House of Commons
Oral Answers to Questions
(1 day, 17 hours ago)
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Alex Ballinger (Halesowen) (Lab)
The Parliamentary Under-Secretary of State for Energy Security and Net Zero (Michael Shanks)
The Government are committed to strengthening collective bargaining and trade union recognition. The Employment Rights Bill and the plan to make work pay will modernise rights and improve conditions. The Office for Clean Energy Jobs engages unions to ensure that renewable energy jobs support economic growth, the net zero transition and workers moving from carbon-intensive sectors.
Alex Ballinger
Many of my constituents in Halesowen work in energy-intensive industries such as forges and heavy manufacturing. The Government are rightly supporting those industries to become more energy-efficient, but workers need new skills, as well as skills in the many new jobs in the renewable energy sector. As they make this transition, how is the Department supporting workers in the west midlands to get the right skills for these new industries?
Michael Shanks
My hon. Friend is right to raise that point. Supporting workers in energy-intensive industries is essential as we transition our economy. The Government will provide over £1.2 billion per year in skills funding by 2028-29, supporting training in renewables, low-carbon construction and advanced engineering. We are also investing over £100 million over three years to develop engineering skills in England and launching new technical excellence colleges to make sure that training stays aligned with employers’ needs. We will also push forward on the clean energy workforce strategy this year.
Mary Glindon (Newcastle upon Tyne East and Wallsend) (Lab)
The Secretary of State for Energy Security and Net Zero (Ed Miliband)
The industrial strategy published last month set out our plans to build clean energy supply chains in the UK, including a new £1 billion fund through Great British Energy to partner with the private sector to create jobs in Britain and the new clean industry bonus, which has the potential to unleash billions of pounds of private investment in offshore wind supply chains. We are determined that the clean energy future will be made in Britain.
Mary Glindon
The power cables over the Tyne are a barrier to businesses securing work for large renewable energy structures, risking possible net GVA benefits of up to £1.2 billion. It has been proposed that the removal of the cables will be completed in 2032. Will the Secretary of State help me push for it to be brought forward so that Tyneside is not held back in the global race for green jobs?
Ed Miliband
First, I congratulate my hon. Friend on being such a brilliant champion of the port of Tyne and what it offers, and she is right to draw attention to this important issue. Approval of any works to reroute the line is a matter for Ofgem, but we stand ready to engage with her and, indeed, Ofgem to try to bring this forward. I suggest that my hon. Friend the Energy Minister meets her to discuss this important issue.
Wera Hobhouse (Bath) (LD)
Despite the growing need for green jobs—obviously, we are all in favour of making sure we have green jobs—fewer than one in 10 employees receive any dedicated green skills training, according to an OVO Energy survey. What can we do to support businesses, and what can the Government do to accelerate that important training programme in all businesses where we need green jobs?
Ed Miliband
The hon. Lady raises an important issue. Later this year, we will publish a clean energy skills plan to address precisely this question: how do we make sure we equip workers with the skills they need to take advantage of those jobs? That is being led by my right hon. Friend the Education Secretary in the work she is doing with Skills England, but there is a whole range of things we can do. For the first time, the Government will publish what the skills needs are for clean energy jobs and how we will meet them, which will be an important step forward.
Dr Marie Tidball (Penistone and Stocksbridge) (Lab)
As people fly off for their summer holidays, the chances are that the steel in the aeroplane’s engine comes from the Stocksbridge Speciality Steels plant in my constituency. I am hopeful about the news that Liberty Steel, which owns the site, has attracted potential investors for this asset. The asset is essential for our national security and provides opportunities for net zero infrastructure, including wind turbines. However, uncertainty about the firm means that pension contributions have not been paid to the skilled workforce for 10 months, causing significant worry and anxiety for 600 local steelworkers. What reassurances can the Secretary of State provide to Stocksbridge steelworkers about how the outstanding pension contributions will be paid, including in any future ownership arrangements?
Ed Miliband
My hon. Friend raises an important issue about her constituency and the steel industry, and I would say two things. One is that what this Government have done, which I am afraid was not done previously, is set up a dedicated fund for steel so that we are able to make the green transition. We talked about this in opposition, and we are now delivering billions of pounds to help the steel industry transition. The other is that I will take up the specific pensions issue she raised with my right hon. Friend the Business and Trade Secretary.
Graham Leadbitter (Moray West, Nairn and Strathspey) (SNP)
The workers of Grangemouth deserved far better than they got from the Labour Government. To add insult to injury, they have had to watch them pull out all the stops for Scunthorpe and Prax Lindsey. In a written answer to me, the Energy Minister refused to confirm how much money the UK Government had spent to continue operations at Lindsey. Will the Secretary of State now come clean and tell us what price they are willing to pay to save jobs in England, which they were not willing to pay to save Grangemouth in Scotland?
Ed Miliband
The hon. Gentleman is so wide of the mark it is unbelievable. The Grangemouth closure was foreshadowed before this Government came to power. We have worked hand in glove with his colleagues in the Scottish Government—all the way along, Gillian Martin and I have been working on it—and for him to try to make party politics out of the issue is, frankly, a disgrace.
Andrew Bowie (West Aberdeenshire and Kincardine) (Con)
The British oil and gas industry is a resilient sector—it has had to be, given this Government’s actions over the past year—and it takes a lot to shock it, but shocked it was when, on 2 July, sadly the Energy Minister claimed to the Scottish Affairs Committee that there was no “material difference” between oil and gas imports and production from the North sea. Might the Secretary of State take this opportunity to apologise and clarify those remarks, because thousands of workers in the energy industry supply chain in Aberdeen and across the UK are very worried that the Department has such scant regard for them, their work and this world-leading industry?
Ed Miliband
First of all, Mr Speaker, let me congratulate the hon. Gentleman on his promotion to shadow Secretary of State. [Laughter.] On the specific issue he raises, we will take no lectures from the Conservatives. Some 70,000 jobs were lost in the North sea on their watch. And here is the difference: we are building the future. The Acorn project was talked about for year after year by the Conservatives but nothing was done. This Government are delivering.
Andrew Bowie
The Secretary of State will not apologise. That is absolutely fine. The industry already knows that this is a Government who want nothing to do with it, and who take every opportunity to talk it down and make every effort to shut it down. In that same session last week, the Minister who is sitting to the Secretary of State’s left also claimed that
“much of the gas that is extracted from the North sea is exported”.
That is simply not true: 100% of all the gas extracted from the North sea is used in Britain. The Secretary of State knows that, so why is he so determined to talk down this industry, spout falsehoods and myths, drive investment out of the UK, rely more on imports and, crucially, cost people’s jobs and drive the skills we need out of this country? That is exactly what he and his colleagues are doing.
Ed Miliband
Here is the difference between them and us. They would keep us hooked on fossil fuels for time immemorial. They have learned not a single lesson from the disaster they inflicted on this country: family finances ruined; business finances ruined; public finances ruined. A year on, there is not a word of apology.
Emma Foody (Cramlington and Killingworth) (Lab/Co-op)
Noah Law (St Austell and Newquay) (Lab)
Chris Vince (Harlow) (Lab/Co-op)
Katrina Murray (Cumbernauld and Kirkintilloch) (Lab)
The Secretary of State for Energy Security and Net Zero (Ed Miliband)
Since coming to office, the Government have shown how clean power can create jobs across our country, with thousands of jobs in nuclear, through our investments in Sizewell C and small modular reactors; in carbon capture and storage; in offshore wind; and in home heating through our warm homes plan. This is what it means to deliver reindustrialisation through our clean energy sprint.
Emma Foody
I thank the Secretary of State for that answer. The north-east is uniquely placed to be the home of the green energy revolution, with the expansion of the Energy Academy in north Tyneside providing a skills pipeline. How will the clean energy industries sector plan help to provide long-term certainty for investment and deliver good quality jobs for communities across my Cramlington and Killingworth constituency and the north-east?
Ed Miliband
I see the north-east as an absolute powerhouse for the clean energy jobs we want to create. Early on in this Government, we did something which again had been talked about for years by the Conservative party in delivering the east coast carbon capture, usage and storage cluster, which is projected to create thousands of jobs, including benefits for my hon. Friend’s constituency. It is not just the direct jobs that will be created, but jobs in the supply chain. We have an opportunity—the north-east will be at the heart of this—to lead in the clean energy jobs of the future.
Noah Law
I declare an interest as the chair of the all-party parliamentary group on critical minerals. Building local supply chains in Cornwall is one of the primary means by which local people can benefit, if we are to dig nearly £1 billion-worth of stuff out of the ground every year or pump 95 GW of offshore wind power onshore. Therefore, what steps is the Secretary of State taking to ensure that supply chain businesses, particularly those of the size we have in Cornwall, and their workforces get the support they need, so that workers and local communities may share in the spoils of that investment?
Ed Miliband
Let me first say how much I love Cornwall. I love Cornwall for many reasons, but one reason I love it is the opportunity it offers to drive the jobs of the future. I know from my visit that, whether it is through critical minerals, geothermal or offshore wind, there are huge opportunities in Cornwall. That is what the industrial strategy is designed to superpower. That is what the huge investments my right hon. Friend the Chancellor made in the spending review will provide. As part of our clean energy workforce strategy later on this year, Cornwall will be at the heart of it.
Chris Vince
I know that the Secretary of State loves Harlow as well. Does he agree that the historic investment in clean energy secured at the spending review will mean thousands of job opportunities for young people, including in Harlow, in renewable energies, nuclear, energy efficiency and so much more?
Ed Miliband
I love Harlow, Mr Speaker, and I love Harlow college. The visits I have made to the college have been incredibly inspiring; I have seen with my own eyes the enthusiastic young people there and spoken to them about green skills and the jobs of the future. When I think about what this Government intend to deliver, it is absolutely about my hon. Friend’s constituents in Harlow.
Katrina Murray
Will the Secretary of State join me in congratulating TK Murray Ltd—no relation, honest—an energy-saving contractor based in Kilsyth, on having already cross-trained more than half its workforce to become fully fledged installers of air source heat pump technology from gas boilers? This has been facilitated by Warmworks, which has developed a supply chain of more than 30 small and medium-sized enterprises to make more than 750 green jobs a reality.
Ed Miliband
I love Cumbernauld, Mr Speaker. My hon. Friend raises the important opportunities in heat pump technology. The growth in heat pumps that we are seeing is not just about a better deal for consumers, but about the manufacturing that we can see. My hon. Friend has given a great example of that.
Mark Pritchard (The Wrekin) (Con)
If the Secretary of State loves Shropshire, and I am sure he does, I hope he will not bulldoze over all our green belt—but that is another story for another day.
The Secretary of State talks about green jobs. I am sure he does not want our fire services to be deployed more and more, but with solar energy feeding into battery energy storage systems, there is real concern at Shropshire fire service and across the country that there will be fires that are very difficult for our fire services to control. Does the Secretary of State agree that our fire services should be a statutory consultee on future planning applications for battery storage?
Ed Miliband
This is an important issue that we need to take seriously. At the moment, it comes under the health and safety regime, but we are consulting on the best arrangements to ensure that we have the highest standards of safety. There are high safety standards in place, but as we see the growth of batteries, we will endeavour to ensure that those standards are maintained.
Alison Bennett (Mid Sussex) (LD)
It goes without saying that I love Burgess Hill. One brilliant business there is Steve Willis Training, which is this week celebrating 25 years in business, training the region’s future electricity, plumbing and heating engineers. Does the Secretary of State agree that such businesses are vital in delivering the skills of the future, and will he join me in congratulating Steve Willis Training on being a brilliant family business that provides key skills to the south-east?
Ed Miliband
I warmly congratulate Steve Willis Training on its 25 years in operation and on the work it is doing. The hon. Lady makes an important point: we can help to create jobs in the private sector, but the question then is whether people will have the skills to fill them. Organisations and companies like Steve Willis Training are fundamental to that. Sometimes it requires lots of training; sometimes it requires shorter amounts of training to retrain people in new technologies like heat pumps. It is vital that that training happens.
Mr Richard Holden (Basildon and Billericay) (Con)
People across Basildon and Billericay, and indeed across the country, want to see more jobs in energy production and to see cheaper energy. What they do not understand is why the Government are backing some but not all forms of energy. Why are the Government insisting on shipping jobs in oil and gas abroad, rather than keeping them here while investing in green energy at the same time?
Ed Miliband
The answer is that we are not. As the right hon. Gentleman knows, the reality is that the North sea has been a basin in decline and that 70,000 jobs were lost under the previous Government. The question is: do we create the jobs of the future as well as maintaining existing fields for their lifetime? This Government are committed to doing so. If he wants to see those jobs, he should support our plans.
Seamus Logan (Aberdeenshire North and Moray East) (SNP)
Tempted as I am to wax lyrical about the beauties of Aberdeenshire, I will instead ask the Secretary of State a very simple question. By this time next year, how many jobs will GB Energy have created in Aberdeen and Aberdeenshire?
Ed Miliband
GB Energy will create thousands of jobs across the country, including in Aberdeen. Here is why GB Energy really matters: we have chosen to put its headquarters in Aberdeen, as we recognise that Aberdeen is the clean energy capital of our country—not just for oil and gas, which is important, but for the future. SNP Members are chuntering on the Front Bench, but they never did anything to create that future for people in Aberdeen.
Calum Miller (Bicester and Woodstock) (LD)
The Parliamentary Under-Secretary of State for Energy Security and Net Zero (Michael Shanks)
We are working with Ofgem and the National Energy System Operator to accelerate network infrastructure through reforms to planning, supply chains and other areas, delivering the capacity needed to achieve clean power by 2030 and to drive economic growth.
Calum Miller
In my constituency of Bicester and Woodstock, the local plan anticipates significant new employment sites to create jobs and growth. Tritax Big Box tells me that it wants to put solar panels on 100% of usable roof areas on the buildings that it intends to create. Local planning policies would support that, yet I was shocked to learn that Tritax expects to install solar panels on only 25% of usable roof space. It cannot get a permit to generate electricity or consent to export to the grid. Will the Minister or his officials meet me to discuss how we can turn this into a win-win opportunity for rooftop green solar?
Michael Shanks
That sounds like a fantastic opportunity. Our ambition is to see solar panels on as many rooftops across the country as possible. It is a win-win opportunity, as the hon. Gentleman rightly puts it. He and I have spoken about a number of these issues previously, and I am happy to discuss this one with him. If he could write to me with the specifics, we will certainly look at the matter. In the meantime, we are looking at reforming all those processes to make sure that we can get as much power as possible.
Bill Esterson (Sefton Central) (Lab)
The challenges of increasing electricity grid capacity include the ability to get planning consent and to achieve grid connections, as the Minister knows. In the report that the Select Committee published last week, we referred to the problem of inconsistency in some of the guidance and energy plans over which comes first—the grid connection or the planning consent. Will the Minister please address that and ensure that the Government clear up that inconsistency, so that we can move forward with increasing electricity generation and grid capacity?
Michael Shanks
I thank my hon. Friend for the question and for the work that he and the whole Committee have been doing on this matter. His report has been my bedtime reading every night this week as it is an important piece of work. He is right about two things. First, where processes are not as well aligned as they should be, we absolutely need to look at what we can do to make sure that they work much more coherently. The second point his report made, which we are also looking at, is how we bring together things such as the strategic spatial energy plan, the holistic network design and the land use framework to make sure that we have coherent plans across the country, so that we can plan properly our energy system.
Shaun Davies (Telford) (Lab)
The Parliamentary Under-Secretary of State for Energy Security and Net Zero (Miatta Fahnbulleh)
We know that the cost of energy is a huge challenge to businesses across the country. That is why our mission to deliver clean power by 2030 is so important: that is how we will get bills down for good. While we try to get there, we are taking action to support businesses, including through the new British industrial competitiveness scheme, which will reduce electricity costs by around 20% to 25% for more than 7,000 businesses.
Shaun Davies
When the Government help businesses reduce energy costs, including by aiding their transition, businesses such as the pubs and cafés in Dawley, Madeley and Oakengates and manufacturers on Stafford Park and Halesfield can then protect and create jobs and pass on savings to customers. Will the Government back those businesses and ask the energy giants, which continue to make tens of billions of pounds of profit, to pay for it?
Miatta Fahnbulleh
My hon. Friend is completely right to stress the challenges faced by businesses. The Government are committed to backing businesses. We are working with the regulator to make sure that the system is fair for everyone and, as is set out in our industrial strategy, from 2027 the new British industrial competitiveness scheme will reduce electricity costs by up to £40 per megawatt-hour, which will benefit thousands of electricity-intensive industries, including the ones in his constituency. We are very clear that we are backing businesses, and we will do everything we can to support them in driving down bills.
Martin Vickers (Brigg and Immingham) (Con)
Energy costs are an issue that the Prax oil refinery has brought to my attention over the years as a problem it has been facing. I appreciate the calls I have had with the Minister for Energy about this. I was able to visit the plant on Friday, and there was clearly growing concern, with hundreds of jobs at risk. What assurance can the Minister offer my constituents who are affected by this situation?
Miatta Fahnbulleh
The hon. Member is right to raise this situation; we know that it is very difficult, and we have been engaging on it. There have been long-standing issues with how the plant is run. We are trying, across the piece, to support businesses to make the transition—and support them within the transition—so that we can protect jobs across the country.
Nick Timothy (West Suffolk) (Con)
When the price cap fell last month, the Labour party boasted, “£129 off your bills, delivered by Labour”. The Minister knows that energy bills fell as wholesale gas prices fell, and she knows that her policy is to take the country off gas and keep increasing policy costs on bills. That is why she refuses to repeat the claim. Will she take this opportunity to apologise for her party saying something that she knows is untrue?
Miatta Fahnbulleh
Every time the hon. Member stands up to speak, I hold my head in absolute frustration. He is gambling with fossil fuels, and quite frankly the Conservatives should hang their heads in shame. Energy bills rocketed under their watch and they did nothing about it—they were happy with that. That is not a legacy that we are willing to contend with, which is why we are taking action in the short term to drive down bills through our sprint to clean power. Their legacy is one they should be ashamed of, so they should not be lecturing us.
David Taylor (Hemel Hempstead) (Lab)
Adam Thompson (Erewash) (Lab)
The Parliamentary Under-Secretary of State for Energy Security and Net Zero (Michael Shanks)
The clean power 2030 action plan makes it clear that nuclear will play an important role in our future energy system, providing low-carbon baseload power to the grid. We are delivering the biggest new nuclear building programme in a generation, having committed almost £17 billion at the recent spending review.
David Taylor
I was grateful to the Secretary of State for showing his love for Hemel Hempstead when he came to launch a new scheme on solar panels the other month. On the question of new nuclear and clean jobs, could the Minister outline how communities like mine in Hemel Hempstead will benefit from these new jobs?
Michael Shanks
Well, my right hon. Friend the Energy Secretary says that we love Hemel Hempstead; I think we agree on that. The nuclear sector is poised for significant growth. That will help deliver on our energy needs in the future, and it is how we will deliver thousands of skilled jobs across the country. The nuclear skills plan is a collaborative effort between Government, industry and academia, setting out the targeted work we need to address the skills gap and bring forward the thousands of apprentices we will need to deliver this work in the future. The regional skills hubs we have established will help to deliver training support locally to ensure that every community in the country benefits.
Adam Thompson
Rolls-Royce in Derby has recently been announced as the preferred bidder for the delivery of small modular reactors, which means that many of my Erewash constituents will become the beating heart of the workforce that delivers the reactors. Can the Minister explain how Derbyshire’s finest SMRs will help to end our reliance on foreign oil and gas?
Michael Shanks
My hon. Friend is absolutely right; the Government are committed to delivering a new golden age of nuclear, securing an abundance of clean power after 14 years of dither and delay from the Conservatives, and with that will come investment across the country. On 10 June, following a robust two-year process, Great British Energy Nuclear selected Rolls-Royce SMR as its preferred bidder to deliver the UK’s first small modular reactor, subject to final Government approvals and contract signature. The Government are making available £2.5 billion across the spending review to enable this to be one of Europe’s first SMR programmes.
Jim Shannon (Strangford) (DUP)
I have always been a supporter of nuclear power. Unfortunately, we do not have access to nuclear power in Northern Ireland, but I know from discussions with the Minister that he is very keen to ensure that modular nuclear power opportunities are available in Northern Ireland. Business that I have spoken to want access to these opportunities, as does the Northern Ireland Assembly. I know that the Minister is always committed to trying to make things better, so has he had an opportunity to talk to the relevant Minister in the Northern Ireland Assembly about ensuring that access to modular nuclear power is available to us in Northern Ireland?
Michael Shanks
I regularly engage with Ministers in the Northern Irish Executive, including in the Department for the Economy, which has responsibility for energy policy in Northern Ireland, and we discuss a range of issues. We are happy to support the Northern Irish Executive in any way we can, either with technology or through rolling out the regulatory framework. We are really excited about the opportunities posed by SMRs and are happy to discuss that in Northern Ireland as well.
Wendy Morton (Aldridge-Brownhills) (Con)
Sir John Whittingdale (Maldon) (Con)
The Parliamentary Under-Secretary of State for Energy Security and Net Zero (Miatta Fahnbulleh)
We understand that high energy bills are a challenge for businesses, and particularly energy-intensive companies. We are clear that, in the long term, our mission to deliver clean power is the only way to bear down on that cost. But while we get there, we are providing the support needed through the British industrial competitiveness scheme and the supercharger scheme, protecting over 7,000 businesses.
Wendy Morton
The UK’s industrial electricity prices are among the highest in Europe, and it is quite clear that the Government’s current policies are failing manufacturing businesses in constituencies such as mine. Will the Minister commit to introducing support that genuinely reduces electricity costs for manufacturers, including by tackling high wholesale energy prices, rather than prolonging the uncertainty, which sadly puts local jobs at risk?
Miatta Fahnbulleh
I gently remind the right hon. Member that industrial energy prices rocketed on the Conservatives’ watch. Gas prices for non-domestic companies went up by 170%, which was catastrophic for UK plc. We are taking action to support businesses through our sprint to clean power and, critically, the measures we are providing through the British industrial competitiveness scheme. Those measures have been supported by Make UK, the British Chambers of Commerce, UK Steel and the Chemical Industries Association. The Conservatives dithered, delayed and did nothing to support businesses; we are cracking on and getting on with the job.
Sir John Whittingdale
On Friday, I visited C&M Precision Ltd, a small manufacturing company in my constituency. Electricity represents easily its biggest cost. What is the Minister doing to listen to small and medium-sized enterprises like C&M who feel that their voice is simply not being heard?
Miatta Fahnbulleh
We are listening to businesses, particularly small and medium-sized businesses. We have heard companies complain, for example, about being locked into expensive fixed-term contracts. That is why Ofgem is working to deliver blend-and-extend contracts so that businesses can benefit from lower prices. We have heard their frustration at the lack of a redress system, which is why last December we expanded the ombudsman service to 99% of businesses so that they can get redress and financial awards of up to £20,000. We have also heard their frustration about energy brokers, which is why we have consulted on introducing regulation of third-party intermediaries. We will respond in due course.
Mike Reader (Northampton South) (Lab)
Last week, the Energy Security and Net Zero Committee heard from Make UK and representatives from the chemical, petrochemical, steel and ceramics industries that closer alignment and collaboration with the EU on energy pricing is critical to reducing bills. That is also recognised in the Government’s industrial strategy. What more is the Department doing to bring that forward quickly?
Miatta Fahnbulleh
My hon. Friend makes a good point. Industry voices have been calling for that close alignment, particularly on the emissions trading scheme—we have heard that from UK Steel, the CBI, Make UK and the Energy Intensive Users Group—and we believe that those stronger linkages are the right thing to do to cut red tape at the border, to protect consumers from higher costs and, critically, to boost trade and growth, which the Government are absolutely committed to doing.
Alistair Strathern (Hitchin) (Lab)
One way to drive down energy costs, including for energy-intensive industries, could be to help cut curtailment costs by encouraging the co-location of new energy-intensive industry sectors with some of the renewable sectors that we are currently having to pay to switch off. As we start to roll out more data centres across the country, what conversations have Ministers had about how such centres could be optimally located to help reduce our energy bills at the same time?
Miatta Fahnbulleh
My hon. Friend makes a good point, as always. We in the Department are working across Government—as part of the AI Council as well as with colleagues in the Department for Business and Trade—to ensure that we have the co-ordination and collaboration to support businesses on the ground.
Marsha De Cordova (Battersea) (Lab)
The Parliamentary Under-Secretary of State for Energy Security and Net Zero (Michael Shanks)
We will continue to support new renewables through the contracts for difference scheme in conjunction with initiatives such as the warm homes plan, the future homes standard and the boiler upgrade scheme. Great British Energy and Great British Energy Nuclear will together invest more than £8.3 billion over this Parliament in home-grown clean power.
Marsha De Cordova
I welcome the Government’s mission to achieve clean power by 2030. I know that the Minister will agree that it is vital that we make the transition to net zero as quickly as possible, not only to fight climate change but to lower energy bills. Does he agree that whereas previous Governments have failed to deliver for the British people, our plans are the single best way to bring down energy bills for families, including in my Battersea constituency, and to provide them with much-needed energy security?
Michael Shanks
I completely agree. My hon. Friend makes the point that this is not just about action on the climate—as important as that is—and creating thousands of new jobs, but about bringing down bills and, crucially, delivering on that energy security point. The truth is that even though our clean power mission is about doing all four of those things at the same time, the Conservative party opposes all of that action, would leave us much more vulnerable to the volatility of the fossil fuel markets, and would turn its face against the economic opportunity of the 21st century.
Sir Jeremy Wright (Kenilworth and Southam) (Con)
The Minister will recognise that one way to increase the supply of clean energy is to enable community energy projects to supply local energy markets. When Ministers are asked about that, as he knows they have been many times, they generally say that there is no technical obstacle to it happening, but will the Minister recognise that there is world of difference between, on the one hand, something being technically possible and, on the other, that same thing being facilitated and encouraged so it really happens? Will he focus on the latter as the Government develop their energy market reforms?
Michael Shanks
I completely agree. The right hon. and learned Gentleman is absolutely right: there are no technical barriers to doing it, but that does not mean that it is a straightforward process. To be honest, things that I thought would have been much more straightforward, like how we define “community”, are more difficult to get right, but we are absolutely determined to do it. He is right to make the point about delivering clean power that benefits local communities, so that they can buy it locally and really see the benefit of hosting it. That is exactly what we are determined to do and we will continue to work to make it happen.
Luke Akehurst (North Durham) (Lab)
The Parliamentary Under-Secretary of State for Energy Security and Net Zero (Miatta Fahnbulleh)
We know that households are under huge pressure with the cost of living, and energy costs are a big part of that. The expansion of the warm home discount scheme will mean that nearly 3 million more families will receive vital support with their energy bills this winter. This will provide much-needed help at a time when people desperately need it.
Luke Akehurst
Will the Minister confirm how many residents in my North Durham constituency will benefit from the extension of the warm home discount to all households in receipt of means-tested benefits?
Miatta Fahnbulleh
Sadly, we do not have data at constituency level, but I can tell my hon. Friend, who is a brilliant champion for his constituency, that around 100,000 extra households in the north-east will benefit from the expansion—an increase of around 50%.
Mr Gregory Campbell (East Londonderry) (DUP)
The Minister will be aware that many homes, particularly in rural areas, are older properties that are difficult to insulate. Does she agree that we all need to concentrate on those older types of properties, many of which are the homes of elderly people who cannot afford expensive energy? We need to concentrate on ensuring that those homes are properly insulated and that the warm home discount scheme is extended to such properties.
Miatta Fahnbulleh
The hon. Member makes an important point. We are very clear that we need to make sure that we have the right solutions for every household, including those in rural communities. I have met representatives from rural communities, councils, Members and some of the companies that are trying to do work in rural communities. We are absolutely committed to getting this right as part of the warm homes plan.
Jess Brown-Fuller (Chichester) (LD)
The Secretary of State for Energy Security and Net Zero (Ed Miliband)
Since the election last year, we have secured over £50 billion of investment into the UK’s clean energy industries. Last year’s renewables auction for allocation round 6 was the most successful in our history, and we will shortly open the AR7 auction. This is the way to deliver energy security, lower bills and good jobs for our communities.
Jess Brown-Fuller
Private sector investment via community energy schemes is a popular way of engaging people to get behind renewable energy projects in their area. A great example is Meadow Blue Community Energy in my constituency of Chichester, which puts money back into the community with a grant scheme and is now funding solar panels on local school roofs. Does the Secretary of State agree that community energy projects would attract more private sector investment if grid access costs were reduced and the delivery of local supply was made easier?
Ed Miliband
The hon. Lady raises an important issue, which was also raised by the right hon. and learned Member for Kenilworth and Southam (Sir Jeremy Wright). She is right about the virtues of community energy. Great British Energy is going to partner with local communities to deliver community energy up and down the country, because sometimes public capital—it could be loans, it could be grants—can help lever in the private capital that we need. She is also right about some of the barriers, as the Energy Minister mentioned. I want to assure her that we are going through the different barriers in granular, nerdy detail to see how we can break them down.
Torcuil Crichton (Na h-Eileanan an Iar) (Lab)
I must declare an interest as a crofting tenant of Knock and Swordale common grazing, as good a definition of a community as you can ever get, but Knock and Swordale, along with several other community power schemes in my constituency, cannot get grid connections except through active network management connections, which basically means that the communities can supply power to the grid only when the big boys—the commercial companies—are not doing so. These connection offers are next to useless, and the National Energy System Operator, Ofgem and the transmission companies have to be told from this Dispatch Box that they cannot be agnostic about what kind of grid connection they offer and to whom. They must put communities first if communities are going to support this transition.
Ed Miliband
My hon. Friend, who I have talked to on a number of occasions about these wider issues, raises a really important point. I was just talking to the Energy Minister about it. Let me take away my hon. Friend’s point about access. We are committed to driving forward community energy, and we will talk to NESO and Ofgem to get it right and make sure it happens.
Matt Turmaine (Watford) (Lab)
The Parliamentary Under-Secretary of State for Energy Security and Net Zero (Kerry McCarthy)
Yesterday, the Secretary of State made an incredibly important statement to this House outlining the crises we face when it comes to climate change and the decline of nature. Tackling this starts with being honest about the science and what the experts are telling us. We know that we can only have climate security for future generations by acting at scale today.
Matt Turmaine
I thank the Minister for her answer. Energy security is important not just to help bring bills down now. Does the Minister agree that it is also vital for the future and for protecting future generations, including in my constituency of eminently lovable Watford, because those young people are the ones who will face the climate change consequences in the years to come?
Kerry McCarthy
As someone who grew up in Luton, I am not sure I am allowed to say that I love Watford, because there is an age-old rivalry there—but yes, we know that acting now with our clean energy superpower mission, scaling up renewables, reinforcing the grid and reducing our reliance on volatile fossil fuel markets will mean a cleaner, more secure future for generations to come. That is why, unlike the Conservatives, we are following the science and showing the leadership that is needed at home and abroad.
Graham Stuart (Beverley and Holderness) (Con)
Around Beverley, there are proposals for five solar farms, totalling 465 MW. Can the Minister assure my constituents that the scientific evidence that will be used to assess this will include the cumulative impact of these projects on the area around Beverley?
Kerry McCarthy
Yes, of course we look at the cumulative impact of these developments. Having been in the Department, the right hon. Gentleman will know that we have an excellent team of scientists led by Professor Paul Monks, who I want to pay tribute to because he is standing down later this year. I am sure the right hon. Gentleman would want to do so too.
Mr Speaker
I call the shadow Secretary of State—and congratulations on your marriage!
Claire Coutinho (East Surrey) (Con)
Thank you, Mr Speaker.
The Secretary of State tried to argue yesterday that he is a climate change believer and everybody else who disagrees with him is a denier, because he does not want to engage with any legitimate criticism of his policies. He is offshoring British industries—in other words, replacing British goods with dirtier imports with higher emissions. Can the Minister confirm what the scientific evidence is that doing so will help to tackle climate change?
Kerry McCarthy
Perhaps if the right hon. Member had been here yesterday, she would have been able to engage with the Secretary of State on this. The science is absolutely clear: every avoided fraction of a degree of warming makes a difference to the severity of climate impacts. That is why the Prime Minister went to the global leaders summit at COP29 last year to announce a new 1.5°C-aligned nationally determined contribution, and we will continue to show international leadership.
Christine Jardine (Edinburgh West) (LD)
The Parliamentary Under-Secretary of State for Energy Security and Net Zero (Miatta Fahnbulleh)
The Government have stepped in to ensure a more controlled and carefully managed phase-out of the radio teleswitch service. I have been engaging directly on this and meeting Energy UK and Ofgem fortnightly to discuss progress and the suppliers’ phase-out plan. My focus and priority is absolutely clear: to ensure that there is no impact on consumers and that we minimise any consumer detriment.
Christine Jardine
I welcome the Government’s change in course, because the previous hard deadline would have left many people, including people in my constituency of Edinburgh West, vulnerable and, indeed, unaware that there was any need to change their meter, but there is still a big problem in Scotland, as 100,000 people are still waiting on meters, and may be unaware of this issue. On engaging with the community, will the Minister please tell us what she is doing in Scotland to ensure that rural communities are approached about this, and vulnerable people get protection?
Miatta Fahnbulleh
We have been working closely with the Scottish Government and engaging with Scottish MPs. We know that about 97,000 meters needs to be replaced in Scotland. All those households have been contacted multiple times. In addition, because we know that there are particular challenges in some rural communities, we have done a sprint, in which suppliers are working in collaboration with the local authority to bring down the number of replacements needed. I can reassure the hon. Member that no area will be switched off without us contacting consumers to inform them, without us allowing them to book in emergency appointments, and, critically, without us informing MPs and local authorities, so that we do this in the best possible way.
Peter Swallow (Bracknell) (Lab)
The Parliamentary Under-Secretary of State for Energy Security and Net Zero (Kerry McCarthy)
The Climate Change Committee report made clear the progress we have made in the past 12 months on overturning the terrible legacy of the Conservatives, who turned their back on climate action. We know that clean power is the route to energy security, lower bills and good jobs. It is a shame that the Tories and Reform are still stuck in the past.
Peter Swallow
The Climate Change Committee says that the UK should be proud of its approach to consistent and sustained decarbonisation, but there is much more to do. This week, Bracknell Forest Community Climate Action is hosting a summit to discuss what can be done locally to address climate change and support nature. Does the Minister agree that local initiatives like this demonstrate the strong public support for action on climate change?
Kerry McCarthy
We know that there is strong public support, and we are keen to engage more at a local level with groups like Bracknell Forest Community Climate Action. That is why we have set up the local net zero delivery group to work with councils and mayors, and why we will produce a public participation strategy later this year. I very much hope that my hon. Friend’s constituents will get involved in that.
Dr Danny Chambers (Winchester) (LD)
Will the Minister join me in congratulating the fantastic Lib Dem-run Winchester city council on being rated the greenest council in the UK by Climate Action UK? That is a lot of work by politicians, and it shows what politicians who dearly believe in this issue can achieve if they crack on and deal with it, rather than weaponising it in some kind of culture war.
Kerry McCarthy
I am happy to join the hon. Member in congratulating his local council. I visited the Local Government Association the week before last, I think, with the local net zero delivery group, on which we have representation from all areas of local government. I am keen to learn from the best and translate that into action for others who need a bit more encouragement.
Helen Maguire (Epsom and Ewell) (LD)
The Parliamentary Under-Secretary of State for Energy Security and Net Zero (Michael Shanks)
Our clean power 2030 action plan sets out our pathway to delivering clean power. To support that plan, we recently launched the solar road map, which confirms plans to increase domestic solar installations through the future homes standard and warm homes plan.
Helen Maguire
Over 50% of our food and £2.7 billion in lifesaving medicines depend on the cold chain, but operators face soaring energy costs and growing grid instability. In Epsom and Ewell, Sunswap is pioneering battery and solar-powered refrigeration, which cuts emissions while protecting vital supply chains. Will the Minister commit to targeted support for renewable energy innovators like Sunswap, whose technology can strengthen both sustainability and national resilience?
Michael Shanks
The hon. Lady is right that we have an enormous amount of innovation in this space and real potential to meet our future needs, not just as a result of the pathway that we have outlined, but through innovative solutions like the one she mentioned, which provide specific support to targeted industries. I am happy to look further into her proposals, and at the funding available for innovation. If she wants to write to me with any details, I will happily follow up.
Dave Robertson (Lichfield) (Lab)
A business in the village of Fradley in my constituency has a plan to put millions of watts of solar on the roof of its businesses. Unfortunately, it cannot proceed with that application, because there is not sufficient export capacity on the site. It would never export a watt of that electricity, which would meet only a fraction of its energy needs. Will the Minister meet me, so that we can discuss how we can make regulatory changes to support projects like this one?
Michael Shanks
My hon. Friend makes a point that others have raised. We are looking in granular detail at how the system works to ensure that the regulatory landscape allows such opportunities to be taken. I am very happy to meet him to discuss this further. We are taking a detailed look at every single aspect of the system, so that communities, businesses and others can benefit from being able to export power to the grid. That will help the country with its energy needs and deliver a benefit for local communities.
Alex Brewer (North East Hampshire) (LD)
Mrs Elsie Blundell (Heywood and Middleton North) (Lab)
Max Wilkinson (Cheltenham) (LD)
The Parliamentary Under-Secretary of State for Energy Security and Net Zero (Miatta Fahnbulleh)
We believe that the best way to protect households permanently is through our mission to deliver clean power by 2030. Combined with our warm homes plan to upgrade millions of homes across the country so that they are warmer and cheaper to run, that will drive down energy bills and make cold homes a thing of the past. We know that we need to support people while we make that transition, which is why we are extending the warm home discount.
Alex Brewer
Almost 10% of people in my North East Hampshire constituency live in fuel poverty. I agree with the Minister that investing in renewable energy would help to tackle that, so how is she working with the Ministry of Housing, Communities and Local Government to empower local authorities to develop renewable energy generation locally—by following Europe’s lead in putting solar over car parks, for example—in order to make energy cheaper and more sustainable?
Miatta Fahnbulleh
The hon. Member is right: there is a big push to work with local and regional authorities to ensure not only that we generate renewables that can impact on bills, but that we upgrade homes. Through local energy action plans, local authorities are, for the first time, working with the National Energy System Operator and other systems operators to drive that. Local and regional authorities have a crucial role to play in upgrading millions of homes across the country.
Mrs Blundell
My Heywood and Middleton North constituents live in a state of profound uncertainty as to how the unpredictability of global energy markets will affect their families. Does the Minister agree that if we want to protect those families from volatility, we must end our reliance on global fossil fuel markets, and introduce targeted interventions to bring bills down, particularly for those on the lowest incomes?
Miatta Fahnbulleh
My hon. Friend is right. It beggars belief that the Conservative party is so stuck in its ideological opposition to moving towards clean power. We are clear that we must break our dependence on global fossil fuel markets, which led to record energy bills during the energy crisis. We are making that sprint, but it is critical that we support the most vulnerable households while we make that transition, which is why I am so proud that this Government extended the warm home discount so that an extra 2.7 million households—one in five—will benefit this winter.
Max Wilkinson
I congratulate Ministers again on embracing the principles of the sunshine Bill campaign, run by me and many others to ensure that solar panels are included on the roofs of all new houses. In the heat of recent weeks, people in my constituency have been sweltering in beautiful old regency buildings, which pose a particular challenge in this respect. Do Ministers agree that if we line up heat pump technology and solar panels, we can lower our energy bills and keep cool at the same time?
Miatta Fahnbulleh
The hon. Member is right. We believe in a solar panel revolution. That is one of the key things that Great British Energy will bring about across the country. On overheating, it will be critical to ensure that as we upgrade homes, we make them fit for purpose in the context of climate change. We are including air-to-air heat pumps in the boiler upgrade scheme, and we will consider other measures to keep homes cool.
Chris Hinchliff (North East Hertfordshire) (Lab)
The Government have taken long-overdue steps to secure rooftop solar on new builds, but there is even greater untapped potential on existing commercial and domestic rooftops. Will Ministers consider introducing a scheme, similar to those in other countries, offering free installation of rooftop solar for businesses and residents? The costs could be paid back through a long-term power-purchasing agreement. That would simultaneously increase the supply of clean energy and cut bills.
Miatta Fahnbulleh
My hon. Friend is right to talk about the potential of solar on our commercial buildings. We know that solar can reduce energy bills by about £600. We are looking at all the options, because we are absolutely serious about a solar rooftop revolution, whether on our homes or commercial buildings.
Pippa Heylings (South Cambridgeshire) (LD)
We welcomed the joint agreement signed in May between the UK and the EU, in which small steps were taken to address the impacts of the Conservatives’ botched Brexit deal on energy costs and bills. What further steps will the Secretary of State take to forge energy co-operation through a recoupling of the UK and EU electricity markets and the UK’s participation in the EU’s internal electricity market, to boost trade, bring down renewable energy costs and reduce energy bills?
