is able to claim asylum in France, and they do not need to get into one of those boats to claim asylum in the UK. Secondly, unless every single person that wants to come to the UK is given a safe and legal route, those people who are not given a place on what would presumably be a capped scheme would none the less try to cross by small boat. So the idea that that is a solution to small boat crossings is manifestly absurd.
There are of course safe and legal routes. Some were set up for specific purposes, such as the Ukrainian scheme, the British national overseas scheme, the UK resettlement scheme that saw 25,000 people from Syria resettled here, the Afghan citizens resettlement scheme and the Afghan relocations and assistance policy for Afghanistan, and the refugee family reunion route. There are plenty of safe and legal routes, and as I say, unless every single person who wants to come here is given a safe and legal route, there will still be illegal crossings, which are anyway unnecessary because France is safe and people are able to claim asylum there.
Chris Philp
I will make some progress.
The Government’s amendment makes reference to the Border Security, Asylum and Immigration Bill, and the obvious truth is that their Bill will not make a great deal of difference. It creates a Border Security Commander. I know Martin Hewitt and I have every respect for him, but the Border Security Commander has no powers. All the Bill provides are functions, and those functions include preparing an annual report and publishing a strategic priority document. With all due respect to the immigration Minister, I do not think the people smugglers will be very concerned by an annual report or a strategic priority document. The so-called counter-terror-style powers in the Bill amount to confiscating mobile phones and using slightly enhanced surveillance tactics on the criminal gangs. This is a tiny step in the right direction, but the truth is that it will make no difference. As the National Crime Agency has said, law enforcement alone will not fix this problem, because if we dismantle one gang, another will simply pop up in its place. That is what the National Crime Agency assessed a year or two ago.
We do know what worked in Australia, which had an even bigger problem than us about 10 years ago, with about 50,000 people crossing to Australia. It set up Operation Sovereign Borders, which entailed a removals deterrent, and they used Nauru rather than Rwanda. In a few months, after only a few thousand people had been removed there, the illegal maritime crossings to Australia stopped entirely. The number went down to zero because the deterrent effect meant that people in Indonesia did not even attempt the crossing in the first place, and because those crossings were stopped, hundreds and hundreds of lives were saved. So it is clear to me that we need a removals deterrent, like Rwanda, to prevent these crossings.
Dr Caroline Johnson (Sleaford and North Hykeham) (Con)
I visited Rwanda, and I was impressed by the facilities being built for the migrants due to go there. Does my right hon. Friend agree that, had the Rwanda scheme not been cancelled by the current Government, the people due to go there would be being cared for and would be setting up new and successful lives, and we would not have people dying in the channel?
Chris Philp
Yes, I completely agree, and I commend my hon. Friend for going to look at the facilities there. Had that scheme been started as intended, on 24 July, the deterrent effect would by now have stopped these crossings. In fact, the United Nations High Commissioner for Refugees sends people to Rwanda, so it is clearly good enough for them. Other countries, including Germany, are now looking at removals deterrents. It is clear that the Government should restart a proper removals deterrent, and I urge them to do so urgently.
We have presented a Bill to this House which contains serious and credible measures to limit legal migration, to take action against illegal migration and to ensure people with no right to be here are removed, including foreign national offenders. One of the most important measures is to repeal the Human Rights Act in relation to immigration matters, because over the years UK judges in the immigration tribunal have adopted evermore expansive definitions of ECHR articles to allow dangerous foreign criminals to remain in this country. There are thousands of examples of the definitions of the articles—not just article 8, but article 3 as well—being stretched and stretched over the years beyond any definition of common sense, and certainly beyond anything contemplated by the framers of the ECHR 70 or so years ago.
That is why the Human Rights Act must be repealed so that Parliament decides the rules, not judges applying expansive interpretations. I will give just one example. There was a Zimbabwean paedophile who failed to be deported back to Zimbabwe. A judge—I think using article 3, not article 8—said no, the paedophile could not be sent back to Zimbabwe in case he faced some hostility back in Zimbabwe. What about the rights of children in the United Kingdom to be protected from paedophiles? What about the rights of British citizens to be protected from foreign national offenders? That is why we need to repeal the Human Rights Act in relation to immigration matters. That is why it is in our Bill, and I call on the Government to support it.
It is time to deliver what the British public want. The Opposition have developed a credible and detailed Bill to do that. I call on the Government, if they are serious, to support it.
The Minister for Border Security and Asylum (Dame Angela Eagle)
I beg to move an amendment, to leave out from “House” to en and insert
“notes that 127,896 people crossed the Channel while the previous Government was in office, as a criminal smuggling industry took hold on the French coast; further notes that 84,151 of those people arrived while the previous Government’s £700 million Rwanda scheme was in force, with only four volunteers travelling to Kigali during that time; welcomes the fact that the current Government deployed the 1,000 staff working on that scheme to process asylum decisions and deportations instead, resulting in 24,000 people with no right to be in the UK being removed in just nine months; further welcome the progress made since July 2024 in establishing the Border Security Command, cracking down on illegal working, and increasing the resources allocated to identifying, disrupting and dismantling smuggling gangs; and looks forward to the crucial agreements reached with France, Germany, Italy, and Iraq to increase enforcement cooperation taking full effect, and the counter-terror powers introduced in the Border Security, Asylum and Immigration Bill becoming law.”
I note that the motion begins by regretting the fact that we are 20 weeks into this year and more than 12,000 people have crossed the channel by small boat. Let me start on a note of consensus: I agree with the right hon. Member for Croydon South (Chris Philp) that numbers are too high and I agree that they must come down. I will come on to the action we are taking to achieve that aim.
But first, I must address what we on Merseyside would call the shadow Home Secretary’s brass neck. What he did not say in his speech was that in the last 20 weeks when he was immigration Minister, it was not 12,000 people who crossed the channel, but 13,000. It was not 230 small boats that made the crossing, as we have had so far this year; during his last 20 weeks in charge, it was almost 500. Where was his motion of regret then? Where were his expressions of outrage then? In fact, let me tell the House just how bad it was in his last 20 weeks in charge, from the end of April to the middle of September 2021. More people crossed the channel by small boats in those 20 weeks than in the previous 40 months put together, all the way back to the start of the crossings in 2018: 173 weeks-worth of crossings and he managed to get them to exceed that total in his last 20 weeks in charge.
That was not the right hon. Gentleman’s only claim to fame during his period in office, because he was the Minister in charge when net migration started to run completely out of control. In the 19 months he was in charge, net migration rose from 170,000 to 470,000, a 300,000 increase in less than two years.
Chris Philp
The hon. Lady should correct the record. I never had ministerial responsibility for legal migration, so I would be grateful if she withdrew that.
Dame Angela Eagle
Collective responsibility apparently never used to matter to the Conservative party, but if we remember some of the history we will know that that was actually true.
I want Members to cast their minds back to the summer of 2022, and the 20-week period from Chris Pincher having his night at the Carlton Club all the way through to when the right hon. Member for Godalming and Ash (Sir Jeremy Hunt) had to write an emergency Budget. The Conservative Government descended into utter chaos, with three different Prime Ministers and four different Home Secretaries taking turns in office. What was happening with small boats in the channel during those particular 20 weeks? We had not 12,000 or 13,000 arrivals, but 30,000 arrivals.
Dame Angela Eagle
No.
There were 30,000 arrivals in the space of 20 weeks— not 220 or even 500 boats, but 670 boats. How did that happen? The Conservatives were all too busy fighting among themselves and crashing the economy to bother about protecting our borders.
Let us not forget the role that the shadow Home Secretary played in that little bit of Conservative party history. In the space of 20 weeks, he went from tech Minister to no ministerial role, to Chief Secretary to the Treasury, to Paymaster General, to police Minister, but none of that was his most important role. We should remember—
Dame Angela Eagle
I am talking about 20-week periods, which feature in the Opposition’s motion. I am talking about what happened in a 20-week period, when—just to go back over it—the shadow Home Secretary went from tech Minister to not having a job, to being Chief Secretary to the Treasury, Paymaster General, and then police Minister. The Conservatives brought the same chaos to government as they did to their immigration policy, over which they had control for 14 years.
Dame Angela Eagle
No; I am going to make some of these points. We should all remember that the shadow Home Secretary was once credited as being the economic guru behind Liz Truss’s premiership. This is the man who helped Liz Truss to write her catastrophic mini-Budget, drive the country off a cliff and scupper her own premiership.
Dr Caroline Johnson
On a point of order, Madam Deputy Speaker. The history lesson of who was which Minister in which Government when is obviously all available on the internet, if people want to look. How does it relate to the matter we are discussing today, which is what the current Government are doing to tackle migration?
Madam Deputy Speaker
I thank the hon. Lady for her point of order, and I look forward to hearing her views in the debate later.
Dame Angela Eagle
I think it is perfectly reasonable to point out the chaos that there was in 14 years of Conservative government and the shadow Home Secretary’s record in these areas—
Dame Angela Eagle
Let me finish the sentence. No, I will not give way.
I think it is perfectly reasonable to point out what the Conservatives’ record is, when they have come to the Chamber to try to lecture the Government about what to do with our immigration and migration policies, even though we are clearing up their mess.
This Government inherited a system in total chaos from the Conservatives, which was partially because of the chaos I have just mentioned—those 20 weeks between the Pincher visit to the Carlton Club and the Budget that was needed to clear up Liz Truss’s mess, when we had three Prime Ministers and four Home Secretaries. Can the Conservatives seriously pretend to the British people that while they were busy doing all that, they had a coherent migration policy that they can lecture us about? I do not think so.
Dame Angela Eagle
I am happy to give way to the hon. Gentleman now, because he stood up when I got to the end of a sentence.
Dr Evans
I am very grateful to the Minister; now that I know that formally, I look forward to being able to intervene in future.
I would be grateful for clarity on the Prime Minister’s policy. In 2020, he wrote a letter in which he defended migrants’ rights and made a positive case for immigration, yet in his recent speech he talked about crafting an “island of strangers”. Will the Minister provide clarity on which of the two the Prime Minister believes when it comes to immigration policy?
Dame Angela Eagle
When we discuss migration policy, net migration and legal or illegal immigration, it is really important to remember that we are talking about human beings, that we should treat them as human beings and that all human beings have human rights. We should not perpetuate narratives that dehumanise people. Too often—
Dame Angela Eagle
Let me finish the sentence. Too often, the Opposition parties—some of the Opposition parties; not all of them—perpetuate a narrative that is increasingly dangerous. Let us not dehumanise fellow human beings.
John Glen (Salisbury) (Con)
I recognise how important it is to use temperate language, but all my hon. Friend the Member for Hinckley and Bosworth (Dr Evans) did was to factually set out two statements the Prime Minister made, with an interval between them. The Minister must acknowledge that the public mood has changed significantly in very recent times. The purpose of this debate is to scrutinise the Government’s record in their 10 months in office and to see how effective those interventions have been. It is perfectly legitimate to ask about the characterisation that her Prime Minister has made very recently about this matter.
Dame Angela Eagle
I do not think that the two quotes are incompatible with each other. Our White Paper sets out the route forward. Net migration is coming down. The legacy that we inherited from the Conservative party was the quadrupling of it in four short years. It is also important to remember that when we are talking about legal migration and net migration, we must have integration and the capacity to absorb the people we allow into our country. Crucially, when it comes to small boats, we have to have the capacity to decide who comes into our country. I do not see that those two statements from the Prime Minister, which were years apart, are incompatible.
Stephen Gethins (Arbroath and Broughty Ferry) (SNP)
May I commend the Minister for saying that we are talking about people? In a recent debate in this place, I mentioned that Lord Alf Dubs had used the “outrageous” to describe what the Prime Minister had said. He did not. He said that the Prime Minister’s words were “regrettable”. I was wrong about that. Does the Minister realise that words matter when we are talking about people? We can have different views on migration policy, but we are talking about people. I commend those words that she used just now, and I encourage other members of the Government to do likewise.
Dame Angela Eagle
I thank the hon. Gentleman. It is very important to remember that we thrive—as we always have in our history—with a tolerant, multicultural society in which we strive to understand each other and get on with each other, rather than to divide and seek to cause resentments, which some people with their own political narratives do, and that is regrettable.
Dr Danny Chambers (Winchester) (LD)
Clearly, this is a very emotive debate for Members from all parts of the House. It is probably a good time to acknowledge that in the NHS, we are more likely to be treated by an immigrant working for the NHS than we are to be waiting behind an immigrant for treatment. Despite the rhetoric that has been promoted by many politicians over the past few years, especially those who championed Brexit, we should acknowledge that the NHS was not being crippled by immigration, but being sustained by it.
Dame Angela Eagle
It is important that all of us acknowledge the humanity of people who come to our country to work, and the contribution that they make. But we also have to have rules: we have to decide who comes to our country and why, and we have to explain those rules to the electorate. That is what I shall go on to try and do.
We inherited a system in total chaos. The Conservatives allowed criminal gangs to take hold across the channel, which saw the numbers arriving rocket from 300 in 2018 to more 30,000 in a few years. They crashed the asylum system, with a 70% drop in monthly decision making and an 80% drop in asylum interviews in the run-up to the election. There was a 34% drop in returns compared with the last Labour Government, and they spent £700 million sending four volunteers to Rwanda. Their handling of legal immigration was no better. Net migration quadrupled in the space of just four years to nearly a million—that is their record.
Those numbers tell a wretched story of a system spiralling out of control; an entire criminal industry building up along our borders with terrible consequences; ruthless smugglers sending desperate people on dangerous, sometimes deadly, journeys and making a fortune in the process; basic rules not being enforced; and a collapse of trust and confidence in the state’s ability to perform one of its most fundamental functions: keeping our borders safe and secure.
So bad was the Conservatives’ record that the public simply stopped believing anything they said—and who can blame them? For all the talk about stopping the boats and stopping this crisis, the crisis carried on. Unsurprisingly, strong words and grotesquely expensive gimmicks make little impact against sophisticated smuggling networks. The task of ending this chaos falls to this Government.
Pete Wishart (Perth and Kinross-shire) (SNP)
The Minister knows that I have long believed that this Government are harbouring their own ambitions for a Rwanda scheme. It started with the idea of a returns hub in Albania, but that seems to have been rejected by the Albanian Government. Does the Minister have any further plans to introduce some sort of son of Rwanda on behalf of her Government?
Dame Angela Eagle
When we came into office, we ended the Rwanda scheme. The scheme was about deporting people, processing their asylum in another country and never letting them back here. [Interruption.] But it did not work—[Interruption.]
Madam Deputy Speaker (Judith Cummins)
Order. I want to hear what the Minister has to say, as do my constituents and, I am sure, all Members’ constituents.
Dame Angela Eagle
The Conservatives—who conveniently called an early election so that the Rwanda scheme would never start, after spending years saying that even perpetrating the idea of a Rwanda scheme would stop the boats—know as well as I do that over 84,000 people crossed the channel in small boats in the years from the Rwanda scheme being put into law to its being abolished. They can sit there and say that—
Dame Angela Eagle
No. They can sit there after all this effort and all these gimmicks and pretend to the British people and Members of this House that the Rwanda scheme was ready to go and would have worked perfectly if only their Government had staggered on until 24 June, but nobody believes them, because it was a flawed scheme from the start. It was not a deterrent, it did not work, and it was massively expensive.
Several hon. Members rose—
Dame Angela Eagle
No, I have given way enough. I will carry on and make my points, because we do not have much time.
Since the general election, we have established the Border Security Command to draw together the work of all relevant agencies, supported by at least an extra £150 million this financial year. We have backed UK law enforcement to play a leading role in major international operations to take out the gangs and their supply chains further up the smuggling route. We have deepened co-operation with key allies, including France. We have struck new agreements with Germany, Iraq, Italy, the Calais Group and the G7. We have hosted a major international summit on border security—the first of its kind, with over 40 countries in attendance.
We have also transferred the staff and resources from the failed Rwanda scheme and used them to return more than 24,000 individuals with no right to be in the UK. We increased asylum decision making by 52% in the last three months of 2024, and we have ramped up illegal working enforcement visits and arrests by 40%.
Dame Angela Eagle
No. As this Government have made clear consistently, this is just the start. We need to go further, and we will.
Dr Andrew Murrison (South West Wiltshire) (Con)
On the topic of going further, will the Minister give way?
Dame Angela Eagle
No.
There are two main factors that make today’s challenges different from the past. The first is technology. The physical distances between nations and continents may not have changed, but the near universality of smartphones and internet access has made the world feel a lot smaller. The gangs can organise journeys more quickly and easily than ever before. For the people they prey on, the promise of a different future is right there on the screen of a mobile device.
The second factor is the emergence of a ruthless criminal industry worth billions of pounds, stretching across borders and continents. On illegal migration and border security, we are acting to get a grip on issues that have gone unchecked for far too long. For years, the ringleaders and facilitators of this trade have been able to evade justice by ensuring that they are not present when money changes hands or the boats set off. To shift the dial, we need action to be taken earlier and faster. We need a response that fits the scale and urgency of the threat, and to mount such a response we need to legislate.
Having intensified activity across policy, operational and international arenas since the general election, we have moved to strengthen the law by bringing forward the Border Security, Asylum and Immigration Bill. The House is well acquainted with the Bill, but its core aims and measures bear repeating. The Bill puts an end to the failed gimmicks of the past. It furnishes law enforcement with counter-terrorism-style tactics to strike against smuggling gangs earlier and faster—long before they get within striking distance of our shores. The National Crime Agency and its associates who help us with this work asked us to change the law to provide them with those tactics.
The Bill introduces new powers to seize electronic devices, and new offences covering the sale and handling of small boat parts for use in illegal activities. It upgrades serious crime prevention orders to target individuals involved in organised immigration crime. It creates a new offence of endangering life at sea to act as a deterrent against small boat overcrowding. It also sends an unambiguous message that we are ready to take action against those who are complicit in fatalities in the channel. [Interruption.] I talk about fatalities in the channel; Opposition Members laugh and joke among themselves.
Mark Ferguson
I thank my right hon. Friend for giving way—that roar from Opposition Members is no doubt enthusiasm for what I am about to ask.
This week, the Government signed a deal with the European Union that includes, among other things, the ability to find out if someone has been arrested in another European country for people smuggling and the ability to use facial recognition technology. Does she agree that those are exactly the tactics one would need if one wanted to smash the gangs, and yet the Conservative party opposed the deal?
Dame Angela Eagle
I agree. Of course, the Conservative party also oppose all of the Bill, despite—[Interruption.] Well, Conservative Members say it is not true, but they voted against it. I do not know why the Opposition should have voted against a Bill that provides more powers to deal with organised immigration crime internationally.
Dr Murrison
I am, as always, listening carefully to what the Minister has to say. Has she been listening to the National Crime Agency? It has said clearly that although many of the things she has outlined are important, her list is nevertheless missing one thing: deterrence. Will she explain where deterrence features in her measures?
Dame Angela Eagle
The National Crime Agency has not said that about the Bill. In fact, if the right hon. Gentleman had listened to the evidence sessions at the beginning of our consideration of the Bill, he would have heard good evidence from the NCA supporting the parts of the Bill that provide counter-terrorism and prevention powers, and being enthusiastic about the increased opportunities that the Bill will give for successful enforcement.
Mr Louie French (Old Bexley and Sidcup) (Con)
On that point, will the Minister give way?
Dame Angela Eagle
No.
Turning to legal migration, through the plans in our immigration White Paper, we will deliver a system that supports our efforts to reduce net migration and backs British talent. As the Home Secretary set out in the House last week, our approach is founded on five core principles: first, that net migration must come down; secondly, that the migration system should be linked to skills and training domestically, so that no industry or sector can rely solely on overseas recruitment—a major failure of the last Government’s 14 years in office; thirdly, that the system must be fair and effective, with clearer rules in areas such as respect for family life and stronger safeguards against perverse outcomes that undermine public confidence; fourthly, that this country’s laws must be respected and enforced, from cracking down on illegal working to deporting foreign criminals; and fifthly, that the system must support integration and community cohesion.
This is not a task that can be completed overnight. Clearing up the Opposition’s legacy will not be easy because of the chaos that we inherited from the Conservative party. We saw record net migration, record small boat arrivals and record numbers of asylum hotels, criminal smugglers left to run amok for years, and public confidence shaken by past failures, expensive gimmicks and broken promises. It has been left to this Government to clear up the mess and turn the page on the chaos and failures of the past. That work has begun.
Madam Deputy Speaker (Caroline Nokes)
Before I call the Lib Dem spokesperson, I wish to make it clear that there will be a five-minute time limit for Back-Bench speeches.
Dr Al Pinkerton (Surrey Heath) (LD)
The Conservatives want to talk about immigration today. I am delighted to start by talking about their record in government, though I should warn the House that calling it a record may be overly generous. A record, after all, implies coherence, consistency and competence. What we have witnessed instead is a decade of headline-chasing gimmicks, theatrical tough talk, performative cruelty and policy U-turns so dizzying they could give a weathervane whiplash.
Let us start with the basics. As the shadow Home Secretary has already confessed, the Conservatives promised again and again to bring immigration down. That was in 2015, in 2017 and in 2019. Then they promised the same thing in 2024, when the British public in their infinite wisdom told the Conservatives to go back to their constituencies and prepare for a period of quiet reflection. Spoiler alert: they did not just miss those targets—they incinerated them.
At the time of the last election, when the Conservatives wanted to stand on their record, net migration was the highest in British history. It was not just high, not just elevated, but record-breaking. What was their grand response? Rwanda. Yes, Rwanda: a deportation scheme that cost half a billion pounds and moved precisely zero people; a stunt so hollow that it made the policy vacuum look crowded; a triumph of symbolism over substance, if ever there was one. Throughout it all, we heard the same tired refrain from the Home Office lectern from which the right hon. Member for Croydon South (Chris Philp), who opened today’s debate, used to speak: that immigration somehow threatens our identity. That came from a Government who relied utterly and shamelessly on migrant workers to prop up every sector that they spent a decade undermining—from the NHS to social care, higher education to farming. If hypocrisy were an export, the Tories would have been running a trade surplus.
Dr Pinkerton
No, thank you. The hon. Gentleman’s party had nine years; I have less than nine minutes.
Meanwhile, the legal migration rules became so convoluted that even seasoned immigration lawyers needed to phone a friend. Skilled workers were welcomed one week and penalised the next. International students were encouraged to come and then punished for having families. The only thing consistent in Conservative policy was chaos.
All that was wrapped in a layer of chest-beating, slogan-touting nationalism. “Take back control,” they cried, as if chanting it loudly enough might somehow make it true. Yet control is not about standing on the shoreline like King Canute, barking orders at the tide. It is about building a system that actually works—one that treats people with dignity, balances compassion with pragmatism and delivers results instead of rhetoric. Instead, what did we get? An asylum system on its knees, trafficking gangs operating with near total impunity and, most tragically, lives lost in the channel. Just this Monday, 62 people were rescued after a small boat sank in the early hours. One person died; others were injured. That, of course, is not an anomaly. According to the BBC, over 12,500 have crossed the channel in small boats this year, and it is only May.
The Labour response so far has, I would argue, been muted ambition, vague promises and nervous tiptoeing around the institutional wreckage, as if managerial competence alone might magic away a decade of Conservative failures. The Liberal Democrats are clear that these crossings must stop, but unlike the Conservatives we do not confuse cruelty with competence.
Dr Pinkerton
No, I will not.
We believe in expanding safe and legal routes for refugees, including humanitarian travel permits offering vulnerable people a viable alternative to risking their life at sea.
Dr Pinkerton
No.
We also believe that the real way to tackle the channel crisis is through stronger co-operation. That means working through Europol to dismantle trafficking networks, share intelligence, deliver joint enforcement and report progress back to Parliament every six months, as well as a statutory duty for the UK Border Security Commander to meet their Europol counterparts at least once every three months.
Dr Pinkerton
I give way to the hon. Member for Hinckley and Bosworth (Dr Evans).
Dr Pinkerton
We need safe and legal routes in order to allow people an alternative to putting their life at risk to cross the channel. That work needs to be done on a continental basis with our European partners.
Dr Pinkerton
No, thank you—I will make progress.
We believe that European co-operation is, as I have just indicated, the answer to the small boats crisis. Even the shadow Home Secretary agrees. We all heard him say that the UK’s withdrawal from the Dublin agreement, as part of Boris Johnson’s botched Brexit deal, meant that the UK
“can’t any longer rely on sending people back to the place where they first claimed asylum”.