Miatta Fahnbulleh
We have been listening to industry voices, and they are very clear about the opportunities for stronger alignment. We will continue to engage with them, and with our partners in the EU on the opportunities as we make the sprint to clean power.
Graham Stuart (Beverley and Holderness) (Con)
The Secretary of State for Energy Security and Net Zero (Ed Miliband)
Since the last oral question time for the Department, the spending review announced the largest investment in clean energy in our country’s history—investment in new nuclear; in carbon, capture and storage; and in hydrogen transport and storage. We are investing £8.3 billion through Great British Energy and £13.2 billion in our warm homes plan for energy security, lower bills and good jobs.
Graham Stuart
Evidence from the National Grid, Ofgem and Imperial College London shows that locational or zonal pricing would save billions of pounds a year, lower bills and reduce the need for expensive and often unpopular grid infrastructure. Why has the Secretary of State ruled it out?
Ed Miliband
I made a comprehensive statement to the House on this last Thursday, and the grounds for the decision are these: first, there is the question of fairness, and secondly, there is the question of the cost of the transition and what would happen in the meantime. We need investment in our clean energy infrastructure, and we need investment in growth. I believe that our way—reformed national pricing—is the right way forward.
Ben Goldsborough (South Norfolk) (Lab)
Ed Miliband
My hon. Friend makes an important point. That is why the strategic spatial energy plan will set out where we need our energy infrastructure, so that we can have a planned system that matches power needs and infrastructure at least cost to bill payers and taxpayers.
Claire Coutinho (East Surrey) (Con)
Yesterday, the Secretary of State said I was hiding when I was, in fact, with my six-month-old baby, who I know he is aware of. On behalf of all young mums who face those kinds of comments in their first few weeks back at work, may I gently suggest he reflects on those remarks?
I want to ask the Secretary of State a very simple question: is £82 higher or lower than £72?
Ed Miliband
On the first point, I completely respect the right hon. Lady’s decision to be with her young baby, and there was no offence intended. I think it is very important that we understand the needs of new parents and, indeed, parents across the country. On the question she asked, I do not know what she is getting at, frankly.
Claire Coutinho
I do not know whether the Secretary of State does not know or does not want to say, but £72 a megawatt-hour is what electricity cost last year, and £82 is the price he has paid for offshore wind, and he is set to do the same this year—and that is before the extra costs for the grid for wasted wind and back-up, which are going through the roof, thanks to his policies. Yesterday, he committed to radical honesty. In that spirit, will he admit either that he cannot add up, or that his policies cannot bring down bills?
Ed Miliband
I am going to be radically honest and tell the right hon. Lady the truth: she is gambling on fossil fuels—the same thing she did that led us to the worst cost of living crisis in our country’s history, with family finances, businesses’ finances and public finances wrecked. The only way to bring down bills for good is through cheap, home-grown power that we control. We have an energy security plan. The Conservatives have an energy surrender plan.
Anneliese Midgley (Knowsley) (Lab)
Ed Miliband
GB Energy will prioritise a whole range of projects, and that is a matter for GB Energy, as a publicly owned energy company at arm’s length from Government, but there are huge opportunities right across our country, whether in floating wind, tidal, hydrogen or offshore wind and supply chains. GB Energy is owned by the public and will benefit people right across Britain.
Pippa Heylings (South Cambridgeshire) (LD)
Across Europe, we have already seen 2,300 heatwave-related deaths—avoidable deaths—and the Met Office report says that things will just get worse. The Lib Dems and I have a really cool idea. Will the Secretary of State work with local authorities to open up public spaces with air conditioning, such as leisure centres and libraries, so that they can provide relief from extreme heat for the elderly and vulnerable?
Ed Miliband
There is no monopoly on good ideas, and the hon. Lady raises the important issue of how we adapt as a country to the climate crisis. We know we have a lot more to do, and we will listen to all good ideas.
Cat Eccles (Stourbridge) (Lab)
Ed Miliband
My hon. Friend raises a great example, and I will take a risk and say yes, I will come to Stourbridge. I love Stourbridge, and I look forward to seeing that project.
Carla Denyer (Bristol Central) (Green)
The Parliamentary Under-Secretary of State for Energy Security and Net Zero (Michael Shanks)
Of course the Government follow the regulations that we have put in place quickly, and applications must be considered on a case-by-case basis—that is the way anyone would expect them to be dealt with. I will not say on the Floor of the House any more about those applications, as they are live decisions that will be made in due course by the Department.
Melanie Onn (Great Grimsby and Cleethorpes) (Lab)
Michael Shanks
I will repeat what I have said before: we are obviously hugely disappointed by the way that the owners have dealt with the company. I repeat the ask that I have made in the House a number of times, and in writing to the chief executive, that he should put his hands in his pockets and do the right thing by the workforce. We are doing everything we can as part of the insolvency process safely to manage the refinery, and to look at whether there are buyers interested in taking it on.
Blake Stephenson (Mid Bedfordshire) (Con)
Ed Miliband
The most significant thing about the OBR report is that it says there is an 8% threat to our GDP by 2070 in a 3°C world, and a 56% rise in the debt to GDP ratio if we do not act on climate change. That is the most important thing from that report, which I recommend all hon. Members read over the summer.
Juliet Campbell (Broxtowe) (Lab)
The Parliamentary Under-Secretary of State for Energy Security and Net Zero (Kerry McCarthy)
I appreciate my hon. Friend’s concerns. This is a matter for the Department for Environment, Food and Rural Affairs, but I am happy to talk to colleagues as they bring forward their land use framework. Nature-based solutions to climate change are important, so we very much engage with our colleagues in DEFRA on these issues.
Llinos Medi (Ynys Môn) (PC)
Solar developers are not playing by the rules when it comes to accessing the land of people on Ynys Môn. Government guidance states that developers must act reasonably when trying to obtain permission to access the land, but my constituents have received threatening emails and there have even been cases of developers trespassing on land. Does the Minister condone such behaviour, and does he believe that current guidance is strong enough to protect constituents such as mine?
Michael Shanks
I do not know the specifics of the case that the hon. Lady raises—if she wants to send any details to me, I will certainly look at them. We clearly want to see and expect in every single case a partnership between developers delivering projects that we think are important, the planning system responsible for putting the processes in place and the communities who should have their local area protected and be able to access it. I am happy to follow up with her if she wants to raise specifics with me.
Steve Witherden (Montgomeryshire and Glyndŵr) (Lab)
Michael Shanks
That is not the position of the Government, because report after report and the evidence points to the fact that undergrounding cables is significantly more expensive than putting them above ground. Individual applications will clearly look at the individual circumstances and make a decision on that. We have said as a Government that communities that host network infrastructure should benefit through community benefits and direct money off bills, and that is what we will deliver.
Ben Obese-Jecty (Huntingdon) (Con)
It was recently announced that the surplus Ministry of Defence land at RAF Wyton in my constituency has been designated as an MOD trailblazer site. The Housing Minister confirmed to me last week that no assessment has yet been made of the energy infrastructure currently in place. The Prime Minister recently confirmed to me here in the Chamber that my proposal to develop a defence technology cluster on the site would be supported. To that end, is the Minister prepared to look into the available energy infrastructure and substation connectivity at the site and write to me with his assessment?
Michael Shanks
The hon. Gentleman is assiduous in raising these sorts of questions with me. I am very happy to look at the possibilities. He is right to outline the potential of sites such as that, and we will look at it.
Tracy Gilbert (Edinburgh North and Leith) (Lab)
Nova Innovation in my constituency is pioneering floating solar, which is generating clean energy. Will my right hon. Friend outline what steps the Government are taking to support the development of floating solar?
Ed Miliband
That sounds incredibly exciting, and I look forward to finding out more.
Lincoln Jopp (Spelthorne) (Con)
We have been using floating solar technology in this country since 2016. Last month, the French started the largest plant in Europe, producing 74.3 MW. The Chinese have single plants that produce 350 MW. Given the scale of its use across the world, bar Britain, why did the Secretary of State refer to floating solar as a nascent technology? What is nascent about it?
Ed Miliband
It sounds like I am being educated about floating solar. I am happy to share the hon. Gentleman’s enthusiasm for it; if he has proposals about how we can take it forward, I am all ears.
Perran Moon (Camborne and Redruth) (Lab)
In France, Germany, Croatia and elsewhere on mainland Europe, geothermal energy is being taken very seriously. I was disappointed that geothermal energy got little mention in the industrial strategy, particularly as there is estimated to be 30 GW of energy in the Cornish granite batholith. Will the Secretary of State meet me to discuss how we clear the barriers to unleash the potential of the Cornish granite batholith?
Michael Shanks
My hon. Friend always raises the huge potential of Cornwall in this House and in the energy space. He is right to talk about the potential for geothermal; we are hugely excited about the opportunities that it presents. I am very happy to meet him and others to discuss further how we can take it forward.
Wendy Chamberlain (North East Fife) (LD)
I am already being contacted by constituents who are worried about affording their energy bills this winter, but do not feel that the service they get from the energy companies is properly supporting them. What steps are the Government taking to ensure that energy companies provide the support that they need?
The Parliamentary Under-Secretary of State for Energy Security and Net Zero (Miatta Fahnbulleh)
We are very clear that energy companies have strict obligations to follow. We are working with Ofgem to ensure that it adheres to those obligations, and we are doing the job of reviewing Ofgem to ensure that it is a proper consumer champion, with the mandate and powers to work on behalf of consumers and reform this market so that it works in the interests of the hon. Lady’s constituents.
Brian Leishman (Alloa and Grangemouth) (Lab)
More than 100 INEOS chemical employees are to lose their jobs at Grangemouth because the refinery has closed. The £200 million commitment to Project Willow does not help them in the here and now, and it is frankly an insult to the workers who are about to lose their livelihoods to talk about training opportunities at Forth Valley college that are not being afforded to them. What have the Government actually done and what will they do for those workers who do not have the same redundancy or training package as the refinery workers?
Michael Shanks
We are looking in the round at how we can deliver jobs and opportunities on the Grangemouth site. The National Wealth Fund made an unprecedented commitment of £200 million, and I have been meeting companies that are potentially interested in developing projects, to make sure we get them over the line. We have delivered on the training guarantee and delivered support beyond that provided by the Falkirk and Grangemouth growth deal. We are doing everything we can to support the workforce there, and we will continue to do so.
Afghanistan
(1 day, 17 hours ago)
Commons ChamberRead Hansard Text Watch Debate Read Debate Ministerial Extracts
The Secretary of State for Defence (John Healey)
With permission, Mr Speaker, I wish to make a statement on a significant data protection breach from February 2022 relating to the Afghan relocations and assistance policy. It led to the High Court granting an unprecedented super-injunction and the previous Government establishing a secret Afghan resettlement route. Today I am announcing to the House a change in Government policy. I am closing that resettlement route, disclosing the data loss, and confirming that the Court order was lifted at 12 noon today.
Members of this House—including you, Mr Speaker, and me—have been subject to the super-injunction. It is unprecedented. To be clear, the Court has always recognised the parliamentary privilege of proceedings in this House, and Ministers decided not to tell parliamentarians about the data incident at an earlier stage, as the widespread publicity would increase the risk of the Taliban obtaining the dataset. However, as parliamentarians and as Ministers, it has been deeply uncomfortable to be constrained from reporting to this House. I am grateful to be able to disclose the details to Parliament today. I trust that you, Mr Speaker, and Members will bear with me if I take the time to ensure that the House now has the fullest information possible, as I discussed with you yesterday.
The facts are as follows. In February 2022, 10 months after the then Defence Secretary, Ben Wallace, introduced the Afghan relocations and assistance policy and six months after the fall of Kabul, a Defence official emailed an ARAP case working file outside authorised Government systems. As the House knows, ARAP is the resettlement scheme that this country established for Afghan citizens who worked for, or with, our UK armed forces over the combat years in Afghanistan. Both in opposition and in government, Labour has backed that scheme, and ARAP has had full support from across this House.
The official mistakenly believed that they were sending the names of 150 applicants. However, the spreadsheet in fact contained personal information associated with 18,714 Afghans who had applied to either the ex gratia scheme or the ARAP scheme on, or before, 7 January 2022. It contained names and contact details of applicants and, in some instances, information relating to applicants’ family members. In a small number of cases, the names of Members of Parliament, senior military officers and Government officials were noted as supporting the application. This was a serious departmental error. It was in clear breach of strict data protection protocols, and was one of many data losses relating to the ARAP scheme during this period.
Ministers in the previous Government first became aware of the data loss in mid-August 2023, 18 months after the incident, when personal details of nine individuals from the dataset appeared online. Action was taken to ensure they were swiftly removed, an internal investigation was conducted, and the incident was reported to both the Metropolitan police and the Information Commissioner. The Met deemed that no criminal investigation was necessary, and the Information Commissioner has continued to work with the Department throughout.
However, journalists were almost immediately aware of the breach, and the previous Administration applied to the High Court for an injunction to prevent the data loss becoming public. The judge deemed that the risk warranted going further and, on 1 September 2023, granted a super-injunction, which prevented disclosure of the very existence of the injunction. That super-injunction has been in place for nearly two years, during which time eight media organisations and their journalists were served to prohibit any reporting. No Government wish to withhold information from the British public, parliamentarians or the press in this manner.
In autumn 2023, previous Ministers started work on establishing a new resettlement scheme specifically designed for people in the compromised dataset who were not eligible for ARAP but who were nevertheless judged to be at the highest risk of reprisals by the Taliban. It is known as the Afghanistan response route, or ARR. It was covered by the super-injunction. The then Government initially established the ARR to resettle a target cohort of around 200 principals, but in early 2024 a combination of Ministers’ decisions on the scheme’s policy design and the court’s views had broadened that category to nearly 3,000 principals.
I want to provide assurance to the House and the British public that all individuals relocated under the Afghanistan response route, ARAP or the Home Office’s Afghan citizens resettlement scheme undergo strict national security checks before being able to enter our country. The full number of Afghan arrivals under all schemes has been reported in the regular Home Office statistics, meaning that they are already counted in existing migration figures.
As shadow Defence Secretary, I was initially briefed on the ARR by James Heappey, the former Armed Forces Minister, on 12 December 2023, and issued with the super-injunction at the start of that meeting. Other members of the present Cabinet were only informed of the evidence of the data breach, the operation of the ARR, and the existence of the super-injunction on taking office after the general election. By that time, the ARR scheme was fully established and in operation, and it was nearly two and a half years since the data loss.
I have felt deeply concerned about the lack of transparency to Parliament and to the public. I felt it only right to reassess the decision-making criteria for the ARR. We began, straightaway, to take a hard look at the policy complexities, costs, risks, court hearings and the range of Afghan relocation schemes being run by the previous Government. Cabinet colleagues endorsed the need for new insights in the autumn of last year, while the scheme kept running. In December 2024, I announced the streamlining of the range of Government schemes that we inherited into the Afghan resettlement programme to establish better value for money, a single set of time-limited entitlements and support to get Afghan families resettled. On behalf of the House, I sincerely thank our colleagues in local government, without whom this unified resettlement programme would simply not have been possible.
At the beginning of this year, I commissioned Paul Rimmer, a former senior civil servant and ex-deputy chief of Defence Intelligence, to conduct an independent review. The review was concluded and reported to Ministers last month. Today I am releasing a public version of Rimmer’s review, and I am placing a copy of it in the Library of the House. I am very grateful to him for his work.
Despite brutal human rights abuses in Afghanistan, the Rimmer review notes the passage of time—it is nearly four years since the fall of Kabul—and concludes:
“There is little evidence of intent by the Taleban to conduct a campaign of retribution against”
former officials. It also concludes that those who pose a challenge to the Taliban rule now are at greater risk of a reaction from the regime, and that
“the wealth of data inherited from the former government”
by the Taliban
“would already enable them”
to target individuals if they wished to do so, which means that it is “highly unlikely” that merely being on the spreadsheet
“would be the…piece of information enabling or prompting the Taleban to act.”
Rimmer is clear: he stresses the uncertainty in any judgments and does not rule out any risk. Yet he concludes that, given this updated context, the current policy that we inherited
“appears an extremely significant intervention…to address the potentially limited net additional risk the incident likely presents.”
The Rimmer review is a very significant element, but not the sole element, in the Government’s decision to change policy, to close the ARR and to ensure that the court order is lifted today. Policy concerns about proportionality, public accountability, cost and fairness were also important factors for the Government. This was not a decision taken lightly; it follows a lengthy process, including the Rimmer review, detailed ministerial discussions and repeated consultations with legal advisers. Just as I have changed Government policy in the light of the review, the High Court today, in the light of the review, ruled that there was no tenable basis for the continuation of the super-injunction.
To date, 900 ARR principals are in Britain or in transit, together with 3,600 family members, at a cost of about £400 million. From today, there will be no new ARR offers of relocation to Britain. From today, the route is closed. However, we will honour the 600 invitations already made to any named persons still in Afghanistan and their immediate family. When this nation makes a promise, we should keep it. Today I am also restoring full accountability for the Government’s Afghan relocation schemes to Parliament, and I would expect our Select Committees now to hold us to account through in-depth inquiries.
Let me turn to the practical action that we have taken as a result of this policy change and in preparation for the lifting of the court’s super-injunction. My first concern has been to notify as many people as possible who are affected by the data incident and to provide them with further advice. The Ministry of Defence has done that this morning, although it has not been possible to contact every individual on the dataset, owing to its incomplete and out-of-date information. Anyone who may be concerned can head to our new dedicated gov.uk website, where they will find more information about the data loss; further security advice; a self-checker tool, which will inform them whether their application has been affected; and contact steps for the detailed information services centre that the MOD has established.
This serious data incident should never have happened. It may have occurred three years ago, under the previous Government, but to all those whose information was compromised I offer a sincere apology today on behalf of the British Government, and I trust that the shadow Defence Secretary, as a former Defence Minister, will join me in that.
To date, 36,000 Afghans have been accepted by Britain through the range of relocation schemes. Britain has honoured the duty we owe to those who worked and fought alongside our troops in Afghanistan. The British people have welcomed them to our country, and in turn, this is their chance to rebuild their lives, their chance to contribute to and share in the prosperity of our great country. However, none of these relocation schemes can carry on in perpetuity, nor were they conceived to do so. That is why we announced on 1 July that we would no longer accept new applicants to ARAP. However, I reiterate the commitment that we made then to processing every outstanding ARAP application and relocating those who might prove eligible, and we will complete our commitment to continuing the review of the Triples.
I recognise that my statement will prompt many questions. I would have liked to settle these matters sooner, because full accountability to Parliament and freedom of the press matter deeply to me—they are fundamental to our British way of life. However, lives may have been at stake, and I have spent many hours thinking about this decision; thinking about the safety and the lives of people I will never meet, in a far-off land in which 457 of our servicemen and women lost their lives. So this weighs heavily on me, and it is why no Government could take such decisions lightly, without sound grounds and hard deliberations. During the last year we have conducted and now completed this work. I commend my statement to the House.
James Cartlidge (South Suffolk) (Con)
I am grateful to the Secretary of State for advance sight of his statement and for receipt earlier this morning of a hard copy of the Rimmer review. I also thank the Secretary of State and the Minister for the Armed Forces for briefing me yesterday and other parliamentary colleagues today. Furthermore, given the nature of the super-injunction and the fact that the timing and nature of the statement relate entirely to the court’s lifting of that super-injunction, I recognise that it was entirely right for the Secretary of State to update the House at the earliest opportunity, and I welcome the opportunity that colleagues now have to scrutinise these matters.
Let me begin by declaring an interest. I was a Defence Minister in August 2023, when the Department first became aware of the breach, my main role being to chair one meeting on the matter in August 2023 because I was the duty Minister. Thereafter, however, as Minister for Defence Procurement and with this sitting outside my portfolio, I had relatively minimal direct involvement. That said, the Secretary of State has issued an apology on behalf of the Government and I join him in that, and in recognising that this data leak should never have happened and was an unacceptable breach of all relevant data protocols. I also agree that it is right for an apology to be issued specifically to those whose data was compromised.
It is nevertheless a fact that cannot be ignored that when this breach came to light, the immediate priority of the then Government was to avoid a very specific and terrible scenario: namely, an error on the part of an official of the British state leading to the torture, or even murder, of persons in the dataset at the hands of what remains a brutal Taliban regime. As the Rimmer review confirms, that scenario, thankfully, appears to have been avoided. Of course, we understand that the review was set up in January and reported to the Secretary of State in June.
I want to be clear that it is entirely appropriate that the Secretary of State has sought to update the Department’s understanding of the threat on the ground in Afghanistan that exists today, particularly for those persons in the dataset who had previously been considered to be at the greatest risk of reprisals. However, the House will appreciate that when Ministers became aware of the data breach in August 2023, we did not have the luxury of six months in which to assess the situation. As Rimmer says in paragraph 53:
“The review notes that the passage of time is particularly relevant.”
I know that my former ministerial colleague—the former Minister for the Armed Forces, James Heappey, who led the response to the leak—will have been focused entirely on what he saw as his duty of care to those at risk of reprisals, based on the threat assessment that pertained at the time. However, any threat picture is constantly evolving, and as I say, I support the Secretary of State’s decision to review the MOD’s understanding of the threat. Given the latest situation, as reported by Rimmer, we support his conclusion that the Afghanistan response route can now be closed.
Turning to the super-injunction, I entirely understand why this would be a subject of considerable interest, particularly to the newspapers and media outlets concerned. We have an independent judiciary, and it is not for me to comment either on the decision to grant the injunction in the first place or to lift it today, but it is surely telling that paragraph 56 of the Rimmer review states that planning at the time that the Government became aware of the breach in the summer of 2023 was based on a
“risk judgement that were the Taleban to secure access to the dataset, the consequences for affected individuals may be serious.”
Had that not been the case, no doubt the Court would have been less likely to grant the injunction, and certainly not a super-injunction.
On the leak, can the Secretary of State confirm that it was by a civil servant, and that Ministers at the time took steps to change the casework procedure by not using spreadsheets sent by email, but moving to a more secure system fully within the entirely secure network? Can he confirm that, although the dataset was of about 18,000, only a relatively small portion were identified as at high risk of reprisals, and only a small number had been settled here, which is why, as he stated, the cost is about £400 million, not the £7 billion reported elsewhere? Now that these matters are rightly in the public domain and given the reassessment of the threat in the Rimmer review, I agree that it would be wholly appropriate for the Defence Committee and others to look further into these matters.
Can the Secretary of State comment on one specific item being reported, which is that someone—I refer not to the person who made the leak, but another apparent third party who obtained some of the data—was engaged in blackmail? Did the original Metropolitan police investigation look at that, and if not, will he consider reopening it so that the police can look at that specific point, which has serious implications?
Although we must recognise the huge role played by Afghan nationals in support of our armed forces, any policy in this area must always be balanced against our own national interest. We support the Government in closing the ARR scheme, as we did with their decision to close the full ARAP programme.
John Healey
I welcome the tone in which the shadow Defence Secretary has responded, and I welcome his joining me in the apology on behalf of the British Government to those whose data has been compromised. I also welcome his acceptance that, as he put it, it was “entirely appropriate” for the Defence Secretary, as part of a new Government, to look to update the Department’s assessment of the threat. I am very pleased that, as the House will have noted, he supports Rimmer’s conclusions and my policy judgments that the Government have announced today. The shadow Defence Secretary is right that, in simple terms, Rimmer gives us a revised, up-to-date assessment of the risk—in particular, the risk to those individuals whose data may be on that spreadsheet. He does confirm that it is highly unlikely that their name being on the dataset increases the risk of their being targeted.
The shadow Defence Secretary asked me three or four specific questions. He asked about the official—it was a defence official. I cannot account for the improvements in data handling that previous Ministers may have made, but when I did his job in opposition, this data leak was just one of many from the Afghan schemes. I can also say that, in the past year since the election, the Government have appointed a new chief information officer, installed new software to securely share data and completed a comprehensive review of the legacy Afghan data on the casework system.
On the £7 billion figure, which I think the shadow Defence Secretary may have picked up from court papers, that was a previous estimate. It is related not simply to the Afghan response route but an estimate of the total cost of all Government Afghan schemes for the entire period in which they may operate.
On the significance of today’s announcement and the policy decisions that we have taken compared with simply continuing the policy and schemes that we inherited, the taxpayer will pay £1.2 billion less over the period, about 9,500 fewer Afghans will come to this country and, above all, proper accountability in this House and proper freedom of the media are restored.
Mr Tanmanjeet Singh Dhesi (Slough) (Lab)
I thank the Secretary of State for advance sight of his statement. Although I welcome it and his intent to inject parliamentary transparency and scrutiny, this whole data breach is a mess and wholly unacceptable. As I mentioned to the Minister for the Armed Forces during our recent secret briefing, I am minded to recommend to my Defence Committee colleagues that we thoroughly investigate it to ascertain what has transpired, given the serious ramifications on so many levels.
As things stand, notwithstanding the contents of the Rimmer review, how confident is my right hon. Friend the Defence Secretary that the Afghans affected, many of whom bravely supported our service personnel, will not be at risk of recriminations and reprisals?
John Healey
I can only recommend that my hon. Friend reads in full the public version of the Rimmer report, which I have published today. Rimmer sets out conclusions and an updated risk assessment, taking an up-to-date view, recognising that the situation in Afghanistan is nearly four years on from the point at which the Taliban took control and that the present regime sees those who may threaten the regime itself as a greater threat to their operation than any former Government official or serving official.
I recommend that my hon. Friend reads that report, and I expect that he, as the Defence Committee Chair, will want to take full advantage of this restored parliamentary accountability. I have always believed that our Select Committee system in this House is perfectly capable of, and better suited to, many of the in-depth inquiries that often get punted into public inquiries or calls for such inquiries. I hope he will have noted the fact that the shadow Defence Secretary also endorsed that view.
Helen Maguire (Epsom and Ewell) (LD)
I thank the Minister for the Armed Forces for his briefing on this issue this morning.
I am pleased this House now has the opportunity to scrutinise this alarming data breach. It was right that the then Government moved to introduce a new scheme to try to minimise the risk to the Afghan soldiers and their families caught up in this breach involving 18,714 individuals in total. It is the very least we owe them given the sacrifices they made to support our campaign in Afghanistan, and I welcome the apologies from both sides of the House as a result of this data breach.
There are, however, serious questions raised about how this data breach was allowed to happen under the Conservatives’ watch, and the heightened level of risk it has created for the Afghans involved. What steps have been taken to address the root cause of the breach and ensure that it cannot happen again? Reporting by the Financial Times this afternoon suggests that an original relocation scheme considered for all 25,000 Afghan personnel could cost up to £7 billion. Will he confirm what assessment his Department has made of that figure, and why that was kept hidden from the public?
The immediate priority must be to ensure the safety of all those individuals caught up in this breach, so what assurances can the Secretary of State provide that lifting the super-injunction does not heighten dangers for the individuals concerned? What steps is he taking to ensure that the individuals whose data was leaked are aware of the incident? What additional support is being provided to them directly now that the case is in the public domain? In the light of these developments, can he outline when the casework and final relocations under this and the ARAP scheme will be completed?
John Healey
I welcome the hon. Lady’s response. I provided the answers to two or three of her questions directly to the shadow Defence Secretary. On the steps we have taken to ensure the reduced risk of data losses and data breaches in future, one can never say never but I am more confident that I was 12 months ago. I have also given a response on the £7 billion figure. The estimated full costs of all Afghan schemes that will run to their completion, from start to finish, because of the savings that will derive from the policy decisions we have taken today, will be between £5.5 billion and £6 billion. The cost of the ARR scheme to date—the cost and the sums committed to bring the 900 principals and their immediate families who are in Britain or in transit—is about £400 million. On those still to come, I expect the cost to be a similar sum.
I think I said in my statement to the House that Rimmer recognises the uncertainties and the brutal nature of the Afghan Taliban regime. There can never be no risk in such judgments and decisions, and that is one reason that I and the Government have taken this decision with hard deliberation and serious intent. I hope the House will back it this afternoon.
Emily Thornberry (Islington South and Finsbury) (Lab)
I am grateful to the ministerial team for my early briefing, which gave me an opportunity to read a Foreign Affairs Committee report that came out—it was begun in September 2021—in 2022 under the chairmanship of the right hon. Member for Tonbridge (Tom Tugendhat). It is called “Missing in action: UK leadership and the withdrawal from Afghanistan” and it was excoriating:
“The manner of the withdrawal of international forces from Afghanistan was a disaster, a betrayal of our allies, and weakens the trust that helps to keep British people safe.”
It said:
“the Government should keep better records—securely held—on locally-employed staff”—
we have heard that this is one of the many data losses from ARAP—
“to ensure that any evacuation can be carried out more effectively. It should devise a policy, based on clear and fair principles, about the assistance that will be offered to local partners in the event of a security deterioration, and report to us when it has done so.”
I hope that such a policy has been developed, that more lessons have been learnt and that Ministers will report to my Foreign Affairs Committee about where we are now.
John Healey
I am sure Ministers will report to my right hon. Friend’s Committee if she invites us to do so. She is right to make the big argument that anyone providing data to the British Government has a right to expect that personal data to be stored securely, handled safely and not subject to the sort of loss or breach that we saw too often in the early days of the Afghan relocation schemes.
Sir Edward Leigh (Gainsborough) (Con)
I commend the Secretary of State for his honesty and I agree with everything he says in his statement. What an appalling mess, but part of the original sin was our intervening militarily and then scuttling out. On a wider point, may I take it that we have learnt our lesson and have got over the liberal imperial itch of the Cameron and Blair eras to intervene militarily in ungovernable countries such as Iraq, Afghanistan, Syria and Libya? Let us now move on, but I support what the Secretary of State said.
John Healey
I am grateful to the right hon. Gentleman for his remarks. I am certainly grateful for his support for my statement this afternoon. Although he has not said it, he is a big champion of press freedom and I expect that he also recognises that an important part of our decision has been the period in which we have seen no public knowledge, no media reporting and no parliamentary accountability. We set that right today.
Louise Jones (North East Derbyshire) (Lab)
As a veteran of the war in Afghanistan, I was appalled to watch the chaotic mismanagement following the fall of Kabul that left Afghans who served alongside our troops and who worked so hard for a better Afghanistan, dangerously exposed. This was a situation that I feared would happen and could see coming even when I served in Afghanistan in 2017. The fact is that the previous Government had plenty of warning that that situation could happen and failed to plan properly for it. This data breach joins a litany of other data breaches, delays and failures of our allies. Does the Secretary of State agree that we must give our fullest support to those Afghans, so they can rebuild a new life in the UK?
John Healey
I do indeed. I know from Afghan families who were relocated in the early days to my own constituency in South Yorkshire that it was the voices of Members on both sides of the House, speaking up in exactly the same terms as my hon. Friend just has and recognising the debt this country owes to many of those who worked alongside or served with our armed forces and who made possible in the first place the very difficult job that our forces undertook in Afghanistan, that provided a warm welcome, and they continue to do so. To those Afghans, we are offering a new home and a chance to rebuild their lives and contribute to our country.
Lincoln Jopp (Spelthorne) (Con)
I welcome the Secretary of State’s statement and the tone of voice with which he delivered it. I commanded the Scots Guards in 2010 in Afghanistan, at the high watermark of violence. I was very well served by Naz and Mukhtar, and I will always be grateful both to the Ministry of Defence for getting them to Britain and to the communities in this country who have welcomed them to their new lives here. I want to focus on a particular phrase the Secretary of State used. The shadow Secretary of State asked whether it was a civil servant who carried out the leak. The Secretary of State said it was a “Defence official” and The Times is reporting that it was a soldier. I think it is worth clarifying exactly whether it was a civil servant, a spad or a soldier, because conflating the term “Defence official” to cover members of the armed forces is something that might come back to bite the Secretary of State if he continues to do it.
John Healey
This was a data breach that took place three and a half years ago under the decision and leadership of the previous Government and previous Defence Ministers. The challenge this Government faced was far bigger than the actions of one official that long ago. My full focus since the election in July last year has been to get to grips with the costs, the proportionality—or disproportionality—of the schemes in place, and the lack of accountability to Parliament, freedom of the press and public knowledge. It is that set of factors that has taken up my time and my attention.
Derek Twigg (Widnes and Halewood) (Lab)
I note that the shadow Secretary of State made great play of the changes and the extra safeguards that Ministers of the previous Government put in place following the breach. I also note that the Secretary of State said he had had to make more changes and introduce new software. That suggests to me that the changes put in place by the previous Government were not good enough. Can I ask him this clearly? Who had knowledge of this incident in the 18 months after the data breach had taken place before it reached Ministers? How were there no checks on anyone in the Department who had access to that sort of data to ensure they were using it properly?
John Healey
My hon. Friend poses questions to me in the House this afternoon that I simply cannot answer. The events date from a period well before I took office. As he above all will appreciate, new Ministers have no access to the policy advice, the legal assessments, any of the papers or even the threat assessments that previous Government Ministers may have commissioned. I think that that subject is, if I may say so, proper material for the Defence Committee, on which he serves in such a distinguished way, to perhaps take a deeper look at and to call witnesses on who may be in a better position to answer those questions than I am this afternoon.
Finally, my hon. Friend asked about software. I am afraid I am one of the last people to be able to give an authoritative view on the question of cyber-security and up-to-date software, but the nature of this work means that there is a constant requirement for new software and for updating. The fact that we have taken the steps in the past 12 months that our experts and I have regarded as necessary does not necessarily mean that the steps taken by previous Ministers were inadequate. What I can say, however, is that when I was the shadow Defence Secretary, we were aware of and exposed in opposition the building backlogs in casework, the regular data breaches and the broken promises that sadly too often characterised the Afghan relocation schemes, particularly in the early years.
Ian Roome (North Devon) (LD)
I, too, welcome the statement given by the Secretary of State today. As a member of the Defence Committee, I look forward to giving this matter the scrutiny it deserves. I will not go into the detail of the report, but I think it is important to clarify, if the Secretary of State is able to do so, whether the data breach in question has in the past put or is now putting any serving members of the UK armed forces at risk?
John Healey
I look forward to being called to give evidence to the hon. Gentleman’s Committee if it does launch such an inquiry. To the best of my knowledge and belief, no serving member of our armed forces is put at risk by the data loss.
Michelle Scrogham (Barrow and Furness) (Lab)
It is staggering to hear of yet another serious data breach under the previous Conservative Government. Does the Secretary of State—[Interruption.] Conservative Members can bicker from their Benches, but it was clearly a mistake made when they were in power. Does the Secretary of State agree that we have inherited a chaotic and poorly managed system, and can he tell us what systems have been put in place to correct that? We must not see more systems with officials emailing an Excel spreadsheet—it absolutely beggars belief. Can he confirm that this will never happen again?
John Healey
My hon. Friend is absolutely right in the criticism she levels. I would just say, however, that I do not think any Minister could stand here and guarantee that there will never be another data breach, data loss or data error in that way, in the same way that no chief executive of any organisation could say so. I can say that we have taken steps to reduce the risk of that happening and that we no longer do any casework on spreadsheets, which was the technology that was available in the early days of this scheme. That was part of the problem, I think, in the inadvertent mistake made by the Defence official.
Sir Julian Lewis (New Forest East) (Con)
What worries me more than the lifting of this super-injunction is the fact that we have closed down all the Afghan schemes at the very time that undocumented Afghans who felt it necessary to flee to Iran and Pakistan are being rounded up for forcible repatriation to an Afghanistan led by the Taliban. I understand that the investigation into our obligation to the Triples—the special forces that our forces trained—will continue, and I welcome that. Will the Secretary of State confirm that despite the closure of the schemes, anybody who is found to have worked closely with our armed forces and is in imminent danger can still be rescued and admitted to this country?
John Healey
It is more than four years since the previous Defence Secretary, Ben Wallace, launched on behalf of this country the Afghan relocations and assistance policy with the full support of this House. There has been ample time for anyone who could conceivably believe they might qualify to make their application. None of those schemes, including ARAP, was ever conceived or designed to last in perpetuity, which is why we closed them at the beginning of this month to any new applicants, and why I have taken the decision, based on Rimmer and the other factors I have identified, to end the ARR scheme today. On the ARAP applicants—the sort of Afghans whom the right hon. Gentleman is concerned about—we will complete any remaining applications that are in our system waiting to be processed. On the Triples, we will complete the second phase of the review that we have given a commitment to them and to this House to undertake.
Dame Meg Hillier (Hackney South and Shoreditch) (Lab/Co-op)
I welcome the Secretary of State’s support for parliamentary transparency and for the work of the Committee corridor in this House. I have no doubt that my excellent colleagues who chair the various Committees that are responsible will do a thorough job of examining this matter, and I hope that the Secretary of State will facilitate the sharing of any information that may need to be handled in a sensitive manner. When Labour was last in government, there were a number of breaches of this nature; a predecessor of his asked to be notified of every one, and most were due to human error. It is great that we are updating the IT systems and dealing with the security, but could the Secretary of State touch on the measures that will be put in place to guard against the human error that will inevitably creep in?
John Healey
For functions and roles like this, having sound, secure caseworker software, good training and proper protocols—all of which are now in place—greatly minimises the risk that anything like this data breach, which we now find out took place in February 2022, is likely to happen again. Most importantly, I think it will help to provide the reassurance that anyone providing data to the British Government or state should have that that data will be held and handled securely.
Mark Pritchard (The Wrekin) (Con)
If the Defence Secretary will forgive me, I detect some wriggling. The fact is that he is justifying this super-injunction and not telling Parliament, the press, the public and, unbelievably, the Afghans who were potentially in harm’s way. Is it not the case that his argument is actually very thin? Even the MOD admits that Taliban-aligned individuals already had access to the database, so not telling those Afghans that they were in harm’s way is, quite frankly, unbelievable. The precedent of a super-injunction is very concerning for this place. How do we know that there is not another super-junction about another leak? Of course, the Secretary of State could not tell us, could he?
John Healey
Well, I can say to the right hon. Gentleman that if there is another super-injunction, I have not been read in. In his characteristic way, he makes an important point about how unprecedented, uncomfortable and, in many ways, unconscionable it is to have a super-injunction like this in place. In the light of that, I hope he will accept that it was a difficult decision to review the risks, the costs and details of the scheme, and the legal hearings that have taken place. Those have all been components of the important policy decision that I have been able to announce to the House today, and I hope he will back it.
Catherine Atkinson (Derby North) (Lab)
My husband served in Afghanistan and has always felt keenly the debt that our country owes to those who worked alongside and supported our forces, and I know that many of my constituents who served there feel the same. If we fail to honour our debts, why should people in future conflicts trust us and support our troops? Does the Defence Secretary share that concern? Does he also agree that it is right that we offer a warm welcome to the Afghans who come to our country seeking sanctuary?
John Healey
I agree 100%, Mr Speaker. My hon. Friend speaks so plainly, so forcefully and so passionately. When we first debated the obligation to put in place the ARAP scheme four or five years ago, when I was shadow Secretary of State for Defence, one of the things that struck me most was that those who felt fiercest were, understandably, those who had served—those in this House who had been part of the 140,000 British men and women who had served in Afghanistan over 20 years—because they recognised just what a debt this country and they owe to people like those whom my hon. Friend’s husband speaks about.
Wendy Chamberlain (North East Fife) (LD)
I welcome the Secretary of State’s pledge to restore full accountability to the Government’s relocation schemes, but I am saddened that this is the first opportunity that we have had to talk about the closure of ACRS and ARAP on the Floor of the House, given that they were announced by written statement at very short notice only two weeks ago. May I ask a couple of specific questions? On the ARR, which we have only found out about today, the Secretary of State mentioned 600 invitations that will be honoured. For those who were not accepted and are part of the breach, are they aware of that? ARAP has been closed to new applications, but, again—I have asked the Minister of State for the Armed Forces about this before—what is the communication strategy for updating them? The ACRS was never open to vulnerable women and the civil rights defenders it aimed to protect. Again, what communication will the Government have with those individuals who are in hiding either in Afghanistan or in third countries?
John Healey
We made a statement about the closure of the Home Office-run ARAP and ACRS on 1 July, and the hon. Lady will have had opportunities since then to raise those matters in the House. On the information to those who may be affected, we will honour the invitations that have been issued to 600 ARR individuals. To everyone else in the dataset, we have communicated the latest position this morning. We are offering access to further advice through the designated area of the gov.uk website, and that includes steps that individuals can take, if they wish, to get in touch with our information services centre, which has been set up by the MOD to deal with questions and concerns that people may have.
Ms Stella Creasy (Walthamstow) (Lab/Co-op)
It is a very shocking story that the Secretary of State has told us today, and I pay tribute to him for his commitment to be transparent about it. Sadly, this comes as no surprise to many of us here and to those in our offices who, over that period of time, had to deal with hundreds of desperately distraught people ringing in to find out what might happen to their relatives. I have to be honest with the Secretary of State: this matter is not closed. I join the right hon. Member for New Forest East (Sir Julian Lewis) in being desperately concerned that we still have people who would have qualified under these schemes, but who, because of failures like this, fled Afghanistan or tried to go to other countries. We tried to raise this issue with Ministers, but could not get meetings with them, and now we discover that there were secret schemes.