Straight from the horse’s mouth!
Let us talk about the backlog. At the end of 2024, about 91,000 asylum seekers were stuck in limbo; most had been waiting over six months just for an initial decision. And while they wait, they are banned from working, banned from rebuilding their lives and forced to depend entirely on the state. That becomes a source of resentment for local communities, whose discontent can be weaponised by the darker fringes of our political spectrum.
Dr Pinkerton
No.
That is why my hon. Friend the Member for Hazel Grove (Lisa Smart) tabled an amendment to the Border Security, Asylum and Immigration Bill to allow asylum seekers waiting more than three months to work. That is humane, it is pragmatic, and it would help to grow the economy. The Conservatives failed to address that injustice for a decade, and Labour has also failed to grasp the nettle since. It is disappointing that both parties voted against that sensible policy, which would have ensured that those seeking asylum paid their own way.
Dr Johnson
I thank the hon. Gentleman, who is making an interesting speech, for giving way. He talks about the importance of safe and legal routes, of which there are several, but does he accept that if those safe and legal routes are capped to some extent, there will still be people for whom there is not a safe and legal route, who may then risk their life in the channel?
Dr Pinkerton
We must also recognise that safe and legal routes are one mechanism that needs to be pursued —so too is international aid, which allows people to stay broadly in the regions from which they may otherwise be displaced. We often forget that Jordan has the highest number of refugees of any country in the world.
We welcome this Government’s attempt to address the wreckage left by the previous Government, but let us be clear: any new immigration policy must come with a credible action plan for filling vital jobs without harming the economy. Let us start with a higher carer’s minimum wage. Right now, our social care sector is in crisis: there are simply not enough workers and millions of people are missing out on essential care. Instead of properly investing in the British workforce, the Conservatives chose the short-term fix: underpaid overseas workers propping up an underfunded system. With those workers being squeezed from all sides, many care homes are at breaking point, and families are being left to pick up the pieces.
It is disappointing that Labour’s national insurance increases are only adding to the pressures in that sector. The Government’s recent immigration announcements look set to disproportionately hit the care sector. Let me be absolutely clear: the people who come to Britain to care for our elderly and disabled are not the problem. They are vital to this country and to the wellbeing of some of the most vulnerable people in our society, and they deserve our thanks and respect, not to be demonised by those who failed to pay British workers properly in the first place.
Cameron Thomas (Tewkesbury) (LD)
My hon. Friend is making an interesting point about those who help us. Following a complicated pregnancy, my wonderful daughter was birthed at the John Radcliffe hospital in Oxford by a team comprising English, Spanish, Indian, Italian and South African experts. Will he join me in thanking those immigrants who bring so much to our country and help us when we need it?
Dr Pinkerton
I thank my hon. Friend for his intervention. I was recently also in my local hospital where I had an extraordinary care experience from a multinational care team. I celebrate all those NHS workers who have come from overseas to serve us all.
Finally, let me turn to one of our greatest national assets: our universities. As a recovering academic who spent more than 20 years in higher education, I have seen at first hand how international students enrich our campuses, strengthen our soft power and boost our economy.
Dr Chambers
My hon. Friend and I have both spent part of our careers teaching at universities. Would he acknowledge, given the university funding troubles at the moment, that our universities are very much propped up by foreign students paying tuition fees, which helps subsidise the cost for British students?
Dr Pinkerton
I am grateful to my hon. Friend for his comment, and I will come on to make a point about the state of the finances of UK universities.
Universities are magnets for global talent and they are the envy of the world, so why are this Government so determined to undermine that? The new immigration White Paper limits international graduates to spending just 18 months in the UK after their studies. This is a short-sighted, self-defeating policy that has already caused alarm in the sector. I have heard from university vice-chancellors who are warning of financial catastrophe and a collapse in international recruitment. The Russell Group has also been clear that international students drive local economies, fund research and help make Britain a science superpower. Higher education is the No. 1 export for 26 parliamentary constituencies and among the top three in 102 of them. We jeopardise that at our peril.
As if that were not enough, there is now talk of a levy on international student fees, because apparently what our universities really need in the middle of a funding crisis and a challenging international recruitment environment is a brand new tax. This feels reckless, and we strongly encourage the Government to think again and to work with the university sector to flesh out those proposals in a way that works for both the country and the university sector.
The Liberal Democrats will always stand for an immigration system that is fair, firm and forward looking, one that supports the economy, reflects our values and honours Britain’s proud tradition of offering sanctuary to those in need. The Conservatives today want to shine a light on immigration, but when we look at their record, we see a decade of chaos, cruelty and catastrophic incompetence. I congratulate them on their courageous decision.
Mr Jonathan Brash (Hartlepool) (Lab)
I want to start by being very clear about what I believe and what I know my constituents in Hartlepool believe. Immigration, whether legal or illegal, is far too high. There is nothing right wing or indeed racist about being worried about immigration and its effect on our communities. We as a party and as a Government will absolutely be judged on our ability to solve this problem over the coming years. I know that the Minister agrees with this wholeheartedly, and we will stand by it. We will be judged on our ability to solve this problem.
The Conservative motion before us feels rather like the arsonist turning up and complaining that we have not yet put out the fire. It is a motion that I am sure the Reform party will support, if any of its Members can be bothered to turn up, given its entirely vacuous nature and total absence of any policy solutions.
I want to talk briefly about legal migration, because that hugely exercises me and many of my constituents.
Mr Brash
I will give way in a moment. The last Conservative Government put construction workers on their points-based immigration system. They wanted to import construction workers—the people we need to rebuild this country—while my further education college that trains local Hartlepudlians in construction skills had its funding cut by 10%. That is nothing short of economic vandalism—vandalism that for far too long threw my constituents on the scrap heap. That is the Conservatives’ legacy.
Mr Snowden
The hon. Member just referred to the Government as equivalent to the fire brigade turning up to put out a fire. Given the Government’s track record since coming into office, does he agree that it would be fair to say that they brought petroleum to put out the fire, not water?
Mr Brash
Again, after 14 years, the Conservatives turn up demanding to know why nobody has done anything about the issue in 10 months. Frankly, it is hypocrisy of the highest level.
I turn to the comments made about the Conservatives’ much-touted Rwanda scheme and illegal migration. Time and again we hear the same tired lines—“It was just about to work”, “If only we’d had a little longer, it would have solved all the problems of the small boats.” Well, they had the time. They chose to call the early general election; they could have waited. If they had truly believed in the scheme—this totemic flagship of theirs—they would have backed themselves, but they did not, because they knew it was a busted flush. They knew it was going to fail, and they rushed to the country before that failure could be fully exposed.
How did we get to this point in the small boats crisis, which is central to a lot of what we are talking about? There were no small boat arrivals recorded before 2018. Why? It was because at that time the UK had a returns agreement with the EU—anyone making that dangerous crossing could be returned—but the Conservative Brexit deal did not have a returns agreement in it. The same Brexit deal championed by Reform is the reason for the numbers we are seeing. The hon. Member for Clacton (Nigel Farage), who is not in his place, championed that deal and now uses the numbers it caused as a weaponised political choice.
Mr Brash
The reality is that before 2018 we had that agreement. We have had it before. This Prime Minister has shown time and again his ability to negotiate on the world stage, and I have total confidence that he will do that.
Indeed, the only surrender that has taken place this week is the hon. Member for Clacton surrendering to his sun lounger. As a direct result of the failure of the Conservative party to get a returns agreement in its Brexit deal, we have seen the numbers explode. However, progress is being made. The asylum backlog is now down 32% from its record high under the last Government. In Hartlepool—a town unfairly targeted with disproportionate dispersal accommodation—we now have a freeze on any new asylum accommodation and a clear target set to reduce numbers. But let us be clear: the numbers are still too high. That is why the passage of the Border Security, Asylum and Immigration Bill is absolutely essential. It gives us the ability to use counter-terrorism powers to pursue and dismantle the criminal gangs that facilitate those crossings—powers that the Opposition parties voted against.
We have to go further. We must tighten the use of article 8 of the European convention on human rights to ensure that it cannot be misused, so that it is this House, not the courts, that decides who stays and who is deported. I place on the record that any foreign criminal in this country should be deported. We must strike agreements with international partners, so that those people coming on boats can be swiftly returned, because that is the true deterrent. That will be achieved not with Tory gimmicks or by Reform slogans, but with detailed policy, focused diplomacy and the hard graft that this Labour Government have already begun.
It is about time that Conservative Members stopped playing politics with this issue. That is what the people of Hartlepool expect and it is what the Government must do. As long as I am in this place, I will hold them to account to do that.
Sir John Hayes (South Holland and The Deepings) (Con)
There has been too much immigration to this country for far too long. I have great regard for the Minister for Border Security and Asylum, the hon. Member for Wallasey (Dame Angela Eagle), as she knows, but regard allows for sharp disagreements, and if she did not know that we disagree, she will after this speech. That level of immigration has damaged our economy, our shared sense of belonging on which social cohesion depends and our public services, by increasing population to an unsustainable level.
Let me first turn to the economy. The effect of mass migration on the economy has been to displace investment in domestic skills and in recruitment and retention of labour. It has displaced investment in the modernisation of our economy and it has therefore damaged productivity by inhibiting it. It has essentially created an economy that is low-skilled and dependent on the provision of relatively cheap labour, and is therefore unfit to compete in a high-tech, high-skilled world. That is what mass migration has done to our economy.
For evidence, one has only to look at the House of Lords Committee on Economic Affairs report, which says:
“we have found no evidence for the argument, made by the Government, business and many others, that net immigration—immigration minus emigration—generates significant economic benefits for the existing UK population.”
The reason for that is that 70% of migrants are in low and medium-skilled roles. They are not the brightest and the best; they are not the people who we need to fill the vacancies that cannot be filled otherwise. Essentially, vacancies are being filled rather than providing opportunities for the vast majority of those Britons who cannot get a place in the labour market.
Mass migration has certainly damaged social cohesion by undermining our shared sense of belonging. We simply cannot import that number of people—many of whom do not speak English as their first language—without significant investment in integration; yet even if we were integrating at pace, the sheer volume would make it impossible to hold many communities together. We have seen social fracture, with a risk of complete fragmentation, in many communities.
Hon. Members from across the House will have visited schools where the headteacher has said proudly, “Of course, the children here speak 15 different languages,” as though that were a cause for celebration. Without a common language, there can be no currency for learning about one another and there can be no means by which we can share what makes us British. We have to promote the English language and we should abolish any attempt by any authority to translate things into foreign languages: let us make that a rallying cry from today.
Finally, the population of this country is growing at an unsustainable rate. We have heard already that successive Governments, beginning with the Blair Government, then the coalition Government, Tory Governments and now this Government, I am sorry to say, have failed to recognise that if we increase net population by 700,000 to 900,000 people a year, a number that equates to the combined populations of the five cities of Cambridge, Norwich, Hull, Lincoln—
Sir John Hayes
I did say that it was under successive Governments. The reason for that is that the liberal elite of this country—I do not count the hon. Gentleman among its number—that controls far too much of the Establishment and wields too much power is at odds with the understanding which prevails in his constituency and mine of ordinary, everyday working people, who recognised what I have just said long ago but were told by people who should have known better that net migration at that level was not only tolerable but desirable. It is a complete nonsense to pretend so, and every piece of analysis justifies that.
Steve Barclay (North East Cambridgeshire) (Con)
I thank my right hon. Friend and constituency neighbour for giving way. Does he agree that this concern about the high levels of immigration is also an issue of democracy and the sense of people not being heard? I noted the hon. Member for Hartlepool (Mr Brash) expressing support for deportations of foreign-born criminals, but unless the Government use levers—restrictions on visas for those countries not taking people back—we will again see too many foreign-born criminals in our prisons instead of being deported back to their native country.
Sir John Hayes
I of course agree with my right hon. Friend, who as usual has brought a particular insight based on his long experience to our considerations, and let us just take one example of that. Some 647,000 migrants received health and care visas from 2021 to June 2024; 270,000 of them were workers and an extraordinary, outrageous 377,000 were dependants. Even—[Interruption.] Even, I say to those on the Liberal Democrats Benches, those remaining members of the liberal elite who still perpetuate the conspiracy of silence about these matters must understand that everyone who comes to the country brings an economic value and an economic cost, and many of those dependants will not have brought economic value. That is not to disparage them in any way—they are perfectly nice people, I am sure—but they are not adding to the economy and certainly not adding to the per capita productivity or growth in the economy. In fact, they are detracting from it.