The Secretary of State will understand that, right now, MPs’ offices across this country will be hearing this and be worried that, again, they will get those phone calls and have those queries. He is right to say that there must be parliamentary scrutiny. Can he assure us that there will be additional resources to help us support our constituents who come forward and that he will keep an open mind that, even four years later, there will still be cases that are relevant to this scheme that should be heard—people who should be given sanctuary here—if we are to honour our debt to those people who kept our forces safe?
John Healey
I pay tribute to my hon. Friend, who has been one of the most active and most assiduous Members of this House in championing the cause of her constituents and others who may be trying to get access to the scheme. It has been over four years since the ARAP scheme was first established, and there are still 22,000 ARAP applicants whose applications will be processed. Where eligibility is established, they will be offered the relocation that this country has undertaken to give them. Those applicants need not have applied from Afghanistan, but many did so. From the outset, one of the most important features of the ARAP scheme—given that the Taliban had taken over in Afghanistan—was that it applied to female Afghans who formerly worked alongside our own forces and even served in the Afghan forces alongside our own, who have potentially been at greatest risk. For them, the offer to relocate to this country, and to rebuild and re-establish a life here, has been very important.
Sir Geoffrey Clifton-Brown (North Cotswolds) (Con)
I commend the Secretary of State for the calm and sensible way in which he has announced the change in Government policy today. I can already announce to the House that, since the briefing earlier today, I have made preliminary arrangements for MOD officials to address the Public Accounts Committee to examine the cost implications. Some £400 million has been spent so far, and I think the Secretary of State said in parentheses that another £400 million will be spent on the 600 people currently based in Afghanistan who have received invitations under the scheme. Can he give me and the House an assurance that if those 600 people, who must be in some danger, do need assistance, it will be rapidly provided?
John Healey
The hon. Gentleman is very fast off the mark, and I am glad that he has already issued his invitation to his Committee. He is asking for figures as Chair of the PAC. The cost of what has been spent and committed in order to get in transit to Britain the 900 principals eligible under ARR, plus their immediate family members, is around £400 million. For the remaining members of the ARR and their immediate families who have been issued invitations, we expect something similar again. But because of the policy decisions that we have been able to announce and the changes that we have been able to make to the programmes we inherited—he may want to probe this with his Committee—it means that the taxpayer should be paying £1.2 billion less over the next few years, and that around 9,500 fewer Afghans will come to this country.
Baggy Shanker (Derby South) (Lab/Co-op)
I welcome the Government’s decision to support the lifting of the super-injunction today and bring this awful matter properly into the public domain. Does the Secretary of State agree that it is right and proper that this issue is now fully scrutinised by Parliament?
John Healey
I do, indeed. One important feature for me in being able to make this statement and to set out the details before the House this afternoon has been that we are now restoring the proper parliamentary accountability of Ministers to this House for the decisions that we take, the schemes that we run and the spending that we commit on behalf of the taxpayer. I look forward to Members in this Chamber—and, I hope, in the appropriate Committees—undertaking their proper constitutional role in a way they have not been able to do over the past two years without being constrained.
Dave Doogan (Angus and Perthshire Glens) (SNP)
This has been a difficult statement for the Secretary of State—make no mistake. He said in his statement that this was a breach of very strict data protection protocols. Well, on the basis of this breach and the other breaches around Afghan resettlement, those protocols were clearly not strict enough. He has declined to say whether it was a contractor, a civil servant or a member of service personnel. I do not think that anyone in this House wants to know who it was, but I would like to know how senior that person was. If it was a junior member of MOD staff, the delinquency is both systemic and personal, but if it was a senior member of MOD staff, the delinquency is purely personal on the basis of their knowledge and seniority.
This instance related to brave Afghans, but what reassurance can the Secretary of State give us that the brave personnel of the UK forces would not be compromised by a level of delinquency similar to this in the MOD—and why the synchronicity between the lifting of the super-injunction and the ending of the schemes? Should we not walk a mile in the shoes of the people who have fled the Afghan regime, and do should we maybe think whether we need an ARR-plus wash-up to get these people out of danger if it becomes a reality?
John Healey
I wanted this House to hear the policy decisions that I had made and I wanted this House to hear them first. The judge, aware of the decisions that the Government had taken and the announcements that I was planning to make today, took his decision to lift the super-injunction and to deliver his court judgment at noon.
On the question of the individual responsible for the original data loss, that is not something I am prepared to pursue in this House. Clearly the overarching responsibility was with the Ministers at the time. My full focus has been to get to grips with what we inherited, take a fresh look at the policy that was in place, and be in a position—with the proper degree of deliberation, and with sound grounds—to come to the House and announce the changes I have this afternoon.
Mark Ferguson (Gateshead Central and Whickham) (Lab)
As I am sure many Members do, I feel a sense of anger that once again the Afghan people have been betrayed. I thank the Secretary of State for his candour and his response, and for lifting the super-injunction, which will allow proper parliamentary scrutiny, but will he assure me that the following three questions will be answered? First, how was a year allowed to pass between the initial leak and it being uncovered? Secondly, how was an email with a spreadsheet attached considered a serious way to send around what effectively amounted to a kill list of Afghans for the Taliban?
Thirdly, the role of James Heappey in overseeing this has been mentioned. What role, if any, was held by the two Secretaries of State for Defence over that time, one who served until August 2023 and one who served from August 2023—to my mind, either side of the information coming to light? If we do not get to the bottom of those questions, we will do an immense disservice to the British people and, worse, to Afghans, who have been let down once again.
John Healey
My hon. Friend signals some of the areas that the necessary parliamentary scrutiny will consider. I have to say, it was 18 months, not one year, between the original data loss and when it was first discovered and brought to Ministers’ attention in August 2023. To his second question about the spreadsheet, this was a period in which officials and the Department were working at breakneck speed to put in place novel schemes that were urgently needed. Clearly that sort of spreadsheet software is inappropriate for this casework system, and it is no longer used in that way. Finally, on the role of my predecessors, Grant Shapps was the Defence Secretary who oversaw the design, extension and establishment of the ARR scheme.
Neil O’Brien (Harborough, Oadby and Wigston) (Con)
As well as risking lives, this extraordinary error has cost taxpayers huge sums. The Secretary of State says that it will now cost £1.2 billion less, but what will be the total cost of all these schemes after that? First, given the extraordinary lack of transparency that this Parliament has been subjected to—and voters too—will the Secretary of State agree to publish the legal advice that led to the expansion of the ARR and other schemes so that we can properly discuss it? Secondly, the Secretary of State did not mention any official resigning or being sacked over this extraordinary episode. I think my constituents will find that quite surprising. Will he name the number of people who have resigned or been sacked over this extraordinary error, and if nobody has been, does he agree that that is wrong?
John Healey
I am not in a position to make a decision about publishing the legal advice that led the previous Government and Defence Secretary to extend the scheme. It is not legal advice that I have had access to or seen. On the question of costs, the hon. Member for North Cotswolds (Sir Geoffrey Clifton-Brown), Chair of the Public Accounts Committee, will do the job. I can confirm that the total cost of all Afghan relocation schemes to date, for those 36,000 Afghans who have been brought to this country, is around £2.7 billion. The expected cost over the entire lifetime of those schemes, to bring in anyone who may subsequently prove eligible, is between £5.5 billion and £6 billion. That is at least £1.2 billion less because of the policy decisions I have taken this afternoon.
Amanda Martin (Portsmouth North) (Lab)
I thank the Secretary of State for his openness and transparency, and for his apology, and I thank Portsmouth city council for its involvement in Afghan resettlement schemes, which have helped many of those who served alongside my Portsmouth North constituents. I welcome today’s decision. The Government rightly took time to consider all the options and examine the complexities, including through the Rimmer review. They considered the cost to taxpayers and the safety of those affected, alongside the need for transparency and openness in this House and to the press and the public. Does the Secretary of State agree that we must, as a Government, reaffirm our commitment to public transparency?
John Healey
I do agree, and this House is doing so this afternoon in response to my statement. The role that my hon. Friend’s local council in Portsmouth and councils across the country are playing in making sure that there is a warm welcome and a unified Afghan resettlement programme in place for those Afghans and their families who we are welcoming into this country is remarkable. We thank them for that. Central Government and this House could not see these schemes operate effectively without our local councils.
Sir Iain Duncan Smith (Chingford and Woodford Green) (Con)
I commend the Secretary of State’s statement. I will not dwell on the past, because I am sure that the Defence Committee and other Select Committees will have a look at that. I want to ask him about where this goes in future. All these schemes are closing, but there are still people out there who do not recognise the statement in the report that there is no longer a widespread campaign of targeting individuals. I have one case in my mind. The Minister for the Armed Forces knows exactly who I am referring to: Sami Atayee, who has fled and is in hiding in Pakistan, and whose brother has been arrested during the pursuit. He was not directly employed by the British Government—he could not have been, for security reasons—but the testament of General Olly Brown and others all say that he saved lives for British servicemen and servicewomen. We surely owe people like that a debt of honour and gratitude for their work, so I simply ask the Secretary of State to look at what might replace the schemes that he has got rid of, which were inflexible, very narrow and often left out those who really did this Government a service. I would be grateful if he came up with some flexible idea that allows some of these people to seek succour here in the United Kingdom.
John Healey
I hesitate to be too blunt with the right hon. Gentleman, because I have a great deal of respect for him. If any applicant is not eligible under the criteria of the scheme that this House has approved and the Government have in place and operate, that can really only lead to one decision. He encourages me to look in a creative way at other options. My hon. Friend the Minister for the Armed Forces is very familiar with the case that the right hon. Gentleman raises. We will look at it again, but I do not want to raise false hopes for him, or for the man whom he describes so vividly, and with such concern.
Peter Swallow (Bracknell) (Lab)
I am proud that Bracknell Forest is involved in the Afghan resettlement programme, and is offering transitional support to the brave Afghans who risked their life to support our troops. Any such scheme depends on public trust, so it is concerning to hear that under the Conservative Government, we instead had secrecy, security breaches and a super-injunction. Will the Secretary of State take this opportunity to reaffirm two commitments: first, that this Government will continue to honour the moral obligation we owe to the Afghans who fought alongside our troops, and, secondly, that we will do so in a way that reaffirms this Government’s commitment to public transparency?
John Healey
I will indeed reaffirm our continuing commitment to honouring the obligations and duty that we owe to those who served or worked alongside our forces. Through the ARAP scheme, we will complete the processing of any outstanding applications, and any who prove eligible will get full relocation and resettlement support. I am glad to be able to restore a degree of that parliamentary scrutiny and transparency that our system in Britain depends on.
Calum Miller (Bicester and Woodstock) (LD)
I thank the Secretary of State for his statement. He said: “When this nation makes a promise, we should keep it.” I agree. In the chaos of withdrawal, my constituent who left under ARAP was made a promise by British officials that his pregnant wife could follow him. Two years later, we have still not kept that promise. My constituent’s wife and child continue to move around in Afghanistan to evade the Taliban, and my constituent is so desperate that he is talking about returning to Afghanistan—despite the risk to him—to be reunited with them. The Minister for the Armed Forces, who knows the case, has told me that the Ministry of Defence will not consider it, and that this is now a matter for the Home Office. In the light of that, will the Secretary of State repeat his commitment that our nation should keep its promise to my constituent? Will he undertake to discuss with the Home Secretary how her Department will ensure that such cases are afforded proper treatment in the light of our commitment to the Afghan people?
John Healey
I will take a look at the case and, if required, I will speak to my right hon. Friend and colleague, the Home Secretary.
Josh Fenton-Glynn (Calder Valley) (Lab)
I pay tribute to all the diplomats and armed forces involved in what was clearly an extraordinary operation. It is a stark reminder that our asylum system—despite the demagoguery we sometimes hear in this place—often represents a sacred duty to those who put their lives at risk for us and our allies. Will the Secretary of State confirm that while the ARR is now closed, we will continue to process cases of those in the ARAP scheme since 1 July, including the one that I have raised with officials?
John Healey
My hon. Friend speaks powerfully. Where there are outstanding ARAP applications, they will be processed. Where there are outstanding Triples cases that fall into the second phase of the review, that review will be completed, and where eligibility for ARAP entitlement is established, that will be honoured.
Ben Obese-Jecty (Huntingdon) (Con)
I thank the Defence Secretary for his statement, but I think it asks a lot more questions than it answers. Will he outline exactly how the dataset came to be accidentally emailed? Will he confirm that it was indeed an accident? What was the security classification of that dataset? Who was the dataset emailed to, given that it is now feared to be in the hands of the Taliban? I appreciate that he might not be able to answer some of those questions, but given that this happened three years ago, what level of investigation has taken place? Can that be published?
John Healey
I think that I reported earlier to the House that the incident under previous Ministers was reported to the Metropolitan police. It was also reported to the Information Commissioner. The Met police deemed no criminal investigation or further action to be required. The Information Commissioner still has the case—we are working closely with them—and I would expect some conclusions and judgments from the Information Commissioner’s Office before too long, but I simply cannot say when.
Melanie Ward (Cowdenbeath and Kirkcaldy) (Lab)
I ran an aid agency when the Taliban came to power in 2021 and vividly recall trying to get the then Government to help with the evacuation of brave Afghan colleagues, aid workers and human rights defenders—people who had served humanity—under huge threat. I remember the confusion that reigned in the UK Government. To hear that the lives of tens of thousands of Afghan civilians were further put at risk by this data breach is deeply shocking. The Defence Secretary will know that under the Taliban, Afghan women and girls are enduring the world’s most severe women’s rights crisis. Does he agree that the UK must do all it can to support the women and girls of Afghanistan in realising their right to equality?
John Healey
I do. Where female Afghans are eligible for the schemes, it has been important that they have been able to apply, and we have been able to offer them the same relocation and resettlement as others. My hon. Friend speaks with great authority and passion about that period in Afghanistan four years ago, when the Taliban were taking over as Kabul fell. I am sad to say that her characterisation of policy confusion and programme failure is exactly what was going on in the British Government at that time.
Ben Lake (Ceredigion Preseli) (PC)
The Secretary of State will know that communities in Wales, as across the UK, have been proud to welcome those Afghans and their families who served alongside UK personnel. Many colleagues have raised concern about the Afghans who might remain in Afghanistan or in adjacent countries and may still be in danger for their services rendered. How confident can we be that all those in severe and imminent danger of reprisals will receive invitations for resettlement?
John Healey
Those who have received invitations will have those honoured. On the concerns that the hon. Member may have about the assessment of risk in Afghanistan, I recommend that he reads Paul Rimmer’s report, which is comprehensive and up to date. It inevitably contains some uncertainties, and it identifies the risks that are inevitably there in any policy judgments that Government Ministers like me must make. I will also reinforce the point that the hon. Member made about the welcome and the pride with which the Welsh people embrace those Afghans who come to rebuild their lives in our country.
Mary Glindon (Newcastle upon Tyne East and Wallsend) (Lab)
My constituent has an active application to bring members of his family, who are currently in a third country, to safety in the UK. The MOD has advised him to assume that their data has been compromised, which is deeply concerning given the nature of the work he used to undertake. He has been told that this third country cannot be supported, even though his family might not be safe in Afghanistan. Will the Secretary of State help to ensure that his case is accelerated, given the further danger that the data leak may have put his family in?
John Healey
If my hon. Friend writes to me with the details of that case, I will certainly take a hard look at it.
Jim Shannon (Strangford) (DUP)
I thank the Secretary of State very much for his well-chosen, careful, contrite words, which were said in a tone that the House appreciates. As an MP who has often decried the abandonment of those Afghans who helped to secure safety for our troops, and whose job put them in the firing line, I must agree with the principle of doing the right thing, and being a nation that is seen globally as supporting those who support us. The issue of secrecy to the House is critical; the Secretary of State has outlined that. Does he agree that Governments must always totally protect those who were put in harm’s way, under the principle of doing what it is always right to do? I think of my constituent who served along with our forces in Afghanistan, and whose Afghan friend is in hiding in Pakistan with his wife and three children. I think of him and the fear he is in. If I send the Secretary of State the details of that gentleman and his family, will he ensure that he gets the help we should give him? That is what my constituent wants, what I want as his MP, and what that person wants.
John Healey
I appreciate the way in which the hon. Gentleman raised his concerns about that case. If he writes to me with the details, I will take a hard look at it.
Alex Ballinger (Halesowen) (Lab)
I served twice in Afghanistan alongside some of the bravest soldiers, judges and women’s rights defenders I have met. After the fall of Kabul, I was based in Pakistan with the Foreign, Commonwealth and Development Office, where I was involved in the evacuation from Afghanistan. At that time, despite the excellent work of people who served in Op Pitting, we saw many mistakes made by the last Government, including dogs being prioritised ahead of people. This data breach, which was held secret for years, is just the latest embarrassment from that evacuation. Will the Secretary of State consider a Select Committee inquiry into not just the breaches in this case, but the entire Afghan relocation system, which has failed so many times?
John Healey
One of the great joys of this House is the depth and breadth of experience that Members on all sides bring to debates. I applaud my hon. Friend and the insights he brings from his experience in Afghanistan and Pakistan.
It is certainly not for Ministers to define the terms of any inquiry that a Select Committee of this House may choose to undertake. That will be a matter, quite properly, for those Committees. If Ministers are summoned and required to account and give evidence, we certainly will.
Points of Order
Sarah Owen (Luton North) (Lab)
On a point of order, Madam Deputy Speaker. Over the weekend a member of staff in the Commons, Muhbeen Hussain MBE, was publicly defamed online by several Conservative MPs, including Members of the shadow Front Bench. Following threats of legal action, the defamatory posts were deleted by some, but the damage was already done. This behaviour not only does reputational damage, but given the current discourse, brings serious harm and, potentially, risk to life.
What advice does the Speaker’s Office have for Members in this House and in the other place who abuse the power dynamic of their elected office to defame openly a young staffer who also works in this House, while quietly deleting their tweets without an apology? Does that fall short of the standard expected of those who serve in this House and would it be proper for them to apologise?
Madam Deputy Speaker (Ms Nusrat Ghani)
I am grateful to the hon. Member for giving notice of her point of order. The Chair is not responsible for Members’ comments on social media, but I am sure the Table Office will be able to advise on how to pursue the matter further.
Mr Paul Foster (South Ribble) (Lab)
On a point of order, Madam Deputy Speaker. Yesterday in Westminster Hall the debate on the Northern Ireland veterans petition took place. Given that this is an exceptionally sensitive and emotive issue, Westminster Hall was at full capacity, and many veterans were in attendance and many more were watching online, do you feel that it is appropriate conduct for the shadow Secretary of State for Defence, the hon. Member for South Suffolk (James Cartlidge) to shout across the floor that I, a military veteran discussing emotive and exceptionally challenging veteran issues, should “show some courage”, in a way that was clearly audible for all to hear? Given the nature and importance of the issue we were attempting to debate, that the remark was shouted from a sedentary position, that the hon. Member is the shadow Secretary of State for Defence and that I and many colleagues found it to be wholly inappropriate and insulting to infer that I lack courage, do you feel that that is acceptable parliamentary language?
Madam Deputy Speaker
I am grateful to the hon. Member for giving notice of his point of order and, I believe, for confirming that he notified the hon. Member for South Suffolk. The remarks he refers to were not recorded in Hansard. None the less, I remind all hon. Members that good temper and moderation are the characteristics of parliamentary language and that heckling from a sedentary position from either side of the House does nothing to enhance the quality of debate.
Bill Presented
Diego Garcia Military Base and British Indian Ocean Territory
Presentation and First Reading (Standing Order No. 57)
Secretary David Lammy, supported by the Prime Minister, the Chancellor of the Exchequer, Pat McFadden, Secretary John Healey, Stephen Doughty, and Luke Pollard presented a Bill to give effect to, and make provision in connection with, an agreement between the governments of the United Kingdom and the Republic of Mauritius concerning the Chagos Archipelago.
Bill read the first time; to be read a Second time tomorrow, and to be printed (Bill 285) with explanatory notes (Bill 285-EN).
Human Fertilisation and Embryology (Regulation)
Tuesday 15th July 2025
(1 day, 17 hours ago)
Commons ChamberHuman Fertilisation and Embryology (Regulation) Bill 2024-26 View all Human Fertilisation and Embryology (Regulation) Bill 2024-26 Debates Read Hansard Text Watch Debate
A Ten Minute Rule Bill is a First Reading of a Private Members Bill, but with the sponsor permitted to make a ten minute speech outlining the reasons for the proposed legislation.
There is little chance of the Bill proceeding further unless there is unanimous consent for the Bill or the Government elects to support the Bill directly.
For more information see: Ten Minute Bills
This information is provided by Parallel Parliament and does not comprise part of the offical record
Dame Caroline Dinenage (Gosport) (Con)
I beg to move,
That leave be given to bring in a Bill to make provision about the regulation of online providers of fertility and certain ancillary services by the Human Fertilisation and Embryology Authority; and for connected purposes.
Having a child is variously viewed as one of the most life-changing, exhausting, expensive, thankless, frustrating and ultimately magical and rewarding things we ever do in our lives. My two sons sometimes drive me round the bend, but I quite literally love them more than anything in the world.
For many people, having a child requires a form of fertility treatment; in fact, one in six couples in Britain is affected by infertility problems. More than 52,000 people accessed fertility treatment in 2023—the most recent year for which statistics are available. For perspective, that is up from 6,000 in 1991. In the past 25 years, the proportion of children being born by in vitro fertilisation has doubled. The regulator for the fertility industry, the Human Fertilisation and Embryology Authority, reports that there are now enough children born by IVF for there to be one in every classroom around the UK. That is for a number of reasons.
It is worth celebrating that since 1991 social attitudes towards women getting into and staying in work have progressed even further; there are now 10% more women in employment. Sometimes, however, building a successful career can make it harder to build a family. One in 10 fertility treatments are undertaken by single women, and the average age of those women is slightly older, at 36. Although the proportion of young adults in the UK who identify as lesbian, gay or bisexual has doubled in the last five years, the Government amended the law that regulated fertility access to remove the barriers for female same-sex couples for the first and only time in 2008, and that is what we are here today to discuss: apart from that one change, regulation has remained static while industry, attitudes and lifestyles have raced ahead.
The Human Fertility and Embryology Act 1990 regulates fertility clinics, and despite the fertility landscape constantly modernising and moving with the times, that piece of legislation has remained largely unchanged since it was passed 35 years ago. The failure of the regulatory regime to oversee adequately the uniquely high-stakes world of modern fertility treatment was thrown into sharp relief recently with the unexpected closure of Apricity Fertility. Acting as a hub that connected parents to the very complex web of fertility services, it was effectively a digital concierge service, linking women with partner clinics and offering advice and support, yet not providing any of the medical services itself.
Just days before Christmas, on 20 December, Apricity Fertility notified customers that it would cease all operations from 1 January. While families across the country were opening their Christmas presents, hundreds of Apricity customers, including women who were just about to start their IVF injections, were opening emails that would ruin their Christmas and leave them in limbo at a very crucial point in their fertility treatment. Patients scrambled to seek confirmation from clinics that they could continue with their treatment, because as we know, even a month’s delay can massively affect the chance of a successful cycle. In many cases, having already spent every single penny that they had in the world in the pursuit of having a baby, some were told by their insurers that they would have to pay thousands more up front to continue their treatment.
We know that IVF is a physically demanding and incredibly emotionally fraught process. IVF cycles are more likely to be unsuccessful than successful, but Apricity boasted an above-average success rate of 46%. As IVF.net stated, therefore, for hundreds of couples, Apricity’s closure was
“more than a logistical hurdle—it is a devastating emotional blow.”
Even worse, families who had signed up Apricity were not offered the peace of mind that a regulator provides, because it was not regulated; it was an unlicensed online clinic. That means that the health and advice on offer could have been complete rubbish and could have been backed by no expert knowledge at all—and such online services are expanding in scope and number.
The HFEA has warned:
“For some time a range of activities marketed as fertility treatments have taken place outside of HFEA licensed clinics in a variety of settings, including ‘wellness’ clinics. More recently, the fertility market has started to move online, in settings which are outside of the regulated scheme”.
More people are accessing the fertility market and treatments than ever before, and particularly in that way. Though the HFEA cannot put an exact number on that, precisely because such services fall outside its regulatory scope, given that 73% of IVF cycles are funded privately, it is likely to be a very large proportion.
In recognition of the changing landscape, and with patient trust and safety in mind, the HFEA recommended in 2023 that the 1990 HFE Act
“should be revised to accommodate developments in the way fertility services are provided.”
I know that Health Ministers have met the chair of the HFEA to discuss updating the regulatory regime around fertility treatment, but such change will require primary legislation. I have had no firm commitment that the Government are seeking a change in the law, but the case of Apricity has underscored the urgent need to safeguard patients’ rights to their data, their eggs and their sperm.
This is a classic case of regulation just not keeping pace with modern life. It is criminal that organisations that are in the business of making dreams come true can just disappear, along with people’s money and their hopes of starting a family. The Chancellor has made it clear that she is no fan of regulators, but in the field of medical treatment and specifically the process of IVF, a strong regulatory regime is absolutely vital to ensuring confidence and security, so I urge Ministers and Members across the House to support my Bill, to bring in the recommendations of the HFEA and to support women and families at one of the most important stages of their lives.
Question put and agreed to.
Ordered,
That Dame Caroline Dinenage, Katie Lam, Liz Jarvis, Aphra Brandreth, Sir Ashley Fox, Joe Robertson, Christine Jardine, Jim Shannon, Sarah Champion, Florence Eshalomi, Samantha Niblett and Wendy Morton present the Bill.
Dame Caroline Dinenage accordingly presented the Bill.
Bill read the first time; to be read a Second time on Friday 12 September, and to be printed (Bill 284).
Business of the House (Today)
Ordered,
That, at today’s sitting, business in the name of the Leader of the Opposition shall be treated as being taken on an allotted day provided under paragraph (2) of Standing Order No. 14 (Arrangement of public business); such business may be entered upon at any hour and may be proceeded with, though opposed, for up to six hours after the start of proceedings on the Motion for this Order; proceedings shall then lapse if not previously disposed of; and Standing Order No. 41A (Deferred divisions) shall not apply.—(Lucy Powell.)
Welfare Spending
(1 day, 17 hours ago)
Commons ChamberRead Hansard Text Watch Debate Read Debate Ministerial Extracts
16:10 - The House divided: - Ayes: 106 / Noes: 440 - Question accordingly negatived.
Madam Deputy Speaker (Ms Nusrat Ghani)
I inform the House that Mr Speaker has not selected any amendments. I call the shadow Secretary of State to move the motion.
Helen Whately (Faversham and Mid Kent) (Con)
I beg to move,
That this House believes the two-child benefit cap should remain in place and that households with a third or subsequent child born from 6 April 2017 claiming Universal Credit or Child Tax Credit should not receive additional funding, because those who receive benefits should make the same decisions about having children as those who do not; further believes that lifting the cap would exacerbate a benefits culture which is unfair on the taxpayers who pay for it and unfair on those who become trapped on benefits, because those who can work, should work; and generally supports further changes to reduce welfare spending and ensure that benefits are there only for those who need them.
All of us have to make difficult choices in life about what we can afford. Many of us here are fortunate, but one of those choices will have been the number of children we have. We may wish that such an important decision were not tainted by something as unromantic as money, but that is the hard fact of the matter. Children are wonderful—I say that as the mum of three teenagers—but bringing them up is an expensive business. As Conservatives we believe in the importance of family, in personal responsibility, in fairness, and as families and as a society, in living within our means. That is why today we are calling on all Members to affirm our commitment to a policy that reflects those principles.
Let me take a step back for a moment and reflect on the situation we are in as a country. We have 28 million people in Britain who are now working to pay the wages, benefits and pensions of 28 million others. More than half of all households received more in benefits and benefits in kind than they have paid in taxes. To spell that out, more people are net recipients than net contributors. That is happening right now, and with every day that passes, spending on benefits is going up and up. Health and disability benefits alone are set to hit £100 billion by the end of the decade. That is more than we spend on defence, on education and on policing.
While it might seem kind to spend more on welfare, it is not. It is not kind to those trapped in the welfare system and written off to a lifetime on benefits. As we embark on a doom loop of uncontrolled spending, higher taxes, struggling businesses, entrepreneurial exodus, rising unemployment and then more people out of work and on benefits, it is not kind to those who lose their jobs and their incomes in that cycle of misery. If the moment comes when we cannot afford to provide welfare even to those in desperate need, it most definitely will not be kind to them, the very people our welfare safety net is meant to be there for.
Dave Doogan (Angus and Perthshire Glens) (SNP)
The shadow Minister talks about kindness. Does she agree, therefore, with the Children’s Commissioner for England, who has said that children in England are now living in “Dickensian levels” of poverty? A principal element of that is the two-child cap. What element of kindness does the shadow Minister see present in that unfairness?
Helen Whately
I do not agree with the hon. Member. I am going to talk about poverty in a moment, so if he will just hold on, he will hear my view on that point.
This is a ticking time bomb. If we do not solve this problem, our economy will collapse, yet opposite me sit members of this Labour Government who have just shown us, with the welfare chaos over the past couple of weeks, that they will not, and indeed cannot, fix this. In fact, they are just making it worse.
If hon. Members cast their minds back to early 2020, they will remember that Labour was in the midst of a leadership election. The now Prime Minister made a clear and unequivocal commitment to
“scrap…punitive sanctions, two-child limit and benefits cap.”
Then, once he had secured the leadership of the Labour party and the election neared, he changed that tune. He said Labour was not going to abolish the two-child limit. He acknowledged the need to take tough decisions and not to make unfunded spending promises, and on this we can agree. But saying that he would take tough decisions is not the same as actually taking them.
Take for example the Universal Credit and Personal Independence Payment Bill, now just called the Universal Credit Bill, which Labour voted through last week. It was meant to save £5 billion. The first U-turn brought that down to £2 billion, and the next U-turn then brought it down to—well, the Minister on the Front Bench at the time could not tell us, but the consensus is that it will now cost the taxpayer around £100 million.
Dame Harriett Baldwin (West Worcestershire) (Con)
My hon. Friend is making a powerful speech. Does she agree that, as a result of that Bill, one of the things that is most shocking is that in due course it will actually pay someone more to be on welfare than to work full time on the minimum wage?
Helen Whately
My hon. Friend makes an important point about the problem of a welfare trap, where people would better be better off on benefits than working full time on the minimum wage.
Helen Whately
I will first make a little progress, but then I will be happy to give way to the hon. Lady.
Last week’s welfare fiasco saw a Bill that was meant to save money become a Bill that will cost money. We have also seen the fiasco of the winter fuel payments cut, with the Government having to row back on their tough talk because taking money from low-income pensioners is not, in fact, the way to make savings. And now we are debating the future of the two-child limit, which Cabinet Ministers, including the Prime Minister, have indicated is the next tough choice that they are not going to make.
Dame Caroline Dinenage (Gosport) (Con)
My hon. Friend talks about tough choices. Does she agree that families that are in work make tough choices every single day, about what they can afford and how they spend their money, and that those who receive benefits should really have to make the same tough choices?
Helen Whately
My hon. Friend makes an important and thoughtful point. Many families, whether they are living off benefits or in work, would like to have more children but have to make these difficult choices about what they can afford. This is a point about fairness.
I know that many Labour Members passionately believe that the limit should go, and they will make arguments today about child poverty as if they were the only ones who care about it—[Interruption.] For the avoidance of doubt, that is not true. Our difference of opinion is about what to do about it. I think all of us are at a loss to know what the Prime Minister believes in. By contrast, we know what we believe in and we know why we are here. That is why we have brought forward this debate on the two-child limit, because somebody has to make the case for fiscal responsibility, for living within our means, for fairness, for ensuring that work pays and for keeping the two-child cap.
I want to be clear that all of us—including those of us on the Opposition Benches—want children to have the best possible start in life. Let us also be clear about what the two-child limit actually is, because I note that some Members from other parties are confused. The two-child limit restricts the amount of additional universal credit that families receive for having children to the first two children only, with some sensible exceptions, such as for twins or non-consensual conception. The cap does not apply to child benefit, which is available to all families with incomes of up to £80,000 for every child, regardless of the number of children in a family.
Sir John Hayes (South Holland and The Deepings) (Con)
I am proud to be a member of the party of Wilberforce, Shaftesbury and Disraeli, who all understood that it is essential to free people from need, and that in that effort the state can be a force for good. But in freeing people from need we should not limit them to a life of dependency. It is entirely possible to believe that although welfare can be a force for good, so too can personal responsibility, and responsibility means making the kinds of choices that my hon. Friend has set out.
Helen Whately
I could not put it better than my right hon. Friend.
We know that bringing up children is expensive and important. When working couples have to make tough decisions about whether they can afford to start a family in the first place, they should not be made to pay more in taxes to fund their neighbour to have a third, fourth or fifth child. Someone in a job does not get paid more just because they have another child. If we are worried about people getting caught in a benefits trap where it pays more to be on welfare than in work, how much worse would it be with neither the two-child benefit nor the benefits cap? It would mean benefits increased by thousands. When I say thousands, the House of Commons Library has told me that a family with five children would get more than £10,000 extra a year and a family with eight children would get more than £20,000 extra a year. That is more than the after-tax income of someone working full time on the minimum wage.
Deirdre Costigan
Does the hon. Member seriously believe that any family anywhere in the country will take seriously the Conservative party lecturing them on personal and fiscal responsibility, when this is the party that not only brought the economy to its knees through the uncosted promises of Liz Truss’s Government, but partied in the back garden of No. 10 when the rest of us were under covid restrictions?
Helen Whately
If I could take the hon. Lady back a bit, she might remember when we came into office in 2010, and we had to bring down the deficit year after year to get the country’s finances under control.
Giving children the best start in life is not as simple as handing out more money. It is about giving parents the community support they need as they encounter the challenges of bringing up a child, which is why we launched the family hubs. It is about education, but school teachers around the country are being let go. It is about growing up in a household with someone in work, but across the country people are being made redundant because of the Chancellor’s jobs tax.
I know that I will not win over everyone here with my argument. For instance, I do not expect to convince the four remaining Reform MPs, because their leader has said that he would remove the two-child limit—the hon. Member for Clacton (Nigel Farage) believes that is the right thing to do and said that he is not finished yet on benefit giveaways. But asking the taxpayer for ever more in taxes to pay for their neighbour’s benefits is not the right thing to do. The country, taxpayers and future generations cannot afford this. The Prime Minister, the Chancellor and Cabinet Ministers have been unable to rule out more tax rises this autumn. Businesses, working people, pensioners, savers, homeowners—whose pocket will be picked next?
Last week, the Office for Budget Responsibility warned that the UK’s finances are in a very “vulnerable position”. Now more than ever we need the Government to take the tough decisions—but will they? I know Labour Back Benchers are itching to vote to scrap the limit, but where are the Government on this? Will they take the position of the Prime Minister in 2020, in 2024 or now, or will they have to abstain because the Government just do not know? Soon we will see.
Only the Conservatives understand the importance of personal responsibility, fairness and living within our means. Labour, the Lib Dems, the SNP, the Greens and Reform all voted last week for more welfare spending. Will they do the same today, or will they vote with us to back the people getting up every morning, going out to work, doing the hard yards, making the hard choices and working hard to build our country?
The Minister for Employment (Alison McGovern)
Well, there we have it—as ever, all politics and no economics. The Conservatives come to this House to talk not about the people of this country, but about themselves. In March, we found out the truth of the Tory record on child poverty, which is highly relevant to their motion today. From 2010 to 2024, the number of poor children skyrocketed by nearly 1 million. After 14 years in office, the Conservatives left us with 4.5 million of our children growing up without the ability to make ends meet. That is what Tory Governments do, just as they did from 1979 to 1997, when child poverty more than doubled, leaving 4.2 million children in relative poverty. The Conservatives can come to this House to defend the failures of the last Government as many times as they like, as their motion does today. Every single time, we will remind them of their record.
Alison McGovern
I will give way if the hon. Gentleman apologises to the 4.5 million children in this country growing up in poverty.
Graham Stuart
The Minister and Labour Members are in absolute denial about the state of the country. The Government came in with growth as their No. 1 mission, and what have they done? They have brought growth to an absolute, shuddering halt. They have done what every Labour Government do, which is to increase unemployment. Who does that hurt the most? It is the poorest. From an age point of view, who does that hurt the most? It is the young. An increase in youth unemployment of 45% was a scar on this country that the last Labour Government left. It was the Conservative Government that outgrew Germany, France, Japan and Italy over the 14 years we were in power. She should be ashamed of her record, even though it is only 12 months old.
Alison McGovern
I thank the right hon. Gentleman for that lengthy intervention. I deeply regret that he does not feel the need to look his own record in the face and, more than anything, that he has nothing to say to the 4.5 million children in this country without the means to make ends meet.
Emergency food parcels distributed by Trussell Trust food banks have increased by 164% over the past 10 years, and 1.1 million children are living in households that have gone to a food bank over the past 12 months. In this country we now have more food banks than police stations. Are the Conservatives proud of that record? I hope not.
Nobody in this country should be begging—no child should face that indignity. The consequences are serious. Over 80% of parents say they struggle to get basic support, such as a GP appointment, or to see a health visitor. Schools are in an attendance crisis, with one in five kids now missing a day a fortnight or more, and it is worse for poor kids. That is the Conservatives’ record. These failures for our children will echo down the years and will turn up in our nation’s life expectancy, the benefits bill they say they care about and, worst of all, in the sense of hopelessness that far too many people in this country now have.
Do the Conservative Opposition have a response on their record? As we have heard, no, they do not. Have they apologised to families in the UK? As we have heard, no, they have not. Have they reflected on their record? As we have heard, no, they have not. They bring a motion to this House to do none of the above, but to agree with the Tory party policy from 10 years ago. They are the same Conservative party that created the mess we are in now, and they have no regrets. Their motion talks of a benefits trap, and the hon. Member for Faversham and Mid Kent (Helen Whately) just repeated that. They will be awfully cross when they find out who spent £3 billion on the universal credit system that they now say traps people in poverty. They promised that universal credit would get people into work; instead, it pushed people into incapacity benefits.
Paul Holmes (Hamble Valley) (Con)
I gently say to the Minister that she and her Back-Bench colleagues do not have a monopoly on talking about poverty. If she really cared about poverty, she would not have allowed a policy to be brought before this House last week that, before it was changed, would have put 150,000 extra children into poverty. If she genuinely believes in tackling poverty, why is she still standing at the Dispatch Box as a Minister, because she should have resigned for putting more children into poverty under her proposals?
Alison McGovern
I do not believe for a moment that it is just people in the Labour party who care about poverty in this country. Former Conservative Members of this House who were discharged from their duties by previous Prime Ministers, and many other Members of different parties over many years, have cared about poverty. We should deal with facts in this place, and I am merely repeating, for the benefit of the House, the Conservative Government’s record on poverty. I will cover the details of the child poverty taskforce in my speech. If the hon. Gentleman wishes at any point to make representations to the taskforce of Ministers dealing with child poverty in this country, I will happily receive them.
Sir Desmond Swayne (New Forest West) (Con)
On the question of facts, will the Minister give way?
Alison McGovern
Let me make a little progress, if I may.
The official Opposition’s motion speaks of a “benefits culture”. I simply ask them this: who made that culture happen? Who was in charge for the past decade and a half? Either the last Tory Government were powerless to stop that culture being created, or they were responsible for it—which is it? Until they can see the consequences of their own time in office and accept the damage that they did, which they clearly cannot, no one will hear a single word that they say.
There are, however, people in this country who deserve a hearing: those who have experienced childhood under the last Tory Government. As the hon. Member for Angus and Perthshire Glens (Dave Doogan) mentioned, we heard last week from the Children’s Commissioner —who, I point out, was appointed under the Conservatives—on her work capturing the opinions of children who have grown up in poverty because of the policies espoused by Conservative Members.
Paul Waugh (Rochdale) (Lab/Co-op)
The Minister is making an important speech with which many Labour Members will agree. She will be aware that 59% of families with more than two children and which are on universal credit are in work. That is far from the feckless parent caricature that we have heard from the Conservatives. More importantly, does she agree that the children should come first, so we should urgently scrap the two-child cap as quickly as possible?
Alison McGovern
As my hon. Friend rightly points out, in the speech by the shadow Minister, the hon. Member for Faversham and Mid Kent (Helen Whately), we heard yet again from a Tory party that wants only to ignore the facts in favour of dividing people in this country, as it did for the many years it was in government. That is not what people want. People want this country to move forward together.
Alison McGovern
I will mention a few contributions by the Children’s Commissioner for England, and then I will give way further.
We heard from the commissioner that children think that free breakfast clubs and school meals are important. That is why we have begun the roll-out of free breakfast clubs in all primary schools and last month announced the expansion of free school meals to all on universal credit, lifting 100,000 children out of poverty by the end of this Parliament.
Young people told the commissioner about how they absorb their parents’ money worries. One 16-year-old girl said:
“I worry about money quite a lot. I see myself as quite approachable to my mum so my mum will tell me absolutely everything.”
Children need to grow up without that stress, so we have introduced the fair repayment rate for universal credit households, so that a debt to the Government does not keep families poor, which will help 700,000 households with children.
Sir John Hayes
I am mindful of two of her predecessors in Birkenhead. The first is F. E. Smith, the great Tory, who talked about “all must have prizes”. Sometimes, in our modern Britain, it feels that all must have state support. The second is the late Frank Field, who is much regarded and revered in this House for his honesty about welfare reform. The Minister is right that successive Governments have failed to grasp this nettle. The truth is that the relationship between the state and the individual has changed over time. We need a welfare system that focuses support on those in the greatest need. She surely believes that, and that requires bold welfare reform. Is she up for that or not?
Alison McGovern
I thank the right hon. Gentleman for his intervention and for reminding me of two of my predecessors. I cannot claim to have known the former, but I did know Frank Field very well. Frank and I talked many times, particularly with regard to Birkenhead, about his belief in the value of work. He wanted to see our shipyard thrive and young people in Birkenhead grow up with the pride of employment. I like to think that when the Prime Minister came to Cammell Laird shipyard recently to talk about the value of good work in Birkenhead, Frank would have felt very proud.
Jamie Stone (Caithness, Sutherland and Easter Ross) (LD)
Will the Minister give way?
Alison McGovern
I will continue for just a moment.
All the young people who spoke to the commissioner could not have been clearer about the challenge of learning in overcrowded bedrooms. They were clear and direct about the shame of not always being able to keep clean because of a lack of hot water. I am deeply proud that we have committed funding for social housing to get children out of temporary accommodation, and expanded the warm home discount for all those on universal credit who are eligible. To ensure that the next generation of families experience a friendly face and have a place to play, we have expanded Best Start family hubs to every local authority.
As I said earlier, those are just some of the changes being brought about thanks to the child poverty taskforce chaired by my right hon. Friends the Secretaries of State for Work and Pensions and for Education.
Stuart Anderson (South Shropshire) (Con)
The family hubs are a great thing. The Minister said that they have gone to every local authority, but, if I have read the data correctly, none has gone to South Shropshire. Will she look into that and see whether we can get them there?
Alison McGovern
I will ask the Minister with responsibility for family hubs to write directly to the hon. Gentleman and work with him on that suggestion.
From the word go on taking office, the Prime Minister wasted no time in setting up the taskforce of Ministers to analyse the situation for our children in poverty.
Stephen Flynn
If I recall correctly, from the get-go, the Labour party suspended seven Members of its parliamentary party for voting to scrap the two-child cap. The Minister’s colleague, the hon. Member for Rochdale (Paul Waugh), asked her very clearly whether she believes that the two-child cap should be scrapped, but she did not answer. Perhaps now she will. Does she believe that the cap should be scrapped—yes or no?
Alison McGovern
I will come to the two-child limit in a moment, but let me correct the right hon. Gentleman: the issue then was Members voting to amend the King’s Speech.
From the word go on taking office, the Prime Minister wasted no time in setting up the taskforce of Ministers to analyse the situation for our children in poverty and to identify the most cost-effective ways of helping them to experience better childhoods. Our child poverty strategy will be published later this year, but, as I have said, we have already taken steps that we believe will help to mitigate the worst effects of 14 Tory years. Just yesterday, the Chancellor announced the better futures fund, the world’s largest social outcomes fund, which will be backed by £500 million of Government funding over 10 years to support vulnerable children, young people and their families.
Several hon. Members rose—
Alison McGovern
I have given way a lot, Madam Deputy Speaker, and I am worried that you will be quite cross with me if I keep giving way, so I will make progress.
Alison McGovern
I did say that I would give way to the hon. Gentleman, so let me do so before I finish my speech.
Jamie Stone
The Minister is extraordinarily gracious. She has rightly talked about universal credit, and what she says is very interesting indeed. I have constituents on legacy benefits who are—I think this is the right word—“migrating” to universal credit. The trouble is that they have to wait five weeks until they get their first cash. How will they make ends meet? What about the direct debits? I worry about that. Perhaps the wonderful group of Ministers considering these matters could look at that situation, because people are really caught in a trap.
Alison McGovern
The hon. Gentleman is not the only person who worries about it, and I will receive his intervention as a submission to the child poverty taskforce.
The child poverty taskforce is looking at all the levers we can pull—across income, costs, debt and local support—to prevent poverty, including social security reform. Our universal credit review is considering ways that the system can improve in order to stabilise family finances and provide roots into good work.
On the two-child limit specifically, the consequences of the Conservative choices made over the past decade and a half are clear for all to see. We have rightly said many times that we will not commit to any policy without knowing how we will pay for it. Taxpayers in this country—who include many parents, grandparents and those who care deeply about the fortunes of the next generation—have the right to know that they have a Government who will help grow our country and our economy. Poverty creates stony ground for that growth. It robs people of the dignity of being able to look after themselves and the choices about how to live their own lives. It robs children of what should be a worry-free time and makes them less able to take risks and try new things as they grow up.
This makes bad beginnings for a country that needs its next generation to be innovators, to be inventors and to build our future. I say this as one of three in a family with hard-working parents where money was tight. We knew every day in those years when I was growing up that the Tory Government at the helm did not give a stuff about people like us—we knew that every single day. Families in this country who are struggling should know that this Labour Government think about them every day. We have taken action to improve life for our kids, and we will keep fighting for that every single day.
Madam Deputy Speaker (Ms Nusrat Ghani)
I call the Liberal Democrat spokesperson.
Steve Darling (Torbay) (LD)
Children are 20% of our population in the United Kingdom but 100% of our future, and it is shocking that almost a third of those children are growing up in poverty. That is why the Liberal Democrats believe the two-child limit should be lifted, as well as the benefit cap.
There are 4.5 million children living in poverty in the United Kingdom. That is almost a million and a half more than the population of Wales, which is shocking in the 21st century. Some 44% of children live in a family where someone has a disability, which relates back to the conversations we have had about universal credit and PIP in recent weeks. The figure I have is slightly different from that of the hon. Member for Rochdale (Paul Waugh): 72% of children living in poverty live in a family where an individual is in work—people are in work, and yet their children are in poverty.
I reflect on a visit I made to a primary school in Paignton in the winter, where the headteacher said, “We have children who are coming into school cold, hungry and tired.” The impact of this on children is shocking. I represent the most deprived constituency that has a Liberal Democrat MP. The fact of the matter is that children do not choose to be born into large families, so having a benefits system that punishes those children is perverse in the extreme. This has been exacerbated by the cost of living crisis. Whether it is skyrocketing rents or utility bills, those are all significant challenges that have an impact on these youngsters.
The shadow Secretary of State, the hon. Member for Faversham and Mid Kent (Helen Whately), said that people have choices. What about a couple who choose to have three or four children, and everything is going well, but suddenly one of them is in an accident or contracts a significant disease that debilitates them, and their partner has to give up work to look after them and the rest of the family? That is not a choice; it is a sad circumstance for that family. We as a society need to make sure that the safety net is there to support them.
The Liberal Democrats have made a manifesto commitment to lift the two-child limit and the benefit cap, and it is not just us who believe this is the right way forward. The big four children’s charities believe this is the best, most cost-effective way to tackle child poverty. The Joseph Rowntree Foundation—a much loved organisation of mine—also believes this is the best way to tackle child poverty.
Childhood is a very short period of our lives. It is sad that the child poverty strategy has been delayed, but I hope it will emerge in the autumn. When I was the leader of Torbay council, we turned round children’s services from failing to good within two years. Part of that was ensuring that we used the whole of our orchestra of Torbay to support children: the Government’s biggest instrument is lifting the two-child limit and the benefit cap, because we desperately need to lift these children out of poverty.
Gill German (Clwyd North) (Lab)
Tackling the causes of child poverty is the reason I came into this place. As a teacher and then cabinet member for education, I know only too well about the child poverty that has grown for over a decade—I could see it happening before my eyes. In Wales, much has already been put in place to mitigate the impact, including in my own work: long-established free breakfast clubs, work to lower the cost of the school day and universal free school meals in every primary school.
There is also the incredible work that my local schools do, with family support spaces, banks of winter coats and food banks—yes, food banks—in schools, to make sure that children go home to a proper meal. The necessity of these in 21st-century Britain is a stain on our country, so when I hear Conservative Members talk about benefits culture, blaming people for their financial struggles and telling them to live within their means, I am frankly staggered, because it is their inaction and shoulder-shrugging that has led us to where we are today.
Graham Stuart
Does the hon. Lady recognise that there were 800,000 fewer people—including 300,000 children—in absolute poverty and 4 million more people in work in the UK when the Conservatives left power in 2024 than there were in 2010? Labour Governments take us in the opposite direction: they put people in the dole queue and make the whole country poorer. That is why the Conservative party can be proud of its role in poverty reduction, including for children.
Gill German
I thank the right hon. Member for his intervention, but to be frank, I do not recognise any of it. The Tories sat on their hands and allowed low-paid work to grow, access to work to dwindle, welfare dependency to deepen and daily living costs to soar.
Gill German
I have just given way, so I will make some progress.
I came to this place because I did not want to mitigate the impact of child poverty any more—I wanted to do something about it. That is exactly what this Labour Government are doing, by boosting the minimum wage, taking others on the pay scale up with it; by investing in getting people trapped outside the labour market into work—the surest route out of poverty in the long term for them and the generations that follow; by negotiating trade deals to bring food costs down; by expanding the warm home discount, so that almost 1 million more families can afford to pay their bills, and investing in our own clean energy to bring those bills down for good; by increasing the standard rate of universal credit above inflation for the first time ever; and by establishing a fair payment rate for those who find themselves immediately in arrears with universal credit, which is a recognised driver for food bank use—an early action towards our manifesto promise to end mass food bank dependence for good. That is what action looks like—not indifference, not inertia, and not blaming those who are in need of support.
I know only too well that the drivers of child poverty are complex and multifaceted, but we must not shy away from that complexity. That is why I am proud that one of this Government’s first actions was to begin work on a child poverty strategy where, importantly, everything is on the table to drive down poverty and drive up opportunity.
Gill German
I am just about to finish, if the hon. Gentleman will forgive me.
I look forward to the findings of the child poverty taskforce in the autumn. More than that, I look forward to getting to work to make child poverty a thing of the past, so that we can continue to act, rather than to blame as the motion does today. We must put child poverty into the dustbin of history, where it belongs.
Several hon. Members rose—
Madam Deputy Speaker (Ms Nusrat Ghani)
Order. We have two Opposition day debates that are both heavily subscribed, so we will start with a speaking limit of four minutes.
Dr Kieran Mullan (Bexhill and Battle) (Con)
I am pleased to have the opportunity to speak in this debate, which at its heart is about fairness and what works, rather than what sounds good. I believe that supporting families and helping parents requires a balanced system that provides support for those who need it, but that also ensures a sense of fairness to the taxpayer and the many working families who do not see their incomes rise automatically when they have more children. The previous benefit structure, which adjusted automatically for family size, was unfair on taxpayers, who pay for the extra benefits being received. Indeed, under the previous Labour Government, 1.4 million people spent years trapped in out-of-work benefits, with 50,000 households allowed to claim benefits worth over £500 a week, or over £26,000 a year, which was higher than the average wage at that time.
Taxpaying families who are not in receipt of benefits often have to make tough decisions when choosing how many children to have, and many will have made the decision not to have more simply because they could not afford it. As others have pointed out, for demographic reasons we may wish that that was not the case, but it is, and it simply is not fair to ask families who are making those difficult decisions to pay for the benefits of others who are not making those choices.
Joy Morrissey (Beaconsfield) (Con)
My hon. Friend makes an excellent point. This is about fairness; it is about hard-working families who are trying to take care of their two children, while watching someone who is on benefits having multiple children. It is about fairness, equity and welfare state dependency.
Sir John Hayes
I spoke earlier about F. E. Smith, who spoke about all having prizes who had
“stout hearts and sharp swords”.
The stout hearts drive us to do the best for those in the greatest need, but our sharp swords should make us brave enough to recognise that there are those who are absorbing welfare expenditure that should be spent on those needy people. That is what the Government ought to do, but I heard none of that from the Minister.
Rachel Gilmour (Tiverton and Minehead) (LD)
Will the hon. Gentleman give way?
Dr Mullan
Not right now.
I recognise, of course, that some people are not able to make the same choice about the number of children in their family—including, for example, children who are cared for under kinship arrangements, or adopted; there are many exceptions to the policy to make it fair. The welfare system is already growing unsustainably, with spending on health and disability benefits alone set to hit £100 billion by the end of the decade, yet Labour, Reform and the Liberal Democrats all back higher welfare spending, including scrapping the two-child limit, which will keep taxes high. The Resolution Foundation estimates that scrapping the two-child benefit limit will cost £3.5 billion a year by 2029-30. Is this really an appropriate time to put more pressure on the public finances?
Graham Stuart
The focus of the motion today is the two-child benefit limit, yet we heard not a single word from the Minister about it. That shows just how listless and drifting the Government are, when those on the Front Bench cannot tell the truth to this House or to those on the Back Benches. The truth is that the Labour party is riven in two, and those on the Front Bench no longer have any power of propulsion.
Dr Mullan
As others have pointed out, the Government put forward welfare reforms that were supposed to save money but ended up costing money, and this is yet another attempt to placate their Back Benchers in a way that we cannot afford. We must be clear about our record: we brought down absolute child poverty when we were in government. Labour Members are happy to quote figures on relative poverty and take them at face value, but when we quote figures on absolute poverty from the same datasets, they do not want to hear it. I am clear that I care more about absolute poverty, and how much someone actually has to spend on things that they need, than I do about relative poverty.
David Pinto-Duschinsky (Hendon) (Lab)
Does the hon. Gentleman also care about deep poverty? That increased to a point where four in 10 children who were in poverty under the Conservatives were in deep poverty. Will he apologise for that?
Dr Mullan
I think we need to look at the absolute poverty figures and at what difference we can make to them—and what makes a long-term difference to the number of people in poverty of any kind is employment. We reversed the decline in employment, but we are now seeing it get higher every day under this Government’s policies. That is what is bringing even more people into poverty—their record on the economy and on employment.
Dr Mullan
I want to finish my speech.
Poverty is, of course, a matter for Government. It is about policies and about incomes, but there is another important side to child poverty in this country that people are too uncomfortable to talk about: child maintenance and the absence of payments made in single-parent families. Research by the single-parent advocacy organisation Gingerbread found that 43% of children in single-parent families in the UK are living in poverty, compared with 26% in couple families. We know that poverty has many causes and there is no single solution, but there is clear evidence that when child maintenance is paid in full, it has a significant impact in lifting children out of poverty. Research shows that where it is received, child maintenance cuts the child poverty rate by 25%.
Gingerbread’s “Fix the CMS” report found that 57% of parents who care for a child and had a child maintenance arrangement in place reported that they did not receive the full amount. The amounts involved are significant. At the end of September 2024, total cumulative arrears of payments that were formally expected stood at £682.1 million, and that figure is due to reach £1 billion by the end of the decade. That is just a fraction of the story, because those figures are based only on the sometimes quite pitiful amounts that non-custodial parents have to pay, either because they earn little or because they hide what they earn. Those figures also do not include parents who are not pursued for money by the custodial parent.
Absent parents are denying children much higher amounts of money than the official figures suggest, and there is a deep unfairness to that. If a custodial parent simply chose not to provide any more resources to the child they care for, they would face criminal sanction for neglect. A non-custodial parent who does not give money for the upkeep of their child faces no similar ramifications. I have no idea why we do not place an expectation on a non-custodial parent to make the same efforts to find work and earn money as we do with out-of-work people on benefits, as they are also creating a burden on the taxpayer.
As the Minister may know, there is legislation that allows steps to be taken to place non-paying parents in home detention. I urge her and the Government to look closely at that. If people cannot be bothered to go out, work and pay for their children when they do not live with them, they should not be allowed out on a Saturday night to drink beers with their mates. That would help to drive down the huge amount of money that is owed to children by parents who are simply not paying for them—
Matt Rodda (Reading Central) (Lab)
It is a pleasure to speak in support of the policies outlined by the Minister. I wish to discuss the crisis in the system, the situation in my constituency, and some of the important initiatives under way to get people back into work.
It is worth reviewing the scale of the crisis that the current Government inherited just a year ago. After 14 years of the previous Government, 4.5 million children were living in poverty, 2.8 million people were on long-term sickness and disability benefits, and the cost of those benefits was up by £20 billion since the pandemic.
Matt Rodda
I will not, I am afraid. I need to make some progress.
In addition, one in eight young people were out of work due to long-term sickness and were on sickness and disability benefits. In short, the system that the Government inherited this time last year was in crisis and, moreover, trapped people in poverty.
We are lucky to have a growing local economy in my constituency. We have a town that attracts many new businesses, and we grow our own businesses. However, that wealth is not spread evenly. Despite the impressive array of new buildings in the town centre, there is a stark contrast between the wealth in those businesses and some of the wonderful science parks on the edge of the town, and the poverty in which some of our residents live. I want to see that issue addressed. The Government are taking important steps forward in tackling that issue. I certainly saw the problems when I was a councillor in Reading. They can include families struggling to get by in an area where the cost of living is particularly high and the cost of housing is high; that is a crucial part of the issue.
Creating more good jobs is very important, and that is not just my opinion. Those jobs need to be spread across the country, and I believe the Government are making real progress on that, and on growing the economy. Indeed, I will correct a point that was made earlier: the UK economy has grown more in the first quarter of this year than any other comparable G7 economy, and that is in a difficult economic context around the world. As well as a need for economic growth, there is a need to improve access to good jobs. That is one of the points I want to cover.
Anna Dixon (Shipley) (Lab)
Does my hon. Friend agree that disabled people have been written off by the Conservatives for too long? They have not been given opportunities to access work and good jobs, and they have been blamed by the Conservatives, for the sake of cheap headlines. Does he also agree that the Labour Government’s proposed transformation of jobcentres, which is already under way and will involve retraining dedicated work coaches, will help people to access the good jobs that he talks about?
Matt Rodda
My hon. Friend is absolutely right and makes an excellent point.
Dave Doogan
Will the hon. Gentleman take an intervention from a Member on the Opposition Benches?
Matt Rodda
I will make a little more progress.
I have discussed some of the challenges in my constituency, which are very pertinent to the wider debate. Even in areas of the UK where economic growth is at quite a reasonable level, we face real challenges accessing some of that wealth. The Minister outlined the 17 initiatives aimed at encouraging people to return to work, building their confidence and growing their ability to access work. That is so important. I would like to see more of that, and I hope that the Minister will say more about that later.
Many of my constituents who are not able to benefit from the great opportunities in our town are struggling with a series of challenges in their lives. That is not through their own lack of initiative, but often because of pressures on childcare and many other issues.
Jim Shannon
I agree with the points that the hon. Gentleman makes about child poverty. In Northern Ireland, child poverty has grown by between 35% and 40% in total, so many people in Northern Ireland have experienced child poverty in the last five years who would not have experienced it for a long time before that. The Government have indicated that having a strategy may work. Does he feel, as I do, that we need a strategy not just for Westminster, but for the whole United Kingdom, so that we can collectively address this issue?
Matt Rodda
The hon. Gentleman makes a very important point. This must be a strategy for the whole United Kingdom. I am obviously reflecting on the issues in my community, where we are lucky to have relatively high economic growth, but that growth is not spread or shared evenly. I want more detail from the Minister about the 17 very exciting pilots, which have focused on offering help and support.
I appreciate that time is pressing, but let me briefly focus on some of the very important first steps that the Government have taken in this area. Some of these policies are not solely within the remit of the Department for Work and Pensions, but are cross-Government. It is important to see the context. We have had the biggest investment in employment support for many years, with £3.5 billion being invested in that important field. There has also been an increase in the minimum wage to £12.21 per hour, and the initiative to build more homes during this Parliament. That is vital. As I said, one of the biggest challenges for families in my area is the very high cost of housing, so it is very important that we build homes to buy and to rent across the country, and that families can access those. Greater supply will obviously drive down the cost.
It is also important that families are supported with childcare. That is a very important aspect of helping parents return to work, particularly when they have young children. I was delighted to hear the Best Start announcement, and there will be a Best Start project in Reading. Other initiatives have provided similar support; the free breakfast clubs, for example, are also very important. I want a quicker roll-out of those programmes.
Matt Rodda
I am afraid that I really am pressed for time.
We need to see the wider context of the very difficult inheritance the Government had. Hard work is under way, but it will obviously take time to shift some of these very persistent problems. The focus on helping people to return to work is so important, and I hope that the Minister will say more about these important trailblazers; they seem extremely well-designed. Thank you for my time today, Madam Deputy Speaker.
Sir Ashley Fox (Bridgwater) (Con)
The UK’s benefits system is designed to act as a financial safety net. It exists so that people in hardship through no fault of their own can be supported. Supporting families and helping parents into work requires a balanced and fair system. It must provide meaningful support for those who need it most, while maintaining a sense of fairness for taxpayers. That is why the Conservatives introduced the two-child limit and believe it should be retained—so that people on benefits face the same choices as those in work. The welfare system is growing unsustainably, with spending on health and disability benefits alone set to hit £100 billion by the end of the decade.
John Glen (Salisbury) (Con)
Does my hon. Friend acknowledge the words of Richard Hughes of the OBR, who said in a report last week:
“The UK cannot afford the array of promises that it has made to the public”?
He also said that debt is on a trajectory that the UK “can’t sustain”.
Sir Ashley Fox
I am grateful to my right hon. Friend for making that point. It is essential that we put Britain’s finances on a sustainable path. All benefits are funded by taxpayers or borrowing, so every time the cost of benefits rises, so does the burden on taxpayers, or the debt we place on future generations.
Sir John Hayes
My hon. Friend is right about the cost of benefits, but he is also right to suggest that they need to be directed to those in the greatest need—the most deserving. That is what we all want across this House. Sadly, because of family breakdown and the fragmentation of communities, the state has stepped in to do what was once done, in my early life, by families, individuals and communities. It is really important that this welfare reform is seen in that broader context, and that we direct the money to those with the greatest need.
Sir Ashley Fox
I am grateful to my right hon. Friend for making that point. I know that he, like all Conservatives, believes in personal responsibility, living within our means and fairness to the taxpayer.
Sir Ashley Fox
I will not take any more interventions.
Many thousands of couples think every year about whether to have children. They make that choice based on several factors, but one of the most important is whether they can afford to bring up that child as they would like to. Under the previous system, pre-2017, there was a fundamental element of unfairness in the system. A family in receipt of benefits saw those increase automatically every time they had another child. That is not true for a family not in receipt of benefits. Why is it that someone on benefits should not have to make the same choices and sacrifices as someone in work? Why should a taxpayer who is unable to afford to have more children subsidise the third, fourth or fifth child of someone not in work?
The welfare bill in this country is increasing at an unsustainable rate. Unemployment is rising, thanks to the action of the Government, and more people than ever are receiving disability benefits, but this Government seem completely powerless to do anything to reverse that trend. The Prime Minister says that his welfare reforms strike the “right balance”, but the truth is that he was forced into a humiliating U-turn by his own Back Benchers and has had to totally gut his plans. Scrapping the Government’s PIP reforms means that the welfare Bill will make no savings at all—indeed, the total package will end up costing the taxpayer about an extra £100 million a year. What a fiasco!
The Government set out to save £4.5 billion, and have ended up spending more taxpayers’ money to buy off Labour rebels. No thought was given to the burden on the taxpayer, or to the extra debt that the Government would incur and the interest that will have to be paid on it by our children. The fact that so many Labour Members want to remove the two-child benefit cap is testament to the irresponsibility with which they treat the public finances. Their solution is always to spend more money—preferably belonging to someone else.
Now, we have the spectacle of the leader of Reform UK, the hon. Member for Clacton (Nigel Farage), saying that he also supports scrapping the two-child cap, despite having been an outspoken supporter of it when it was introduced. Reform supporters in my constituency are rather puzzled by his decision. It suggests that the hon. Member is not guided by any political principle, but is chasing votes in the red wall, where he hopes to win seats from the Labour party. In my view, that confirms that he is wholly unserious about governing this country. There is only one party in this House that is serious about sound money, and that is the Conservative party. We are the only party that is serious about stopping the creeping reliance on welfare, and that cares about taxpayers keeping more of the money they earn.
Tom Hayes (Bournemouth East) (Lab)
Today, we have seen lots of colleagues taking interventions from each other. When I stand up to speak, particularly about poverty, I take interventions from another source—my mum. She will be sitting at home, watching the TV, and she will text me, because she knows that I am going to talk about my upbringing—about growing up in poverty, caring for her and my father, who were disabled and were forced out of work because the NHS and the social security system were nowhere to be seen when my mum and dad needed them. She is going to text me, as she always does, to say, “I’m sorry. I did my best.” She does not always realise that poverty is systemic—that it is about society and the structures we build. She internalises the shame and the guilt, and feels like she did not do enough.
Given what has been said today, I also fear that my mum will ask me a further question: “Why are some of those MPs suggesting, or saying, that I am a scrounger, as a person dependent on the welfare system?” I do not think that Members of Parliament intend to create that impression, but they should know that what they say perpetuates the shame and stigma of poverty, which is impossible to eradicate in one lifetime, and is passed on from one generation to the next. That is why I stood for Parliament. I am in this place to try to tackle child poverty, so that the people of Bournemouth East—the constituency I represent—do not have the same kind of childhood I had, living without very much, and relying on the love of a mum and dad who will sacrifice everything to get you to where they think you need to be, when they should be able to depend on a wider social security system. I ask Members speaking in today’s debate to reflect on the language they use, because the outside world is watching.
Antonia Bance (Tipton and Wednesbury) (Lab)
Does my hon. Friend agree that his mum and dad did a brilliant job bringing him up; that mums and dads in all sorts of circumstances do their level best, bringing up their kids; that they are proud—as my hon. Friend’s parents no doubt are of him—of the job they have done, and the contribution that their children make; and that a person’s circumstances of birth do not define who they are going to become?
Tom Hayes
I always agree with my hon. Friend, especially when she says that I should agree with my mum. I thank her for her intervention, and I agree that nobody’s background should shape their future. We are in this place to create a better social security system, a better NHS and better public services, so that children today in all our constituencies can access the support that they need, in the form that they need, enabling them to truly thrive.
It deeply saddens me that in my constituency of Bournemouth East, children are growing up in poverty. Some 27% of children in my constituency are growing up in relative poverty; in the ward of Boscombe West, that figure is 43%, and in the ward of Springbourne, it is 36%. That is unacceptable in 2025 in modern Britain, and we should not put up with it. Looking beyond my constituency, a near-record 2.8 million people are out of work due to long-term sickness—thrown on the scrapheap. Some 300,000 people fall out of work every year because of their health, and part of the reason for that is the underfunding of our public services; that leaves people on waiting lists, and waiting lists kill.
We know that 4.5 million children are in relative poverty after housing costs, a figure that has risen by 900,000 since 2010. We also know that the Tories presided over the worst Parliament ever recorded for economic inactivity; it rose by over 800,000 to 9.4 million people. We hear from Opposition Members about the connection between work and welfare, but when they presided over such economic inactivity, such poor productivity and such sluggish growth, is it any wonder—
Tom Hayes
I will not be taking an intervention.
Is it any wonder that, as a consequence, we have people who are in significant difficulty, particularly when the social security and public services that they rely on have been chopped back?
As such, I welcome the launch of the child poverty taskforce as an early priority of this Government. I was pleased to meet the Minister just last week to talk about my priorities, which include trying to make sure that play is not squeezed out of childhood and that we have a social security system to meet the needs of children, particularly in the disadvantaged areas of my constituency.
Edward Morello (West Dorset) (LD)
I thank my hon. Friend and colleague from Dorset for giving way. He has talked about the issues outside his constituency of Bournemouth East, and he does not have to look far to see some of the inequalities that are in play—only to West Dorset. He will know from our beautiful part of the countryside that delivering services, including access to affordable healthcare, is even more difficult in rural Britain due to the sparsity of the population. That makes it even more important to support those most vulnerable members of our community.
Tom Hayes
I thank the hon. Member for his intervention. He invites me to champion his work. I do not think I will do that, but I will acknowledge his hard work and commitment, and I am pleased that he is a colleague.
The child poverty taskforce is going to be critical. The report that it will release, based on feedback from all Members of this House and all our civil society organisations, will be so important, so I am glad that we are taking the time to get this right. It will be a once-in-a-generation opportunity truly to tackle the root causes of child poverty. I am also pleased that, although we have launched that taskforce, this Government are cracking on with the hard work. Just this week, we have seen the announcement of the better futures fund—£500 million from this Government, to be matched by £500 million from local government and the private sector. In total, that is a £1 billion fund that will make a huge difference.
Similarly, I am pleased that we are providing free school meals for all children in families that are on universal credit—that will have a significant impact for my constituents. I am also pleased about the revamped Sure Start, which I think we should talk about more. A revamped Sure Start in all of our local authority areas, with the money that is being given to it, will be able to spot some of the hardships—the physical and mental health issues—that arise from poverty, and to tackle its root causes as well as its symptoms. It will give children a chance to grow, play, learn from each other and develop with peer support, and it will enable their parents, who have been starved of parenting support under the Conservatives, to learn from each other and get what they need. We have a long way to go in order to reverse the decline caused by the Conservatives and lift as many kids as possible out of poverty, but together across this House, I believe that we all have the solutions. I hope we can take this debate forward in the right way and lift those kids out of poverty.
Blake Stephenson (Mid Bedfordshire) (Con)
We must have a fair welfare system—one that provides vital support to those who need it but does not create a barrier to finding work. We need a financially sustainable system that delivers fairness for the taxpayer and does not entrench dependency. The Government’s Universal Credit and Personal Independence Payment Bill—which I think has now been shortened to the Universal Credit Bill—barely saves any money. In fact, I think we heard from the shadow Secretary of State, my hon. Friend the Member for Faversham and Mid Kent (Helen Whately), that it will cost more money, and it will make no impact on helping people back to work. That highlights the Government’s complete failure to reform our welfare system.
The welfare bill continues to rise, and economic growth is being strangled as a result. With thousands signing on to incapacity benefit every day, it is clear that we must get serious and take control of welfare spending. We cannot become a welfare state with an economy attached. I will always stand up for those in Mid Bedfordshire who need vital support. The two-child limit is an important safeguard in our welfare system, striking a balance between supporting families and helping parents into work, and ensuring fairness for working families who do not see their incomes grow as their families grow. Working families across the country are having to make difficult decisions about the size of their family.
Blake Stephenson
I will happily give way—the hon. Lady has been trying for some time.
Rachel Gilmour
Does the hon. Member accept that even with his emphasis on parental financial responsibility, the two-child benefit cap punishes the entirely innocent party—the children, who had no choice in their existence? Is that not deeply unjust?
Blake Stephenson
I am sympathetic to the point, but I will get on to how unjust and unfair it is to expect other families to pay for those situations, and the fiscal stability and security we need as a country.
Joy Morrissey
Does my hon. Friend agree that this is actually about growth in the economy, low tax, the welfare state being there as a safety net—not as a path to dependency, in which our economy is stifled and lacks any growth—and children whose parents work hard being given the same privileges and fairness as anyone on welfare benefits?
Blake Stephenson
I absolutely agree. It is important that we get people into work so that they can look after their families and make the right decisions for them.
Shifting the financial responsibility of children on to the state risks not only entrenching inequality, but opening the floodgates to unsustainable dependency, encouraging parents to have children beyond their means under the assumption that the state will bear the cost. It is neither equitable nor responsible for the state to incentivise larger families through an open-ended benefits system. That is especially true as the cost of our welfare bill and its burden on the taxpayer continues to rise. The fiscal reality must not be ignored.
Projections from the Child Poverty Action Group and the Institute for Fiscal Studies estimate that removing the cap would create an additional £1 billion annual cost to the public finances. As we grapple with considerable economic pressures, such a policy shift is simply not affordable. Removing the cap would force the Government to raise taxes further, borrow even more money—when borrowing is already out of control—or divert public funding away from other stretched public services. The Government have lost control of the public finances, and working families cannot afford to take another hit.
Ayoub Khan (Birmingham Perry Barr) (Ind)
The hon. Gentleman mentioned raising taxes, but does he accept that there are many ways to do that? One way is to look at large corporations and people who have far more money than they will ever use.
Blake Stephenson
I certainly accept that there are many ways to raise taxes, but my constituents and businesses in my constituency are paying far too much tax as it is. We cannot continue to squeeze corporations, businesses and hard-working people further to achieve the hon. Gentleman’s aims.
The Government have lost control of public finances. Working families cannot afford to take another hit. I recognise the sensitivity of the debate. It is crucial that we support those in genuine need, and we must work towards ending child poverty. The state, however, simply cannot afford to subsidise unlimited family expansion on the backs of working people.
Several hon. Members rose—
Madam Deputy Speaker (Ms Nusrat Ghani)
Order. The speaking limit has now been reduced to three minutes.
Deirdre Costigan (Ealing Southall) (Lab)
I have visited St Anselm’s food bank in Southall on many occasions and spoken to its brilliant volunteers, but the people who find it hard to speak to me are those collecting the food. Being poor and unable to feed their family is not something they want to shout about. I can see the distress written on their faces. Those mums and dads have not decided to live in poverty. Many of them have jobs, but they just cannot make ends meet. They are the casualties of 14 years of Conservative Government—of public services that were cut to the bone, leaving people without a vital safety net when things go wrong; of a jobs market that left workers on bargain-basement terms and conditions and low-wage jobs with no protections; and, of a welfare system with a basic rate that just was not enough to live on, instead pushing people into relying on sickness benefits.
David Pinto-Duschinsky
Does my hon. Friend agree that, exactly because of those problems, we should all welcome the uplift to the basic rate of UC, which will lift the income of 6.5 million families?
Deirdre Costigan
I absolutely welcome that point. The Conservatives put 1 million more children into poverty, with 800,000 children now relying on food banks such as St Anselm’s to eat. In the motion today, the Conservatives have the bare-faced cheek to blame those families, as if parents choose to let their kids go hungry. The only people to blame for this are Liz Truss’s Conservative party, who gambled with the country’s finances, betting it all on pie-in-the-sky promises they knew they could not pay for, bringing the economy crashing down overnight. Families in Ealing and Southall are still suffering the consequences; 40,000 of them are having to go to the food bank this year.
Under this Labour Government, we want to make food banks the exception and not the norm. That is why Labour has opened new breakfast clubs, such as the one in Wolf Fields in Southall; expanded nurseries, such as in Allenby primary; extended free school meals for all those on universal credit; and reduced energy bills by £150 for more than half a million Londoners.
We know, however, that we need to change the whole busted system that puts people into poverty in the first place. That is why Labour is ending the low-paid, bargain-basement jobs of the Tory era. Our Employment Rights Bill will end zero-hours contracts, with families no longer wondering from week to week if they can get enough hours to afford food. We are stopping fire and rehire, extending sick pay to low-income workers, and we have raised the minimum wage for 3 million working families. Our next step is to address the injustices faced by those working in the gig economy.
Jake Richards (Rother Valley) (Lab)
My hon. Friend is talking about other areas of public policy that affect welfare. Is not the other side of the coin the 2.8 million people out of work due to long-term sickness and the state of our NHS? The fact that waiting lists are coming down month after month under this Labour Government will help people who are currently on benefits to get back into work.
Deirdre Costigan
I agree with my hon. Friend, and we are making huge progress on reducing those waiting lists. We are also fixing the broken welfare system that the Conservatives left behind. We are increasing the basic rate of universal credit to help those families who rely on it, so that it starts to become enough to live on, and they do not have to use food banks. We have changed the rules, so that people are no longer better off on sickness benefit. That is how the Conservatives left the welfare system, but we are the Labour party, and we believe in good jobs as the best route out of poverty. We have put more than £1 billion into helping people find those good jobs.
What do the Conservatives have to say for themselves? There is no apology to the almost 1 million children that they put into poverty and left reliant on food banks. There is no apology to the almost 3 million people on long-term sick left living on benefits when many of them wanted to work. There is no apology to the tens of thousands of families struggling to get by on bargain-basement jobs. They created the problem, and as their motion shows today, they have absolutely no plan to fix it. All they can do is blame the very families their policies have forced into poverty. It is clear that only this Labour Government are serious about getting Britain working, ensuring that those who cannot work have a decent living income, finally ending reliance on food banks, such as St Anselm’s in Southall, for good.
Cameron Thomas (Tewkesbury) (LD)
Two weeks ago, the House came together to watch the Labour party tear itself apart over to what extent it would remove welfare support from some of the most vulnerable in society, including, but not limited to, those with Parkinson’s and dementia.
It is not all bad news, though. Jeff got married in the same week, so congratulations to Jeff. He got married in Venice. By most accounts, it was a lovely and private affair. Although it cost him approximately $50 million, he probably would not have noticed, because he is worth $328 billion. Like most very wealthy people, his wealth has almost doubled in the past two years. For context, it would take an MP earning only their salary, which is almost three times the average UK salary, 2.5 million years to accrue that kind of wealth. Clearly the Government will not be taxing Jeff, whose wealth lies offshore, although he does own a modest UK-based delivery business with an annual turnover of £30 billion. It paid less than 3% in cumulative tax on that figure last year.
Labour did promise that those with the broadest shoulders should carry the heaviest burden. I am sure that enough wealth exists within our own borders to keep our most vulnerable citizens supported. Will the Government therefore commit themselves to both keeping and increasing digital service tax, so that big tech pays its fair share?
Luke Murphy (Basingstoke) (Lab)
I am grateful to the Opposition for initiating a debate that enables us to discuss one of the most critical issues facing our nation: child poverty. Every child growing up in poverty represents a future diminished, opportunity denied and potential unfulfilled. Every child deserves the best start in life, so that they can learn, achieve and go on to live the best life that they deserve. That is why tackling child poverty is now firmly back at the top of the Government’s agenda.
For 14 years, the previous Government presided over a shameful legacy that led directly to this crisis. As others have said, they left us with 4.5 million children in relative poverty, including 3,000 in my constituency. Since 2010, child poverty increased by a staggering 900,000 children, but instead of trying to tackle the problem, the Conservatives decided in 2015 to abolish the target of eradicating child poverty. Their motion and, indeed, their rhetoric allude to the idea that Governments should “make work pay,” but when they were in government they oversaw the first Parliament on record with living standards lower at its end than at its start.
Some within the Conservative ranks have today shown a shocking disregard for this issue. They have talked of personal responsibility, but their version of personal responsibility appears to be lecturing others on it rather than taking any themselves. If they were taking personal responsibility on child poverty, they would come to the House and explain why it rose by 90,000 children. Was it a matter of policy design, was it a matter of policy failure, or was it, indeed, the fault of the children themselves?
Tom Hayes
Does my hon. Friend agree that people in disadvantaged and poorer areas typically live in overcrowded, poor-quality rented accommodation, and that this Labour Government’s efforts to improve the quality of rented accommodation should be commended as a way of tackling child poverty?
Luke Murphy
Absolutely. As one who has fought outside the House for significant investment in affordable housing, particularly social housing, I greatly welcome the Government’s massive investment in the affordable housing programme.
It falls to this Government to fix the mess that the Conservatives left behind. We are committed to driving down poverty and driving up opportunity in every part of our country, delivering the change that the country so desperately needs. We have already made a considerable downpayment on the comprehensive strategy on child poverty that is due later this year, providing free school meals for all children in households receiving universal credit, for which so many of my Labour colleagues campaigned for many months and years; delivering free breakfast clubs in schools; reforming universal credit deductions with a new fair repayment rate, which the Minister mentioned earlier and which puts hundreds of pounds back into the pockets of 700,000 of the poorest families; and increasing the standard allowance of universal credit.
Looking ahead, our plan to get Britain working involves the biggest investment in employment support in a generation, including an additional £1 billion a year by the end of the Parliament for work, health and skills support through a “Pathways to Work” offer.
Adrian Ramsay
The hon. Gentleman has rightly highlighted the terrible record of the previous Government and the number of children who went into poverty during that period, which includes an extra 250,000 who went into poverty as a result of the introduction of the two-child benefit cap. He has listed some actions that this Government are planning to take. Will he add to that list his support for scrapping the cap, and will he join figures in his own party, such as Lord Kinnock and Mark Drakeford, in supporting the introduction of a wealth tax for the super-rich, so that we can fund the tackling of inequality and support the most vulnerable?
Luke Murphy
I will not get ahead of our Chancellor when it comes to the announcements about taxation that will be made later in the year, but I am confident that those on the Front Bench know that they have our full support in delivering the final recommendations of the child poverty taskforce, also later in the year.