Cameron Thomas
The right hon. Gentleman speaks of the liberal elite but he is being generous there to me, a guy who was state-educated; I am very much just a bloke, but I thank him. One thing the Liberals were elite at was pointing out the fact that Brexit was not going to work. The promise of Brexit was of course to take back control of our borders; what does the right hon. Gentleman make of the fact that immigration is now four times higher than in 2019, following his own party being in government?
Sir John Hayes
Of course Brexit and particularly free movement led to a massive influx of people. When David Blunkett, now Lord Blunkett in the other place, was Home Secretary, he estimated that as a result of free movement 13,000 people would arrive in this country. In fact, the figure was in the hundreds of thousands and when settled status was granted it turned out to be millions. So the hon. Gentleman is quite wrong about the effects of Brexit.
Sir John Hayes
I will not because I know others want to get in and I am already testing the Deputy Speaker’s patience.
The truth of the matter is that we need to address migration not only for the reasons I have given about population growth and the damage to social cohesion and the economy, but because unless we do so the British people will assume, and rightly so, that people here just do not get it. Well, I do, and I hope those on my Front Bench now do, and the Government need to wake up and smell the coffee pretty soon.
Sally Jameson (Doncaster Central) (Lab/Co-op)
Immigration is a part of Britain’s history and we have a proud record of supporting those seeking refuge from across the world. British life has been enriched by people who have come from across the globe and made their lives here contributing to the NHS, the business sector, local communities and our economy. However, the immigration and asylum system we have inherited is, after years of neglect, not fit for purpose.
Today, due to time constraints I will particularly focus on border security and asylum, because it goes without saying that border security is national security and our asylum system can only work if it is well managed and well regulated. Indeed, over the last six years criminal smuggling gangs have been allowed to take hold along all our borders, making millions of pounds out of small boat crossings and exploiting some of the most vulnerable people while going virtually unchallenged. We have had expensive rhetoric from the Tories, and I am sorry to say that they practically collapsed the asylum decision-making system and relied on the Rwanda scheme, which was simply a gimmick. They haemorrhaged an eye-watering £700 million of taxpayers’ money on a system that we all knew would not work and, indeed, did not.
It is important to shine a light on what this Government are doing with the legislation they have introduced—the Border Security, Asylum and Immigration Bill—which will put national security back at the heart of our border system. It will give law enforcement agencies counter-terror-style powers and actually deal with the criminal smuggling gangs, and Opposition parties voted against it.
Sally Jameson
I am not taking interventions—you had 14 years to intervene.
We will have tougher border security measures for foreign national sex offenders, who will be excluded from refugee protections. We will have new powers on seizing electronic devices, new offences against gangs selling and handling small boat parts and new and modernised biometric checks overseas to build a clear picture of individuals coming to the UK and to prevent those with a criminal history from entering. We have new agreements with France, Germany, Italy and Iraq on tackling those gangs, and our agreement with France will mean that policing units will have the authority to intercept boats in shallow waters. We have announced a £150 million funding package for the Border Security Command, unlocking new surveillance technology and new additional funding for the National Crime Agency.
Whether it is through the Border Security, Asylum and Immigration Bill or the workings of the immigration White Paper we announced recently, we are finally getting to grips with the system after many years, making it fair and humane but also putting in the graft to ensure that laws and safeguards are in place, so that we do not find ourselves in this mess ever again and that our national security is not put at risk. There is no more rhetoric or gimmicks, but meaningful action and a Government who are actually governing, facing up to the problem and getting it sorted. That is what my constituents and people across the country expect.
Nick Timothy (West Suffolk) (Con)
Nobody ever voted for mass immigration. The country has repeatedly said that it wants border security, very little immigration and deportations for those who break the law, yet successive Governments have imposed mass immigration on our country. Human rights laws that render border security and immigration control almost impossible are treated like untouchable and unchangeable holy scripture.
The justifications for mass immigration have changed over the years. First, people were told that the numbers were small and that nothing much would change. Next, people were told that immigrants would integrate and that there was nothing for them to worry about. People were then told that multiculturalism was a gift and that things such as foreign foods made it all worthwhile. More recently, as the numbers became unimaginable and communal intimidation, violence and sectarian politics, and even terrorism, became, in the words of Labour’s London Mayor,
“part and parcel of living in a big city”,
people have been told to keep their views to themselves and parrot the official line instead.
However, diversity is not our strength: it is a very serious and difficult challenge that we have to manage, thanks to policies imposed on the public by politicians who chose—arrogantly and callously—to ignore what the people of their country wanted. [Interruption.] If the hon. Member for Stoke-on-Trent Central (Gareth Snell) wants to intervene, he can do so. Britain’s true strengths are our long stability, our legal inheritance, our institutions, our language, our shared identity forged through the triumphs and tragedies of history, the places we have in common, our literature, our culture and even our food. [Interruption.] The hon. Gentleman is entitled to intervene, but he has continued to abuse from a sedentary position—as, indeed, have various Members on the Government Benches. This is supposed to be a debate.
Gareth Snell (Stoke-on-Trent Central) (Lab/Co-op)
The hon. Gentleman served as the chief of staff to Baroness May, who was the Home Secretary and the Prime Minister at different points. Is he honestly saying that he does not bear a single piece of responsibility for the situation that we find ourselves in today, given that he was at the heart of policymaking when this all went terribly?
Nick Timothy
When I worked in the Home Office, for the first couple of years net migration fell—after that, it rose. The Conservatives, like the Labour party, have failed the public on immigration. I am happy to accept that, but Members on the Government Benches show no sign of any contrition or of learning anything from experience.
While politicians have talked vague nonsense for years about British values, sometimes values that could equally be said to be French or Dutch or whatever, and sometimes values not even shared by many British people, the constituent pieces that add up to our shared identity and culture are precious. Without our shared identity, there is less social trust, little solidarity and less willingness to compromise and make sacrifices for one another. It is undeniable that mass immigration and the radical diversity it has brought have undermined that shared national identity.
What of the justifications for this massive social change? We have been told for years that it is vital for our economy, but mass immigration has displaced British workers from their jobs and undercut wages. The zealots who still support mass immigration will no doubt scoff that I am guilty of the lump of labour fallacy. If I am, so is the Migration Advisory Committee and various immigration experts. The only fallacy is believing that importing millions of fiscally negative immigrants will make us richer.
Nick Timothy
I will in a moment. That fallacy is now enshrined in Whitehall policy through the Office for Budget Responsibility, which insists that immigration creates fiscal headroom without calculating, as the Danish Ministry of Finance does, the true long-term fiscal cost of immigration by national background of migrants. I will now give way, unlike the Immigration Minister when she was going on.
Dr Caroline Johnson
My hon. Friend is making an important speech. My right hon. Friend the Member for South Holland and The Deepings (Sir John Hayes) talked earlier about the five cities-worth of people being brought into the country. What that essentially means is that we have to build five more cities to accommodate them. Has that not increased house prices and, in fact, made many young people poorer and meant they find it more difficult to get on the housing ladder?
Nick Timothy
Indeed. I remember when Dominic Raab was the Housing Minister and he made that point. The response from the Labour party was one of sheer hysteria, with accusations of bigotry. My hon. Friend is completely right.
Mass immigration has also killed labour market pressures for employers to invest in skills and training, labour-saving technology and the pay and conditions of their workers. Then there is the capital stock of the country. When our population increases at the kind of speed we have experienced, what do we expect to happen? There are fewer hospitals and surgeries, less space on trains and the road, and fewer flats and houses and police officers and prison spaces per person than before.
Let us dwell for a moment on the social problems that we have created for ourselves. According to the census, there were six London boroughs where a majority of people were born abroad. In towns and cities across the country, the census shows that we can draw a line where on one side the white British population lives and on the other lives an Asian Muslim population. The reasons that should alarm us ought not to need spelling out.
We are importing many of the world’s hatreds. Just look at the Saturday marches against Israel and the intimidation of Jewish communities, or the riots we saw in Leicester three years ago. When the Prime Minister referred to an island of strangers, he was not wrong, even if the Immigration Minister did not back him up in using that language in her speech.
The pity is that the policy response is risible. From Tony Blair to Boris Johnson, we have seen successive Governments talk things up, only to deliver ultra-liberal immigration policies. [Interruption.] Yes, this is the point, and Labour still will not learn. This Government are pursuing the same cynical path. Their policies are pathetic. They cannot even tell us if indefinite leave to remain changes will apply to immigrants already in the country. We know that Labour lacks what it takes to drastically cut the number of people coming into the country or to remove all the people who are here who break the law, claim benefits or take out more than they put in. I hope, and I believe that my party has rediscovered the necessary steel. The future of our country will depend on it.
Jo White (Bassetlaw) (Lab)
There was a court case yesterday where a people smuggler, known as “Captain Ahmed”, was jailed for his part in co-ordinating and managing the small boat crossings of more than 3,000 people. He is a ruthless man who treated human life as rubbish, ordering the murder of migrants and happily bribing officials to pursue his financial objectives. This man was smuggling across the Mediterranean, but his methods mirror that of the criminal gangs bringing people across the English channel. My question to the Opposition is: why was he here living in asylum accommodation when he was arrested in 2023? He had previously served a prison sentence in Italy for drug smuggling, and yet he was never deported. That is why I welcome the borders Bill.
Dame Angela Eagle
Does my hon. Friend agree that when we came into government, there were more than 18,000 foreign national offenders living in our communities who should have been deported and had not been? When we left office in 2010, that number was 4,000.
Jo White
I thank the Minister for making that key point. The British people were let down by the Opposition when they were in government. I welcome the Border Security, Asylum and Immigration Bill, which gives us the powers to pursue those people not only here in our country, but across borders to their origins. In government, we will never allow people with criminal records to be considered for asylum.
The last Government allowed the backlog of asylum seekers to rise to over 80,000, housing them in hotels across the country and, when that became too embarrassing, trying to hide them away by putting them on a disease-ridden barge, buying disused Army bases at huge expense, and setting up a dispersal process with houses being purchased across the country.
It is only this Government who have tackled the problem head-on. More than 24,000 people have now been returned, and 23 hotels have been closed down—but I want more, my constituents demand more, and I will keep coming to the House to ensure that we get more. We must get the borders Bill into law, and smashing the gangs is critical. Reform and the Tories keep voting against the Bill, while repeatedly offering no viable alternatives. There is only one party that can be trusted to secure our border, and I will back the Government.
Pete Wishart (Perth and Kinross-shire) (SNP)
I have to say that I was amazed to see a Conservative motion on immigration on today’s Order Paper. I think all that most of us in the House require from the Conservatives is a full and sincere apology for the mess and chaos that they left behind, and then for them to go away for a long period of self-ordained silence. They thought that they were reducing immigration, but what they did was quadruple it. They did not even understand their own immigration policy. They were letting hundreds of thousands of people come into this country. So please, do not get to your feet and have the temerity to lecture this House about immigration after the mess that you made.
Madam Deputy Speaker (Caroline Nokes)
Order. The hon. Gentleman did rather incite me to get to my feet, and I am somewhat stunned at his allegation that I have played any part in this.
Pete Wishart
That was not like me, Madam Deputy Speaker. It was very lax, and I apologise.
The Conservatives are currently languishing in fourth place in the opinion polls, and it is a well-deserved position.
Cameron Thomas
I am making this intervention from the Reform Bench, in the absence, apparently, of their own interest in immigration.
Another thing that I think the Conservative party might answer for is the fact that Vladimir Putin weaponised immigration in 2015 through his terrorist tactics in Syria. I wonder whether the Conservatives have given much thought to how the Conservative Friends of Russia group continued to operate for nearly a decade thereafter.
Pete Wishart
I do not think the Conservatives give much thought to anything in this particular field, so I would not even venture to give an opinion on that.