This Government will never allow young people to be written off, as the Tories did for years. As I said at the beginning of my speech, I am pleased that the Conservatives initiated the debate, which has given us all a chance to discuss child poverty and their record on welfare, both of which are shocking. I lament the fact that they have failed to recognise the scale of their failure today, but I am pleased that this Government are getting on with the job of returning people to work, ensuring that social security is there for those who need it, and tackling the moral stain on our country that is child poverty.
Ayoub Khan (Birmingham Perry Barr) (Ind)
I find it deeply shameful that we must see our constituents suffer under the cruelty of the two-child benefit cap. It is a policy that punishes children for the circumstances of their birth, and it has no place in a civilised society. Outside the walls of the Treasury building, in Birmingham Perry Barr I receive testimonies from the families who must live with the reality of the two-child benefit cap, and 53% of children in my constituency live in poverty, which is more than 3,000 impacted by this cap.
These are not just statistics; they are lives. In Birmingham Perry Barr, I constantly receive heartbreaking testimonies from families living with the consequences of this callous measure. Let me tell the House what that means in real life. It means a mother skipping meals so that her children can eat. It means children sharing a bed in a cold, damp flat because the heating bill must come second to food. It means school uniforms being bought two sizes too big because they need to last for years. At a time when food prices are soaring, with energy bills spiralling out of control, rent being unaffordable and council tax rising, this Government have actively chosen to make life harder for struggling families. No child’s future, no child’s health and no child’s dignity should depend on how many siblings they have, yet under this Labour Administration that is exactly the situation we have created.
This is not just an economic failure; it is a moral one. Working families—and more than 50% are working while relying on some benefits—and those doing everything asked of them are being abandoned in their hour of need, and it is happening under Labour’s watch. The Institute for Fiscal Studies has stated outright that scrapping the cap would bring nearly half a million children out of poverty. Ending this policy would not just relieve families, but ease the pressure on food banks, schools and charities—the organisations that have been forced to pick up the slack where the Government have abdicated responsibility.
Despite all this evidence and all the human suffering, this Labour Government refuse to act. Time and again, they have shown where their priorities lie: protecting billionaires and large corporations from paying their fair share, while children go to bed cold and hungry. The Government say that they are committed to solving the issue, but they continue to fail the British public at every turn. At current projections, they are on track to be the only Labour Administration in living memory to oversee an increase in child poverty rates. It would be a shameful legacy to leave behind and the deepest betrayal of our future generations, so I urge the Government and Ministers to change their stance, stand on the side of British families and end the two-child limit. We face a child poverty emergency, and it is up to us to respond with the urgency it demands.
Antonia Bance (Tipton and Wednesbury) (Lab)
In the Black Country we work hard, we are proud and we do not lack for personal responsibility, but forces bigger than any individual—deindustrialisation and the cruel 14 years of austerity—mean that good folk earn less, are sicker, and have fewer chances and fewer choices than people elsewhere. As I stand here every day in this place, the kids living behind the doors that I knocked on during the general election and every week since live in my heart, because one in two of them—one in two—in my ends grow up in poverty. That means every second family, every second door, every second kid, and in the 12th most deprived borough in the country, that is our share of the 4.5 million kids growing up in poverty in this national emergency.
I want to thank the churches, mosques, gurdwaras and community organisations in my ends that are serving dignity, love and solidarity alongside food parcels, warm clothes and hot food. But I will also say this: when the state walked away from us, took money from our councils, closed our Sure Starts, cut the social security that we have paid for, and watched as good jobs in heavy industry fled and nothing replaced them, we picked ourselves up, we helped one another and we somehow kept the wolf from the door.
Community self-defence is now exhausted, but I say to those children that at long last the cavalry are coming. In this rich country, no one will go without the basics, and every child will matter again. Just look at the start we have made—ending no-fault evictions, building council homes and banning zero-hours contracts. This autumn, people will see the scale of our ambition in the child poverty strategy. The down payments we have already made include free school meals for every family on universal credit, and free breakfast clubs, including at St John Bosco primary school in West Bromwich in my constituency. There will be family hubs in every single town, and we are fixing local government finance so that it once again takes account of deprivation and of places such as mine.
Darren Paffey (Southampton Itchen) (Lab)
My hon. Friend is making an incredibly powerful speech about the resilience of her community and the action that this Labour Government are taking. Her constituents, like mine, are being lectured on personal responsibility. Does she share my astonishment that, despite the opportunity to take some responsibility themselves for a mini-Budget that crashed our economy, and for 3 million people out of work and a welfare system out of control, we are hearing no apology or personal responsibility from the Conservative party?
Antonia Bance
My hon. Friend will be unsurprised to hear that I am awaiting that apology, both for that and for the 900,000 more children in poverty under the previous Government.
As I was saying, that is a down payment on the child poverty strategy to come. I know that I do not need to urge ambition on my hon. Friends on the Front Bench. They carry in their hearts every day the children who did not eat last night. They know that whether you have dinner this evening should not depend on how many siblings you have.
There is no need to listen to those on the Opposition Benches, who pushed up child poverty by 900,000. Come and walk around Friar Park or Princes End, meet those kids and tell them why someone’s choices, far away here in London, mean they have no tea tonight. It is time they apologised to the children of this country. And there is no point listening to the absent bandwagon johnnies of Reform. If they cared about people on low wages, they would not have voted against increasing statutory sick pay, banning zero-hours contracts or increasing the national minimum wage. As always, it is Labour that stands for working-class families.
Caroline Voaden (South Devon) (LD)
Poverty robs children of their future: it limits their life chances; impacts their long-term health; and reduces their ability to participate in the bits of childhood that widen their experience, build resilience and teach new skills.
We may live in a beautiful part of the world, but the children in South Devon who go to school hungry, who live in overcrowded and unsuitable accommodation, and whose parents are working two or three low-paid jobs just to make ends meet—they are the children whose lives have already been limited by the situation they are growing up in. Emma Hopkins, from the Mother’s Manifesto group in Totnes, told me that they had heard from mothers who were regularly skipping meals so that they could feed their children, living on the brink and racked with anxiety. The mental health impact of that is enormous. One mum of two, filling up on tea, was worried that her eldest child just does not believe her any more when she says she has already eaten.
That is not something we should hear in 2025. It sounds like something from a Dickens novel, but over 5,300 children in South Devon were living poverty in 2023, facing daily challenges that no child should have to endure. If the Government lifted the two-child limit today, families across my constituency and everywhere else would feel the difference immediately. Surely, if we want to reduce the welfare bill in the long term, we must lift children out of poverty now to give them the best chance to grow up healthy, with the best opportunities to go on to have meaningful work.
Some 4.5 million children across the UK are living in poverty, and the two-child limit is one of the biggest drivers of rising deep poverty among children. Alongside that, the benefit cap disproportionately harms some of the most vulnerable in our society. Single parents, disabled households and families struggling with high housing costs are penalised regardless of their actual needs. And in an area where the ratio of income-to-housing cost is one of the highest in the country, families in South Devon are particularly hard hit. That is not just unfair; it is a failed policy that is causing real harm to children and their families.
The Liberal Democrats believe that these arbitrary limits must be removed. We would replace them with an evidence-led approach to social security, one that recognises the complexity of family life and the genuine needs of children. Investing in children is not only right; it makes economic sense. Supporting families now reduces future strain on healthcare, social services and the justice system. It strengthens community and saves public money. The Government must end the two-child limit and the benefit cap. That is the most effective way to lift hundreds of thousands of children out of poverty, and we owe it to our children to do better.
Brian Leishman (Alloa and Grangemouth) (Lab)
Pessimism is understandable when brutality is overpowering. Just over a year ago, the British public tried to shake off that pessimism and emerge from the brutal reality of life in Britain after 14 years of relentless cuts that have torn apart the social safety net of our country. It is little wonder that people felt so pessimistic.
The motion on welfare before us is the continuation of the austerity that has contributed to Britain becoming an incredibly unequal society. In 2010, 30,000 people needed an emergency food parcel; now, that figure is over 3 million and rising. Nearly 80% of people who are reliant on food banks are in work. While the very richest have received tax breaks and enjoyed seeing their wealth grow at eye-watering rates, we have seen the creation of a new stratum of society: the in-work poor. It is telling of the politics of this country that despite being the sixth largest economy in the world, we have people in full-time employment who are reliant on the generosity of others to survive. That is pure political failure. Morally, it is just not right.
Having a child is a blessing, and not a blessing that everyone receives. The two-child cap is an inherently cruel policy that punishes the least advantaged. The idea that a third, fourth or fifth child is worth less than the first two is beyond wicked.
Stuart Anderson
I thank the hon. Member for giving way. The Government have not yet set out their policy on the two-child limit. If they decide not to scrap it, will he support that policy?
Brian Leishman
I thank the hon. Gentleman for that point, which I will come on to. He has clearly had advance sight of my speech.
The Government should of course lift the two-child cap immediately, and it was wrong of them not to make that a part of the King’s Speech.
The wording in the motion referring to a “benefits culture” is both lazy and classist, not to mention demonstrating the ignorance—wilful or otherwise—of the Conservatives about the struggles experienced by millions in this country. However, I expect that from some in the Conservative party. I agree that the welfare system is broken and that it needs changed, but the changes it needs are not to be found in this motion or in what the Government put before the House last week. Like thousands of my fellow party members, I do not expect that from the Labour party. Last week’s vote was a stain on a great party that should be defending and fighting for the people that this motion seeks to belittle.
Improving living standards should be the priority of this Government and every Government, and we are not doing nearly enough—not yet. A year into this Government, what people need is not MPs creating a living standards coalition group; they need them voting in this place to improve living standards, not writing letters about improving living standards. After last week’s vote, which came too late for disabled people, I urge MPs to wake up before making the same mistake again.
I urge the Government to resist going down the road of pitting old people against children or children against striking workers, or any of that nonsense. Leave that division and nastiness to other parties that seek to divide and conquer and create inequality.
Danny Kruger (East Wiltshire) (Con)
It has been a very good debate, and I am very grateful to all hon. Members across the House who have contributed.
It is still no clearer to us what the Government think or intend to do about the two-child cap, but it has been very good to hear so many strong voices from the Opposition Benches for and against the two-child limit. Of course, we do not really know what the Prime Minister himself thinks. He campaigned for the Labour leadership on a promise to scrap the two-child limit; then, in order to win the general election, he campaigned to keep it. Now, under pressure from his Back Benchers—once again, I pay tribute to the real powers in the Labour party—he is hinting that he will scrap it after all at a cost of £3.5 billion. Add to that the £4.5 billion the Government have to find because they abandoned their welfare reforms and the £1.3 billion they lost when they U-turned on the winter fuel payment, and the Government will have to find £9.3 billion this autumn.
Peter Swallow (Bracknell) (Lab)
I would like to clear up what this Prime Minister and Government have done. They have expanded eligibility for free school meals to include more than 3,000 children in Bracknell Forest; expanded Best Start family hubs, which is something the previous Government never funded in Bracknell Forest; expanded the warm home scheme; rolled out free breakfast clubs in primary schools; limited expensive school uniforms to three branded items—
Madam Deputy Speaker (Caroline Nokes)
Order. The hon. Gentleman should know that interventions must not be his speech read out at speed.
Danny Kruger
I am very grateful to the hon. Gentleman for his recitation, much of which was Conservative policy now rebranded by the Labour Government and the rest was further spending commitments. The Government are incapable of cutting spending, so we know where this is headed: tax rises in the autumn. There will also be tax rises on wealth. We know what wealth is: it is the product of economic success. It is what happens when people risk their capital and make things that people want. Wealth means more jobs, higher wages and more tax revenues. It means that we can reduce debt and invest in more businesses. And wealth taxes, which are coming, will mean less of all that. That is the Labour way—circling the drain and then going down to national bankruptcy. That is where a wealth tax and welfare spending lead us to, and the rest of the House seems to support that plan.
Iqbal Mohamed (Dewsbury and Batley) (Ind)
According to the latest DWP data, more than 11,800 children in my constituency of Dewsbury and Batley are living in poverty. This is not abstract and it is not inevitable; it is a direct result of policy choices by the previous Government and the maintenance of that policy by the current Government. One parent shared—
Madam Deputy Speaker (Caroline Nokes)
Order! May I please urge people to make interventions short and pithy and not pre-prepared and read out.
Danny Kruger
I will come in a moment to the matter of child poverty, and I recognise the point that the hon. Gentleman is making.
I was just referring to the fact that all the parties except ours—indeed, it is unclear what those on the Government Front Bench think—seem to support lifting the two-child cap. The Liberal Democrats cannot seem to see a spending opportunity without grabbing it with both hands. Their spokesman, the hon. Member for Torbay (Steve Darling), spent £4.5 billion just in his speech earlier this afternoon. Then we have the SNP Government, who have presided over higher economic inactivity and lower employment than in England, have missed all their targets for child poverty, and still clamour for more money for welfare.
Then there is the Reform party, which is sadly absent today. I do quite like the Reform party and I agree with its Members on lots of things, but there is a problem: they would spend money like drunken sailors. I can see what is happening and I am very worried about it—they will end up in an electoral pact with the Liberal Democrats with a joint ticket to protect welfare spending. I do not know how hon. Members feel about the anticipated alliance.
The hon. Member for Dewsbury and Batley (Iqbal Mohamed) and others, particularly Members on the Government Benches, have cited widening poverty rates over the past decade or more, and they repeatedly raised the issue of 4.5 million children, but they are talking about relative poverty. The fact is that relative poverty increased under the previous Government because, overall, the economy grew, as more people became more prosperous. As the median income rises, more people come under it; that is how it works. If relative poverty goes down under this Government, it will be because they shrank the economy. That is highly likely, but it is not an achievement to boast about.
Relative poverty is not a measure of anything except the operation of the law of averages. Therefore, what we need to look at is real poverty, absolute poverty. As we rescued the public finances and grew the economy, absolute poverty went down under the Conservatives.
On children, the percentage of children in absolute poverty after housing costs fell between 2010 and 2024. We pulled 800,000 people out of absolute poverty and averted over a million more people falling into absolute poverty. We had more people in work, a higher employment rate, and fewer workless households than since records began. We should thank my right hon. Friend the Member for Chingford and Woodford Green (Sir Iain Duncan Smith) for that. Mention was made of Wilberforce and Disraeli. One day they will add the name of Duncan Smith to that great record.
Madam Deputy Speaker (Caroline Nokes)
Order. That should have been “the right hon. Member for Chingford and Woodford Green”.
Danny Kruger
It just doesn’t flow as well, but yes, apologies Madam Deputy Speaker.
Luke Murphy
In 2023, the shadow Minister said:
“The narrative that the public has now firmly adopted—that over 13 years things have got worse—is one we just have to acknowledge and admit.”
Does he still acknowledge and admit that things got worse under his Government?
Danny Kruger
I am grateful to the hon. Member’s archaeology in finding my previous quotes. Many things did get worse over the last decade and a half—of course I recognise that. But much of it was as a consequence of the global financial meltdown that his party presided over. We spent many painful years fixing the deficit that Labour left us.
I want to quickly cite the previous Government’s record on young people. Labour Members have boasted of the new Labour years, but in 1997 youth unemployment stood at 650,000, and by the time Blair and Brown had finished in 2010 it was up a third to 940,000. When we left office 14 years later, we had almost halved it down to 560,000—lower even than in 1997. That is the Conservative record.
I will conclude shortly, but I first say to those across the House who want to lift the child benefit cap to consider what they are asking. They are asking working people who pay more in tax than they receive in public services—and who themselves have had to take agonising decisions about whether or not they can afford to have another child given the taxes they pay—to fund the benefits for other people who receive more from the system than they pay in.
Paul Waugh
The shadow Minister makes a point about the state funding children. Does he accept that a million families that have three or more children receive child benefit presently? If he accepts that point, does he, as a father of three—as am I—not accept the principle that those children come first under the child benefit? What is the difference between child benefit and universal credit? Does he want to cap child benefit at two children?
Danny Kruger
The difference is that child benefit is paid to everybody. Child benefit is a universal entitlement. We need to ensure that we are not adding to the incentives in the system to live a life on benefits. I fully recognise the point that the hon. Gentleman makes.
When I say that some people receive more from the system than they pay in, I am not trying to stigmatise those people. That point has been thrown at us, but it is not the case. I am not stigmatising people who receive more in benefits than they pay in tax. Life is not all about whether someone is a net fiscal contributor or not. I agree with points made by some Members that we should think more about social structures than fiscal transfers, but when it comes to fiscal policy there is a limit. Reciprocity matters, and when we are talking about money, it is right that people living on benefits face something of the same realities as people who pay for themselves.
We still have too many families trapped in welfare. What we need is more families and, yes, larger families supporting themselves through well-paid work. We need a tax system like that in Europe, America and across the world, which recognises families. The previous Government made an important step with the changes to the high-income child benefit charge, which was scrapped by Labour. The best thing we can do for families is to get the tax system and, crucially, the wider economy right, so that we have good growth, good jobs, higher wages, flexible childcare and strong communities.
Kanishka Narayan (Vale of Glamorgan) (Lab)
The shadow Minister talks about trade-offs in public finances, growth and child poverty. In the period since 2015-16, there was zero progress on absolute poverty and zero progress on relative poverty—public finances ruined and growth flat. Does he not think that the central trade-off was between a Tory Government and a thriving country?
Danny Kruger
The story of the last 14 years is quite easily told. In 2010 there was a budget deficit of 9%, and we had almost fiscal bankruptcy. We spent 10 years very painfully restoring the public finances at great cost, and I totally understand that. Then we were back down to a balanced budget. Then covid hit, and we spent the last five years trying to recover from that. On welfare, we have a very proud record of reducing unemployment and making work pay. Since covid we now have this great problem of disability and sickness benefits. That is the challenge that we were undertaking to fix as we left office and that the Government have now completely failed to conclude.
It is not too late. I am glad to see the Minister for Social Security and Disability in his place. His review should not wait until next autumn; we need it this autumn. We need proper plans to fix the welfare system, not just to increase spending as the Government are now doing. I urge hon. Members across the House to support our motion. Let me be clear: every Member who does not is voting for welfare dependency and national bankruptcy. Only the Conservatives have a plan to fix this.
The Parliamentary Under-Secretary of State for Work and Pensions (Andrew Western)
Before I turn to some of the rawer politics as the debate demands, I thank all hon. Members who have taken part in this important debate. Like other hon. Members, I am appalled by the level of child poverty in this country. Running through the debate was an underlying and understandable anger at the unacceptable increase in child poverty since 2010, with 1.1 million children using food banks to eat.
Graham Stuart
I am sure that the Minister wants to give a fair and balanced overview, and we all wish to see fewer people in relative poverty, notwithstanding his support last week for a measure that would have put it up by a quarter of a million. Just to have balance on the record, does he recognise that, in absolute terms, between 2010 and 2024 the number of children in poverty dropped by 300,000, and the number of people in poverty overall by 800,000?
Andrew Western
I absolutely accept that the Conservative party, because of its shameful record, made a fundamental change to the way in which poverty is assessed. We have returned to the internationally recognised comparator that exposes that shameful record. We will not run away from that internationally recognised comparator. It is on that on which we will be judged, and the Conservatives must also be judged on that.
I thank Labour Members who spoke in the debate so passionately about the work that the Government have already done on child poverty and the Conservative party’s shameful record. I thank my hon. Friends the Members for Clwyd North (Gill German), for Reading Central (Matt Rodda), for Ealing Southall (Deirdre Costigan), for Basingstoke (Luke Murphy) and for Tipton and Wednesbury (Antonia Bance)—and, yes, my hon. Friend the Member for Alloa and Grangemouth (Brian Leishman). He and I may not agree on the process being followed by the Government to tackle child poverty wherever we see it, but I do not doubt his commitment and support to tackling it.
I thank in particular my hon. Friend the Member for Bournemouth East (Tom Hayes) for his powerful personal testimony about his upbringing, and about the stigma of poverty and the shame that many parents feel when they require extra support. Like him, I grew up in modest circumstances, as one of five children. For a period, in a single-parent household, we were dependent on tax credits, child tax credits and the education maintenance allowance—remember that? I will not allow privately educated Conservative spokespeople to lecture us on the plight of struggling families up and down the country when they have shown no care at all about the part they played in putting many of those families into crisis.
Andrew Western
What is low is scrapping the Child Poverty Act in 2016. The Conservatives’ record on child poverty is cheap and low. [Interruption.] The right hon. Member for Beverley and Holderness (Graham Stuart) can continue to chunter from a sedentary position; I could reel off their record all day.
Andrew Western
I will not at the moment.
Let me come to the shadow Secretary of State, who, like many Conservative Members, was in total denial of the Conservative record, not only on child poverty, but on the welfare bill, which has spiralled enormously since 2020. They put 4.5 million children in poverty, and they come here with this motion. There was no recognition of the fact that almost 60% of families affected by the two-child limit are in work. There was no understanding of the lack of clarity in their motion, which does not specify whether it relates only to universal credit and child tax credit. It says that children “should not receive” any “additional funding”. What of child benefit? What of disability living allowance for children? The motion is not worth the paper it is written on, unless that is now their policy.
The Conservatives have talked about personal and fiscal responsibility—quite unbelievable from the party that crashed the economy and left the welfare bill spiralling. They take no responsibility for their actions at all, but they seek to lecture others on how they should live their lives. The shadow Secretary of State talked about giving families broader support—for instance, through family hubs. How many Sure Start centres closed under the previous Government? In their first 10 years alone, it was 1,300. Then, we heard that only the Conservatives understand the importance of living within their means. I have two words for the hon. Member for Faversham and Mid Kent (Helen Whately): Liz Truss.
David Chadwick (Brecon, Radnor and Cwm Tawe) (LD)
In Wales, sadly, we have some of the highest rates of child poverty in the United Kingdom, and some of the highest across Europe. Why is that? Why is poverty so stubbornly high in Wales, and would lifting the cap not improve things for Welsh children?
Andrew Western
Lifting the cap is one of the many levers that the Government are considering. We will look at that in the round, and when we come forward with our child poverty strategy, we will look to lift children in Wales, Scotland, Northern Ireland and here in England—children up and down this country—out of poverty, because that is a moral mission for this Government. Indeed, we have already started that important work, with free breakfast clubs, free school meals for families on universal credit, restrictions on branded school uniform items and, to the point made by the hon. Member for Bexhill and Battle (Dr Mullan), proposed changes to the Child Maintenance Service. We will also abolish direct pay, which was created by the Conservative party. This will lift 20,000 children out of poverty.
Andrew Western
The hon. Gentleman will be aware that there was £1 billion worth of employment support alongside those measures, the impacts of which are yet to be scored by the Office for Budget Responsibility. We are serious about getting people back to work as a route to tackling poverty, as well as providing an important safety net for those who need it.
The hon. Member for Bridgwater (Sir Ashley Fox) asked why others should subsidise someone’s third, fourth or fifth child. I say gently to the Conservatives that it is never the child’s fault. A third child has the same right to thrive as the first two, and if they do not, all three children suffer. A hungry child is a hungry child, whatever their background.
Andrew Western
I am afraid I will not take any further interventions, as I only have a couple of minutes left. The hon. Member for Tewkesbury (Cameron Thomas) tempted me to speculate about decisions around taxation. He will appreciate that that is way above my pay grade, and I hope that he is patient enough to wait for the next fiscal event to get an answer to his question.
Graham Stuart
On a point of order, Madam Deputy Speaker. Given collective responsibility, is it in order for a Minister of the Crown to argue against a policy of his own Government? If I have understood correctly, it is the policy of the Government and the Labour party to maintain the two-child benefit cap.
Madam Deputy Speaker (Caroline Nokes)
Order. The right hon. Gentleman will know that that is not a matter for the Chair, and he is seeking to drag me into the debate.
Andrew Western
It is also not what I said, Madam Deputy Speaker. I said that we on our child poverty taskforce are considering all available levers in the lead-up to the child poverty strategy, which will come in the autumn.
The Opposition spokesperson, the hon. Member for East Wiltshire (Danny Kruger), made a point about controlling welfare spend. Yet again, we heard that the four years post-covid were not an appropriate time to tackle the spiralling welfare bill that the Conservatives created. In those four long years, the Conservative party got through three Prime Ministers, five Ministers for health and work, six Secretaries of State for Education and seven Sunak resets, yet the welfare bill continued to spiral. Child poverty worsened, and we had wasted years, so we will take no lectures from the Conservatives on welfare spend, and certainly not on the best way to tackle child poverty.
This party inherited the Conservatives’ shameful legacy of disastrous levels of child poverty and a broken social security system that fails to command people’s trust. Across Government, we have started the urgent work to fix these problems and to drive down child poverty once again, as the last Labour Government did, in partnership with the devolved Administrations, charities, local authorities and others, and to build a fairer, more sustainable social security system that helps people build better lives by giving them the right incentives and support. We will do that important work because tackling child poverty is a moral mission for this Government, and we will oppose this motion today because all levers are under active consideration as we seek to do so.
Madam Deputy Speaker (Caroline Nokes)
Before I put the Question, I will just remind the Minister that, like the shadow Minister, he should not be referring to Members by their name in the Chamber but by their constituency.
Question put.
Taxes
(1 day, 17 hours ago)
Commons ChamberRead Hansard Text Watch Debate Read Debate Ministerial Extracts
19:20 - The House divided: - Ayes: 165 / Noes: 342 - Question accordingly negatived.
Madam Deputy Speaker (Caroline Nokes)
I must inform the House that Mr Speaker has not selected any amendment.
I call the shadow Chancellor of the Exchequer.
Sir Mel Stride (Central Devon) (Con)
I beg to move,
That this House notes that the Government was elected on the basis of a manifesto commitment not to increase taxes on working people and not to increase National Insurance or the basic, higher, or additional rates of Income Tax, or VAT; accordingly regrets the decision to raise employers’ National Insurance contributions in the Autumn Budget 2024; further regrets the proposed changes to Agricultural Property Relief and the burden on taxpayers from increases in Council Tax, which is forecast to increase at its highest rate in 20 years; calls on the Government to reaffirm the statement made by the Chancellor of the Exchequer in the Autumn Budget 2024 that, from 2028–29, personal tax thresholds will be uprated in line with inflation once again; regrets that the Government plans to bring those whose only income is the State Pension into paying Income Tax this Parliament; and urges the Government not to introduce new taxes on the value of assets owned such as savings, homes and pensions, which would drive wealth creators away from the UK.
This is the Government of broken promises. The Labour party said during the general election campaign that it would do nothing on taxation, and yet it came straight into government and placed £25 billion-worth of taxation on businesses up and down our country. We know the consequences of that: it killed growth nearly stone dead, and it has cost around £3,500 pounds by way of lower wages alone to the average working family. It is a clear breach of the Labour party’s manifesto. Members need not take my word for it—they can take Paul Johnson’s, when he was the head of the Institute for Fiscal Studies. He has also been on the airwaves recently describing the move as not just a breach of the Labour party manifesto, but a “blatant” breach.
We had the Secretary of State for Environment, Food and Rural Affairs—then the shadow Secretary of State—out reassuring farmers, looking Tom Bradshaw, the president of the National Farmers Union, in the eye and telling him that at least when it came to inheritance tax, farmers had nothing to fear from a future Labour Government. How wrong they were!
Then there was the winter fuel payment debacle. Labour reassured pensioners up and down the country that it would not be means-testing the winter fuel payment. Before somebody jumps up and says, “Well, it only excluded millionaires,” it did not—some 80% of pensioners living below the poverty line were denied those payments and had to go through a long and cruel winter. The U-turn, when it finally came, will come as little comfort to pensioners who are now about to be dragged into income tax for the first time as a result of the Labour party’s policies.
In opposition, the Labour party said it would freeze council tax, and yet we have seen in the latest spending review a £7 billion increase in council tax levied across this Parliament. According to the IFS, it is the largest increase in council tax in a generation—and that from the party that said it would not be putting up taxes on working people. Does it not think that working people pay council tax?
Dr Luke Evans (Hinckley and Bosworth) (Con)
I am grateful to the shadow Chancellor for making that point. Does he believe that a humble toolmaker who happens to own a small business is a working person?
Sir Mel Stride
Indeed, my hon. Friend is absolutely right. We need to stand up for everybody—even our toolmakers.
Let us be frank: we have had to table this motion today, which seeks to do nothing other than reaffirm the commitments that the Labour party has already made, because of the litany of broken promises that I have just shared with the House.
Sir Jeremy Hunt (Godalming and Ash) (Con)
Does the shadow Chancellor agree that, following the welfare U-turns, public finances today are in a far worse state than they were a year ago when the Government came into office? There is a crucial difference: a year ago, the Conservative Government were taking difficult decisions to bring taxes down in order to grow the economy; because this Labour Government are failing to take those decisions, there is only one way taxes can go, and that is up.
Sir Mel Stride
My right hon. Friend is absolutely right, and under his stewardship, things were so much better. As he points out, the Government have resiled from any attempt to control the welfare bill—an unfunded tax commitment of £5 billion. That, plus the U-turn on the winter fuel payment, is more than £6 billion of unfunded commitments that the Government are responsible for—unfunded commitments that they said they would never see themselves making. He is absolutely right: the legacy that he left when he was Chancellor in the previous Government was the highest growth in the G7 for our economy. We had near record levels of employment, and near record low levels of unemployment. We had had 13 consecutive months of real wage growth, and inflation had been brought down from over 11% due to the Ukraine war, to bang on 2% on the day of the general election. Where is inflation now? It is almost double what the Government inherited.
Ben Coleman (Chelsea and Fulham) (Lab)
Given all the extraordinary and wonderful things that the right hon. Gentleman is setting out, is it not equally extraordinary that the British people thought you were a shower and needed to get rid of you—and they did? That is why you are on the Opposition Benches and we are over here.
Madam Deputy Speaker (Caroline Nokes)
Order. I am not sure that the British people were seeking to get rid of me.
Sir Mel Stride
I think what the hon. Gentleman said was a gross impertinence, Madam Deputy Speaker. He also referred to you as an absolute “shower”, which is totally unreasonable. I have always been a great admirer of yours, as you know, and always will be. [Hon. Members: “ Name him!”] Name the hon. Gentleman—quite.
We have a Government who are grossly incompetent. As soon as they came into office, what did they do? They talked down the economy. It is no surprise that the British Chambers of Commerce is now saying that the No.1 concern of its members is high taxes, or that the latest survey by the Institute of Chartered Accountants in England and Wales once again shows that business confidence is down—and that is for the fourth survey in a row.
Graham Stuart (Beverley and Holderness) (Con)
Amid the shadow Chancellor’s quite correct exposition on the subject of where the Government have gone wrong, does he not have a little pity for the Ministers on the Government Front Bench? After last week, it is quite clear that they are no longer responsible for the running of the Government, as that has been handed to the hard left who have no interest whatsoever in balancing the books, and do not care about rising debt, rising gilt costs and the other irresponsible outcomes of this Government, who are now absolutely out of control.
Sir Mel Stride
My right hon. Friend is absolutely right. When it comes to criticising this Government, it is always confusing whether to address those on the Front Bench or on the Back Benches, because they are never quite in the same place.
The big mistake that the Government made was to talk down the economy by going on about this confected black hole of £22 billion—something that the Office for Budget Responsibility has already debunked. The Government should stop using that number. They are the ones who created a black hole of some £6 billion, as I have just set out, and they should focus not on the black hole that they have invented, but on the one they have created. It is that black hole that is creating speculation across the summer about what will happen in autumn, damaging confidence and damaging businesses up and down the country.
Noah Law (St Austell and Newquay) (Lab)
Does the right hon. Gentleman accept that regardless of the actual size of the black hole left by the previous Government, it is a significantly larger number than the one he is talking about with respect to the welfare bill?
Sir Mel Stride
I am not sure that I fully understood the point, but the hon. Gentleman seems at least to accept that there is a real black hole when it comes to this Government, of at least £6 billion.
Sir Alec Shelbrooke (Wetherby and Easingwold) (Con)
Does my right hon. Friend find it extraordinary that when the Government came into office they made a big play of putting the OBR on a pedestal, but because they did not like the news, they now want to dismiss it and water it down?
Sir Mel Stride
Well yes, exactly. The Government will look to any floating branch or whatever to cling on to, to try to look a little better than they truly are.
We have seen a Government who have indulged in spending like it was the 1970s. The result of that has been to push up inflation, which has led to interest rates being higher for longer than they otherwise would have been. It is all very well for Labour Members to trumpet the fact that there have been four interest rate cuts since they came into office. The reality is that if they had not lost control of inflation, there would have been more and they would have come more quickly. The headroom that the Chancellor has against her fiscal targets is wafer-thin. This is the usual Labour way: spending and spending and spending until it runs out of other people’s money.
Melanie Ward (Cowdenbeath and Kirkcaldy) (Lab)
The shadow Chancellor talks about interest rate rises. Will he enlighten us as to why he thinks we should take lectures on economic competence from his party, which has a shadow Cabinet with 16 members who served in the Government of Liz Truss and Kwasi Kwarteng?
Sir Mel Stride
It would be sensible for the hon. Lady to look at those on her own Front Bench and ask why they take these appalling anti-business decisions. The answer is that hardly any of them have any experience of private business or of setting up a company—in fact, not one senior Front Bencher from her party has that. That is unlike the Conservatives—whether that is myself; the shadow Home Secretary, my right hon. Friend the Member for Croydon South (Chris Philp); the shadow Business Secretary, my hon. Friend the Member for Arundel and South Downs (Andrew Griffith); or others—who actually understand the real world of business.
Dr Evans
The shadow Chancellor makes a very good point. Is he surprised by the Federation of Small Businesses, which has come out and said that for the first time ever in its index—since records began in 2008—more small businesses will contract than will grow? Is he as worried as I am about what signal that sends to those small business owners who are trying to grow for our economy?
Sir Mel Stride
My hon. Friend is absolutely right. The reality is that if we tax something, we tend to get less of it. This Government have taxed business, so it is not surprising that the economy has been damaged as a consequence.
An often fair question asked of the Conservatives is: what would we do? Let me answer that question directly. First, we would have taken very different choices. We would not have loaded up taxation on businesses and stifled growth in the way that Labour has: we would have focused on productivity. We would not have come into office and given the train drivers 14% and the junior doctors 22% with no strings attached whatsoever. We were told by the now Health Secretary during the run-up to the general election that all we needed to do was get around the table with the unions and settle and the problem would go away—well, the junior doctors are back for more.
Darren Paffey (Southampton Itchen) (Lab)
Will the right hon. Gentleman give way?
Sir Mel Stride
I will momentarily.
We would of course have tackled the welfare bill, as we did when we were in office. We made £5 billion-worth of savings, as scored by the Office for Budget Responsibility, and we had 450,000 fewer people going on to long-term sickness benefits as a direct consequence of our policies. We had a clear plan to go into government and save £12 billion a year in addition.
Darren Paffey
While the shadow Chancellor is engaging in such fascinating whataboutery at the Dispatch Box, will he take the opportunity to say which of the 25 tax increases in the last Parliament he regrets or would undo?
Sir Mel Stride
I think this debate is actually about the tax policy of this Government. As I have clearly set out—[Interruption.] To be fair, there was the small matter of covid, which came along and shrank the UK economy by 10% overnight. People at the time speculated that we would see mass unemployment, the like of which our country had never, ever seen, yet through our intervention we ensured that that did not happen.
Likewise, when the Ukraine-Russia war brought inflation to our shores through energy price spikes, peaking at 11.1% at the back end of 2022, we took the tough decisions, along with the Bank of England, to bring that inflation down. In the meantime, we protected millions of low-income families up and down the country from the consequences of that inflation. That came with a £400 billion price tag, so it is not surprising that some taxes had to rise in order to pay for that.
Mr Richard Holden (Basildon and Billericay) (Con)
The shadow Chancellor is making an excellent speech. Does he agree that the danger is that if Governments do not have a prudent financial position, they end up in the situation that we are now seeing, with the interest on Government debt going up and up? We are now paying around £10 billion a year more than we were at the time of the general election.
Sir Mel Stride
My right hon. Friend is absolutely right. With the increasing Government debt to which this Government are constantly adding, and the higher interest rates for longer for which they are responsible because of their extravagant spending, we are spending about £100 billion a year on simply servicing that debt, which is twice what we spend on defence. That is not sustainable, and things will get worse under this Government.
Joe Powell (Kensington and Bayswater) (Lab)
Might the Chancellor elaborate on the national debt that the previous Government inherited in 2010, compared with what we inherited last year?
Sir Mel Stride
I would be delighted to talk the hon. Gentleman through that. The preceding Labour Government left this country with a deficit of 10.1%, or £160 billion a year, so clearly we had to get on top of that deficit. It is a simple fact of economic life that if a country is running a large deficit, its debt increases, but by the time of covid, we had largely settled that deficit. For the reasons that I gave a moment ago, of course we added to the debt and the deficit at that point, because we had to intervene to stabilise the economy. However, the inheritance that we received in 2010 was the start of that debt climbing. The hon. Gentleman should acquaint himself with the economic history.
What approach can this Government take in the autumn? They are not going to be saved by growth—that is for the birds. The OBR, the Bank of England and the International Monetary Fund have all downgraded growth, and the Office for National Statistics recently announced that for the second month in a row, we have had an economic contraction.
How else might the Chancellor make the numbers add up? Well, despite Ministers insisting that their commitment to the fiscal rules remains non-negotiable, there are reports of potential changes to the broader fiscal framework, including the early use of the flexibility of a 0.5% of GDP range for the current budget target, which would allow £12 billion to £13 billion of extra borrowing. However, that would be a breach of faith. There are similar reports that Ministers might move to just one OBR forecast a year, to avoid an embarrassing emergency Budget like the one we saw in March. However, that would completely abandon the commitment not to sideline the OBR, so when the Minister comes to the Dispatch Box will he reconfirm that the Government’s commitment to the fiscal rules also applies to the fiscal framework, and that we will continue to have two OBR forecasts per year?
The Government should be looking not for yet more borrowing, but to rein in spending. However, the welfare debacle shows that they are utterly incapable of doing that, so that leaves just taxes. The motion before us today simply asks the Minister to confirm the Chancellor’s commitment not to extend the freeze on tax thresholds. She specifically said in her Budget speech that such a move
“would hurt working people. It would take more money out of their payslips.”—[Official Report, 30 October 2025; Vol. 755, c. 821.]
When the Minister comes to the Dispatch Box, will he confirm that he, too, holds that position? Will he also rule out wealth taxes? We have already seen tens of thousands of people—high net worth individuals—leaving our country. I know that socialists may say, “Good riddance to them—they are wealthy”, but the Adam Smith Institute calculates that the tax forgone as a consequence of their departure is equal to the tax paid by around half a million people on average earnings. The Labour party has no plan to stem that exodus of talent and wealth creation.
Whatever decisions are taken in the autumn, they will be bad ones, and as nervous markets look on, they may prove disastrous. It may even be that this Government take us to a dark place; it is hoped not, but if history is any guide to the future, the lights are surely flashing red. Surely, too, the British people, those hard-working men and women up and down our country—the businesses, the entrepreneurs, the farmers who toil all hours, our charities, our hospices, our veterans, our elderly, and all those who embody the very best of all that our country can be—deserve answers about the promises made to them, and about whether their pay packets, their pensions and their savings are safe. Surely, they deserve better than this wretched, rotten and defunct Labour Government.
The Chief Secretary to the Treasury (Darren Jones)
I congratulate the shadow Chancellor on another theatrical performance—one that I know we all enjoyed across the House. I remember fondly his previous attempts to weave the story of “Alice in Wonderland” into his contributions. The only conclusion I can draw today is that he has not found his way out of the rabbit hole just yet.
The shadow Chancellor made a number of points where he seemed to rewrite history. It was all the fault of Russia invading Ukraine, with not one mention of Liz Truss—“Who’s that? We’ve never heard of her.” When asked why, if everything was so hunky-dory under the Conservatives, they suffered such an historic loss, the answer was, “Oh, I don’t know.” There was no answer to the question. We had hope when he said, “I will tell the House what I would do differently.” I sat and listened carefully, and the grand reveal: “I would focus on productivity.” Well, I think the Conservatives said that before, and how did that go? Not one policy, suggestion or apology for their record—not one thing.
In contrast, this Government were elected with an historic landslide and on a mandate of change. [Interruption.] Conservative Members question our historic landslide, but they should look at the number of seats we have on our side of the House, and how many they have on theirs. I encourage them to remember that the aim of the game is to get Members in this House. It was an historic landslide for the Labour party at the last election, elected on the promise of change—to put pounds in the pockets of working people and to deliver for the renewal of Britain.
At the Budget last year we fixed the foundations, stabilising the public finances and putting Britain back on the road to growth, after 14 years of Conservative waste and decline. [Interruption.] I know that the Conservatives do not want to hear it, but every time one of them gets up to speak—we have heard it already—it is as if they have forgotten about the £22 billion black hole they left in the public finances. Rather than act to fix it, they called an election, ran away and left it for us to clear up their mess. This Labour Government will never repeat the mistakes of the Conservative party.