As I was saying, the Conservatives are in fourth place in the polls, and their entire vote has practically gone wholesale to Reform. This scrappy, desperate motion represents a vain attempt to stop that leakage and get some of their vote back. Let me also say to the hon. Gentleman that it does not matter how hard they try—and they are trying—because they will never outperform Reform, who are the masters of nasty rhetoric. The Conservatives are mere amateurs compared with the hon. Gentlemen of Reform who just so happen not to be in their places again.
The whole debate about immigration is descending into an ugly place which seems to fire the obnoxious and the unpleasant. I am talking not only about those two parties but about the Government too, and I am now going to direct my blame at some of the things they are doing. A new consensus is emerging in the House. For all the faux arguments and fabricated disagreements, the three parties are now more or less united in a new anti-immigrant landscape in the House. The only thing that seems to separate them is the question of who can be the hardest and the toughest in this grotesque race to the bottom on asylum, refugees and immigration.
The fear of Reform percolates through every sinew in this House. It dominates every single debate, and everything that is going on. Reform is killing the Conservatives, but Labour seems to want a bit of the self-destruction action too. Everything the Government do on immigration is now looked at through the prism of Reform, and they have even started to get the Prime Minister to use Reform’s language. The hon. Member for Clacton (Nigel Farage) could not have been more generous in his tribute to the Prime Minister for his contribution to nasty rhetoric. The thing is, the “island of strangers” speech could have been made by any one of these three parties.
Sir John Hayes
I reassure the hon. Gentleman that I have not changed my mind about this; I have believed it forever. I only change my mind about anything about once a decade. The truth of the matter is that he must know that, according to the ONS, the scale of population growth will be equivalent to the population of Edinburgh, Glasgow, Leeds, Leicester, Liverpool, Newcastle, Peterborough, Belfast, Cardiff, Manchester, Ipswich, Norwich, Luton and Bradford added together. That cannot be reconciled with the quality of life and standard of living that his constituents and mine expect.
Pete Wishart
I know the right hon. Gentleman does not change his mind, and it is something that we all love him for in this place. Maybe we should look forward to what is on its way in a couple of decades. I think he knows that a spectacular population decline will start to kick in around the mid-part of this century. Spain and Italy are already doing something about it. All we are doing in this place is stifling population growth through the two-child benefit cap—something that works contrary to what we require.
All Labour is doing is climbing on the anti-immigrant bandwagon, and that is alienating its supporters. I am sure that everybody saw the Sky News report this morning on the intention of former Labour voters. Sky News found that only 6% of lost Labour voters have gone to Reform. Labour has mainly lost votes to the Liberal Democrats and the parties of the left. In fact, Labour has lost three times as many voters to the Liberal Democrats and the left as it has to Reform, and 70% of Labour voters are considering abandoning the Labour party to support the parties of the left.
Pete Wishart
I cannot give way any more.
In chasing Reform voters by using its language and appeasing Reform, Labour is only further alienating its supporters. One can only wonder at the political genius that is Morgan McSweeney, who has managed to chase voters away in a search for voters who do not exist.
Pete Wishart
I cannot give way—I have no time.
Ordinary Labour voters have good, liberal values, but just now they have a party that is not representing their views. That is why they are moving on.
In Scotland, we take on Reform. We are one of the few parties across the United Kingdom that has steadied its own position, and we have even improved it slightly. There is a big gap between us and Reform. That is because we take on Reform’s arguments and we do not appease the party or go on to its agenda. I encourage Labour colleagues to think about that.
We now have an immigration policy that is the exact opposite of what we need in Scotland, and it is contrary to our national interest. Scotland is in the early stages of the population and demography crisis, and it will only get worse because of what this Government are going to impose on us. We will soon have too few working-age people available to look after an ever-increasing older population.
For all three parties—Labour, the Conservatives and Reform—immigration is a burden and is out of control. For us in Scotland, it is essential to the health of our workforce and our economy. That is why we will never stop calling for a separate Scottish visa. We need the tools in our country to face up to our crisis. I will leave the Government to get on with their grotesque race to the bottom and to pander to Reform in a vain attempt to get some votes, but Scotland does not need their new “island of strangers” policy. It is contrary to what we want, so please leave us right out of it.
Connor Naismith (Crewe and Nantwich) (Lab)
The Conservatives have the brass neck to come to this place and get Member after Member to stand up and talk as if they are commentators. They are completely ignoring their role over the previous 14 years, when their record on immigration was appalling. It started with David Cameron, who promised to get migration down to the tens of thousands. That was followed by a conveyor belt of Prime Ministers and Home Secretaries who ratcheted up the rhetoric almost as high as the number of people coming into the country. Finally, we had the Boris wave, which saw net migration hit almost 1 million. I have to say that, when I was listening to the right hon. Member for South Holland and The Deepings (Sir John Hayes) talk about the liberal elite, I wondered if he was referring to Boris Johnson, because it happened on his watch. Boris’s betrayal was perhaps the worst, given that he led a Brexit campaign that famously centred on control of our borders. The Conservatives’ 14 years in power prompts the question: if they want a binding cap on migration, who on earth would trust them to keep to it?
There is a strong case for control over legal migration, and I wholeheartedly welcome the steps outlined in last week’s immigration White Paper, which I believe will contribute to that aim. My constituents do not object to people from around the world coming to this country to contribute to our economy and enrich our culture. We have a proud history of that. However, it must be carefully balanced with preventing exploitative labour market practices that create a race to the bottom on pay and conditions in crucial sectors such as health and social care, as well as the need to build strong, united and integrated communities.
Sir John Hayes
I take the hon. Member’s point. As I did say, successive Governments are to blame for this, beginning with the Blair Government or perhaps even earlier. Would he, however, acknowledge that we cannot increase the population on the scale we have been doing without putting unbearable pressure on demand for housing, access to GPs and health services, and other public services?
Connor Naismith
This Government are committed to bringing the numbers down. Regretfully, the right hon. Gentleman forgets the role of austerity in putting pressure on public services, housing and the other things he mentioned.
Turning to the issue of small boats, I first want to acknowledge that this country has a proud history of providing refuge to people fleeing persecution, and I think most people believe in those traditions, but this should not be determined by one’s ability to cross a continent or pay huge sums of money to people smugglers. What we need, quite simply, is fairness and control. That is why I welcome the steps the Government have taken to speed up processing, disrupt the smuggling gangs and work alongside our international allies, whom the previous Government unfortunately spent a lot of their time alienating.
Connor Naismith
No, I will not give way. I want to make some progress.
The Rwanda plan was, quite simply, a joke, and I think the Tories take my constituents for fools. It cost them £700 million, and they sent only four volunteers. Shockingly, they still think it just needed more time. The right hon. Member for Richmond and Northallerton (Rishi Sunak), the former Prime Minister, staked his entire reputation and electoral fortunes on stopping the boats. If the Rwanda plan was going to work, why did he call a premature election in the rain outside 10 Downing Street rather than in an airport hangar? It was because he knew the plan was not going to work. Why else would he do it?
Aphra Brandreth (Chester South and Eddisbury) (Con)
I thank the hon. Member, who is my neighbour in Cheshire, for giving way. I note his views on the last Government’s record, but can he explain how Labour’s decision, just 20 days after the election, to suspend the Illegal Migration Act 2023, which would rightly have prevented illegal migrants from claiming asylum or gaining British citizenship, sends anything other than completely the wrong message and undermines public confidence in the immigration system?
Connor Naismith
Quite simply, my experience from talking to voters—we are talking about public confidence —is that the public had no confidence in the Rwanda plan. Everybody could see that it was not going to work, so the Government were absolutely right to cancel it. The answer is that, just like my Labour colleagues and millions of voters, the previous Government knew that it was going to fail. These issues are of crucial importance to my constituents and I will continue to push the Government to do more to control our borders, but that will not happen by slogans or press releases. It will happen through the hard yards of good policymaking, and I am pleased to see that that work is well under way.
Mr Andrew Snowden (Fylde) (Con)
It does not matter how many times the Prime Minister repeats and repeats his vacuous election slogan of “smash the gangs”, there is no plan to do it, it is not happening and nobody out there believes him. The Government had an opportunity when they came to office. The Rwanda scheme was on the brink of becoming operational, which would have given them one of the most robust deterrents in Europe. As we saw in Australia, when a scheme similar to Rwanda was set up in the Pacific, it only had to deport the first few thousand and it had the impact of largely stopping the boats arriving—but in a callous, irresponsible and purely political move, Labour cancelled the Rwanda scheme. It is a political calculation that the Government have got entirely wrong, as without a deterrent everything else they announce or say is just words.
The Government have had nearly a year to show us they had more up their sleeve on immigration than buzzwords and crocodile-tear outrage about the scheme—so, how is that going? Since the election, almost 36,000 illegal immigrants crossed the channel, a 30% increase on the same period 12 months prior. To date, 2025 has been the worst ever year for small boat crossings, with around 12,000 arrivals. That surge in numbers has led to Labour already breaking its manifesto promise to end the use of asylum hotels. Figures show that on 31 December 2024, there were 8,000 more people in asylum hotels than when the Conservatives left office.
The Government have been clutching at straws for good news. They started off by holding a press conference to celebrate the arrest of one member of just one gang—out of the thousands of criminals involved in the illegal immigration trade—to show they were smashing the gangs. If that was not enough of a laughable spectacle in its own right, the investigation had mainly been undertaken before they came to office and such arrests are a matter of course anyway. More recently, they have switched to triumphantly claiming 24,000 deportations. Time and again, even at Prime Minister’s questions today, the Prime Minister has refused to outline how many of those are just routine and voluntary removals, rather than enforced deportations of people who have illegally crossed the channel.
Oliver Ryan (Burnley) (Ind)
Will the hon. Gentleman give way?
Oliver Ryan
I thank the hon. Member. Speaking of voluntary removals and laughable schemes, does he accept that the four people his Government sent to Rwanda were in fact volunteers, and that the whole scheme was laughable and hideously expensive?
Mr Snowden
It did not start. The scheme was not even operational. That is like buying a car, waiting until it gets to the showroom and then claiming that only the showroom manager is driving it, so it is not worth the money. It is a ridiculous thing to say.
We hear vacuous slogans, empty words—quite apt—cooked up stats and a Prime Minister unable to answer the most basic of questions; he is now not only reduced to begging other countries to give him options to provide a safe country to deport to, but he is publicly getting slapped down by the leaders he is asking. The return hubs he is now so desperately trying to set up are only a watered-down version of the Rwanda scheme. Even more worryingly, not only have they shot themselves in the foot by cancelling Rwanda; in launching their new border security Bill, they have not realised that without a deterrent it is all just words.
Mr Brash
I wonder whether the hon. Gentleman can address the point I made in my speech. Repeatedly, Conservative Members, including him, have said, “If we had only waited a little bit longer, Rwanda would have worked.” Why do you think the right hon. Member for Richmond and Northallerton (Rishi Sunak) called the general election—
Mr Snowden
The hon. Member would have to ask my right hon. Friend.
The only tangible elements of the Bill are: a Border Security Commander with no powers other than writing a report and setting some objectives; and new powers to confiscate phones from people who arrive illegally, missing the fact that most of the them discard their phones to hide their identity anyway. Notably, the Bill repeals lots of the Illegal Migration Act 2023, lifting the requirement for the Government to remove people who arrive here illegally and allowing illegal migrants a path to citizenship.
Let us be clear: there should be no route to citizenship for anyone who arrives in this country illegally. France is a safe country, and to get to France—let alone the UK—people will have had to pass through many other safe countries. Everyone who arrives in small boats across the channel or in lorries from the continent is arriving from a safe country and should therefore qualify for immediate deportation. These are not asylum claims; it is illegal immigration.
As much as I would like to take up all the time in this debate—and more—talking about the ludicrously weak and counterproductive policies of this Government, by the time I finished, many more small boats would have crossed the channel. I would rather spare the Minister the time, and hope the Government spend it instead correcting some of their mistakes.
We have outlined some provisions in our Bill that would help, including: disapplying the Human Rights Act from immigration matters; a requirement to deport all foreign criminals regardless of human rights claims; the introduction of a scientific age assessment technique when an illegal immigrant is trying to pretend they are over 18; a requirement to impose visa sanctions on countries that do not take back their own citizens; and increasing the period to qualify for indefinite leave to remain from five years to 10.