Graham Stuart
The Chief Secretary said the name of the game is to get the maximum number of seats. I gently suggest to him that that is not the name of the game; the name of the game is to serve the British people and honour the promises we make to them. [Interruption.] He thinks that is amusing. If he wants to know where his vast majority came from, it came with a series of promises that, one by one, he is breaking.
Darren Jones
I roll my eyes because, evidently, all my hon. Friends put themselves forward and stood to serve the country. As my right hon. Friend the Prime Minister has made very clear, he changed the Labour party to make sure that we put the country first. The right hon. Gentleman makes the case that the name of the game is not to get Members elected to this House; if that is the case, he obviously played the game very well, because the Conservatives failed to do that miserably.
At the Budget, we took the decisions necessary to stabilise the public finances and give our public services a vital injection of cash to start to turn around the years of decline that members of the public across the country know: NHS waiting lists growing, schools crumbling, the prisons crisis, and project after project being cancelled or delayed. That investment was underpinned by changes to the tax system to make it fairer and more sustainable, while protecting working people against higher taxes in their payslips.
Wendy Morton (Aldridge-Brownhills) (Con)
I wonder whether the right hon. Gentleman could help me out by explaining what a working person is.
Darren Jones
A working person is someone who goes to work, and in our manifesto we made a very clear commitment to protect working people through the taxes they pay on their pay slips—which is something that we experience when we go to work.
However, we did more than that. We ended tax breaks for private schools to help fund new teachers and raise education standards, supporting more than 90% of children in state schools to achieve and thrive. We removed the outdated concept of domicile status from the tax system, so that all long-term residents of the United Kingdom pay their fair share of taxes here. We ensured that the UK tax system remains internationally competitive, reforming the tax treatment of carried interest. We took further action by raising the higher rates for additional dwellings for stamp duty land tax to support first-time buyers and main home movers, giving them a competitive advantage. We made changes to the energy profits levy to ensure that oil and gas companies contribute to the clean energy transition. In the Budget last autumn the Government introduced the most ambitious package ever to close the tax gap, ensuring that more individuals and businesses pay the taxes they owe.
Stuart Anderson (South Shropshire) (Con)
The Chief Secretary talks about the Budget. I have spoken to small businesses across my constituency that are feeling the impact of last year’s tax rises, and they are concerned about uncertainty and a lack of clarity. Does he really understand the impact that last year’s attacks on small businesses are having, and how devastating they are for our constituents?
Darren Jones
Of course we engage with businesses, small and large, week in, week out, as Ministers in the Treasury, across Government, and in our constituency capacities. As Members know, the introduction of the employer national insurance contributions was weighted with changes in the threshold for payment with the aim of reducing the burden on smaller businesses. We recognised that we were honouring our promise to working people not to increase the headline rates of employee income tax or national insurance in their pay slips.
Like other benefits that replace income, the state pension is taxable, but the personal allowance will continue to exceed the basic and full new state pension, which means that pensioners whose sole income is the full new state pension or basic state pension without any increments will not pay any income tax. The state pension continues to be the foundation of the support available to pensioners, backed by this Government’s commitment to the triple lock. This year more than 12 million pensioners have benefited from a 4.1% increase in their basic or new state pension, which means that under this Government those on a full new state pension will receive an additional £470. The full new state pension is currently projected to go up by around £1,900 over the course of this Parliament, on the basis of the latest forecast from the Office for Budget Responsibility.
I note that Members of opposition parties have not opposed these spending plans. They have not said that they think the NHS should get less money this year, or that we have too many teachers, nurses or police officers. If they support our spending plans, I simply ask: how would they pay for them?
Melanie Ward
Like many of my constituents, I welcome the investment that was announced by the Chancellor at the time of the spending review for the long-awaited regeneration of Kirkcaldy town centre, a town centre that went only one way under 14 years of Conservative rule and 18 years of the SNP. They talk about support for small businesses, but what really happened is clear. Does my right hon. Friend agree that it has only been possible to do this because of the decisions that we have made to raise revenue?
Darren Jones
I wholeheartedly agree with my hon. Friend, who is an excellent champion for her constituency. She is right to point out that the investment announced for her constituency was a consequence of the decisions made by this Chancellor and this Labour Government to invest in the renewal of Britain.
Mr Louie French (Old Bexley and Sidcup) (Con)
I am not sure what financial qualifications the Chief Secretary has, if any, but last week’s reports suggested that, privately, Ministers are briefing their Back Benchers that they will introduce a wealth tax without calling it a wealth tax. Can he confirm whether or not that is true?
Darren Jones
That is a slightly odd question, but I can definitely confirm that any tax changes, one way or the other, will be announced by the Chancellor at the Dispatch Box in the normal way in the autumn.
As I say, Conservative Members are welcome to come forward with suggestions about how they might pay for the decisions that this Government have taken. Maybe they disagree with our fiscal rules, which are our assurance to the financial markets that we will live within our means and reduce Government debt.
John Glen (Salisbury) (Con)
The right hon. Gentleman is being generous in giving way. One area the Opposition would be looking at is a coherent reform of the welfare system so that, by changing the pathway to entitlement to benefits, we get that whole budget under control, which would make a meaningful difference to the fiscal position that the Government are in.
Darren Jones
As the right hon. Gentleman knows, my colleagues in the Department for Work and Pensions, with the Stephen Timms review and other work, are taking those measures forward.
Madam Deputy Speaker (Caroline Nokes)
Order. The Chief Secretary is the third Minister or shadow Minister to refer to a colleague by name. It seems to be a bad afternoon for it.
Darren Jones
Madam Deputy Speaker, it is because the review is named after the Member, which led to my naming him, but the Timms review will be taking forward that work and coming forward with proposals in due course.
If Conservative Members wish to challenge the fiscal rules, I invite them to do so. Do they instead think it would be wise to let debt balloon year on year, as they did, to pay for the day-to-day costs of Government, ultimately spending more and more on debt interest and less on the priorities of working people? In contrast, our fiscal rules are non-negotiable, and they are the foundation for stability and investment.
The first rule is for stability—that day-to-day Government spending should be paid for through tax receipts—which is the sound economic choice and also the fair choice, because it is not right to expect our children and future generations to pay for the services we rely on today. This first rule allowed my right hon. Friend the Chancellor, at the Budget last year, to allocate £190 billion more to the day-to-day running of our public services over the course of this Parliament.
The second fiscal rule has enabled this Government to invest in Britain’s economic renewal while getting public debt on a downward path. This rule has allowed the Chancellor to increase public investment by over £100 billion in the autumn and a further £13 billion this spring—investment to rebuild our transport network, our defence capabilities and our energy security. In short, it is investment to grow our economy, improve living standards and put more money into the pockets of working people in every part of the country.
Sarah Olney (Richmond Park) (LD)
Let me be clear: the legacy left behind by the last Conservative Government is one to be ashamed of. Their incompetence in governing left schools and hospitals crumbling, social care cripplingly underfunded, and record levels of sewage in our lakes and rivers. Their record is a dispiriting picture of low growth, high interest rates and record levels of inequality.
We know that this Government inherited a mess, and we know that the cause of that mess was years of reckless economic mismanagement, but that cannot be allowed to serve as cover for measures that damage business or cause suffering for the vulnerable in our society. The decisions taken by this Government at the autumn Budget have not worked. The national insurance jobs tax will damage small businesses, lower people’s living standards and undermine 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.
The Liberal Democrats acknowledge that the Government had tough decisions to make. However, instead of raising national insurance, cutting disability benefits and cutting departmental budgets even further, they should be taking bold and ambitious steps to grow our economy, which is the best way to raise tax revenue and boost living standards. That is why we have been calling on the Government to ignore the scaremongering from those on the Conservative Benches, and urgently negotiate a new, bespoke UK-EU customs union.
On taxation, as set out in amendment (b), tabled by my hon. Friend the Member for St Albans (Daisy Cooper), we all know that the Government are desperately looking for ways to raise revenue. I encourage Treasury Ministers to take a look at the measures set out in last year’s Liberal Democrat manifesto, which would ensure that revenue is raised in a fair way, taking into account the huge amount of economic inequality that, sadly, we see across the United Kingdom.
This huge inequality in our country threatens to rip our social fabric apart, which is why the Liberal Democrats have proposed a better way: raising revenue fairly, doing so practically and tackling inequality; increasing taxes on some of the biggest and wealthiest corporations, including the big banks, by reversing the Conservatives’ tax cuts for banks; ensuring that the wealthiest people in the world who are doing business here are taxed effectively, by raising the digital services tax from 2% to 10%; fairly reforming capital gains tax in a way that cuts tax, or keeps it the same for the vast majority, while ensuring that the wealthiest 0.1% cannot avoid paying their fair share; and doubling remote gaming duty to ensure that gambling companies pay their fair share. Those steps could happen immediately, so I hope Ministers, who are keen to fill a fiscal hole, might follow our advice.
The previous Government did so much damage to our high street businesses, but the Labour Government’s national insurance jobs tax has only made things even harder for them and their workers. High street businesses are the beating heart of our economy at the centre of our local communities, and they create the jobs that our communities rely on. The changes to employer national insurance contributions announced in the autumn Budget are an unfair jobs tax which will have highly damaging impacts across many sectors: on social care providers; on GPs; and on the hospitality sector, which has been hit by an extra £3.4 billion in annual costs through the cumulative impact of the changes announced in the autumn Budget. The Liberal Democrats voted against the changes to employers NICs at every opportunity. I once again urge the Government to scrap those measures.
As the motion looks to examine the causes of the economic challenges faced by people and businesses across the country, a perhaps surprising omission is the ongoing disastrous damage caused by the Conservatives’ pitiful Brexit deal. The appalling agreement negotiated by the last Conservative Government has been a complete disaster for our country, particularly for high street businesses, who 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. 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. And a recent study has found that goods exports have fallen by 6.4% since the trade deal came into force in 2021.
The Liberal Democrats welcome the steps this Government are taking to rebuild our relationship with the EU, but I urge them to recognise that this should only be a first step towards negotiating a bespoke UK-EU customs union. Independent analysis has shown that a closer trading relationship with the EU could boost GDP by 2.2%. That would bring in roughly £25 billion of extra tax revenue every year, which would be crucial for fixing the public services which the Conservative party left broken.
More broadly, as we look at measures which would ease the pressure felt by so many businesses and boost the economy as a whole, we continue to call on the Government to introduce vital reform to the business rates system. In 2019, the previous Conservative Government promised a fundamental review of the business rates system, but they failed to deliver it. Meanwhile, the current Government pledged to replace the system in their manifesto, but still no action has been taken. The current system penalises manufacturers when they invest to become more productive, leaves pubs and restaurants with disproportionately high tax bills, and puts local businesses at a disadvantage to online retail giants. The Liberal Democrats have called for a complete overhaul of the unfair business rates system and its replacement with a commercial landowner levy that would shift the burden of taxation from tenants to landowners. Our proposals for fair reform would cut tax bills, breathe new life into local economies and spur growth. Equally important, it would provide long-term certainty for businesses, which is what everybody across the UK wants.
On the Liberal Democrat Benches, we know the extent of the challenges the Government faced when they came into office. We acknowledge that they inherited a dire economic landscape—challenges now exacerbated by an unreliable actor in the White House and an aggressive Russia—but that cannot be an excuse for the mistakes the Government are making. They must take bold action to boost our economy. As such, we support the calls in today’s motion to scrap the national insurance jobs tax and reverse the changes to agricultural property relief. People across the country are still struggling with the cost of living crisis, just as small businesses remain burdened with sky high energy prices, now compounded with an unfair jobs tax and an unfair business rate system.
The Liberal Democrats will continue to urge Ministers to go further and act with more urgency, investing in skills by reforming the apprenticeship levy, properly funding social care and boosting growth through negotiating a bespoke UK-EU customs union to give our economy the boost it so desperately needs.
John Grady (Glasgow East) (Lab)
I rise to speak against the Opposition motion. My right hon. Friend the Chancellor of the Exchequer has raised taxes. She has done so to stabilise the public finances, because the public finances that the Labour Government inherited were in a shocking state; she has done so to invest in public services, in particular the NHS and schools, because public services were left in a shocking state by the previous Government; she has done so to invest in national security; and she has done so to invest in Scotland. My right hon. Friend has raised taxes because public finances need to be managed carefully. We cannot keep pretending that we have money when we do not.
Harriet Cross (Gordon and Buchan) (Con)
On pretending, it seems to me that Labour likes to pretend that the covid pandemic never happened and that the £400 billion that the previous Government spent to protect the country and protect jobs, which Labour supported and asked us to go further on, never happened. Will the hon. Gentleman reflect on that and at least acknowledge what happened in the recent past?
John Grady
I am very happy to reflect that the covid pandemic happened, but I also reflect that Liz Truss and Kwasi Kwarteng’s mismanagement happened. The Conservatives lost the last election because they made a mess of the economy. They have lost their reputation for economic competence, which is why they have lost so many MPs and suffered an extinction event. I read in today’s Times that it was thought that the common crane had been extinct for more than 500 years in Scotland, but it is now reported that there are six or seven nesting pairs in Scotland—more than we have Conservative MPs, and there may be a reason for that.
The Opposition motion implies a reversal of more than £20 billion in taxes. The Opposition need to explain how they would fund that. What cuts would they make, and what effect would that have on the businesses they claim to support? They need to explain whether they would reverse the investment in the NHS, which is essential to businesses. Many businesses have said to me that they want to see investment in the NHS in order to get the waiting lists down and reform the service. That is exactly what my right hon. Friend the Secretary of State for Health is doing. The disruption caused to businesses by NHS waiting lists is significant, but they are now coming down—if only the same could be said for Scotland.
The Opposition must explain whether they would reverse the investment in education, because businesses say to me every week that they want to see investment in skills. They need skilled workers to grow their businesses. It is essential for economic growth.
Graham Stuart (Beverley and Holderness) (Con)
As a Scottish MP, does the hon. Gentleman wish to differ slightly with those on his Front Bench, who have said there should be no new licences for North sea oil and gas? That policy does not mean that we will consume a drop less oil and gas; it simply means that we will import it from abroad with higher emissions and with tens of billions of pounds of tax and tens of thousands of jobs lost. Surely, as a Scottish MP, he should speak up for his constituents and say to those on the Front Bench, “Come on—let’s get those licences going again.”
John Grady
All I will say, Madam Deputy Speaker, is the plain fact is that North sea oil and gas will be produced for many years to come, and the Government support that. The Government are also supporting investment in the industries of the future, such as offshore renewables. Under the Conservative Government, there was a contracts for difference auction with no successful bids, setting back our access to fixed-price, cheap electricity. That is the Tory economic policy on energy: turning up their noses at cheap, fixed-price energy. It is little wonder we are in such a mess.
Dave Doogan (Angus and Perthshire Glens) (SNP)
Will the hon. Gentleman give way?
John Grady
I would like to make some progress, because there are many speakers, but I will give way.
Dave Doogan
I would just like to follow up on the hon. Gentleman’s talking down of Scottish skills and training—classic Labour. How does he reconcile the disparaging characteristic that he paints of Scottish skills, entrepreneurialism and training when Scotland has, for 10 years running, been the top destination for foreign direct investment outside London? What is it that foreign enterprise can see in Scotland that no Labour MP ever will?
John Grady
I cannot recall saying anything disparaging about Scottish education. I did criticise the Scottish NHS—[Interruption.] Well, the reality is that businesses are absolutely petrified of the way the SNP is dealing with Scottish education. We have insolvent universities and colleges in crisis, and education standards are plummeting. Those are the facts, and they are why the Scottish SNP Government will lose in 2026 and we will have a new First Minister.
The Conservatives are meant to be patriotic and pro-defence. How is the investment in defence to be paid for? Would they reverse the record settlement for the Scottish Government given that we have Scottish elections next year? I think they should explain.
John Grady
I will make some progress if I may.
Our debt to GDP ratio is almost 100%, and we inherited that from the previous Government. Conservative Members object to tax rises while wanting tax cuts and increases in public spending and objecting to spending cuts. That is not realistic. We know from the disastrous Budget of Liz Truss and Kwasi Kwarteng that we must manage finances carefully. Some Opposition Members suggest that we should get rid of the Office for Budget Responsibility. The Conservatives shunned the OBR when Liz Truss and Kwasi Kwarteng put forward their Budget and we know what happened then. I find it quite surprising therefore that we still have Conservative Members who want to get rid of it.
The Conservative approach to the economy simply does not grapple with the serious state of the public finances; it inhabits a world of wishful thinking—a world of higher inflation, higher Government borrowing costs and higher interest rates.
John Grady
No, I will make some progress.
The huge inflation unleashed by the previous Government caused immense misery to my constituents. The interest rate rises made life a misery for hard-working families who had bought their homes in Glasgow East. That is why my right hon. Friend the Chancellor of the Exchequer is right to focus on appropriate management of the economy and not wishful thinking. The real question is this: what has the Conservative party come to. Will it ever return to seeing things as they are, rather than proposing policies that bear no relationship to reality? Its proposals, as I understand them, are a form of magical realism, which is why the electorate have cast them into 100 years of solitude.
Sir Andrew Mitchell (Sutton Coldfield) (Con)
I can make a very short speech today, Madam Deputy Speaker, because my right hon. Friend, the shadow Chancellor, in his brilliant speech at the beginning of this debate, set things out so clearly. There are common themes running through both Opposition debates today. The first is that the Government have lost control of expenditure and the second one, which I want to develop very briefly, is that the Executive have failed to listen with appropriate care to what people in this House have said.
On the first of these points, my right hon. Friend the Member for Salisbury (John Glen) said in an eloquent intervention just a few minutes ago that the Government need to work out how to fix last week’s fiasco with the welfare Bill. Far from saving money, this is virtually now another spending measure. It is important to remember that as the former Chancellor my right hon. Friend the Member for Godalming and Ash (Sir Jeremy Hunt) set out clearly, had we been successful in winning the last election, we would have reduced the number of working-age welfare recipients to pre-covid levels, thus saving £49 billion by the end of this Parliament.
The reason I focus on this welfare issue is that it is welfare expenditure with which this Government must get to grips, and they have failed to learn the lessons of the past. I was a very junior welfare Minister in what was then the Department of Social Security between 1995 and 1997. I learned two very important rules, which this Government would do well to consider. On both, it is clear that welfare reform is extremely difficult. The first is that we cannot take away from poor people benefits that they are already receiving. I think I am right in saying that no Conservative Government have ever reduced disability benefits in payment. But Labour did not absorb that vital lesson, which is why they got into so much trouble last week.
The second rule is that if a Government want to reduce the benefits bill, there are only really two ways of doing it. The first is to freeze the level of benefits; that has been done in the past, and it means not falling into the trap that the Government fell into last week. The second is to narrow the gateway into those benefits for future recipients. I urge the Government to absorb these important rules, because they will have to return to the issue of welfare expenditure if they are to make any progress at all on the economy.
I hugely praise the rebellion last week by Labour Back Benchers. They have hopefully taught the Executive a most useful lesson: listen to Back Benchers with respect and close attention. As a former Chief Whip, however, I deprecate rebellions unless I am involved in them. It usually takes years for the Executive to get into the habit of treating their Back Benchers with contempt and derision as unelected Downing Street special advisers strut up and down Whitehall, but this lot—this Government —managed to accomplish it extraordinarily quickly. They have learned the hard way not to treat their Back Benchers and elected Members with so little respect.
Tom Hayes (Bournemouth East) (Lab)
Since working at Oxfam and campaigning for tax justice, I have admired the right hon. Gentleman’s work. Were the Conservative party to listen to him, the right hon. Member for Salisbury (John Glen) and the right hon. Member for Wetherby and Easingwold (Sir Alec Shelbrooke), it could find its way back to a centrist position, which would be of benefit to our country. Will he acknowledge that this Government had a difficult inheritance; that since we came to power, we have faced a changed world, with tariffs, trade wars, sluggish global growth, rising authoritarianism and democratic backsliding; and that as a result, this Government have a harder job? Will he acknowledge that, so we can start to think about how we take forward shared improvements?
Sir Andrew Mitchell
The hon. Gentleman brings me elegantly to my final point. Having praised Labour Back Benchers and encouraged them to speak out, my one ask is that they now stand up for the election pledge, clearly set out in their manifesto, to restore development spending to 0.7%. I ask them to show the same zeal and enthusiasm as they did on welfare for bringing back the 0.7%. Inexplicably and astonishingly, their Prime Minister has cut the figure from the 0.5% they, alas, inherited from us down to 0.3%, and it is already causing massive difficulties, of which the hon. Member, with his background in Oxfam, will be fully aware.
When the House comes back in September, I urge the hon. Member, particularly given his experience, to join other Back Benchers in saying to the Executive, “We will not put up with this. We said in our election manifesto that we would restore development spending to 0.7%, and in the same way that we showed the Government Front Benchers that they could not proceed as they planned with welfare, they cannot proceed as they plan to with development spending.” I urge Labour Back Benchers to ensure that this rethink takes place in the autumn, when the folly of what has happened will be even clearer.
Several hon. Members rose—
Madam Deputy Speaker (Caroline Nokes)
Order. The right hon. Member has set the tone with his speech length. If all Members could stick to around six minutes, everyone will get in. I call Joe Powell.
Joe Powell (Kensington and Bayswater) (Lab)
I congratulate the shadow Chancellor on securing a debate on this motion. When this Government came into office, they found Britain’s public finances vandalised, the economy wrecked, debts soaring, sky-high mortgages, a cost of living crisis that has touched every household in this country, and a mismanaged pandemic, rife with dodgy contracts and corruption. The Conservatives today pretend that they have discovered fiscal responsibility, but we all remember that they increased taxes 25 times in the last Parliament, and gifted us the reckless Liz Truss mini-Budget, which sent mortgages spiralling and tanked the markets.
No Government in living memory have had a worse economic inheritance than this one. The Conservatives have no credible economic plan for dealing with the debt, no credible plan for growth, and no credibility whatsoever with the British public. What they did to the public finances and the national debt even before the pandemic is unforgivable.
Mr Holden
Labour Members pretend that 2010 was year zero. In truth, in 2010 there was an annual deficit of 10% of GDP in Government spending, which meant that the Government were borrowing £1 for every £4 they were spending. Does the hon. Member not acknowledge, or understand, that that was a far worse economic inheritance than any Government have been offered since the second world war?
Joe Powell
I thank the right hon. Gentleman for that intervention, because it is important to talk about debt. I was disappointed that the shadow Chancellor failed to acknowledge that the inheritance in 2024 was total national debt of close to 100% of GDP, which was up from 60% in 2010. The annual debt payments that the Government are having to make—as others have said, they are close to £100 billion, thanks to the Government’s economic inheritance—are 8.3% of total public spending. Imagine what we could do if we spent that money on the NHS, our schools, or fixing the housing crisis.
This goes much deeper than debt. The truth is that we inherited a sick economy, affecting living standards, wages and public services, and there was no plan for growth. The Conservatives left Britain with rising debt and flatlining growth, yet they oppose the very measures that the Government have taken to fix their mess.
Joy Morrissey
Just to correct the record, on the economy, we had the highest and fastest growth in the G7 when we lost the election. We handed the Government that highest growth. I know it is hard for Back-Bench Labour MPs to grapple with that, but it is a fact none the less.
Joe Powell
I thank the hon. Member for that intervention. Of course, the Conservatives tanked the economy, and when there is such a dramatic decline in growth, increasing it from a very low level to a slightly higher one is relatively straightforward. The economic growth figures for the first quarter of this year, as we know, are the highest in the G7.
The Government are trying to fix the mess, including through measures worth over £20 billion a year—measures aimed at repairing our public finances by addressing the black hole and investing in public services that were wrecked by austerity, poor management and wishful thinking. The Conservatives have a nerve to pretend that they would do things differently now. My constituents tell me the same. Indeed, a local resident, George, has been vociferous about the lack of a credible economic plan from the Conservative party, and will not stop sharing his views on the airwaves. Yes, even the former Chancellor of the Exchequer thinks that the Conservatives have no answers to the fiscal challenges that the country faces. There is plenty that George Osborne and I disagree on, but he is absolutely right on that.
At every turn, the Conservative party is backing the blockers and preventing a plan for economic growth, whether it is the Leader of the Opposition blocking new energy infrastructure in her own backyard or the shadow Business Secretary, the hon. Member for Arundel and South Downs (Andrew Griffith), signing letters to delay vital transport infrastructure. It is no wonder that our economy has been held back for so long.
The other parties, too, have nothing to offer. Reform wants Liz Truss’s reckless economics all over again—the same failed experiment of unfunded tax cuts that crashed our economy and left our constituents paying the price. Meanwhile, the Liberal Democrats promise all the benefits of tough decisions with no way to pay for them. It is pure fantasy economics. I am glad that the Government have committed to not repeating those mistakes. It will fall on the Labour party to fix this mess, rebuild our economy and deliver the secure growth that Britain needs.
Nowhere is the cost of failure clearer than in the broken housing system. London boroughs now spend £4 million every single day on temporary accommodation —a massive waste of taxpayers’ money. The Conservatives also locked us into paying billions for over-inflated asylum hotel contracts. That is another egregious waste of taxpayer money that we inherited from them. That is the direct result of not planning for investment or for the long term; it is the price of short-termism and a failure to plan for the future.
Let us look at housing—one part of our plan. We have ambitious planning reforms to deliver the greatest impact on growth at no fiscal cost. We have the biggest investment in social and genuinely affordable homes in a generation. We have leasehold reform, protection for renters and a new decent homes standard, which are all opposed by the Conservative party.
This Government are making tough choices to raise revenue. The Conservatives talk about businesses; I meet businesses all the time, and I understand the pressures that they are under. They tell me that it is vital that NHS waiting lists fall, so that their employees can access the treatment that they need; that we have modern infrastructure in Britain, including transport and energy; that their staff can afford housing options; and that we agree an EU youth mobility scheme to support our hospitality industry.
Bradley Thomas (Bromsgrove) (Con)
When businesses in the hon. Gentleman’s constituency make people redundant, do those employers explain to his constituents that they have to do that for the good of the NHS?
Joe Powell
I am glad that business confidence is at a nine-year high—that is from an independent assessment. The decisions that the hon. Gentleman refers to are already making a difference. Does he oppose the 4 million extra NHS appointments that this Government have managed to secure so far; the three trade deals with the US, India and the EU—deals that the Conservative party failed to get over the line—the four interest rate cuts; the efforts to close the tax gap; the fact that wages have grown more in our first 10 months in office than under the last 10 years of the Conservative Government; the rise in the national minimum wage to support low-paid workers; and the expansion of free school meals to half a million children, which also lifts 100,000 out of poverty?
The motion before us offers no ideas and no credible plan. If the Conservative party were serious about economic growth and tax, it would do some reflecting on its record, apologise to the British people and get behind the Labour plan to get Britain’s economy booming again.
Sir Alec Shelbrooke (Wetherby and Easingwold) (Con)
The motion is simply asking the Government to commit to what they put in their manifesto. It seems that we are hearing every sort of speech other than speeches that address that point.
Let us first take the national insurance rise. It is extraordinary to ask us to believe that businesses in Labour Members’ constituencies are delighted that their taxes have gone up because that will help public services. I am sure that they are all keen to see their taxes go up again to satisfy the new 30% pay rise that resident doctors want. We were told that that would not happen, and that that was why the Government had to put up taxes the last time. A bit of reality has to come to this conversation, given that local businesses are either cutting people’s hours, on a recruitment freeze, making redundancies or going into liquidation.
Let us think about companies that go into liquidation. After 30 years of trading, a company in my constituency went into liquidation last month, simply because it could no longer cope with the NI rise. That was the straw that broke the camel’s back. Twelve people were made redundant immediately, meaning there would be no more taxes—no more income tax or purchasing tax—from that business, and on top of that, benefits would have to be paid.
We are on a downward spiral of tax and spend in this country. Indeed, it is quite incredible to listen to the speeches from Labour Members. It is as if nobody has left the country, no money has been withdrawn from the City, and no person has taken their assets elsewhere. Those are literally the headlines on the economy, day after day, in the Financial Times and other newspapers, yet we get a lot of harking back to the past, rather than recognition that Labour has been in power for more than a year.
Joy Morrissey
My right hon. Friend makes an excellent point about growth and wealth creators being taxed out of this country. They are simply taking their money and leaving, as the Labour party continues to tax them.
Sir Alec Shelbrooke
My hon. Friend sums things up perfectly. What terrifies me is that the Government do not seem to be taking any notice of that. When they talk about bringing in more taxes, such as a wealth tax, Labour Members all cheer. When my right hon. Friend the shadow Chancellor—I think it was him—said that Labour Members do not care, and would like to see more people who have wealth go, someone on the Government Benches shouted “Good!” It is absolutely incredible to say that the people who generate the wealth in this country are the enemy.
Let us just think about my constituency of Wetherby and Easingwold, which does exactly what it says on the tin: Wetherby and Easingwold are the two main market towns in the constituency. Market towns are part of the big ecosystem of the economy that is linked around farming, and the farming tax has created a huge problem in the farming community. People are scared to invest in capital equipment. That is the first thing. “How are we going to pay these bills? Is it even worth passing the farms on? So let’s pause our investment.”
That ecosystem in my constituency is not just about the farmers and what gets sold at the farmers’ market. It is about the businesses that service farm equipment. It is about the businesses that supply mechanical support. It is about the businesses that are involved in every aspect of the supply chain around farming in my constituency, and the worry and concern that is being felt throughout the communities means that they do not spend any money. That means that the Government are now losing out on VAT and on other taxes. So, what is their answer? Let us bring in a wealth tax; let us tax more—it is quite frankly frightening. In terms of taxation, I am terrified of where this country is heading.
Iqbal Mohamed (Dewsbury and Batley) (Ind)
The right hon. Member is making an important speech. Some 80% of millionaires in our country want to pay more tax. They want to contribute to our society and to our public services, so does he agree that when people want to pay more tax, they should be given the opportunity to do so?
Sir Alec Shelbrooke
I am sure it has just slipped the hon. Gentleman’s mind that people have the ability to do that. Famously, when Stanley Baldwin was the Financial Secretary to the Treasury, he gave a third of his wealth to the country to try to help with the national deficit. He did it behind the scenes and just signed it “FST”. He did not actually declare that it was from him. People can pay more tax if they wish. What they cannot do is sit in an unfair position where they can see that we do not have the most competitive taxes in the world; otherwise, they would stay here. It is blatantly obvious what is happening. If I were to throw a party at my house and I locked everybody in and halfway through the party they were trying to tunnel under the fence or get out in a hot air balloon, I would not say, “Well, that’s going really well. Let’s lock some more doors.” This is an overall assault on the lifeblood of the economy of this country. All this motion does today is ask whether the Government will be sticking to their manifesto promises.
When the Chancellor came to the Dispatch Box last July, about a year ago, she kept talking about the OBR. She talked up the OBR, saying we could never again have a situation like under the Tories where they ignored the OBR. She announced £22 billion-worth of taxes for the alleged black hole. The OBR immediately came out and said, “That’s not true, it doesn’t exist.” At best, it was £9 billion, and most of that had been caused by giving pay rises to the public sector because, allegedly, that would solve the problem. We on these Benches warned that, without reform, the public sector would come back. And boy, have they come back!
If the Government wanted to be believed that there was a £22 billion hole, one, why did they raise taxes by £44 billion; two, why did they then do another £30 billion-worth of borrowing; and three, how come we now have a £30 billion hole? That is a £100 billion hole in the economy that has been created since 12 months ago. How can anybody say that the Government have taken responsibility for the economy and are building it up? Somebody on the Labour Benches said that we were trying to rewrite history, but they are trying to rewrite the last two weeks! Labour is the only party I have known to come to the House trying to cut welfare and increased the bill! Where is the money coming from?
What do we hear? We hear that we must get rid of the triple lock, because it is now going to cost £15 billion instead of £5 billion. How about we stop people self-declaring just to have time off work and get on universal credit, which is costing £40 billion, and we do not hit people who are on fixed incomes who do not have the ability to do other things? A great number of the retired people in this country are carrying the burden of supporting their families in work, looking after their grandchildren, and doing those things unpaid. We should be grateful to pensioners in this country and not be saying, “You’re the ones whose income we’ve got to cut” because the Government are letting welfare run out of control.
This does not stop at what the Government have done to businesses in my constituency or to the ecosystem that relies on a rural economy, and it does not stop at them wanting to put solar panels all over credible farming land, pushing those businesses out even further, because they have brought in VAT on schools, and they have done it through pure ideology and envy. My constituents are not rich people. They have cars that are 15 or 20 years old. They do not go on holidays. They have been putting money in to give their children the best education, and they are now having to withdraw their children from those schools.
Joy Morrissey
The Labour party has decided to tax hard-working families on their choice of education. It means that people can no longer send their child to a SEND special school. It means they no longer have the choice to use their money, because the Labour party wanted to take a little more tax from them. Does my right hon. Friend agree that it is not a fair process and it is actually excluding people who want to protect their children for the future?
Sir Alec Shelbrooke
My hon. Friend makes a very powerful point. I am just wrapping up, but I will tell you this, Mr Deputy Speaker: I am a comprehensive schoolboy, and I am not going to take any lessons off the private schoolboy on the Front Bench who tells me that it is unfair that we are not taxing people who are trying to do the best for their children—talk about pull up the ladder, I’m all right, Jack.
Overall, the economy is being destroyed under this Government. We will have a political kickabout this afternoon, but I am terrified of where we are going. The 1970s is back good and proper—public sector strikes, ridiculous pay demands constantly bringing the Government down, 240% debt to GDP ratio predicted on this path, more and more taxes to come, and more and more wealthy people leaving. We saw what happened by 1977 when we went off to the IMF. The situation was so bad that the IMF said no! We are on that path, and it terrifies me.
Several hon. Members rose—
Mr Deputy Speaker (Sir Roger Gale)
Order. It has become apparent already that if we are to get everybody in, we will have to set a formal time limit. After the next speaker, I will put in place a six-minute time limit. If there are a lot of interventions, which will of course add time, it will be reduced smartly to five minutes and possibly even to four minutes.
Phil Brickell (Bolton West) (Lab)
It is a pleasure to speak in the debate, and I do so on behalf of my constituents, who dutifully pay their taxes in the expectation that they will receive a fair deal in return. Today’s motion from the official Opposition implies that the efforts that this Government have undertaken to deliver that fair deal are not in the interests of those constituents. I reject that premise entirely. Instead, Labour in government has constantly and rightly stuck to ensuring that those with the broadest shoulders carry the greatest burden. That approach has secured over £20 billion a year of revenue to pay for schools, the NHS and our national security. The Chancellor has restored responsibility and credibility—
Alison Griffiths (Bognor Regis and Littlehampton) (Con)
Will the hon. Member give way?
Phil Brickell
I will make some progress given the time limits that will be put in place on other Members.
That finally put us on a strong footing to move on from the irresponsible and reckless chaos of Liz Truss’s mini-Budget and the litany of unfunded spending commitments left behind by the previous Administration, who had no intention of implementing them.
I must remind the House of what Labour inherited from the last Government when the Chancellor walked through the doors of No. 11 just over a year ago: a national debt at nearly 100% of GDP—the highest since the 1960s; living standards falling for the first time since the 1950s; anaemic growth that left us second to last in the G7; and the UK as the only G7 country where the employment rate had still not recovered to pre-covid levels by the first quarter of 2024. That was the Conservative legacy—a legacy of economic mismanagement and a tax system weighed down by loopholes, complexity and underenforcement, so I will take no lectures on fiscal responsibility from the architects of that wreckage.
We on the Labour Benches will not indulge the fantasy that the path to prosperity lies in slashing public services, making unfunded promises and claiming that we can borrow endlessly without consequences. Our constituents deserve better. This Government, led by the Prime Minister and the Chancellor, are getting on with what Labour always provides: a Government of service.
First, let me address the abolition of the outdated non-dom regime. For too long, our tax code allowed the very wealthiest to live in this country and enjoy our services, infrastructure and rule of law but contribute only a token amount to the national purse. That ended, quite rightly, with this Government. The new residency-based regime is a matter of principle: “If you live here, you pay here.”
Secondly, we have increased the rate of capital gains tax on share sales—not to punish wealth but to deliver fairness. Many of my constituents contact me to say that they see no reason why wealth—assets, and stocks and shares—should be taxed less than work. There is more to be done on that, but I welcome the measures that the Government have taken so far.
Joy Morrissey
What the Labour party is saying very clearly—it is useful to have it clarified—is that those who scrimp and save, who decide to give money or homes to their children, who save their farm for their children, do not matter. They will be the ones who are punished under Labour—not those who scrounge on benefits, but those who have saved their money and made choices. Labour is saying that those are the people it will punish. I thank the hon. Gentleman for clarifying that.
Phil Brickell
The hon. Member would do well to listen to what I have to say, and I will come to wealth taxation shortly, but I would appreciate it if she did not take that very condescending tone with me—I spent more than a decade working in the financial services industry myself.
These measures have been taken because it is simply the right thing to do. When a nurse in Bolton hospital is paying a higher effective tax rate than someone making millions on property or shares, the system is not just broken; it is unfair.
Thirdly, the Government have cracked down on tax-dodging, with more funding for HMRC to go after tax evaders and bring down the stubbornly high tax gap. That gap—the difference between what the Government are owed and what they actually collect—currently stands at almost £50 billion. That figure—50,000 times £1 million—is almost the size of the entire defence budget in 2023-24. Unlike the dearth of policy proposals from the Conservative party, I constructively implore the Government to continue tackling the enablers of dodgy tax schemes. Firms that promote aggressive tax avoidance schemes will now be held to account with fines of up to £1 million. I welcome that measure in particular.
Rachel Blake (Cities of London and Westminster) (Lab/Co-op)
On that point, does my hon. Friend agree that it is important for HMRC to work with local authorities to take action on tax evasion by high street stores that do not act fairly, like the awful Harry Potter stores in my constituency? I am worried about the impact that they have on the high street and on our tax revenues.
Phil Brickell
My hon. Friend, who has been a fantastic champion on tackling that issue, makes a valid point.
The Opposition would have us believe that taxes writ large are a drag on growth, but the truth is more nuanced. What stifles growth is instability. What repels investment is unpredictability. What corrodes trust is a tax system that rewards avoidance while underfunding our schools, hospitals and police. Labour is putting more money in people’s pockets by boosting the minimum wage for 3 million workers. Wages are growing more in our first 10 months than in an entire 10 years under the Tories.
I would urge the Chief Secretary to the Treasury not to rest on his laurels, however, because there is more to do. I propose three policy priorities that I hope the Treasury will give serious consideration. First, we should review and reform current tax reliefs. Some £204 billion—a quarter of all tax revenue—was spent on tax reliefs in 2022-23, yet many of those reliefs are uncosted, unscrutinised and susceptible to abuse. The Treasury Committee was right to call for a rationalisation of those reliefs. We must audit them for efficacy, eliminate those that serve no public interest and crack down on those that have become vehicles for avoidance.
Secondly, I draw the Minister’s attention to the issue of tax-dodging in our own backyard. At the end of last month, a number of British overseas territories, including the tax haven of the British Virgin Islands, missed yet another deadline to introduce public registers of beneficial ownership. The Minister will know that this is a long-running issue. The BVI in particular has missed deadlines in 2020, 2023 and 2025, as the right hon. Member for Sutton Coldfield (Sir Andrew Mitchell) knows well, he having campaigned strongly on this issue over many years.
In January this year, the Bureau of Investigative Journalism, working alongside the BBC and The Guardian, revealed that Roman Abramovich, the former owner of Chelsea football club, may owe the Treasury up to £1 billion in unpaid corporation tax, penalties and interest. That is from corporate structures with a value of $6 billion, set up through an offshore web of hedge fund vehicles primarily registered in the British Virgin Islands and Cyprus, in what looks like an ultimately botched attempt to reduce tax liabilities.
When a Russian oligarch allegedly manipulates British secrecy jurisdictions in order to obscure profits made from UK-based centres of control, it undermines the credibility and fairness of our tax system. We need every British overseas territory to adopt full public beneficial ownership registers, so that sham structures such as Abramovich’s can be traced, challenged and taxed. Dirty money—the kind that flows beneath the waves of secrecy—corrodes the entire tax system, so I call on the Minister never to shy away from the globe-spanning challenge of tax abuse hidden in the nooks and crannies of our own backyard.
Let me turn to my third and final recommendation for the Government, which relates to the often overlooked distortion in our system of pension tax relief. This long-standing relief disproportionately benefits higher earners, and it has been my settled view for a number of years that we must look again at how it operates. Currently, higher rate taxpayers enjoy 40% relief on pension contributions, while the highest earners enjoy 45% relief. Basic rate taxpayers nevertheless enjoy a rate of just 20%. Total pension tax reliefs cost circa £40 billion per year to the Treasury, according to HMRC. Of that total, two thirds is relief for those on incomes in the 40% and 45% income tax bracket, which represented 12% of the adult population in 2023-24, according to the IFS.