I live in hope, though—for the sake of our national security, the confidence of the British public in our immigration system, and to reduce the strain on our public services—that the Prime Minister picks up the phone to his opposite number in Rwanda, apologises for the disrespectful way he treated their country and begs to get the deal back on the table. However, I think it will take a few more years of repeating empty slogans, dodging difficult questions, and holding press conferences every time there is an arrest of a single person out of the thousands involved in the illegal immigration trade, before the Prime Minister realises that instead of smashing the gangs, he is making everything worse, and that it is time to pick up the phone to Rwanda again.
Oliver Ryan (Burnley) (Ind)
The Opposition motion, which I will not be supporting, uses the word “regret” an awful lot, but it omits any regret on their part for their complete failure to properly secure our borders during 14 years in government. The Conservatives ran an experiment in this country, and they will never be forgiven for it—especially for facing both ways on the immigration question for such a long time.
In 2010, the Tories pledged to get immigration down to the tens of thousands, and over the next five years they failed. In 2015, the Tories said they would get net migration down to the tens of thousands, not the hundreds of thousands, and they failed. In 2017, they said they would get migration to the tens of thousands, not the hundreds of thousands, and they failed. In 2019, they said the “numbers will come down”—at that point, they had panicked slightly about the whole affair.
At the time the Tories were leaving office, net migration was nearly 1 million. Time after time, over 14 years, they told the British people they would tackle net migration and bring the numbers down, but they did not—and now, after 10 months, they have the bottle to stand in front of this Government and ask, “Why are the numbers not down yet?”. We are taking action to bring the numbers closer to the approximately 200,000 that they were when Labour left office in 2010. There is this rhetoric that immigration has been an issue for 30 or 40 years, but the numbers have been sky high over the past 10—since Brexit, really. And the Tories wonder why people think they are irrelevant.
There is mention in the motion of a cap, but—as always with this Opposition—there is a history lesson here. I am old enough to remember 2013 to 2015, and the cap that was announced by the coalition Government. [Hon. Members: “Surely not!”] I was a very junior councillor. A cap was mentioned by the coalition then—a complete chocolate fireguard. They got the headlines when they announced it, but it failed to do the job, so they ditched it. In the end, it was not worth the press release it was written on. It was game playing of the highest order.
We are seeing the same thing again now; history is repeating itself. In the past four years, net migration quadrupled and our asylum system was completely destroyed. The processing of asylum claims took so long and numbers increased by so much that the previous Government were spending £9 million a day on hotel stays across more than 400 hotels. Hotel stays for my constituents are a treat, and not something to be doled out to people coming off boats in the channel—but unfortunately that is what the Conservatives did for the best part of five years. My constituents do not begrudge genuine asylum seekers, but that system was broken and they have told me that that is just not on.
Boats over the channel were basically invented by the previous Government. Indeed, 13,500 people crossed the channel in small boats in the shadow Home Secretary’s last five months as Minister for Immigration, and 260 boats crossed in his last two. The same number of boats have crossed the channel in the last six months of this Government. I would say that that is progress.
If a person is here in this country illegally—and illegal is illegal—they will be removed. That is not in contention; I do not see how it can be. In contrast to those years of open borders, this Government have secured agreements with France, Germany, Italy, Iraq and more. The arrangements with France and Germany in particular are game-changing, and I want to see French boats in the water stopping those asylum seekers in the months to come. I will finish there, Madam Deputy Speaker, because I am very short on time, but thank you very much for calling me to speak.
Katie Lam (Weald of Kent) (Con)
As my right hon. Friend, the shadow Home Secretary, rightly said earlier, migration has been too high for decades and remains so. In every year since 1997, with the unsurprising exception of 2020, net migration was over 100,000 people. Every election-winning manifesto since 1974 has promised to reduce migration. Successive Governments of both parties have promised to end the era of mass migration and control the borders, and successive Governments have failed. In the words of my right hon. Friend the Member for North West Essex (Mrs Badenoch), the previous Government, like the Governments before them, also promised to do exactly this, but, again, like the Governments before them, they did not deliver. I am afraid that this Government are just the latest addition to this rogues’ gallery of broken promises.
Worse than disregarding the public’s wishes, public servants have told the British people to ignore what they can see and feel around them. The public was told that migration would deliver growth. It has not. Instead, people can feel their wages stagnating because they are being undercut. They can see the pressure of mass migration in their soaring rents, in how hard it is for their children to get on the housing ladder, in the lack of cohesion in their communities, and in the pressure on their GPs, dentists and schools. In the words of my hon. Friend the Member for West Suffolk (Nick Timothy), immigration is the biggest broken promise in British politics, and probably the biggest single reason that British politics is so broken.
Katie Lam
I wish to make a little progress.
Fixing this broken system is the single biggest thing that we can do to restore trust in our politics. That means control of the borders and an end to mass migration; we need a system that works in the interests of this country and its people. Those who have come here legally and not contributed enough should be made to leave. Those who are here illegally, either by crossing the channel or from overstaying their visas, must be removed. The era of taxpayers funding accommodation, education, healthcare and legal challenges against their own Government for those who have no right to be here must end forever.
Sir John Hayes
We should deport the approximately 1 million people who are here illegally. We also need, as I hope my hon. Friend will acknowledge, to look at the indefinite right to remain. All kinds of people—with extremely dubious pasts, presents and possibly futures—have been granted that status. Will she commit the Opposition to relook at that, because indefinite does not mean permanent?
Katie Lam
We already have committed to that and will continue to do so. It is a clear amendment both to the Border Security, Asylum and Immigration Bill and to the deportation Bill in the name of my right hon. Friend, the shadow Home Secretary.
Unless and until politicians of all stripes can deliver the migration system that the British people have voted for time and again, there will be no reason for them to trust in our political system, and they will be right not to. We have seen no indication from this Government since they came to power last year that they are willing to do what needs to be done to give the British people the immigration system that they want and deserve. The debate today, I am afraid, has been no different.
The Minister clearly wished only to speak about the record of the previous Government. But they are in charge now—and what do we see? My right hon. Friend, the shadow Home Secretary, points out the facts. He says that Afghans are 20 times more likely to be sex offenders, and Government Members say, “Outrageous!”. Well, it is outrageous; saying so is not. He points out that over 70% of Somalis live in social housing, and they call it race-baiting. That is exactly the attitude that has allowed our political class to ignore the reality of the world that we live in. No party and no Government who continue to treat the British public’s very legitimate concerns with such scorn will ever rise to meet the challenge of securing our border.
The hon. Member for Surrey Heath (Dr Pinkerton) called for more safe and legal routes, but demand to come to Britain will always dramatically outstrip our supply. There is no number of safe and legal routes that will ever stop people making the dangerous channel crossing. The hon. Member for Hartlepool (Mr Brash) called for this House—not foreign courts—to decide who can stay in this country. I admire his stance, and I look forward to the launch of his campaign to leave the ECHR.
My right hon. Friend the Member for South Holland and The Deepings (Sir John Hayes) made a characteristically insightful speech about the substantial challenges of integration, and rightly connected that to the volume of immigration. No country of our size could ever hope to integrate that many people each year, and he is right to say so.
Mr Brash
It is possibly in order for me to correct the shadow Minister. I was very clear that I believe that the application of article 8 should be tightened so that courts in this country are not sovereign over this place regarding deportations. It should be this place that ensures deportations—not our courts.
Katie Lam
I thank the hon. Member for his clarification. I hate to break it to him, but article 8 will not do what he thinks it will, and tightening it will not solve the problem. The article that presents the biggest problems, actually, is article 3, which does not have caveats and cannot be tightened in the way that he suggests.
The hon. Member for Doncaster Central (Sally Jameson) spoke of border security as national security. She was correct to do so, but just last week when told in this Chamber that terrorists come across the channel in small boats, her colleagues on the Government Benches laughed and jeered.
My hon. Friend the Member for West Suffolk made, as ever, a compelling economic and cultural case for control. The hon. Member for Bassetlaw (Jo White), who is not in her place, set out some of the worst problems with the current immigration system, but she was perhaps not entirely forthcoming in the way she shared the statistics. Far from Labour closing asylum hotels, there are 8,000 more people in asylum hotels than when Labour came to power.
The hon. Member for Perth and Kinross-shire (Pete Wishart) and I have aired our differing views on this topic over many weeks in the Border Security, Asylum and Immigration Bill Committee. I am not sure either of us has done much to persuade the other, but I always enjoy his company.
Dr Evans
In 2020 the Prime Minister—then Leader of the Opposition—pledged as point 6 of his “Another future is possible” plan that the Yarl’s Wood detention centre would close. To my knowledge, as of today it is still open. Given my hon. Friend’s experience, is she aware that Yarl’s Wood will be closing? Has she heard the Government commit to closing it, and if so, when will that be?
Katie Lam
I can only recommend that my hon. Friend does not hold his breath.
I was grateful to my hon. Friend the Member for Fylde (Mr Snowden) for mentioning what needs to be done on age assessments. The amendments we have tabled to the border security Bill would make much progress on that.
Last week the Prime Minister said that mass migration risked turning us into an “island of strangers”. He was absolutely right. He recognised, as we do, that fixing migration is the single most important thing that his Government could do to restore public trust in our politics, yet the plan that he presented—the Government’s migration White Paper—is not a plan to end mass migration or control our borders. It is a plan for more of the same.
Instead of a detailed programme, the Government’s White Paper offers more delays, more reviews, more consultations and more half-measures. Their plan to deport foreign criminals is subject to a consultation later this year. Their plan to reform the rules on settlement is subject to another consultation. When given the chance, they have voted against a hard cap on visas, against our plan to disapply the Human Rights Act 1998 from immigration cases, and against our plan to restrict long-term settlement to those who contribute enough to cover their costs. They are just not serious.
The Home Secretary estimates that their plan will cut migration by 50,000 people. In the context of hundreds of thousands a year, that is just not enough. The Government have no plan to remove the 1.2 million people here illegally and no real plan to restrict study or family visas, which made up 40% of all migration last year.
If we thought that the Government’s plans would genuinely end mass migration and control our borders, we would support them in a heartbeat. The need to do what is right for our country is bigger than any single party, politician or Prime Minister. Unfortunately, this Government have no plan, and they will go down as the latest Government who failed to fix mass migration. This is the most shameful betrayal of public trust in British politics, and it must end, but the Labour Government show no sign that they will do what needs to be done.
The Parliamentary Under-Secretary of State for the Home Department (Seema Malhotra)
It is a pleasure to respond to this important debate, which I welcome, because it is time to restore control over the UK’s immigration system. Coincidently, that is the title of our 76-page White Paper, which is a serious plan, and one that the Conservatives should have thought more about bringing forward when they were in government.
Let me reassert the fundamental point made by my hon. Friend the Minister for Border Security and Asylum in her opening speech: the Government are picking up the pieces after years of chaos and dysfunction. The Conservatives can talk all they want, but they cannot rewrite history. When it comes to small boats, the worst day, the worst week, the worst month and the worst year all took place on their watch in 2022—after the Rwanda deal had been signed. They gave us record net migration, they gave us record small boat arrivals and they gave us record numbers of asylum hotels, so we will take no lectures from them.
It bears repeating that what we inherited was, by every possible measure, a failing system. Net migration had risen to record levels, driven in large part by overseas recruitment, despite the public being assured that it would come down. Order and control utterly vanished from the legal immigration system as net migration has quadrupled in recent years to record highs. That was at the same time as investment in training went down: total investment in training per employee fell by 19% in the decade to 2022. It is this Government, in the spring statement, who announced £625 million to go towards skills training. Those important points were made by hon. Members across the House, including my hon. Friend the Member for Hartlepool (Mr Brash).
I pay tribute to the right hon. Member for South Holland and The Deepings (Sir John Hayes) for talking about this issue. There is a debate to be had about cause and consequence, but we cannot deny that apprenticeships in engineering halved while visas doubled on the Conservatives’ watch. That is a serious issue, which the White Paper is tackling. I urge the Conservative party to engage with the substance of that White Paper and the serious reforms we need to make.
The dramatic increase in net migration has had serious and far-reaching implications across a range of areas, from public services and community cohesion to housing stock, the economy and our domestic labour market. Perhaps most damagingly of all, it has badly dented the confidence of our constituents, who want an immigration system that is fair, controlled and managed. They want to see opportunity for themselves and for their families.