That highlights the inequity here: a system of relief that is tilted to those who need it least, not to incentivise moderate earners putting into pensions but to support those on the highest incomes. I urge the Minister to consider moving to a flat rate model of, say, 30%, independent of income bracket, so that every saver gets equal recognition for securing their own retirement.
Finally, with my industry expertise in addressing tax evasion before I came to this place, I would like to address the siren calls of a broader wealth tax being made by a number of colleagues on the Government Benches and elsewhere in the House. Increases in capital gains tax to align them closer to income tax are welcome. Wealth and work should be taxed at similar rates—it is as simple as that—but I have a few words of caution for proponents of wealth taxes.
The Wealth Tax Commission itself acknowledges that wealth taxes could incentivise the wealthy to hide assets behind legal vehicles using expensive lawyers and secrecy jurisdictions. HMRC is already chronically short-staffed, under-resourced and hamstrung by complexity. Without dismantling the complex web of ultimate beneficial owners, offshore trusts, nominee directors and secrecy jurisdictions, we are at grave risk of opening up a game of whack-a-mole that we would likely see the Government lose to deep-pocketed and well-lawyered high net worth individuals who can run circles around HMRC and law enforcement and secrete their assets elsewhere.
My firm view is that the Government should instead crack down on tax evasion, simplify the tax code, streamline existing reliefs and bring capital gains tax levels closer to income tax. The Centre for the Analysis of Taxation estimates that closer alignment of capital gains and income taxes alone could raise some £14 billion for the Exchequer.
As a country, we face enormous challenges: an ageing population, creaking infrastructure, rising global instability and the urgency of the net zero transition. We know that public services are under strain. We need to raise funds in a way that is both fair and that promotes the growth we need to get our country back on its feet after 14 years of Tory decline. Let us be clear: taxation is not merely a tool for revenue but the lifeblood of our social contract, which is why we desperately need a responsible and workable tax system, to ensure that education is a right, not a privilege, that healthcare is free at the point of use and that the most vulnerable in our society are protected.
Dave Doogan (Angus and Perthshire Glens) (SNP)
The first line of the Tories’ motion gets to the word “manifesto”, and I accept their premise that that is what this is about—it is about the commitment
“not to increase taxes on working people, and not to increase National Insurance or the basic, higher or additional rates of Income Tax”.
I do not think that is a tall order. The next item on the list, however, is VAT. Never mind the headline rate, the concern now, from comments inside the Government, is about what will be dragged into VAT or have its reduced rate increased. There is no clarity on that from the Government, much less any reference to it in their manifesto from which Parliament, and taxpayers across these islands, can take any comfort or otherwise.
The motion
“calls on the Government to reaffirm the statement made by the Chancellor of the Exchequer…that…personal tax thresholds will be uprated”
in the manner that they said. That is a fair point. Fiscal drag is an iniquitous thing to inflict on people. It eats into pay rises and erodes people’s incentives to get on and progress, and there is a real concern, given the fiscal misadventure—it seems to be one farce after another with this Government, and one U-turn after another. They talk about introducing stability into the fiscal dynamic. Well I am holding my breath waiting for that to happen, but I think I am making a mistake in that pursuit.
Worst of all—well, it is not worst of all, but it is really bad—are the changes to agricultural property relief, which were also not in the Government’s manifesto, and I sincerely urge the Minister to pause and review those changes. As others have articulated, that measure was clearly something that Treasury officials put in front of every new Chancellor, and every new Chancellor to date has had the wit to say, “Well, I’m not doing that,”—expect for this Chancellor, who is lacking in wit and much else to recommend her. She said, “Ooh, I’ll just go ahead and do that,” completely failing to understand the agricultural economy as it exists in these islands.
My constituency of Angus and Perthshire Glens is the garden of Scotland and the highest productive agricultural land in Scotland. An ecosystem exists around that farm enterprise, of recruitment, training, plant sales, feed stock, markets, fuel sales—it all exists, and it revolves like satellites around the farm business. Those farmers are now saying, “Why would I invest? What on earth would I invest for? Why am I investing my hard-earned capital into increasing technology and lowering the cost of production, so that I can get more competitive food on to the shelves of supermarkets and help with the cost of living, which this Government are incapable of doing anything about, meaning that my asset values go up, and so that when I die and my assets transfer, my tax bill goes up?”
Graham Stuart
The hon. Gentleman is giving a powerful speech on this subject. I was at the Great Yorkshire Show last week, and there we had not only livestock and farmers, but the whole supply chain around that. The only conversation there was exactly as the hon. Gentleman describes, of a whole industry brought low because of this misconceived measure. He talked about Chancellors being presented with things. The caravan tax was presented to the Chancellor in 2012, and it took Government Back Benchers to persuade those on the Front Bench to change path. I hope Labour Members might do the same with the farm tax.
Dave Doogan
That is a welcome and comprehensive round-up of some of the broader issues on this, but it speaks to the fiscal innumeracy that says, “There is no cost to any of this; we can just help ourselves to that and it won’t have any impact.” As the right hon. Member for Wetherby and Easingwold (Sir Alec Shelbrooke) pointed out, if we speak to any rural plant sales or dealership, and they will say that sales have gone off a cliff, along with the VAT, employment, income tax, and national insurance that went with them. That speaks to a Treasury and a Chancellor who have a passing understanding of the price of everything but could not identify value in a line-up.
The motion goes on to talk about pensions. This is difficult, because I do not believe for one minute that we should pull pensioners whose income is only the state pension into tax. Neither do I believe that by dint of being a pensioner someone should get tax relief on the same income that somebody who earns that income will not get tax relief on. The Government are in a difficult position on this, and that is of their own making. Unless and until they guarantee to uprate the rates and protect pensioners from fiscal drag, there is little point in making a great big song and dance about the triple lock, if what that does is pull pensioners into taxation.
Where I diverge from the movers of the motion—
Dave Doogan
Yes, it had to come, and I am relieved that there is a cleavage. Where I diverge with them is on a wealth tax. I see that we are in a state—the UK is not a country—where poverty levels among our children are rising in every country in the UK except Scotland. In Scotland, it costs us £150 million a year—it will be £200 million by the end of the decade—to mitigate Westminster’s mismanagement of child poverty.
We cannot say that it is somehow punitive for people with assets of more than £10 million to attract an annual, modest rate on those assets. That is reflective of the highest tax burden that ordinary people have paid since the second world war—incidentally, I say to Conservative colleagues that that was the case before the election. The Labour party has just knocked that into the stratosphere with its misadventure.
There has been no talk anywhere in this Chamber today about Brexit. I remember the Prime Minister—what was she called? Theresa May. She was asked repeatedly, “What does Brexit mean?” She said, “Brexit means Brexit,” which is as nebulous as it sounds. In 2025, we now know what Brexit means. It means enduring child poverty and flatlining growth, no matter who is in charge of the Treasury in the United Kingdom. It means a common purpose between Labour and the Conservatives to have a neurotic policy on immigration. It means pale imitations to substitute for EU programmes, such as substituting Erasmus with the pointless Turing scheme, or EU structural funding and other funding with “levelling up.” It means a permanent drag on business.
The further we get from covid, the more we see that the fundamentals that are wrong with this economy are due to Brexit. The Minister, in his summing up, will doubtless say—
John Slinger (Rugby) (Lab)
This is all rather desperate from the Conservative party. I had thought that pantomime season was in the winter, but clearly it is not. I will defend the decisions taken by this Government to help working people, grow the economy and fix the mess we inherited from the previous Government, and we are doing so with fairer tax at the core.
I use the term “Government” regarding the last Administration loosely, because they did not believe in government. They ran the tank dry. They were running the factory without maintaining the equipment; they just made last-minute repairs, knowing that things would break down again, and they did. An astonishing 234 schools were found to contain RAAC—reinforced autoclaved aerated concrete—and were almost disintegrating before our eyes; our Army reached its smallest size since the Napoleonic wars; prisons reached capacity; and the Government did very little or nothing. The police saw 20,000 officers cut, and that was reversed only at the last point.
That is what the last Government were: crumbling and shambolic. They presided over a country whose public services were on their knees and whose people had not seen their prospects get better for many years. So woeful was their record that they vacated even the territory that they used to occupy—they became the weak-on-defence Tories, the soft-on-crime Tories and the high-tax Tories.
That brings me to my second point. The Conservatives increased the tax burden to its highest level since the second world war. It was stable at 33% from 2010 to 2019. The 2019 Parliament saw the biggest rise in the tax take in recent history, reaching 36% by 2024. They then engaged in a reckless, unfunded cut to NI, at a time when the economy was still stagnant. They did that deliberately—in my view, it was a poisoned chalice bequeathed to this Government. The Conservatives knew that Labour’s commitment not to raise tax on ordinary working people would mean that we could not and would not reverse that reckless tax cut. They knew full well that they were leaving behind a black hole—Conservative Members may not like to hear it, but they knew that. They knew that the public services were on their knees, but they did not care; they only cared about their electoral fortunes, which did not work out so well.
This Labour Government are not afraid of difficult challenges, nor of addressing those challenges. We actually believe in the concept of government and the responsibility of government—the responsibility to take the difficult decisions necessary to fill the unforeseen £22 billion black hole that we inherited. We therefore believe that we must raise revenue through taxation, as the Chancellor outlined in her Budget last autumn. Despite the accusations of the Conservative party, this has not been to the detriment of working people, nor is it the case that we are not asking the wealthiest in society to pay more. The opposite is true: we have raised taxes on wealth. Private jet passengers now face a 50% tax increase, VAT has been added to private school fees, and we are raising £2 billion more from inheritance tax by closing reliefs used by the wealthiest.
Harriet Cross
In his speech, the Chief Secretary to the Treasury said that working people are people who go out to work. Do farmers go out to work?
John Slinger
Of course they go out to work. I believe that my right hon. Friend the Chief Secretary to the Treasury answered that point earlier in the debate, but I thank the hon. Lady for her intervention.
To add to my list, non-dom status is being largely scrapped, capital gains taxes have increased, and stamp duty on second homes now starts at 5%. These measures help raise the revenue that is required for massive public investment, benefiting working people, not making them worse off. The clue is in the name of our party—Labour. We are the party of work. We are also the party of getting our country, our economy and our public services working.
As such, I ask Opposition Members to look forward to the summer recess with optimism in their hearts. Do not let the doom-mongers and gloom-mongers fill their hearts, for change has already begun. That change is made possible by my right hon. Friend the Chancellor’s Budget and by the spending review. We are fixing the NHS —we promised 2 million additional NHS appointments in our first year, and have delivered 4 million. Waiting lists are down by 260,000, and 1,900 more GPs have been recruited. We are putting more money into people’s pockets; we have boosted the minimum wage for 3 million workers, and wages grew more in our first 10 months than over a whole 10 years under the previous Administration, testifying to the Conservatives’ incompetence and weakness when they were in government. We are fixing the foundations of our economy, with four interest rate cuts, three trade deals and business confidence at a nine-year high. In the first quarter of this year, UK growth was the highest in the G7. We are tackling childhood poverty, opening the first 750 free breakfast clubs, and expanding free school meals. In one day, this Government took action to take 100,000 children out of poverty.
I now turn to the motion in front of us, which implies a reversal of revenue-raising policies worth over £20 billion a year. If Opposition Members oppose the measures we have taken, which of the investments I have just mentioned would they reverse? Is it the free breakfast clubs? Is it the investment in the NHS, with shorter waiting lists, or is it the extra police? Perhaps more pertinently, given the title of today’s debate, how would they pay for it? The Chancellor is not ducking difficult decisions, and I am confident that if people observe her actions, they will see that she and this Labour Government were correct. I call it a “zoom out and dial down” approach. If people zoom out and look down, they will see that the challenges we face as a country—on tax, and on reform of many kinds—require us to take action. If they dial down the endless noise of discontent, whipped up by social media and sometimes in the media and by our political opponents, they will observe a country whose people have—
Bradley Thomas (Bromsgrove) (Con)
Earlier this month, the House witnessed the Government lose control of swathes of their own party. They have had just more than a year in office, and yet the cracks could not be clearer. In the last year, the country has had to endure U-turns, tax increases and a stagnant economy, and yet the Chancellor and the Prime Minister have been pushed by their disapproving Back Benchers into the inevitable: they will have to break their fiscal rules and manifesto commitments.
The OBR has warned of an up to £12 billion cost from the watered-down welfare reforms. Labour promised to stop the chaos and support business through a stable policy environment. That was in its manifesto, yet employer national insurance contributions increased in April—another pledge disregarded. We have seen the national insurance exemption for Indian workers transferring to the UK, which the Indian Government said was a competitive advantage for them. The Leader of the Opposition opposed such a deal as Business and Trade Secretary, yet the Government continue to sell out British workers. Whose side are this Government on? Deals and decisions like that explain why 73% of voters believe that the Government do not have things under control.
David Pinto-Duschinsky (Hendon) (Lab)
This is the Government who got trade deals that the Conservative party failed to do, and saved hundreds of thousands of jobs. Are you saying that you would not have signed those deals? Are you saying—
Mr Deputy Speaker (Sir Roger Gale)
Order. I am not saying anything. Please address the Chair.
Bradley Thomas
The Government have not seen a success. Where we have seen tariffs imposed on the economy, the Government have not reduced them. There is a competitive disadvantage as a result of what we are seeing in the global economic climate. When Labour governs, Britain suffers.
Graham Stuart
On the trade deals, it turned out that the deal with the US entirely excluded the British bioethanol industry, until the President of the United States phoned up the Prime Minister and he unilaterally gave away the entirety of the market, putting at risk hundreds of jobs at Vivergo and thousands of jobs in the supply chain and at Ensus.
Bradley Thomas
I thank my right hon. Friend—that is another failure by Labour.
Sir John Hayes (South Holland and The Deepings) (Con)
There are two fundamental macroeconomic problems facing this country. One is productivity, and the second is mass immigration, which has displaced investment in domestic skills. The Budget did nothing about those, and yet the tax system could be used to address both.
Mr Deputy Speaker
Order. The right hon. Gentleman is very experienced. He should have been here at the start of the debate if he wanted to intervene.
Bradley Thomas
My right hon. Friend the Member for South Holland and The Deepings (Sir John Hayes) is absolutely spot on. The message to the Government is clear: they cannot tax their way to prosperity.
Bradley Thomas
I will not; I have been generous with interventions.
More than half of business owners nationally are planning to, or have made, further cuts to staff numbers in response to increased employer national insurance contributions. In May, 109,000 jobs were lost in a single month. When we tax jobs out of existence, the fiscal rules are not merely stretched; they are shattered. The Chancellor will have either to break her campaign promises and raise taxes, or admit that her rules are broken. Either way, it means that working families and working people across the country will pay the price.
A fortnight ago, the Government rejected calls to protect those whose only income is the state pension from paying income tax. This retirement tax will hit 1 million of our lowest-income pensioners. This is not wealth; they are modest, often meagre incomes relied upon to heat homes, buy food and see a doctor. One in five single pensioners has no other income beyond the state pension and basic benefits, yet to fill a fiscal hole that they have created, the Government resist the plea of their most vulnerable citizens.
Bradley Thomas
I will not give way; I have been generous in taking interventions.
As the Chancellor grows increasingly desperate to save the sinking ship of her fiscal rules, there is now rumour of a wealth tax to compound the Government’s contempt for not only working people, but industry leaders and innovators. That is not conjecture. Only last week, Lord Kinnock said that Labour should be “willing to explore” such disastrous measures. Let us be honest: a wealth tax really means a tax on hard-working people. It means an attack on pensions and on people who have done the right thing and want a sense of fairness, and anyone who has accrued anything will pay the price.
Bradley Thomas
I have explained that I will not give way any further.
The nation deserves better. It deserves a Government who trust enterprise, rein in the bloated state and live within their means. I urge the House to support the motion and send a clear message: scrap the jobs tax, fix the welfare overburden, protect pensioners and give working Britain the honest, sensible Conservative growth plan it deserves.
Brian Leishman (Alloa and Grangemouth) (Lab)
We live in a country where wealth is hoarded by the few while poverty is the fate of the many. Yes, the Government have taken some welcome steps, addressing non-dom status and imposing VAT on private school fees, and I make no apology for being ideological about that. Those are steps in the right direction, but, as has been shown by reforms to welfare, they are far from enough to stop cuts. The truth is that these policies do not come close to tackling the grotesque level of inequality in our country, nor will they generate the revenue that is needed to repair the failed ideology of austerity, privatisation and no small amount of political cowardice in the face of corporate greed.
The 2010s were the decade in which the super-rich won. They were handed tax breaks, were shielded by loopholes, and watched their wealth explode while wages stagnated and services crumbled. Millionaires and billionaires flourished. As I said in the earlier debate this afternoon, the fact that in one of the richest economies in the world millions of people in full-time work are relying on food banks to survive is a national disgrace. They go to work, they do their shifts, and still they are left to rely on the charity of strangers to get by.
This did not happen by accident. It is the result of deliberate political choices: austerity, privatisation, suppressed wages and a tax system rigged in favour of the ultra-wealthy. Even now, with Labour in power, we are being told to temper our ambition. How can we do that when there is a 13-year difference in life expectancy between the richest and the poorest in Scotland, and when thousands of children are growing up cold, hungry and facing an uncertain future?
However, there is an alternative to relentless cuts. There is an alternative to balancing the books on the backs of the poorest. There is an alternative to managed decline as we watch the state become bankrupt both financially and morally. That alternative is genuinely progressive taxation alongside investment in people and communities. I find common ground with my hon. Friend the Member for Bolton West (Phil Brickell), in that I also support equalising capital gains tax with income tax. Currently, many who earn their living through work are taxed more than those who profit by sitting on their wealth. Equalising those rates could raise an additional £12 billion a year. My hon. Friend and I do, however, disagree about the introduction of an annual wealth tax.
Since coming to this place, I have campaigned for the introduction of a 2% annual wealth tax on those with net assets over £10 million. This single policy could raise £24 billion a year, and the notion that the wealthy will flee en masse if we ask them to contribute fairly is a tired and dishonest argument. Even among the ultra-wealthy, there is a recognition that inequality has spiralled out of control. Many are willing to contribute more, as is confirmed by the work of Tax Justice UK and Patriotic Millionaires, but the Government must have the courage to do it.
When we invest in public services, when we lift people up, we build a fairer country and a stronger economy. Children do better at school when they are fed, housed and supported. Workers are more productive when they are not spending every hour worried about how they will make ends meet. Families are stronger when the welfare state works for them, not against them. We have to find new and just ways to fund welfare, to fund the green transition, to fund public services and to rebuild the country. The labour movement was not built to tinker around the edges; it was built to transform, and if this Government are serious about real change—the change that we promised—we must be bolder than we have been so far. Redistribution of wealth and power for the benefit of workers and communities, and wider society, should always be the driving mission of any real Labour Government.
Mr Richard Holden (Basildon and Billericay) (Con)
The damage that this Labour Government have dealt to our economy is a real kick in the teeth for all those who voted for them last year—and for those who did not vote for them, but who wished them well and believed their words at the general election. Time and again, my right hon. Friend the Member for Richmond and Northallerton (Rishi Sunak), and many others on this side of the House, warned that the new Labour Government’s priorities and promises on tax were not to be trusted, and that members of the public should take their words with a bucket of salt. The Labour party cried foul, diving to the ground like a premiership footballer screaming blue murder, but what has come to pass is far worse than many on this side of the House imagined it would be. For all the Government’s talk of fixing the foundations, I have been pained to watch the suffering, distress and anxiety that they have wilfully chosen to inflict on the British people. They have hammered the small businesses on which people rely for their jobs, through changes to business property relief, agricultural property relief, VAT and dual cab taxes, and through the business rate rises and the national insurance tax rise.
I cannot think of a policy as woefully constructed and as disastrously executed as the national insurance tax rise. This Government claim to have been elected on a platform of promoting growth, but they are choosing to boost growth by blowing up businesses. That is so inexplicable that it calls into question the Government’s ability to govern. The people hit hardest by the tax rises are those starting out in their first job, who will be hit by the thresholds, and part-time workers—often women—trying to get back into the labour market. It is among those groups that we see the highest rises in unemployment since the Budget.
It is because of the Government’s choice to raise taxes that businesses are cutting back on hiring staff. They are also making staff redundant, shelving expansion plans and closing their doors. I see that in my constituency, where unemployment is up by about a sixth in the 12 months since the general election. It is also because of that choice that inflation is up and growth is down, and because of choices made by the Labour party that this country will continue to miss out on investment opportunities and economic security.
That brings me to the people who will feel the impact most acutely. During the pandemic, we celebrated key workers—the care home workers, teachers and hospice workers who went out every day in horrendous conditions to do their job in a spirit of service. What kind of Labour Government would willingly choose to punish those who represent the heartbeat of the nation? Only recently, I heard from a woman in my constituency who runs a small childcare business, which she kept going during the pandemic. She wrote to tell me that because of the tax rise, she has had to cut back her assistants’ hours and turn away parents. On the one side, the Government pretend that wages are increasing, but on the other, employers are being forced to cut hours, so people are no better off. It is happening in every constituency up and down the country, and that is the real cost of this Government’s choice.
The national insurance tax rise means less money for schools and teachers, for hospices and their staff, and for the healthcare workers who were applauded during covid—those operating in the most difficult circumstances. It is a fundamental disgrace that the Labour Government, who are always so keen to paint themselves as the kinder, more cuddly, and more friendly party, have made the catastrophic choice to balance the books and fix their failures on the back of essential workers and volunteers. The Government are raising taxes on hospices, which they are supposed to stand up for.
Joe Powell
I thank the right hon. Gentleman for his defence of teachers. I am sure that he welcomes the pay rise for teachers of 5% last year and 4.4% this year, funded by the Budget.
Mr Holden
The hon. Gentleman may shake his head, but he should look at the statistics. Schools in my constituency and his will cut support staff and teaching assistants as a result of the black hole that his Government have created for their workers.
It is particularly pernicious that the Government are raising taxes on hospices. I visited St Luke’s hospice in my constituency at the weekend. It is having to raise hundreds of thousands of pounds a year more—money that would be going towards care for the most vulnerable at the end of their life—to pay for a tax rise that Labour Members will today vote to maintain, while Conservative Members say that it should be removed.
My hon. Friends and I will always raise these issues, as we have the issues for farmers and our food security, or the mind-boggling plans to drive away wealth creators to fill up the Treasury’s coffers, and we will continue to do that in opposition. We are asking the Government to listen to us, because we want the Government to change course and do the right thing. Bizarrely, we do not actually want the Government to drive the country off the edge of a cliff.
John Slinger
In the spirit of listening, I would be very grateful to know which of our investments in the public sector the right hon. Gentleman would cut.
Mr Holden
The Chagos deal comes to mind, which the Government seem so keen on: handing over British taxpayers’ money for something we already own. We would not have made the same decisions that this Government have made. We made it very clear in government that we would not have handed out pay rises to train drivers without the need for reform, or to the junior doctors, who have come back yet again with another double-digit pay demand. The hon. Gentleman needs to think about those things. He can say, “What would you have done?” but we actually said that we would not do those things before they happened, so actually we are the ones who have been financially responsible. He is the one handing money away to Mauritius, so that it can cut its income tax, while the Government Front Benchers seem a bit wary of answering the question of whether they will have to raise taxes later this year. We Opposition Members can guarantee that they will.
I call on the Government to do what is right and look again to their manifesto. The Government should choose to back enterprise, reward work, not punish those who help out in hospices, create growth and opportunity in every corner of our country, and back others who do so, instead of taxing everyone and everything they possibly can. Otherwise, I fear that this Labour Government will face the same fate as all other majority Labour Governments that have ever existed, and leave unemployment higher than when they entered office. That is not exactly the Labour party that people voted for in my constituency or across the country.
Dr Jeevun Sandher (Loughborough) (Lab)
The motion before us shows the difference in values between the two sides of this House. The Conservatives’ motion speaks of wealth creators, but specifically says that only a few of us create wealth. On the Labour Benches, we believe that every single worker creates wealth in this country. We have seen the consequences of 14 years of their values in action: falling living standards, higher waiting lists, higher energy bills and a weaker nation. Our values, as we saw under the previous Labour Government, left us with a stronger, wealthier and prosperous nation, in which we taxed the wealthiest to invest in the services that we all rely on. We left a more prosperous and stronger nation last time, and that is what we are building this time.
We have seen the damage of the past 14 years, as expressed in the motion. We have seen what the Conservatives’ values mean in practice. They believed that if a few did well, and there were a few tax cuts for those at the top, our country would be wealthier. That started in 2013, and continued with Truss. In reality, at the end of that 14 years, no one did well. We had the longest squeeze on wages since Napoleon threatened our shores. We were the only high-income nation to see sickness rise after the pandemic, had the highest energy bills in Europe, and were the worst-connected country in western Europe. That is the Conservatives’ record. I believe the right hon. Gentleman wanted to make an intervention.
Mr Holden
The hon. Gentleman says that the last Labour Government left the country in a fantastic state. As I have mentioned before, they left behind a massive deficit and unemployment higher than when they took office. Does he not understand that a deficit of over 10% of GDP was an horrific legacy to leave in peacetime? Also, unemployment being higher was a betrayal of the people the Labour party is meant to stand up for.
Dr Sandher
The global financial crisis affected every single nation across the world. I do not deny, by the way, how difficult things were in 2010, but we also left the Conservatives an economy that was growing, record low waiting lists, and investment in our nation and a plan to insulate our homes. Because they did not follow through on our plans, we had the worst insulated homes in western Europe, and some of the highest energy bills to go with that. Yes, we left in a difficult moment, but we left the Conservatives with a strong foundation for going forward.
The Conservatives left us poorer, sicker and slower, thanks to their their record on tax. In the worst cost of living crisis in a century, they attempted to cut taxes for the wealthiest. Everybody on the Labour Benches thought Truss was mad; I really do not know what Opposition Members believe anymore.
Graham Stuart
I am sure the hon. Gentleman would not want to mislead the House, so he will recognise that in 2010, fewer than 12% of homes in this country were properly insulated with an energy performance certificate rated C or above; when we handed over power last year, that figure was over 60%. He can look up those numbers, and I ask him to never misrepresent that record in this House, because that is the reality.
Dr Sandher
We saw it in the insulation build-out; David Cameron, as he put it, cut the green crap. Insulation rates were rising when we left office, but they were cut throughout the 2010s; as a nation, we have not had that insulation. That is why we brought in the warm homes plan and are funding it with £13 billion. Millions more homes will be insulated under this Government, bringing down energy bills by hundreds of pounds. Those plans for insulation are funded by the tax rises that the Conservatives oppose. Time and again, we ask them what they would like less investment in, and time and again, no answer is given.
We on the Government Benches are trying to build a country according to our values—a country where each of us is doing well, is doing better, is better educated, is healthier and finds it easier to get around. Those are the building blocks of our nation’s wealth. To build that wealth takes investment, which must be funded, and those who benefit most from our nation’s productivity should be asked to contribute more. That is exactly what this Government are ensuring.
Alison Griffiths
Does the hon. Gentleman recognise that if people are to contribute, the fundamental bedrock is having a job, and that the jobs tax is causing mass unemployment and business closures?
Dr Sandher
Employment is rising, and has risen since the general election. [Interruption.] The reason why unemployment is rising is that more people are seeking to enter the labour force; people are less inactive than before, because we are getting waiting lists down. I would rather people were looking for a job than stayed out of the labour force entirely, as the Opposition would have it. We want to build the kind of country where people are able to work.
We increased employers’ national insurance contributions in the Budget while protecting the smallest businesses. We ended the non-dom tax break, to make sure that the ultra-rich could not escape taxes by using a loophole, and increased taxes on private jets. We are getting more of the energy giants’ unearned profits into the public purse to invest in the things that we all need.
We know the Conservatives will complain constantly about the things we are raising money for, but they will never say what they would cut. We saw what happened over the past 14 years; we saw the weaker nation they left in their wake. The Government are investing to change that for good. After the past 14 years, we were left a weaker and more divided nation—a nation in which each of us produces less, and looks inward as we have found it harder to pay the bills. That is exactly what the Government are fixing, and what we are investing in.
I am proud of this Government. I am proud of this country. Most of all, I am proud of the country we will build, in which each of us does well, and we recognise that our common strength is found in our common prosperity.
John Glen (Salisbury) (Con)
A few months ago, I met a former civil servant. He told me that when he was working in government in the run-up to the ’97 election, Ed Balls would come into the Department and say, “Look, this is what our manifesto says, but here is the three-page memo on what we are actually going to do in government.” In fairness to that Government, they achieved quite a lot. In their first two years, of course, they stuck rigidly to the Conservative spending plans, and Tony Blair’s economic adviser, Derek Scott, said that they had a golden economic legacy.
I have listened very carefully this afternoon to the speeches made by Government Members. Of course, I can acknowledge where we were, in terms of the economy, and the fact that the country wanted change; I recognise that. Government Members, however, have failed completely to acknowledge the scale of the once-in-100-years covid experience, what that did to our public finances, and the challenges it gave us in the Treasury—the tough decisions we had to make, and the inevitable scarring to the economy.
John Glen
I shall just finish my point and then I will give way to the hon. Gentleman.
The typical refrain is then to say, “What about Liz Truss?” I was not a member of Liz Truss’s Government, but I am sure that my colleagues who were did the very best that they could. She was in office for seven weeks. I acknowledge that, politically, it was catastrophic for my party, and there are lots of lessons on which we will have time to reflect, but the failure to acknowledge properly the dominant reason for losing that last election, which was related to the scarring of what happened with covid and the fundamental challenges, does not do credit to this House. I shall give way to the hon. Gentleman if he still wants to intervene, presumably on Liz Truss.
Dr Sandher
I thank the right hon. Member for giving way. We sit on the Treasury Committee together and I find him to be an incredibly kind and brilliant Member of Parliament. He has been very kind to me personally as well.
On the experience of coming out of covid, our contention is not just about Liz Truss, but about the fact that we had the highest inflation and the highest energy bills. Natural gas, which we depend on, sets the price 98% of the time. It is also 50% to 75% more expensive than wind and solar, so the lack of investment in clean energy left us with higher inflation and made us poorer.
John Glen
No, I will a bit of progress now. I will give way to the hon. Gentleman later, even though he did not give way to me earlier.
The Chancellor came to the Treasury Committee in November. She said, “We have now set the envelope for spending for this Parliament, and we will not be coming back for more tax increases or, indeed, more borrowing. We now need to live within the means that we have set ourselves in the Budget and in the allocations of those spending totals.” What has happened in a year? Of course, I recognise that events occur, and I have referred to those under the previous Government. They do present challenges, but the Labour party’s fundamental problem is understanding the effect of high burdens of tax on wealth creators and their motivation to employ people and to invest in the productive capacity of the economy—more jobs and more tax revenues from lower rates. This Government are saying that we can do a little bit more on national insurance; that we can just put a few more burdens of regulation; that the long-term capital investment of £190 billion will transform our economy.
However, what I hear from businesses in Salisbury—small or large—is that the motivation to grow a business, to employ more people, and to say that they are determined to do so because there are some rewards from that is rapidly diminishing. What we hear is speculation about which additional taxes will be imposed after the next three months. Today, Government Members have suggested equalisation of capital gains tax, a flat rate of pension relief, a wealth tax, or higher bands of council tax—although they may have been ruled out. The overall effect on top of what we have already had is for businesses to say, “I’m not going to do this anymore.” We have now had two consecutive months of negative growth. That may well continue, which is bad for everyone. It is bad for the capacity that we have as a country to invest in the transformation that we all seek to deliver on—some things we will agree on—and it is not sustainable if the Government do not recognise that businesses will not grow and expand if that tax level rises beyond a certain amount.
Tom Hayes
I thank the right hon. Member for giving way, particularly as I apparently did not give way to him. I did not realise that it was he who was trying to intervene on me, otherwise I would have given way.
I recognise what the right hon. Member is saying about covid. I think that as a country we have not yet come to the terms with the true impact of covid and we will not do so for a long time, because it still feels very near to us. As a new Member of this House, I take the point that we ought to understand the true impacts. The concern for me and perhaps for other colleagues is that by trying to focus only on covid, and not on the economic and fiscal impact of Liz Truss—I know that he was talking about the political impact—we will never learn the lessons of the Liz Truss moment, and we just do not want to lose sight of the lessons that can be learned.
John Glen
Absolutely. [Interruption.] I am told that I ought not to take any more interventions, but I will say that Liz Truss’s insight about the imperative for growth was right; we do need to look for growth. What she did not do was examine the conditions to do that in a way that the market could understand, and it had catastrophic effects.
We now have a Labour Government, and we now have working people being massively affected by tax changes. We have Andrew Bailey, Governor of the Bank of England, saying that as a reaction to the national insurance changes, businesses have made changes to employment—that means firing people—and we have Paul Johnson downgrading growth prospects, alongside virtually every other independent analyst.
The winter fuel payments were an absolute disgrace. The changes to agricultural property relief and business property relief were put on my desk at every fiscal event, but one just has to say no, because they are the wrong thing to do. The political capital that has been lost by the Government and the damage to their reputation for their stewardship of the economy is catastrophic. I say to those on the Labour Benches that we are facing some really tough challenges as we approach the next Budget. The choices that this Government need to make on taxes will define their future. What happened last week was the worst possible situation.
Several times today we have been asked, “What would you do?” What we would have done and what we would do now is take a root-and-branch look at the welfare system to see what the Government should do. We would focus on the most vulnerable and look after them well. We would recognise that one of the legacies of covid is that the pathway into benefits has gone fundamentally wrong and the country cannot afford it. Unless we grip that major driver of costs for this country, we shall see taxes rise and rise to meet those iron-clad fiscal rules, and we will be in a spiral of decline.
Joy Morrissey (Beaconsfield) (Con)
On 3 December 2024, the Chancellor made a commitment. She told a conference of business leaders that she would not need to raise taxes. It was a foolish claim from a Chancellor out of her depth. She then taxed the engines of growth in her Budget—the businesses and entrepreneurs who create jobs. She sent high-earning taxpayers fleeing from our country in record numbers. She taxed jobs with her betrayal after saying she would not raise national insurance contributions, and that rise has brought charities, small businesses and entrepreneurs to their knees. She has destroyed the family farm with her family farm tax. She has taxed hard-working families with the VAT attack on independent schools.
Having broken her promises and made false claims to businesses, the Chancellor is now coming for pensioners. She is coming for the people who have worked and saved, paid their tax and contributed to this country. She is the only Chancellor who claims to be an economist but does not understand the Laffer curve. It is time for the Prime Minister to realise what he has and to act. He has a weak, out-of-her-depth Chancellor who is sending our country down a one-way street to a 1970s-level economic failure.
Jim Allister (North Antrim) (TUV)
A substantial level of political knockabout is inevitable in a debate such as this, but when it degenerates to the Punch and Judy of “It’s your fault—yes it is!” and “No, it’s not!” it is not really doing anything for my constituents who live in the moment of this Government. Therefore, the debate should properly have a focus on what the Government are doing in respect of our economy.
In Northern Ireland, we have felt, and continue to feel, the brunt of many of those measures, some of which, such as the inheritance tax on family farms, are cited in the motion. I agree entirely with the analysis of the right hon. Member for Wetherby and Easingwold (Sir Alec Shelbrooke) as to the depth and long-term consequences that that is having on family farms.
However, I want to focus for a moment on the other side of the inheritance tax imposition: namely, business property relief, because that has not had the same attention but is having an equally detrimental effect on many businesses. That is particularly so in Northern Ireland, where we have the staggering statistic that 89% of our businesses are micro-businesses—in the UK, the figure is 23%—which translates into the reality that most of those businesses are small family businesses. Those small family businesses, by virtue of what is happening to them with business property relief, instead of planning for growth are now having to plan for death—for inheritance—which is having a suppressive effect on our economy.
We must add to that the fact that we in Northern Ireland live subject to the pernicious Irish sea border, with all the costs that that brings. I heard some hon. Members lamenting that we got Brexit. Well, I lament the fact that in Northern Ireland we did not get Brexit—we were left under the EU’s clutches and controls. Let me illustrate that with a practical example that has just come to light. As a result in Northern Ireland of our living under EU rules, we live under the general safety regulation, and that means that a purchaser in Northern Ireland who wants to buy a new car from a car salesroom in Northern Ireland will be charged £4,000 more than his counterpart in Great Britain. Why? It is because the GSR has to be met. That is but another illustration of how individuals and businesses in Northern Ireland are being oppressed by the lack of Brexit and the continuance of EU rules.
I have heard talk today about wonderful trade deals. Those wonderful trade deals mean that goods coming from those countries into Northern Ireland are treated as coming into the EU. Therefore, if there is a differential in tariff, they pay the EU tariff. Those tariffs would not be paid in GB if those goods had 0% tariffs, or they might have a 10% tariff, but if they are being brought from the US or India into Northern Ireland, the EU tariff will be paid.
Some say, “You can claim it back.” Well, if someone is willing to go through the hideous paperwork of a reclaim and they can prove that the goods they brought in will never end up across the border in the EU, they can eventually—maybe after a year—get a refund. What does that do for cash flow in any business? Those are the realities from Northern Ireland that the Government are refusing to face up to. They are causing trade diversion, yet the Government lamentably refuse to deal with that.
This motion carries considerable merit for me, in that it draws this Government’s attention to what they promised, and the contrast with what they are delivering is very substantial indeed. The Government might have a huge majority, but it is about governing well and not governing in whatever way takes their fancy or the fancy of their Back Benchers. They should do the job, do it right and do it right as far as Northern Ireland is concerned.
Graham Stuart (Beverley and Holderness) (Con)
It is a pleasure to take part in this debate. It is worth reminding the House of the situation in July last year: we had the fastest growth in the G7; employment was 4 million higher than in 2010, with up to 33 million people in employment; inflation was on target, at around 2%; and the UK, between 2010 and 2024, had grown faster than Germany, France, Japan and Italy. That was the legacy of Conservative stewardship.
I have asked Labour Members to give a more rounded picture, but sadly they almost always refuse to do so. Debt to GDP had gone up significantly, partly because of the massive deficit that we inherited in 2010, at more than 10% of GDP—that was phenomenal and had to be brought down over time—and partly because of covid and Ukraine, when we intervened to pay half of everyone’s energy bills. That is a more rounded picture. Overall, we managed to come out with people helped through covid and through the energy crisis, and with remarkably high levels of employment. Yet just a year later, under this Chancellor’s watch, that strong foundation has crumbled.
The Labour party needed to recognise that the economy was recovering and to let it grow. Instead, by coming in and being held by the manifesto commitments not to put up the main taxes on the one hand, and on the other, thinking that they were being clever and somehow keeping to their pledges by imposing national insurance rises on business but not individuals, that had the most bizarre and perverse effect.
The £25 billion hit on the economy created by the jobs tax comes down to about £16 billion after behaviour change, according to the OBR. Then, after compensation for the public sector, it comes down to about £11 million. Then, people have had to scrabble around for hospices, GPs and so on, which means the net is probably about £10 million, and that is before the depressing impact on the overall economy, meaning it almost certainly comes to single-figure billions. But guess what the OBR also says: from next year, 76% of the impact of the £25 billion hit comes out of ordinary people’s wages. That is the situation.
The Government have imposed a tax of £19 billion on ordinary people’s earnings in order to generate less than £10 billion of tax revenue. That is utterly insane, and I ask Members on the Government Back Benches to have a look at that, follow it and come back. I would love to hear that those numbers are wrong, because I would love to hear that we are not doing something as suicidal, crazy and damaging as it appears to be.
I wish I could drink the Kool-Aid, like the hon. Member for Rugby (John Slinger). The funniest thing about him—a man for whom I have a great deal of respect and affection—is that, unlike some of his colleagues who spout this stuff, he gives every impression, which I believe, that he believes it himself. That is what is truly extraordinary.
John Slinger
I thank the right hon. Gentleman for allowing me to intervene. I am certainly not drinking Kool-Aid. I do believe what I say, and I believe it firmly. I respect the right hon. Gentleman as a colleague, even though he is from a different party, but there is no Kool-Aid for me.
Graham Stuart
I thank the hon. Gentleman for that.
The economy has contracted for two consecutive months, shrinking by 0.3% in April and 0.1% in May, in a textbook sign that we are in, or could be headed into, recession. Employment is down too, with Office for National Statistics data showing that payroll jobs have fallen by more than 100,000 in a single month, with around 274,000 fewer jobs compared with last year and unemployment climbing to 4.6%.
Following the excellent speech from my right hon. Friend the Member for Salisbury (John Glen), I would just say that we should look at the big picture. Again, I appeal to colleagues on the Labour Benches. There was a magnificent victory for Labour last year in the election, with 400-plus MPs elected, and it really is up to Labour Members to recognise just how scary a position we are in. We have debt to GDP at about 100% and we have a world in which the fastest growth is to be found in developing states, some of which are quite hostile to us and to our values.