Migration is an important part of our national story—none of us should deny that—because for generations people from all over the world have come to Britain to live, to study and to work, from members of the Windrush generation who helped rebuild our country following the second world war, to the doctors and nurses working in our NHS. Indeed, they enrich our society and culture, as my hon. Friend the Member for Crewe and Nantwich (Connor Naismith) outlined, but recognising the value and contribution of legal migration is not the same as having no controls. For far too long, a persistent and abject failure to exert control has undermined the system, with grave consequences. That is the situation we inherited on legal migration, and we must now have the important debate about why that has been the case and what we must do to bring it down.
The picture on illegal migration and border security was no better. Under the Conservatives, small boat crossings grew in number from a few hundred in 2018 to tens of thousands. Hotel use peaked with 56,000 asylum seekers in 400 hotels in the autumn of 2023 when the shadow Home Secretary was at the Home Office.
Luke Akehurst
I thank my hon. Friend for giving way. This has not been touched upon in the debate, but there is an issue of asylum seekers not just in hotels but in houses in multiple occupancy. That is causing a lot of community cohesion problems, with unscrupulous landlords buying up HMOs in cheap terraced housing in the towns and villages of County Durham. Does the Minister accept that that is also a problem that rose and rose under the previous Government?
Seema Malhotra
That is indeed an issue that the Minister for Border Security and Asylum is working on with local authorities, so that there are caps and we have a well-managed process.
Seema Malhotra
I will make some progress first.
There is also the issue that the UK has come to be seen as an easy target by criminal smuggling gangs, who relentlessly undermine our border security and put lives at risk in the channel and elsewhere, the consequences of which, tragically, we have seen again today. That cannot go on, and under this Government it will not.
We have restarted asylum decision making on the horrendous backlog that was left by the previous Government. Returns are up by 21% to more than 24,000. The hon. Member for Fylde (Mr Snowden) raised the question of those who have been subject to enforced returns. The number is up significantly on the previous year. He may want to engage with those figures and his Government’s record on that.
We have taken action through the new Border Security Command, the Border Security, Asylum and Immigration Bill and the immigration White Paper.
Seema Malhotra
I want to make some more progress. We are acting to restore order and control to the immigration system and to give law enforcement the powers they need—powers the parties on the Opposition Benches voted against.
We have laid out a set of robust measures in the immigration White Paper, including reversing the long-term trend of increasing international recruitment at the expense of skills and training. We want to see net migration come down by investing in training. Also, for the first time, a labour market evidence group will be established, drawing on the best data available to make informed decisions about the state of the labour market and the role that different policies should play, rather than always relying on migration. Immigration must also work for the whole of the UK. The hon. Member for Perth and Kinross-shire (Pete Wishart) and I have been in a number of debates on the needs of Scotland. Departments across Government, along with the devolved Governments and sector bodies, will engage in the new labour market evidence group as part of the new approach.
We will tackle the overly complex family and private life immigration arrangements, where too many cases are treated as exceptional in the absence of a clear framework. That is why legislation will be brought forward to make clear that Government and Parliament decide who should have the right to remain in the UK. That will address cases where legal arguments based on article 8 and the right to family life are being used to frustrate deportation when removal is clearly in the national interest.
Joy Morrissey (Beaconsfield) (Con)
claimed to move the closure (Standing Order No. 36).
Question put forthwith, That the Question be now put.
Question agreed to.
Question put accordingly (Standing Order No. 31(2)), That the original words stand part of the Question.
Petitions
Madam Deputy Speaker (Caroline Nokes)
Please could Members leaving the Chamber do so silently and quickly.
Helen Morgan (North Shropshire) (LD)
I rise on behalf of petitioners in North Shropshire. Oswestry post office is one of 115 larger Crown, or directly managed, branches that have been listed at risk of closure by the Post Office. Its closure would leave many residents without easy access to essential postal and banking services, which are particularly important for elderly residents, small businesses and those without access to reliable public transport. An online petition with similar wording to the petition that I present today has been signed by 2,668 people.
The petition states:
“The petitioners therefore request that the House of Commons urge the Government to take into account the concerns of the petitioners and take immediate action to guarantee the future of Oswestry Crown post office.
And the petitioners remain, etc.”
Following is the full text of the petition:
[The petition of residents of the constituency of North Shropshire,
Declares that Oswestry Crown Post Office has been earmarked for potential closure, removing vital mail, money, travel, identity and driving services from the town centre; further declares Oswestry Crown Post Office’s role as an essential community service at the heart of Oswestry; notes that high streets in towns are already facing huge challenges, including business rate hikes and loss of bank branches; further that North Shropshire is one of the worst served constituency in the England for public transport, and this poses a significant challenge to accessing vital services that crown post offices provide; and further notes that 2,668 people have signed an online petition on this matter.
The petitioners therefore request that the House of Commons urge the Government to take into account the concerns of the petitioners and take immediate action to guarantee the future of Oswestry Crown post office.
And the petitioners remain, etc.]
Liam Byrne (Birmingham Hodge Hill and Solihull North) (Lab)
I rise to present a petition on behalf of residents of the Garretts Green ward in Birmingham, calling for traffic-calming measures around the Oval school in Garretts Green. It was suggested by Miss Thomas, pastoral lead at the Oval school. It has the full support of the school’s children and parents, following recent terrible incidents when two of the school’s pupils were hit by a speeding car and a vehicle crashed into the school gates just before home time. My constituent, Katalya Moxham-Atkin, whose 10-year-old son was knocked over by a car on the adjacent road and had to take time off school to recover, said that traffic calming and a crossing would make “all the difference” to ensuring that her son’s accident is “the last” around the school.
The petition states:
“The petitioners therefore request that the House of Commons urge the Government to work with Birmingham Council to take immediate action to ensure that traffic calming measures, in the form of zebra crossings are installed on Deepmoor Road and Wheatcroft Road around The Oval School in Garretts Green, Birmingham.
And the petitioners remain, etc.”
Following is the full text of the petition:
[The petition of residents of the Garretts Green Ward, Birmingham.
Declares that traffic calming measures need to be put in place in the vicinity of The Oval School in the Garretts Green Ward to ensure the safety of children; further that Birmingham City Council needs to act on the concerns of parents after accidents on the road surrounding the school.
The petitioners therefore request that the House of Commons urge the Government to work with Birmingham Council to take immediate action to ensure that traffic calming measures, in the form of zebra crossings are installed on Deepmoor Road and Wheatcroft Road around The Oval School in Garretts Green, Birmingham.
And the petitioners remain, etc.]
[P003073]
Max Wilkinson (Cheltenham) (LD)
I rise on behalf of petitioners in Cheltenham. Cheltenham is a thriving and growing town, which has many old buildings. That combination of factors provides challenges in the provision of medical services. Some of our existing GP surgeries are searching for improved premises, and with more homes planned in our area, it will be vital to provide new premises to meet additional demand.
I present this petition, a replica of which has been signed by 3,412 Cheltenham residents. It states:
“The petitioners therefore request that the House of Commons urge the Government to consider the needs of a new GP surgery in Cheltenham when allocating resources for health services.”
Following is the full text of the petition:
[The petition of residents of the United Kingdom
Declares that a new GP surgery is needed in Cheltenham, as local surgeries have warned that GPs are under strain, working long hours with no breaks, and some residents struggle to secure timely appointments, and to accommodate the growth of the town.
The petitioners therefore request that the House of Commons urge the Government to consider the needs of a new GP surgery in Cheltenham when allocating resources for health services.
And the petitioners remain, etc.]
[P003074]
UK Health Security Agency: Porton Down
(1 day, 5 hours ago)
Commons ChamberRead Hansard Text Watch Debate Read Debate Ministerial Extracts
John Glen (Salisbury) (Con)
I am extremely grateful for the opportunity to bring the future of the UK Health Security Agency campus at Porton Down, in my Salisbury constituency, before the House again this evening. I say “again” because 15 years ago, on 22 June 2010, as an eager, newly elected, young MP, I raised the uncertain future of the institution in my first ever Adjournment debate. I did so again on 11 September 2013 and again on 24 June 2015, at the start of my second term as Salisbury’s MP.
In one sense, a lot has happened in the past 15 years, but sadly, in another sense, nothing has happened. The project to relocate to Harlow, in Essex, is apparently no closer to completion, but neither have the highly skilled workers at Porton Down been given any assurances that they can stay put. I know that this matter will concern you, Madam Deputy Speaker, given that a number of residents in your constituency of Romsey and Southampton North, which is adjacent to my constituency, will be working at Porton.
As the Secretary of State for Health and Social Care said in response to my oral question on 13 March, two months ago, this
“has been running around the system so long that is now used in a case study for senior civil servant recruitment.”—[Official Report, 13 March 2025; Vol. 763, c. 1295.]
As the House of Commons Library said in a note to me on 22 January this year,
“neither UKHSA nor the Department for Health and Social Care have published an account of this programme to date, nor published any formal reports setting out the current state of the programme.”
The National Audit Office published its report, “Investigation into the UK Health Security Agency’s health security campus programme”, in February last year. That report sets out the key facts on and decision points in UKHSA’s programme, including its history, the causes of the delays and the issues so far at the Harlow site. I will not rehearse all those this evening, but reading the report may be instructive for the Minister.
Jim Shannon (Strangford) (DUP)
I commend the right hon. Gentleman for securing the debate. I remember him bringing the matter before the House before; we have been in the House for the same amount of time, although he is much younger than me. Does he agree that replacing and modernising the UKHSA’s facilities through the programme is crucial to ensuring that the UK has the capabilities to identify, study and respond to the most dangerous pathogens in the world? Perhaps the way forward is to secure changes and to ask the Government to step in to assist the UKHSA to continue the crucial and excellent work that it already does.
John Glen
I am grateful, as ever, to the hon. Gentleman for his support this evening, and he anticipates some of the points I will make later on.
I want also to refer to the Public Accounts Committee, which opened an inquiry into the UKHSA health security campus last year. The Committee heard evidence from the outgoing chief executive Professor Dame Jenny Harries and Shona Dunn, the second permanent secretary, but it was unable to publish a full report owing to the Dissolution of Parliament and instead published its conclusions and recommendations in a letter in May last year. There is a lack of clarity over where we are with these plans, and my simple purpose today is to secure the Government’s assessment of where we are now, 10 months into the new Administration.
Since that Adjournment debate in 2010, four general elections have been fought and I have had five years as a Parliamentary Private Secretary and seven as a Minister in four roles, but since 2015 I have never been offered any briefing on the future of the facility at Porton and on whether that initial decision, given the events of recent years and a sixfold increase in the costs—rather more than inflation—will be followed through on. As the constituency MP, I am eager to get to the bottom of the matter, and in seeking an update from the Minister this evening—and I certainly do not hold her individually responsible, given that she has only been in post for just over 14 weeks—I do want to seek an understanding about the financial obligations of the programme.
Chris Vince
I thank the right hon. Gentleman, who will know why I am here. Obviously I will sing the merits of relocation to Harlow, but I think we would both agree that we really want a decision on this and to know whether there will be a move or not, because the constituents both of us represent are currently in limbo.
Richard Foord (Honiton and Sidmouth) (LD)
In addition to the HSA, the right hon. Gentleman’s constituency is home to the Defence Science and Technology Laboratory, and both do vital work on antimicrobial resistance. Does he know of any work that has been done by the Government to consider the implications for the UK’s AMR research of moving the two institutions apart?
John Glen
I am extremely grateful for that very helpful intervention, because the hon. Gentleman points out the co-location of DSTL and the UKHSA at Porton, and that is a really important fact. The possibility of sharing category 4 facilities—something that has been resisted sometimes by one party or the other—is a material consideration when trying to mitigate excessive costs.
Last year’s NAO report set out that in February 2022, the programme had a staff team of 92 full-time equivalents based across multiple sites including Porton Down, London and other regional UKHSA centres, working across programme operations, management, delivery and capability, in addition to construction, finance and commercial and leadership teams. In November 2023, there were 69 FTE staff on the programme. The programme team is made up of civil servants and service providers, and has input from colleagues from other parts of the UKHSA.
It is very ironic to me that as I read over about 13 mentions of Porton Down that I have made in this Chamber over the last 15 years, so many of the Ministers who responded are now either retired, deposed or in the other place. I am concerned that the civil service people, for whom I have great respect having worked closely with lots of civil servants, have been blissfully unaccountable to any enduring authority or direction on this, while all of this work has been going on in the background. That just cannot be right.
Steve Barclay (North East Cambridgeshire) (Con)
As one of the ex-Ministers who is still here, perhaps I can contribute in a spirit of helpfulness to the current Minister. My right hon. Friend and I have discussed this issue many times. I was so concerned by this proposal as Secretary of State for Health and Social Care that I visited Porton Down and gave a very clear steer—not least when I found, to my huge surprise, that the nursery was being closed, which I thought was the wrong decision. He, like me, was Chief Secretary to the Treasury. As Chief Secretary to the Treasury, I gave a very clear steer that I was concerned that this move did not represent value for money, that times had changed and that the proposal was in error. I wonder whether the case study that is being presented to officials and the information that comes to Ministers properly reflects known concerns raised by Ministers, which appear to have been routinely ignored.
John Glen
I am extremely grateful to my right hon. Friend; I recall the many conversations that we had on this matter.
How can we be in a situation where £530 million—Public Health England’s initial estimated cost for the whole programme in 2015—became an estimated £3.2 billion in 2023? I am not sure if that is the very latest figure. Of even greater concern to me is the fact that it was estimated in 2015 that the project would be completed by 2021, yet the best estimate now is that it will not be fully operational until 2036 at the earliest, which is 11 years away. That is if the programme remains at Harlow.
Dr Lauren Sullivan (Gravesham) (Lab)
I had the great fortune to visit Porton Down with the Science, Innovation and Technology Committee and the Defence Committee. As a research scientist who has worked in category 3 suites, seeing category 4 suites at first hand was quite an eye-opener. I saw the incredible dedication of our scientists, who have served this country incredibly well despite the many attacks that have happened. We definitely need to renovate the labs and have a facility that is secure and that helps to support the jobs of scientists across the country.
John Glen
I am extremely grateful to be made aware of the hon. Lady’s visit and of her support for the capabilities that we undoubtedly need in this country.
I will go back to give some context. As I mentioned in the 2010 debate, the Centre for Emergency Preparedness and Response, as it was known and as many—certainly my retired constituents—still refer to it locally, plays a crucial role in the life of this country and has done for more than 100 years. I suspect that one reason why it is a massive challenge to deliver this project is that a lot has happened during the considerable time that has elapsed since 2015, much of it unexpected. As the hon. Member for Strangford (Jim Shannon) mentioned, Porton’s sister establishment, DSTL, was instrumental in dealing with the Novichok attack in 2018 in Salisbury. During covid, the established expertise at Porton was critical in the support of our nation during the vaccine development and testing process.
My hypothesis is that while peacetime, desk-based studies in Whitehall may have favoured Harlow as a hub back in 2015—it may also have been a function of the former Chancellor George Osborne’s PPS being the MP for Harlow—the reality of how the actual needs of the country played out in practice has shown beyond doubt that Porton has remained instrumental in delivering translational health research for our nation in the interim. Instead of that group of civil servants challenging themselves in the light of events, it was more convenient, in an environment where political sponsorship had moved on, for them to keep driving forward the Harlow vision, even when the labs needed conversion, the planning process was delayed and the lifespan of Porton proved to underline the resilience of the Wiltshire site.
That was reinforced to me just three years ago in 2022, when the Health and Social Care Secretary, Sir Sajid Javid, came to visit Porton Down alongside Professor Dame Jenny Harries, the chief executive, to open a new groundbreaking facility. The two-storey, 22,000 square foot building was one of two that made up a new £65 million vaccine development and evaluation centre, which was built to help to develop and licence new vaccines and cement the UK as a global leader in testing against future variants of the virus. At the time, the Department’s press release said:
“Technologies like those at Porton Down are vital to tackling both COVID-19 and a broad range of emerging health security threats, and this has been recognised by the government’s…funding to progress research into vaccines to help future-proof the world from diseases.”
At that point, Jenny Harries said:
“It was a pleasure to be able to tour these…world-class facilities, with the Health and Social Care Secretary…which will help further establish the UKHSA and its Porton Down site as a global leader of vaccine testing and variant research in the fight against COVID-19. The work undertaken…will define the UK’s future pandemic response.”
I was left pondering—while obviously bound by the strictures of ministerial collective responsibility not to ask the question—why, if Harlow was the answer, such significant additional, separate, parallel capital investment was being made at Porton. Porton remains a world leader in examining diseases that spread rapidly, including insect-borne diseases such as West Nile fever and malaria. It is a world-class centre for translational research that helps to ensure new discoveries are developed and translated from the mind of the scientist into real benefits in tested medicines for patients.
Porton routinely works with partners to develop tuberculosis vaccines and vaccines for whooping cough, meningitis and anthrax. Porton has the biggest TB group in Europe. It has an aerosol delivery function using specialist equipment and a settled, secure setting established after many generations of proven delivery for our nation. Porton is routinely used to do work for the US Government. It is one of very few centres in the world with the capability and experienced staff to carry out that work.
The conclusions of the Public Accounts Committee last May raised the most serious potential consequence of continued indecision. It said:
“As more time passes with no decision on this critical programme the risk of a gap in service for the UK’s high containment public health laboratories grows, with concerning implications for our health security.”
Given the significant interim capital investment, there needs to be a serious review of what is going on here. We know about the risk to the 2036 Harlow completion date because of this indecision and the runaway costs. We also know that the best option must be defined swiftly. I think that is delivering a phased refurbishment on existing sites at Porton Down and Colindale, as set out by the UKHSA chief executive to the Public Accounts Committee in March, allowing Porton to continue its proven record of delivering world-class research and ensuring no such gap in our health capabilities.
I respectfully ask the Minister, recognising her limited experience of this issue, but respecting very much the office that she carries, whether she can explain to the House this evening how the country can go from an identified need to upgrade the Porton facilities by the then Health Protection Agency at Porton in 2006, to a situation 19 years later where three business cases have been produced by the Public Health England and the UKHSA project team—by up to 92 people—and the programme still has not received full approval. What about the wishes of some 900 world-class scientists working in south Wiltshire, over 90% of whom, when asked previously by their trade union, did not want to move? When will this decision be made? Given their unique skillsets, how will replacements be found for the large proportion who will not want to be relocated?
I urge the Minister to challenge the documents put in front of her and to actively consider what my right hon. Friend the Member for North East Cambridgeshire (Steve Barclay) has said, given his experience as Chief Secretary to the Treasury and as Secretary of State. Will she consider that, given the investment announced by Sajid Javid three years ago, Porton Down has been equipped to continue to serve the nation far into the future?
Is continuing to pursue the vision of a Harlow hub, with its £3.2 billion price tag and 11-year delivery horizon, throwing good money after bad? We have spent £400 million, and we have £2.8 billion left to find. Effectively, we are clinging to a redundant plan that briefly made sense—just about, although I was never shown or able to see the outline business case 10 years ago—but that no longer truly reflects what we can afford and the realities of this country’s public health and security needs.
The Parliamentary Under-Secretary of State for Health and Social Care (Ashley Dalton)
I thank the right hon. Member for Salisbury (John Glen) for securing this important debate and for his passionate advocacy on behalf of his constituents for the vital work conducted by the UK Health Security Agency at its Porton Down site. I also take the opportunity to recognise the intervention from my hon. Friend the Member for Harlow (Chris Vince) and his passionate advocacy on behalf of his constituents.
Before I come to the decision-making process, I want to use this opportunity to reference some of the incredible work that takes place on the site. Whether it is advancing vaccine development to address global health threats, such as Mpox, or leading the world in evaluating vaccines to ensure that we have effective programmes that save countless lives, Porton Down stands as a pillar of excellence in our national health security infrastructure.
Through the UKHSA science strategy, we are committed to securing health and prosperity with partners in industry and academia. That is why we established the vaccine development and evaluation centre on the Porton Down site, securing learning from the pandemic and advancing our critical research on vaccines. Porton Down’s diagnostics capabilities are equally vital, providing the UK’s only 24/7 service for detecting rare and imported pathogens, including life-threatening diseases such as Marburg virus, Ebola and Lassa fever. The site also plays a unique role in environmental microbiology and biosafety, helping us to understand better how infections spread in real-world settings.
Porton Down’s role does not stop at healthcare. It reaches into our ecosystems, our food chain and our environment. Porton Down is a national leader in medical entomology, including the surveillance of invasive mosquitoes and ticks. Its work ensures that the UK can rapidly detect and respond to vector-borne diseases, protecting the public from threats before they gain a foothold. The site’s food, water and environmental microbiology teams provide additional expertise that is critical to national resilience and the Government’s work on climate change; but, crucially, the work of those globally leading teams requires the best facilities.
As the right hon. Member will know, many facilities on the site are ageing, and I appreciate that the people who work there need clarity on its future as quickly as possible. The Government are thoroughly assessing options for securing the facilities that are required for these highly specialist functions and services in the future.
Chris Vince
I could talk about the benefits of the Harlow site for a long time, and I often do, but on this occasion I will be brief. May I ask the Minister, when the Government are making those decisions, to take account of the fact that the Harlow site is very much shovel-ready and is ideally located, given its strong infrastructure and travel links and its proximity to existing health clusters? The site would very much future-proof this important work.
Ashley Dalton
I can assure my hon. Friend that the benefits of all options will be considered.
Dr Sullivan
Will my hon. Friend also take into account the multidisciplinary roles and spaces involved in the jobs that she has outlined, and the fact that the existence of a hub, with most of those elements together in one place, will stimulate innovation and great healthcare outcomes?
Ashley Dalton
I can assure my hon. Friend, and the House, that all considerations will be taken into account when this decision is made. As I have said, the Government are thoroughly assessing options, including all those that have been raised. Two main options are under consideration: to rebuild and refurbish some facilities at Porton Down and its sister site at Colindale in north London, or to build an entirely new facility in Harlow, Essex. In either event, the staff working in the defence, science and technology laboratory at Porton Down will remain there, and even when a decision is made on those options, nothing will happen overnight. Complexity and rigorous scientific requirements mean that completion will take more than a decade, which is why we continue to invest in maintaining our current site and facilities at Porton Down, with £38.1 million allocated for capital investment in the recent spending review.
The Government are committed to ensuring that we retain the ability to carry out the vital functions of UKHSA Porton Down. Members, the National Audit Office and the Public Accounts Committee have all advocated for an urgent decision, but identifying the right site that delivers on this mission, while ensuring best value for money, is a complex decision and one that we must get right. I can assure the House that extensive discussions are taking place between UKHSA, the Department of Health and Social Care and His Majesty’s Treasury to inform a decision, and I can confirm that this decision will be taken as part of the spending review, which will conclude next month.
Steve Barclay
Having had the opportunity to be involved in spending reviews, I would be interested to know the current provision for this scheme in the budget over the next three years, because alongside assessing the benefits, there will be the simple question of what is affordable. The NAO has set out an estimate of over £3 billion for the overall cost, but what has the Department provisioned for the spending review period?
Ashley Dalton
I do not currently have the detail on that, but I will write to the right hon. Gentleman following this debate. I can confirm that he knows as much as I do about what might be in the spending review, because those decisions have yet to be made, but more information will be made available as soon as possible.
As the Secretary of State said earlier this year,
“The worst decision is indecision”,—[Official Report, 13 March 2025; Vol. 763, c. 1295.]
and this Government are committed to sorting out this issue once and for all. A decision will be made in a matter of weeks. In anticipation of that decision, UKHSA is taking steps to prepare to remobilise the programme at pace. It recently invited the Government Internal Audit Agency to conduct a short review of its remobilisation plans as part of its commitment to ensure that there is maximum transparency and rigorous assessment of the programme. The agency has also obtained advice from the National Infrastructure and Service Transformation Authority.
I am sure that colleagues from across the House share my view that the work conducted at Porton Down is critical to protect the country. The recent pandemic put into sharp focus how this work is fundamental to keeping us all safe. Although there is still the outstanding question of how we can best preserve the facilities for the country, whatever decision we take will be made in full consultation with the staff at Porton Down, whose critical skills are highly valued by us all.
I thank the right hon. Member for Salisbury again for raising this vital issue, and all Members who have intervened in the debate. I commit to updating him on progress once a decision is made.
Question put and agreed to.