The truth is that no rich, powerful country has a divine right to stay that way. Wealth does not just come down from the heavens. Even in the 14 years when we were in government, too often in this place we seemed to obsess only on how we would spend money. From the moment we got up in the morning to the time we went to bed at night, we would talk about how we would spend the money, but we have to generate it first. It does not matter whether our No. 1 concern is the alleviation of poverty, the defence of the nation, education or the health service—we have to have a strong economy.
That is why the Government were right. One of the reasons they got that majority may be because they said that their No. 1 mission was economic growth. Remember that? It does not come through in the speeches from Labour Members now. Their No. 1 mission was economic growth. We should be sweating in Select Committees, in all-party groups, on the Floor of this House and in Westminster Hall over how we deliver that economic growth, so that we are not going backwards but are actually growing the economy.
We also have to accept something that is going to be tough for Labour Members, most of whom have not had any private sector experience and who tend to believe that the rich are just there to take money off and wealth creators can be endlessly offered haircuts and will just put up with it and if they do not, it shows some moral flaw on their part. We have to accept that the art of government is to recognise the realities, to align the incentives of actors—in this case in the economy—with the public goods we want to see. After a year, there are so many flashing red lights and warning signs that the Government are not getting that right, so they need to be prepared to think again.
I was involved after that omnishambles Budget of 2012, when I was part of helping the then Chancellor see his route to a better path forward, and my experience tells me that Labour Members must recognise that the country is potentially in a really serious, parlous position. We have no divine right to be a wealthy, powerful nation. The next four years are important. I hope and expect that there will be a Conservative Government after that, but whatever happens, the next four years are important and I hope that Labour Members will start to give rather more nuanced and thoughtful speeches in order to influence the Front Bench.
Llinos Medi (Ynys Môn) (PC)
Despite promises of economic competence and a brighter future at the election, the tax choices that this Government have made have undermined economic growth in Wales. Over 99% of all businesses in Wales are small and medium sized, and the increase in employer national insurance contributions has hit them incredibly hard. It has raised operating costs, meaning that businesses are less able to weather times of hardship, and it limits their ability to invest and expand. The impact has also been felt in our hospices. Yesterday, we received the devastating news of the temporary closure of the hospice on Ynys Môn due to financial pressures. This one decision is having a direct impact on our communities.
One policy that the Government could stop before it is implemented is the proposed changes to agricultural and business property relief, which are set to take effect in April 2026. Having listened to the voices of family farmers and local businesses, it is clear to me that this policy will cause huge damage. As the Farmers Union of Wales says, if the reforms to agricultural property relief remain unchanged, the consequences for farmers, rural communities and food production in Wales could be devastating and irreversible. Plaid Cymru has been clear that there should be a Wales-specific impact assessment before this policy is pursued further, given the importance of agricultural and small businesses to our economy and communities.
Instead of damaging policies such as raising national insurance and cutting agricultural and business property relief, we should be making the tax system fairer. We must follow the principle that those with the broadest shoulders should carry the largest burden. Instead of taxing small businesses and trying to plunder benefits, the Government should look at a wealth tax on assets over £10 million to raise the billions in revenue that are needed to support the public finances. Taxes are a political choice. Plaid Cymru would make choices that are on the side of communities in Wales.
Gregory Stafford (Farnham and Bordon) (Con)
This Labour Government have begun a full-scale assault on the British economy. In just one year they have presided over a shambles that has punished workers, hammered businesses and betrayed every promise they made on tax to my constituents in Farnham, Bordon, Haslemere, Liphook and the surrounding villages.
Let us look at the facts. National insurance is up, with a 1.2% rise that the IFS confirms will fall largely on working people. Agricultural property relief has been slashed, which the National Farmers Union warns threatens family farms and food security. In my constituency, farming is not just a way of life; it underpins our local economy and communities. When I visited Bob Milton of Kilnside farm, he told me that his business now faces laying off staff and selling land just to meet Labour’s new tax burden. That is not policy; it is economic sabotage. On the changes to business property relief, a small business owner now faces a tax penalty simply for owning their own premises and hoping to pass their business on. These changes punish success and threaten continuity for family firms across the country.
And what is the result of all this? Inflation is stuck at 3.4%, well above the Bank of England’s target of 2%; unemployment is up to 4.6%, the highest in four years; borrowing was at £17.7 billion in May; and public debt is forecast to hit 96.1% of GDP, with annual debt interests soaring to £130 billion, by 2029-30. The tax burden is heading to an historic high—the highest on record, in fact—yet Labour still refuses to rule out new taxes on homes, pensions or savings. Their Chancellor will not even say whether small business owners are working people, and the Prime Minister dodged the question altogether. In Farnham, shop vacancies have risen from 9% to 10.5% in just one quarter—that is, 16 more shuttered high street shops. In Haslemere and Bordon, employers tell me they are freezing and cutting hours. The Shooting Star children’s hospice that serves my constituency will have to spend £90,000 in new NIC costs—enough to hire three nurses. That is now going straight to the Treasury.
Gregory Stafford
I will not give way.
That is not just wrong; it is unconscionable. Meanwhile, Labour’s VAT raid on education has pushed more than 13,000 pupils out of the independent sector—10,000 more than the Government predicted. That means more pressure on already overstretched state schools, more crowded classrooms, more exhausted teachers and more children falling behind.
Labour promised competence. Instead, they have delivered confusion, contradictions and chaos. They have broken their promises on national insurance, council tax, farms and education, and now they are breaking Britain’s economic future. This is not stewardship; it is self-harm. This is not change; it is collapse. This is not what the British people voted for, and they deserve better.
Robbie Moore (Keighley and Ilkley) (Con)
In my constituency there are dozens of hard-working family businesses, which are the backbone of our local economy and key to our local identity. These business owners get up early, go to bed late, work weekends, employ hundreds of local people and contribute hugely to our local high streets, local communities and local economy. But this Government seem desperate to squeeze every single penny out of those family businesses and into the hands of the Chancellor. The rise in employer national insurance puts a huge strain on the wage bill, especially when coupled with the rise in the minimum wage.
That is squeezing every single family business, as well as schools and hospices. Indeed, last weekend I took part in a local fundraising event—the Oxenhope straw race—which raises money for our local hospice, the Sue Ryder Manorlands hospice in the Worth Valley. Every year they do fundraising, but they tell me that instead of the money going to provide end-of-life care, it now goes straight to the Treasury through employer national insurance. The sad fact is that the large sums of money going to charities is not providing the support that is needed because it is going directly to the Treasury.
The business rate relief reduction is impacting many hard-working businesses across Keighley and Ilkley. The inheritance tax challenges are impacting many of our farming businesses and family farming businesses through slashing the 100% relief on agricultural property relief and business property relief to the £1 million threshold.
That is where the naivety kicks in. When we consider the size of the average farm in England—about 200 acres—and value the farmland, the house, the cottage, the growing crops, the machinery and the livestock, we reach well above the £1 million threshold, therefore exposing nearly every farming business to an inheritance tax liability. Those hard-working businesses make a return of less than 1%, if any at all, yet Labour Members say that they must have the weight of responsibility on their shoulders. That is a disgrace.
Robbie Moore
I will take a quick intervention from the hon. Member, but I hope that he will justify why those hard-working family farms and businesses in Keighley and Ilkley, who get up day in, day out, have to shoulder the burden for the mistakes that this Labour Government are making. Will he answer that point?
Phil Brickell
I thank the hon. Member for giving way. He is the third consecutive Conservative Member to stand up and speak, but I have yet to hear what proposals his party wants to bring in to raise revenue or what services it wants to cut. In my contribution, I made a conscious effort to set out three constructive proposals for the Treasury to consider, and I challenged Conservative Members because there was a dearth of—
Robbie Moore
I am sure that the Government Whips were watching the hon. Gentleman and making a note that he will be in line for a job, and I saw the Minister quaking in his boots at the thought of those bizarre recommendations. The point is that the Labour Government do not realise that all these tax increases are hitting the many hard-working businesses across every constituency represented in this House. Shame on the Government for bringing them forward.
No matter how elaborate the rain dance or how impressive the Government press releases, growth will not come, precisely because of the decisions that the Chancellor has taken. We need a reset; we need a new direction; we need to limit spending so that we can cut tax, not consistently raise it. Until the Government realise that, I am afraid for all the family businesses up and down the country, which are being penalised time and again by this Labour Government.
Sarah Bool (South Northamptonshire) (Con)
Members across the House will be familiar with the winter of discontent. In 1979—the year our Chancellor was born—the Labour Government were at the behest of their union paymasters, and refuse piled up across the country. Fast-forward 46 years: we are a year into the Chancellor’s term of office, and we have before us a summer of anxiety. We have a long and seemingly hot summer ahead of us, with the spectre of impending taxes looming. In a desperate and flawed attempt to paper over the financial chasm of Labour’s own making, the Government are targeting the hard-working people they vowed to stand for.
What has happened in Labour’s first year in office? Well, my farmers are reeling from the raid on their cash-poor industry through changes to APR and BPR, national insurance and the withdrawal of the SFI, to name but a few. The Government ask them to diversify and invest in growing their business, while simultaneously taxing them for the privilege.
The Carrdus school in South Northamptonshire is closing as a direct result of the VAT raids and the national insurance rises. Families who work hard and invest in their children’s education have been punished. Students have been displaced, teachers have lost their jobs, and standards have been hit.
Hospitality owners have said they cannot risk expansion; they are just about surviving as it stands. This year alone, over 1,000 pubs across the UK have closed—220 since April. Beauty salons and hair industry businesses in my constituency have been calling me in because they cannot take on any more apprenticeships. If things continue as they are, there will, the British Hair Consortium says, be no apprentice starts in 2027. What a legacy for this Labour Government.
Pensioners in my constituency were hit first by the removal of the winter fuel allowance, and they now face the prospect of being taxed on their pension for the first time, which is also a terrible disgrace. We have learnt a crucial lesson after a year of this Government: they are the embodiment of the phrase, “Fail to prepare, prepare to fail.” They have had years in opposition to come up with a plan, and they have failed miserably. They keep asking us what we might do. Is that because they are seeking advice from the more fiscally prudent and wise side of the House?
Sarah Bool
I can certainly give you more.
The Minister and Government Members rarely want to listen, but I raise these points on behalf of my constituents, who have asked me to do this. I implore the Government: if they want growth, they must take this summer to think again about how to achieve it, or it will be an autumn of anguish.
Alison Griffiths (Bognor Regis and Littlehampton) (Con)
Hard-working families and business owners in Bognor Regis, Littlehampton and our villages are feeling the squeeze as never before. Labour stood on a manifesto promise not to raise taxes for hard-working people, yet at the very first opportunity, in the autumn Budget, they raised employers’ national insurance. This is a tax on job security and job creation. It is a tax on growth and a tax on ambition.
The jobs tax—one of the Chancellor’s flagship failures—has wrecked business confidence. It has made it more expensive to hire workers, stagnated the jobs market and threatens countless job losses and business closures. It falls on top of the Employment Rights Bill, which signals the return of 1970s-style employment laws that will further stifle growth, as well as the family business tax, higher business rates and higher wage bills. In small coastal towns like Bognor Regis and Littlehampton, where over 90% of local businesses have fewer than 10 employees, every cost increase and every job loss is keenly felt. Across our constituency, families, small businesses, hospices such as St Wilfrid’s and charities at the heart of our communities face an impossible position.
In their short time in government, Labour has become the party of taxation. The Chancellor has backed herself into a corner, and more tax hikes are undoubtedly on the horizon. That is why I thank the Leader of the Opposition for tabling this important motion. Working people in Bognor Regis and Littlehampton and the businesses, charities and hospices that employ them need to be defended from this Government’s tax raids, and that is what I intend to do—to stand up for the people of Bognor Regis and Littlehampton today, tomorrow and throughout this Parliament.
Mr Deputy Speaker (Sir Roger Gale)
I call the shadow Minister.
Richard Fuller (North Bedfordshire) (Con)
We have had an exciting and heartfelt debate. I commend for their speeches my right hon. Friends the Members for Sutton Coldfield (Sir Andrew Mitchell), for Wetherby and Easingwold (Sir Alec Shelbrooke), for Basildon and Billericay (Mr Holden), for Salisbury (John Glen) and for Beverley and Holderness (Graham Stuart), my hon. Friends the Members for Bromsgrove (Bradley Thomas), for Beaconsfield (Joy Morrissey), for Farnham and Bordon (Gregory Stafford), for Keighley and Ilkley (Robbie Moore), for South Northamptonshire (Sarah Bool) and for Bognor Regis and Littlehampton (Alison Griffiths), the hon. Members for Angus and Perthshire Glens (Dave Doogan) and for Ynys Môn (Llinos Medi), and the hon. and learned Member for North Antrim (Jim Allister).
We have heard some excellent speeches from Members speaking with passion on behalf of the small businesses, farmers, workers and pensioners who have been hit by Labour changing its mind on taxes and doing things differently from what it said it would do at the election. We have also heard two new phrases today. Thanks to my hon. Friend the Member for Bognor Regis and Littlehampton, we now realise we have to challenge the Chancellor based on her “flagship failures”, not her flagship policies. With great passion, the hon. and learned Member for North Antrim told us how Labour’s tax on family businesses means that small businesses are no longer planning for growth; they are planning for death.
The public feel they were misled by Labour at the general election. They think those on the Labour Front Bench are incompetent. They think the Prime Minister is woefully out of touch and the Chancellor is out of her depth—and why shouldn’t they? A Prime Minister who needs multiple attempts to define a woman, and multiple attempts to define a working person, does not exactly inspire confidence; a Chancellor who says that she will not raise taxes on working people, and then hikes national insurance, costing working people their jobs and earnings, does not inspire trust.
Our motion provides the Government with an opportunity to draw a line, recognise the overreach and errors in their taxation policies, and give some hope to the makers in our society and those who work hard in our warehouses, offices, factories, shops, restaurants, and public services. They could recognise the errors in the Treasury’s assessment of the impact of the family farm tax on those who grow our food, and the trauma caused by the jobs tax for those who build our businesses. Those are the people who know how to grow our economy, not the numpties on the Front Bench, so why are the Government intent on holding them back?
Alas, the Chancellor thinks that she knows best, and despite taxes being at their highest rate on record, she is on the hunt for new taxes: wealth tax, capital gains tax, pensions tax, council tax, savings tax, tax, tax, tax, tax—it is always the same with a Labour Government. The Government’s strategy is to tax their way to growth, but I have to tell the Chancellor that that strategy will not work. No economy can tax its businesses out of existence and create growth.
Tonight the Chancellor starts her new tax campaign with a visit to the City. For the first time it will not be so much a Mansion House speech as a mansion tax assessment. The Chancellor will claim that the Government’s actions have brought about financial stability—well perhaps, but not in this country. The Government’s Chagos deal has eliminated income tax in Mauritius but given British taxpayers a new £30 billion tax bill, and the Government’s abolition of non-dom status is boosting the tax revenues of Portugal and Italy but will mean taxpayers here having to cough up billions a year more to plug the gap as people leave the UK, taking their tax payments with them.
The truth is that the Chancellor has done the complete opposite of her claims of stability. She is the eye of an instability storm of her own making, where nobody knows when her next tax raid will come, and who will get hit the hardest—a second summer of doubt and uncertainty caused by this Chancellor, and tolerated by this Prime Minister. Labour Back Benchers know it. They know all the times that the Chancellor has led them up the hill, only to lead them down again: the “once in a Parliament” tax hike, the removal of winter fuel payments, the blundered attempts at welfare cuts, and it has only been one year! Labour Members are limping towards recess—look at them, Mr Deputy Speaker. Napoleon’s troops were in better humour on their march back from Moscow than some Labour MPs are as they make their way back to their constituencies, and back to the people to whom they promised so much just one year ago, only to deliver oh so little. No wonder people feel so let down.
But let us be fair: some Labour Back Benchers are going back with a warm feeling. A reshuffle is coming soon, to clear away all the dead wood on the Front Bench —oh, so much dead wood—and some Labour Back Benchers have already had the tap on the shoulder. They already know who they are, and they are going home with great expectations of high office— [Hon. Members: “Ah!”] No, no, spare a thought, please, for the many other Labour MPs who have missed out. They felt that they were given a promise that if they did the right thing they would be looked after. Now they know that the Government have reneged on their promise, and that the change they hoped for will not come. For them, I am truly sorry. But there is one consolation: at least now they know how the rest of the country feels.
The Exchequer Secretary to the Treasury (James Murray)
I listened very carefully to the shadow Minister. He has clearly been taking theatrical lessons from his colleague the shadow Chancellor, the right hon. Member for Central Devon (Sir Mel Stride). Indeed, I have listened to all his colleagues during this debate, and frankly they have quite some cheek. They speak from the Opposition Benches, yet they failed to reflect honestly, even once, on why they are on that side of the House.
The reason why the Conservatives are in opposition is that they not only ran our public services into the ground, but had given up on fiscal responsibility, which is critical for stability, investment and growth. When we won the election last year, it was our task to restore that responsibility and fix the £22 billion black hole in the public finances, which was a legacy of the previous Government’s waste and delay. [Interruption.] I know they hate to be reminded of it, but that is the truth. That is what we inherited. As my right hon. Friend the Chief Secretary to the Treasury said in opening the debate, we acted on that without delay on taking office. At last year’s Budget, the Chancellor acted decisively to stabilise the public finances and lay the foundations for investment in growth after 14 years of Tory decline. Rather than shirking responsibility, we took the necessary decisions to raise taxes and made the necessary choices to ensure that our NHS, schools and other vital public services received the funding they needed to get back on their feet.
I thank all the hon. Members whom the shadow Minister mentioned in his summing-up speech, as well as my hon. Friends the Members for Glasgow East (John Grady), for Kensington and Bayswater (Joe Powell), for Bolton West (Phil Brickell), for Rugby (John Slinger), for Alloa and Grangemouth (Brian Leishman), and for Loughborough (Dr Sandher).
Many hon. Members spoke about the choices that we have had to make as a Government. Let me be clear that while many of the decisions on tax have been difficult—we recognise that they have had consequences—we took every opportunity to make them as fair as possible. That is why, at last year’s Budget, we decided to end non-dom tax status and tax breaks for private school fees. It is also why we increased air passenger duty on private jets, raised stamp duty for those buying second homes, extended the oil and gas levy, and chose to raise capital gains and inheritance tax. It is why His Majesty’s Revenue and Customs implemented the biggest package of measures to close the tax gap that this country has ever seen. Those measures will ensure that everyone, including the wealthiest, pay the tax that they owe.
Those choices have been the right ones to restore the public finances and get public services back on their feet, yet the Conservatives, the Lib Dems and Reform—who surprisingly are not here—all voted against our Finance Act 2025, which started to put our choices into action. They have refused time and again to support the decisions we have taken on tax, while refusing to say what funding for public services they would oppose as a result. The choices I have mentioned and other difficult choices we have made, such as the decision around employers’ national insurance, have been necessary to meet our fiscal rules.
Let me be clear why those fiscal rules are so important, and why, under this Government, they will always be non-negotiable. The fiscal rules introduced by the Chancellor last year are this Government’s assurance to the markets that we will live within our means and pay our Government debt. They are not only crucial to keeping debt payments under control, but enable us to invest in the future of our country. Thanks to the Chancellor’s fiscal rules—the stability rule and the investment rule—we have been able to boost capital investment by £120 billion, compared with the previous Government’s plans. That investment will improve transport infrastructure, deliver more social and affordable housing, bring down bills through energy security, unlock further private sector investment and, most importantly, improve the lives of working people across Britain by making people better off.
Without our plans to balance the books and get debt falling, our £120 billion of extra investment would not be possible, and taxpayers would see ever more of their money being spent on debt interest payments. We have taken the tough but fair and necessary choices to repair our public finances, so that we can rebuild our schools, our hospitals and our frontline services across the country.
As many right hon. and hon. Members have said today, if Conservative Members disagree with our approach, maybe they can tell us whether they would cut spending on schools, hospitals or defence, or perhaps they can tell us which taxes they would raise instead. Rather than do that, the Conservatives and Reform are competing with each other to inherit the mantle of Liz Truss. They both blindly make unfunded promises on tax—promises that we all know would force up interest payments for families across Britain and cause economic chaos, which would hit working people hardest. The British people want security, stability, public services that work again, and more money in their pocket, and only Labour Members and this Labour Government are prepared to take the decisions that are necessary to make that happen.
Question put.
Business without Debate
Petitions
Mike Martin (Tunbridge Wells) (LD)
I rise to present this petition regarding accessibility at High Brooms station. This is further to an online petition on the same matter, which has collected 610 signatures. Under the previous Government’s Access for All scheme, plans were drawn up for High Brooms featuring three new lifts and a footbridge. Now that the current Government have committed extra capital funding for transport, these plans must be implemented.
The petition states:
“The petitioners therefore request that the House of Commons urges the Government to take into account the concerns of the petitioners and take immediate action to ensure that High Brooms Station receives the funding required to improve accessibility.
And the petitioners remain, etc.”
Following is the full text of the petition:
[The petition of residents of the constituency of Tunbridge Wells in Kent,
Declares that an online petition on the matter of improving accessibility at High Brooms Station has generated a lot of interest; notes that under the previous Government's 'Access for All' scheme, plans were drawn up for High Brooms featuring three new lifts, a footbridge, and several other critical improvements; and further declares that now the current Government has committed extra capital funding for transport, these plans must be implemented.
The petitioners therefore request that the House of Commons urges the Government to take into account the concerns of the petitioners and take immediate action to ensure that High Brooms Station receives the funding required to improve accessibility.
And the petitioners remain, etc.]
[P003092]
Sarah Dyke (Glastonbury and Somerton) (LD)
I rise to present this petition about rural post offices in Glastonbury and Somerton, which have closed at an alarming rate over recent years. A separate similar petition from the owners of Somerton Stores, Mr and Mrs Thievendran, recently garnered 800 signatures within two weeks, highlighting the overwhelming support for a new post office in Somerton. However, prohibitive costs have prevented this so far.
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 safeguard the future of post offices in rural areas.
And the petitioners remain, etc.”
Following is the full text of the petition:
[The petition of residents of the constituency of Glastonbury and Somerton,
Declares that rural post offices are under threat; further declares that the loss of Somerton’s dedicated post office in 2022, combined with the loss of a post office in Butleigh, Charlton Adam and Charlton Mackerell has been devastating for the local community; further notes the recent separate petition from the owners of Somerton stores, which garnered over 800 signatures within two weeks highlighting the overwhelming support for a new post office; further recognises the immense benefit that post offices and postmasters have on rural communities; further acknowledges the prohibitive costs many potential postmasters face when attempting to open a post office; further welcomes the forthcoming green paper but believes the Post Office must work with rural communities to ensure a sustainable future for all.
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 safeguard the future of post offices in rural areas.
And the petitioners remain, etc.]
[P003093]
Local Justice Area Reform
(1 day, 17 hours ago)
Commons ChamberRead Hansard Text Watch Debate Read Debate Ministerial Extracts
Liz Saville Roberts (Dwyfor Meirionnydd) (PC)
From March to June this year, the Ministry of Justice held a public consultation on proposed reform of local justice areas. The consultation sought responses on a range of proposed structural changes set to affect magistrates across England and Wales. Among those proposed changes is the merging of three magistrates benches into a single north Wales bench to serve six local authorities covering an area totalling 2,383 square miles. As the Member of Parliament for a significant portion of the north-west Wales magistrates bench area, this plan is of particular concern to me, and I am grateful for the opportunity to debate it today.
The local justice system in the north of Wales currently comprises three magistrates benches—north-east Wales, which serves Wrexham and Sir y Fflint; north-central Wales, representing Conwy and Sir Ddinbych; and north-west Wales, covering Gwynedd and Ynys Môn. The north-west Wales bench is based at the Caernarfon justice centre in the largest town in my constituency. Magistrates are familiar with this court, and with making the journey to that location to undertake their duties. Under Ministry of Justice plans, however, magistrates will be expected to sit at other courts outside their so-called home court between 20% and 40% of their time.
In some areas and in more urban constituencies, that may not result in significantly increased journey times and distances, but that will indubitably not be the case for individuals in the north-west of Wales. For example, if a magistrate lives in Pen Llŷn, a journey to the Caernarfon magistrates court would incur a drive of about 40 minutes. If the same magistrate is called to the next nearest court in Llandudno as part of the 20% to 40% requirement, their journey time would nearly double to an hour and 15 minutes, and if they were called to the north-eastern courts in Mold or Wrexham, the journey times would be one hour and 40 minutes or two hours, respectively—and I must say that that is on a good day.
Jim Shannon (Strangford) (DUP)
I commend the right hon. Member for Dwyfor Meirionnydd—I hope that is somewhere near the Welsh, but with an Ulster Scots accent—for bringing forward this debate and I congratulate her on it. I spoke to her beforehand just to ascertain the direction of travel. Does she agree that magistrates must know their communities and the characteristics of where they come from, so that they can best serve justice for the victims? In other words, the better they know where they come from, the better they know the people they serve, and then they can do their job.
Liz Saville Roberts
I am very grateful to the hon. Gentleman for his intervention. Of course, this is what we talk about: the nature of justice serving those communities. It needs to know the people within those communities and to reflect their characteristics to best serve the victims, defendants, advocates and witnesses in the process by which justice is seen to be done.
The longer journeys I mentioned will inevitably create difficulties. We must remember that magistrates in this instance are volunteers. Many have other responsibilities, such as childcare and the care of elderly relatives. Some will also be in work—in other employment. It is foreseen that the changes are very likely to result in resignations, so my first question is this: has an impact assessment been made of the potential loss of experienced magistrates, the need to recruit and train new magistrates, and whether certain groups of people will be worse affected by changes in travelling time?
Cost is another factor. If an individual magistrate currently sits only in Caernarfon court, but is now directed to spend a minimum requirement of 20% at Llandudno, the annual travel expenses claim are likely to double. If they were allocated, as is theoretically possible, 40% of their time in the Mold-Yr Wyddgrug court, their annual travel claim would be likely to increase by 600%. Will the Minister confirm whether an assessment has been carried out into those substantially increased costs and the effect on value for public money?
I want to turn now to the impact on Welsh language services. While the present three local justice areas are easily grouped under the title of north Wales, it must be recognised that the communities they serve are not uniform. Indeed, the differences are most apparent in their use of Welsh. The Act of Union 1536 decreed that only English could be used in courts in Wales. That was repealed by the Welsh Courts Act 1942, the first piece of legislation to recognise the right to use the language. Of course, legislation has moved on considerably since then.
The north-west Wales bench serves the two local authority areas with the highest estimated percentage of Welsh speakers, Gwynedd and Ynys Môn, where the Welsh language is in daily use as a community, family and administrative language. The magistrates court will routinely hear defendants, victims, witnesses and advocates drawn from those communities and from the town of Caernarfon itself, where 85% of the population speak Welsh. That is just not true for the other two areas in the proposed grouping. That is made clear in the percentage of Welsh-speaking magistrates across the current local justice areas at present: 55% speak Welsh in the north-west Wales area, 16% in the central north area and only 8% in the north-east. We must remember that the purpose of local justice is exactly that: for members of a particular community to administer justice in and on behalf of that community. That means, of course, reflecting that local community.
For the north-west Wales bench, this has resulted in the Caernarfon magistrates court routinely operating in Welsh. Indeed, the Caernarfon justice centre is the home of His Majesty’s Courts and Tribunals Service’s Welsh language unit. There is considerable concern that the hard-fought-for offer of a bilingual service in English and Welsh for all court users will be ill-served by the UK Government’s proposals and that prospective Welsh-speaking magistrates will think twice before applying for roles, thus further reducing the number of Welsh-speaking magistrates serving communities across the whole of north Wales.
That issue was immediately raised by senior magistrates on the north-west Wales bench. They asked why a full assessment had not been made of the impact of the recommendations on the use of the language and the availability of Welsh language services. An addition was then made, I understand, to the equalities statement, outlining a potential impact on magistrates’ use of the Welsh language, phrased as “protected characteristics”. But framing an assessment in that way fails to consider the potential impacts on the rights of victims, witnesses, defendants and service users, and fails to engage with the duties enshrined in the Welsh Language Act 1993.
I am grateful to understand from the Minister, in her response to my letter on this subject, that she is “mindful of commitments” under the MOJ’s Welsh language scheme, noting that this includes responsibilities to
“assess the linguistic consequences of policies affecting services provided to the people in Wales”
and
“to undertake a Welsh Language Impact Test during consultation”.
While we wait to see how those responsibilities play out, it is clear that magistrates in the north-west of Wales do not agree that an adequate assessment of the cultural and linguistic impact of these changes has yet been undertaken. In fact, magistrates have gone so far as to tell me that they believe the MOJ has treated Wales and the people of Wales with contempt.
They are not alone in their concerns, as the Welsh Language Commissioner has made clear. After receiving initial correspondence from the MOJ, the Welsh Language Commissioner’s office told magistrates that
“the information and response provided raises more questions about how the Welsh language was considered within the consultation, especially the alleged failure to consider the implications of moving Welsh Magistrates from Caernarfon to other courts across…Wales”—
that is a translation. The commissioner’s correspondence adds that they doubt whether the impact of the proposals on court users has been identified, particularly for those currently served by the north-west Wales bench. I am aware that the Welsh Language Commissioner has contacted the Minister in relation to their concerns, and I call on the Minister today to respond in full to the commissioner as soon as is practicable.
In her response to my letter, the Minister noted that the MOJ produced a
“full translation of the consultation document considering its relevance to Welsh magistrates, court staff and court users.”
The translation of such documents by public bodies is, in all honesty, the bare minimum—it is actually a requirement under Welsh language standards—and, in all honesty, that is not the point here. It is concerning that so little attention has been given to the effects of UK Government reform on the Welsh language, especially given the Labour Welsh Government’s goal of 1 million Welsh speakers by 2050.
Of course, this is not new. As a result of the closure of rural courts by the previous Conservative Government since 2010, the proportion of bilingual magistrates—who of course are able to work in Welsh and English; it is always worth spelling that out—serving Gwynedd and Môn has fallen from around 80% to just over 50%; as I mentioned earlier, it is at 55%. There are serious concerns that this reform in the north of Wales will further diminish the percentage and number of magistrates who will routinely be able to offer a service in both Welsh and English, restricting what is the right in law as regards language for court users.
It begs the question of how effective justice can be if a person is denied the right to justice in the language in which they express themselves best—the way they express their emotions and feelings. Of course, it is not only that; this language is one of the two official languages of the country. In the case of Caernarfon, and very much in the case of the greater part of Gwynedd and Môn, this is the first language of the majority of people.
My third question to the Minister is: when will there be a proper assessment into the impact of the use of Welsh in court under the proposed changes? After all, let us remember that when Dic Penderyn was sentenced to death in 1831 for his part in the Merthyr rising, he was tried in English, but he said from the scaffold, “O Arglwydd, dyma gamwedd,” or, “Oh Lord, this is injustice.”
The proposals follow what has already been considerable reform in the field of local justice. Local justice areas were last reorganised as recently as 2016. As I have mentioned, numerous courts across Wales have been closed since 2010, including those in Pwllheli, Llangefni, Dolgellau and Holyhead, with the operations centralised in Caernarfon. Magistrates have endured more than a decade of continuous change. Let us remember who they are: volunteers who dedicate their time to help provide justice in their local communities—that is why they have come forward. North-west Wales magistrates tell me that they are regularly praised for their performance. They say they have not been provided with any evidence as to why the proposed changes to merge benches in the north of Wales are necessary.
I suspect the MOJ may be considering following the model of North Wales Police, which is a regional police force. However, I hasten to point out that the force area operates community policing across three sub-regions—western, central and eastern—which reflect exactly the three benches as things stand in north Wales. The Betsi Cadwaladr University Health Board also serves the north Wales region in its entirety, but the pressure placed on it in endeavouring to meet the needs of its widely varying communities is recognised as contributing in part to its being in and out of special measures in seven of the past 10 years.
I have a couple more questions. Will the Minister therefore commit to ensuring that the local justice reform proposals will recognise that justice is best served by magistrates rooted in their communities, and, uniquely to Wales, able to work in both national languages? Will she also commit to redoubling efforts to recruit bilingual magistrates across Wales, so that benches can be fully representative of the communities they serve?
To conclude, the Minister told me last week that one of the geniuses of the magistrates court is the local link, and the fact that it delivers local justice. I agree with her entirely, which is why I secured this debate. I close by urging the Minister and her Department to consider the points that I have raised on behalf of magistrates in north-west Wales, and ask her please to respond to the questions that I have posed during this speech. Diolch yn fawr iawn.
The Minister of State, Ministry of Justice (Sarah Sackman)
Let me begin by congratulating the right hon. Member for Dwyfor Meirionnydd (Liz Saville Roberts) —that was my best attempt at Welsh pronunciation; I hope I did not vandalise it—on securing this important debate on the reform of local justice areas. I agree with her that the contribution of magistrates right across the country, but in particular in north Wales, deserves greater recognition. In particular, the north Welsh magistracy is performing well, and I pay tribute to all those who make that possible.
This debate is a timely opportunity to clarify the Government’s intentions to reflect on our recent consultation and to address the concerns raised, particularly those from Wales. I shall begin by setting out some context surrounding the local justice areas and the case for reform. Local justice areas were first introduced by the previous Labour Government as part of the Courts Act 2003. They replaced petty sessional divisions and were designed to define the geographical boundaries for magistrates court administration.
However, the landscape of justice delivery has changed significantly over the past 20 years or so. The hard legal boundaries of local justice areas create inflexibilities in the magistrates court system, leading to delays and inefficiencies. By abolishing local justice areas and implementing a non-legislative replacement structure, we aim to improve flexibility in the system, reduce bureaucracy and allow for more freedom in the deployment of magistrates.
As the House will be aware, the Government and the judiciary launched a joint consultation earlier this year on what the replacement system for local justice areas should look like. I want to be absolutely clear that that consultation was informed by two key principles: first, a commitment to local justice, of which the right hon. Member speaks; and secondly, a commitment to enhance flexibility for a modern magistracy. I am pleased to announce that we have received more than 1,400 responses from magistrates and a range of stakeholders, including legal professionals, local authorities and members of the public. I was encouraged to see the strong level of engagement with the proposals, and the feedback that we have received will shape the final outcome of the consultation.
I want to stress that we are carefully considering all the responses before moving forward—we do not approach this with a closed mind. This is genuine consultation and the feedback that we have received through it will be vital in shaping the reforms.
Although local justice areas as they are now—a legal administrative boundary set out in legislation—will be abolished, this does not mean an end to local justice. Localism is at the heart of the magistracy. We want to ensure that magistrates continue to feel connected to their local communities, and that local citizens continue to feel that their local magistrates serve them.
At the core of our principles is a new system of so-called benches, a structure of court groups that will be used for the purposes of magistrates’ recruitment, deployment, leadership and training, following the abolition of local justice areas. Unlike local justice areas, benches would not be defined in legislation and would have soft boundaries to allow magistrates greater flexibility to sit in other courts. Such courts might actually be closer to where they currently live, but not accessible due to the current hard, legal boundary, and they might offer magistrates a broader range of cases and work than they currently engage in.
Our consultation proposes to align benches broadly with the boundaries of criminal justice areas, which themselves are based on the boundaries of police force areas. As the core business of the criminal magistrates courts involves prosecutions initiated by police forces, we believe that, in most cases, this is a natural fit. Where a given criminal justice area will be too large to create a workable bench—
Liz Saville Roberts
I am very interested to hear the Minister mention police forces, because I suspected that that was partly the driver. On community policing, will she recognise that North Wales police have felt the need to separate the area into three—a highly populous area in the east, a middle area, and one in the west, which has a much more scattered population—because that better reflects what the community needs?
Sarah Sackman
That is precisely why we have a consultation—to reflect the variation in different parts of the country. In most cases, the criminal justice area and the area in which a police force operates will be a natural fit for a bench, but that will not necessarily work for everyone. We are taking soundings and engaging with local stakeholders to make sure that these soft boundaries, as it were, reflect local circumstances. As I said, this is such a vital debate, and we hope to reflect local contributions in the final set of proposals.
Where a given criminal justice area would be too large to create a workable bench, we have suggested a different model that retains current local justice area boundaries. For example, creating a bench based on the very large geographical area of the Dyfed-Powys criminal justice area in Wales would be impractical. Analysis suggested that it would result in excessively long journey times for certain magistrates—a point that the right hon. Member made. We therefore propose retaining the current local justice area boundaries in that case. On the other hand, where analysis suggested that a criminal justice area could reasonably be used to structure the boundaries of a bench, we have proposed—it is only a proposal, on which we are consulting—merging certain local justice areas. That is the provenance of the benches for north Wales and south Wales.
To reiterate, the point of the consultation is to seek feedback on the proposed model, and gather feedback from magistrates and other stakeholders, such as local leaders, about what will or will not work. The proposed bench configuration is intended as a starting point for this exercise. We are, if I can put it this way, very much in listening mode.
I am aware that magistrates in some benches, including those within the constituency of the right hon. Member, have raised concerns about the proposals, and as ever, she is articulate in setting out the concerns of her constituents and the local considerations. I very much appreciate that she wrote to me in advance of today’s Adjournment debate outlining those concerns, so that we could take them on board in the Ministry of Justice.
I would like to reassure the right hon. Member that her concerns and the concerns of Welsh magistrates have been and will be heard. While I cannot at this juncture confirm the outcome of the consultation—and some of the matters it covers are for the judiciary to determine, not politicians—these concerns and others expressed in the response to our consultation will inform our decisions on the structure for Welsh magistrates courts.
I turn to the question of Welsh language impacts, which are incredibly important in this context. As the right hon. Member has said, a key concern for Welsh-speaking magistrates is the impact of the proposals on the Welsh language. This concern has also been articulated by other members of the Welsh judiciary. At the heart of it is the potential risk that differences in the percentage of Welsh-speaking magistrates in the proposed bench could limit opportunities for Welsh-speaking magistrates or court users to speak Welsh. Let me take this opportunity to assure the House that this Government remain firmly committed to the principle of bilingual provision of court services in Wales, and to the equal treatment of Welsh and English in the delivery of justice in these courts.
Under the proposals, all magistrates would have the chance to discuss their sitting arrangements with their bench chair. Magistrate’s sitting patterns would be decided on a case-by-case basis, taking account of personal circumstances as well as business need. A Welsh-speaking magistrate’s preferences would naturally form part of these discussions. It is certainly not our intention to force Welsh-speaking magistrates to sit in other locations to the extent that it would limit their ability to use Welsh in court.
More broadly, the proposals are intended as a codification of current practice. Magistrates are expected to undertake most of their sittings at the court closest to their home or work location. The overall intention is to minimise as far as possible the extent of practical change to the day-to-day business of magistrates in their local area. Given the continuity in sitting patterns, and the continued provision of interpreters in Welsh magistrates courts, we do not expect the proposals to impact the availability of Welsh language services for court users in Wales. To answer the right hon. Member’s question directly, and to reassure her, a full Welsh language impact assessment will accompany any final proposals.
We will carefully consider the responses we have received from Welsh magistrates and other stakeholders to see what the impact will be on Welsh being spoken in court, and will put in place any mitigations, should they be necessary. We have committed to publishing a full Welsh language impact test alongside the final set of policy decisions, and we expect to publish our response later this year.
I am aware of the issue of the effect that the proposed bench configuration for Wales will have on travel times for magistrates and court users, and concerns about increased journey times and added difficulties for those who, for example, rely on public transport. That concern has also been expressed in some responses to proposals in England; it cuts across the board. We are keen to draw on magistrates’ first-hand knowledge of their local area before finalising any of these boundaries. The ongoing analysis of consultation responses will help us to identify those areas—such as in Wales—where a proposed bench would be excessively large or result in unreasonably long journey times. As the right hon. Member rightly acknowledged, magistrates volunteer and do a fantastic service. We do not want to put barriers in their way; this is about enabling them to carry out their service and be deployed flexibly. It is certainly not intended to impede the vital work that they do.
As for court users, the consultation does not propose any changes to case listing practices. The abolition of local justice areas will, however, make it easier to hear a case in a court closer to a user’s home. We would not therefore expect the new bench or deployment models to result in longer journeys for users. We are nevertheless continually reviewing any potential impacts of the proposals on protected characteristics. Should the data gathered from the consultation responses uncover any previously unforeseen impacts, we will consider revising the proposals to mitigate those.
I thank the right hon. Member once again for raising this issue with her characteristic eloquence and attention to detail. I also thank those who took part in the consultation process and engaged with the proposals. We received 1,400 responses, which is testament to just how much people are engaged on these issues and how much they value the local justice that our magistrates provide. As with any consultation, the dialogue and feedback we have received will be crucial in driving positive outcomes, and I am grateful to all those who have contributed. We are in listening mode, as I said, and we are committed to creating a system that works better for magistrates, court staff and citizens right across England and Wales.
Question put and agreed to.